Published by Hotel and Motel Management
Written by Jason Q. Freed
Automobiles. The jet engine. Tourism. The Heavenly bed.
All have been extremely instrumental in shaping the lodging industry into what it is today, but perhaps none more than a product used by 1.574 billion people worldwide today: the Internet.
Travelers use it to touch base with home and office from their guestroom. Hotel operators use it to communicate internally and between numerous properties. Sales teams use it to sell hotel rooms. Consumers use it to rate their stays and to make decisions.
There is no doubt the Internet has revolutionized the world over the past 20 years, and the hotel industry has been along for the ride. Today, technology vendors and hotel operators are working together to use the Internet for new products and tools that are transforming the way the industry does business.
“It’s been an evolution, obviously, but I would say the defining moment was when broadband became ubiquitous,” said Mark Warner, clinical professor at NYU’s Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management. “Broadband started to change the way the Web was approached and you could do things like have a property-management system online. You couldn’t really do that around 1999-2000 because not everyone had broadband.”
Fast-forward only 10 years and property management has made great strides. Software is hosted online so room inventory and rate databases can be centralized and accessed by multiple networked properties, thus eliminating the need for large servers taking up space and requiring maintenance on site.
The Internet also allows the common PMS to work in conjunction with other crucial tools, such as channel management (which makes room rate and availability known to multiple distribution sources), rate or yield management (which determines what prices rooms should be sold at based on a number of factors), Web booking engines (tools that allow the consumer to book a room and turn that booking into data) and central reservations systems (gathers and manages all incoming bookings from multiple sources).
Channel management is becoming increasingly important as more consumers are looking to the Web to book hotel rooms, said Ryan Haynes, project manager at Rate Tiger, which offers products to maximize revenue strategies across the Internet using multiple distribution channels, such as the hotel’s own website or third-party online travel agents.
“The Internet puts the power in the hands of the consumer, and hotels are left trying to bid the best rate,” Haynes said. “Rate Tiger gives the hotelier that little extra control of being able to manage multiple networks and reduce the time they spend managing these. You can also find out what’s going on with the rest of the industry and find out what the competitors are selling to be sure you aren’t undercharging.”
Prior to the Internet, the primary channel for hotels to sell roomnights was a global distribution system—travel agents using computer systems for searching, reserving and purchasing travel products. In 2004, however, Internet sales exceeded sales from the GDS for the first time in history. Naturally, this has led hotels to ramp up their digital marketing effort by partnering with third-party vendors.
Brian Deagan, CEO of Knotice, a provider of direct digital marketing communications, said he has seen a lot of interest in Knotice from the hospitality industry. Knotice communicates to customers through three channels: e-mail, Web browser cookies and mobile phone messages, and integrates all three to stay relevant as the customer shops.
“When you open that e-mail, and it drives you into that website, we can direct offers that are relevant to you based on what services you are looking for,” Deagan said.
To increase group business sales and marketing efforts, Hotel Equities in 2008 rolled out a web-based product called hotel SalesPro, aimed at helping the sales teams across the 43 branded properties in their portfolio. Prior to implementing hotel SalesPro, each salesperson had their own laptop with a separate database of clients, said Elizabeth Derby, sales coach at Hotel Equities. Today, they share a centralized database and information is readily accessible.
“It allows me, as a leader of the team, to go in at any time and see who is working on what,” Derby said. “I can make sure we’re following up with past clients and potential clients. I didn’t have that ability before.”
At the Hospitality Industry Technology Exposition and Conference in June, hotel SystemsPro, parent of hotel SalesPro, will introduce an extension to its suite of products called hotel WebSpace. The product will help hotel sales and marketing teams use the Internet to find business coming to the area and then capitalize on that local business by promoting their hotel.
“Say you know a soccer tournament is coming to your area, you can create a search-engine optimized landing page stating the event is happening and say, ‘If you’re going to be attending this event, here’s why you should stay with us,’” said hotel SystemsPro product manager Danielle Rieppi. “It’s all about promoting your hotel and driving traffic from that landing page to your website.”
The Internet’s aid to the hotel business is not limited to sales and marketing. In fact, after getting potential guests to notice a hotel, the tough part becomes convincing that potential guest to book a stay and then processing a booking online. Many products tout their ability to increase “look-to-book” ratios.
At the Centennial Inn, a 96-room all-suite independent property in Farmington, Conn., the sales team focuses on leveling the playing field between their independent property and other big box hotels that have deep pockets and more influence on where they show up in Internet search results. Recently, director of sales Victoria Freeman said the property executives felt their Web-booking engine wasn’t getting enough follow through and wanted to look into upgrading.
Freeman said she chose NetBooker NG, a product from Pegasus Solutions, because “it was attractive enough to keep people on our website with more follow through to reservations.”
“Obviously every year we see a higher percentage of people who are booking from some sort of website,” she said. “With Pegasus, if we put that we’re sold out, it automatically hits the third-party websites in real-time, which is crucial because you can’t have someone booking from an outside source and be closed out. We never want a guest to go away.”
As far as managing staff at the hotel, there are a number of software packages that use the Internet to help hoteliers forecast business volume and plan staffing accordingly. Heath & Company Hospitality Advisors provides Web-hosted software that helps clients forecast more effectively, prepare staffing requirements and schedule employees in accordance with the staff plan.
“Ten years ago we began developing tools, first for forecasting and later for developing staffing guides and labor reporting,” said David W. Heath, principal. “Today, we offer a suite of productivity tools that are used in many hotels.”
Without the Internet and its effect on revenue management and promotions, it’s hard to imagine how the hotel industry would have survived the downturn after 9/11. Right as that travel slump hit, customers saw rates falling and began getting smarter about booking their own travel. Today, Warner said travelers are price point people and marketing a hotel room is more about finding the most appropriate distribution channels on the Internet.
“The customer has become very savvy,” Warner said. “It’s different than it was 10 years ago, certainly. It’s all about the customer and how we attract that customer and exceed their expectations. The hotel industry needs to be constantly looking at those things that separate them from the competition, and technology can play a big part in that.”