Real time bookings

The race is on to create the fastest, most accurate and cost effective way of processing room reservations and managing benchmark hotel rates, with Hilton and Micros Fidelio both leading the field

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By  Sarah Campbell Published  August 15, 2006

|~|Davis,-Tim-L.gif|~|Davis says the challenge with ‘off the shelf’ technology is that it is decentralised. Hilton’s OnQ will hold all rooms inventory in one place. |~|Once upon a time, making a hotel reservation was a drawn out process that required reams of paperwork. Guests had to complete long checking in forms and sign a guest registry, while back of house accounts and inventory managers had a hard task determining availability, average room rates and best prices. How things have changed. The arrival of the world wide web has transformed the way most of us live our lives, and this has filtered down to the way most of us make our travel arrangements. Now, a hotel can be booked, and cancelled, with a click of the mouse. While this has speeded up the booking process, it has presented its own range of challenges for hoteliers. Prices can change by the minute, as can availability, and managing so many booking channels can create an inventory nightmare. The internet may have speeded up the process, but now the challenge is to refine it to create a transparent booking platform that is easy to use from both a customer and an hotelier point of view. The merger between Hilton International and Hilton Hotels Corporation at the end of last year has given the group a boost when it comes to online inventory management. The two companies both brought unique strengths and market share to the table to create something of a hospitality behemoth. “With the joining of Hilton Hotels Corporation and Hilton International, we are now able to leverage towards growing strongly in the US and use that as a strong platform in the international markets network side. Growth is the key to our success as a company. It enables us to scale our key assets and spread across all hotels. If you are growing quickly it is better to grow on good foundations. Technology is a big enabler in this,” says Tim Davis, senior vice president, commercial development and information services, Hilton International. Davis is responsible for the commercial strategy and its capabilities in sales, marketing and distribution. Since 1997, Hilton International and Hilton Hotels have been effectively working as one company from a customer and a reservation point of view. Now that the two companies are back together, Davis and his team are working hard to create a unique suite of applications to maximise on sales, marketing and customer satisfaction. “We are investing US $150 million in a new technology called OnQ, which is a suite of applications built around inventory, customer profile and reservation. This will be deployed across all our properties in the next 36 months,” Davis explains. “The end result will be a more centralised technology with the ability to open or retract inventory. It will be faster. “We have a scale advantage, as this will be built once and deployed everywhere. It will be localised too, so it will work in the local markets and take into consideration their laws and taxes. It is basically a centralised Micros Fidelio,” he admits. According to Davis, the challenge with ‘off the shelf’ technology is that it is decentralised. Hilton’s OnQ application will hold all rooms inventory in one place. “The website will be truly powered by every room available and with the best rates on the website,” he says. From a customer point, OnQ will give Hilton the ability to recognise them and do more things for them. Hotels will have access to customer information in whatever channel they choose. “This creates a personal bond between Hilton and the guest. It will drive guest satisfaction and brand loyalty. Technology enables us to do things that make a difference,” Davis claims. Hilton first created a brand web site in the late 1990s. Today, online bookings account for US $2.5 billion per year from the company’s web sites, and this is growing at an average rate of 45%, with some markets showing web revenue growth as high as 65-100%. “Much of our success internationally has come because we built localised brand web sites. For example, in Japan we have a ‘World of Hilton’ brand web site in Japanese. What’s more, all the interaction for that site is also in Japanese. “In 2003, we invested heavily in taking away the problems of legacy systems. This enables us to launch local web sites not only in the local language but also related to the local market. For example, to market a weekend break to the Japanese market is different from what would be relevant when marketing this to a UK market. This has enabled us to compete, be relevant and we are now in a position to grow,” Davis says. Hilton currently has eight local sites — the UK, Germany, Japan and four Scandinavian websites. There are plans for an Arabic site and, over the next 18 months, this will grow from eight sites to 25. “Numbers-wise, we are one of the largest ecommerce companies in the world, and are the top ecommerce company in the hotel business, measured by value of sales,” Davis claims. “When people talk about how much business they do online there are factors to consider, such as what category of hotel you are selling. A mid-tier property is easier to understand and therefore less complex as a purchasing decision, so will drive more online bookings. For a luxury brand, you may achieve 5-10% online bookings. It is affected by category and brand,” he adds. At present, the challenge in the Middle East for Hilton is consumer confidence in using the internet as a booking tool. The internet currently accounts for 4-5% of bookings in the Middle East for outbound travel, and Davis puts this down to cultural differences. “The customer wants to make their payment in comfort [through a local travel agent or booking centre], rather than to transact in an environment ‘out there’ in the global sector. There is a consumer confidence issue. Then, there is having a credit card at all. Some countries in the Middle East are still very cash driven,” he admits. This is a challenge that Hilton still needs to work on, if it is to increase its web-generated revenue in the region. However, one company has already come up with a solution to this: keep the booking with the travel agent, but provide a direct link between that agent and the hotel’s property management system (PMS) to enable real time bookings. Mercator, the IT solutions arm of the Emirates Group, launched the Destination Accommodation Exchange (Daex), a real-time hotel booking system, in Dubai in May. The idea is a simple one: the Daex software links the travel agent’s booking request direct to the hotel’s PMS system providing virtually instantaneous booking confirmations and real-time management of hotel inventory. “Daex makes it easier for travel agents to book accommodation in Dubai, enabling agents and reservations staff to work smarter. The system can confirm the booking at internet speed, as it talks direct to the PMS system,” explains Simon Lewis, manager, eVentures Group. “It also provides hotels with a single point to upload rates information, through the epicentre of their business — the PMS.” Designed by Mercator and developed jointly with Micros-Fidelio, Daex utilises the functionality of Micros-Fidelio’s myFidelio.net internet-based booking system and its hotel PMS solutions, which are used by the majority of all five-star and four-star hotels in Dubai. “With the partnership we have with Micros Fidelio we are leveraging off their knowledge and relationships with hotels in the marketplace. We have developed a very focused marketing strategy with their distribution agent — Key Information Technology (KIT),” says Lewis. To increase functionality and service Daex has been combined with a Hotel Information Management System (HIMS), which is compliant with Open Travel Alliance standards. This web-based system standardises property information through the use of consistent design and content formats. Hotels are able to upload information on their properties, including images, all of which can be edited and updated online, meaning that agents are always able to access the latest information. The Daex system is capable of processing a room booking every five seconds — that totals 18,000 potential bookings a day. For agents, the service is free, while hotels pay a booking charge of $1.50 per booking, for up to 99 rooms, regardless of stay and rate. As KIT works with hotels to upgrade Micros Fidelio PMS systems to the new Opera system, Daex will be given an opportunity to showcase its benefits to revenue and reservation managers. Lewis also plans to present a series of forums to the Dubai hotel industry over the summer. So far, hotels have responded favourably to the concept, and Lewis is confident of achieving 52 properties online with Daex by the end of March 2007. “We have shown [hotels] the capability of Daex to increase capacity of bookings whilst reducing costs, and this is attractive to the four- and five-star hotels. For the two- and three-star properties the opportunity not only is in these business drivers, but also that they can participate on the same distribution system as the four- and five-star properties and enjoy the benefits of destination marketing,” Lewis says. By early August, Lewis hopes that four to six hotels will finalise contracts, and he then predicts a regular growth rate of eight to ten hotels joining the system each month. Naturally, as part of Emirates Group, Lewis is already eyeing possible links with the aviation industry. “Given that Daex is internet based, there are exciting opportunities to provide it on board aircraft where customers can book their room in the air and be met on the ground. This is an exciting concept still in its infancy and one which will certainly add value to the airline product of the future,” said Lewis. Running Daex in destinations outside of Dubai is also a consideration, and again the Emirates link comes into play. “Once the benchmark of Dubai has been established we would like to roll Daex out across the Emirates network. This will add value to the customer base while enhancing our ability, as the Emirates Group, to create tailor-made packages fast and efficiently for customers, while helping hotel partners reduce their costs,” Lewis adds. Other third party booking systems are also entering the Middle East, as the region’s hospitality industry matures. HelmsBriscoe, one of the largest third party conference resource companies specialising in venue selection, set up an office in Dubai earlier this year. “As leading managers of conferences and offsite meetings, we see tremendous potential in the Middle East region. With a significant presence globally, we were looking at expanding our operations, which is what brought us to Dubai. Being one of the main business and tourism destinations of the world, Dubai will be an important base of operations,” says Pat Durocher, managing director, HelmsBriscoe International. The involvement of a third party or outsourcing company has become a viable option for meeting services such as site selection, negotiation, contracting, ground handling, meeting registration, and on-site assistance. “Given that we book 2.7 million room nights per year our buying power enables us to negotiate tremendous value for our clients. In addition, through our network of 750 associates in 31 countries and our state-of-the-art technology, we have the ability to commence a search based on the client’s criteria and acquire extensive service, product and price-related information for hotels anywhere in the world. As there is no charge for our services, our involvement as the third party provides the golden opportunity for a client to get ‘help’ when they need it without increasing payroll or overhead costs, not to mention having the access to a pool of global expertise,” says Deen Ashraf, sales director for HelmsBriscoe International in Dubai. According to Ashraf, “Clients are looking more carefully than ever at their ROI and are taking steps to ensure that they are in the best possible position when it comes to negotiating rates with their suppliers. This has resulted in clients looking at more ‘value driven solution providers’ and adopting the outsourcing concept, whereby a professional ‘third party conference resource provider or a venue site selection provider’ becomes a valued partner.” HelmsBriscoe currently serves over 8,000 clients worldwide, providing no-charge site services to corporate associations and government clients that plan off-site meetings and conferences. As technology develops, making a reservation, and creating a targeted and market-driven pricing structure, looks set to become easier. With technology such as OnQ and Daex, managing inventory and providing best rate guarantees will no longer be a revenue manager’s nightmare, freeing up valuable time for hoteliers to look at other marketing channels and focus on guest satisfaction.||**||

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