What is a hotel reservation? If you asked that question twenty years ago, the answer would have been pretty straight-forward: a name, a credit card number, a check-in, and a check-out date. Probably on a piece of paper out of a fax machine. Period. But is this still the case today? Far from it.
Generally speaking, a reservation is simply a piece of data containing various information that can be used in multiple ways. Let's take it from a revenue management perspective, for example: a reservation contains useful insights to create the most robust rate and inventory strategies, such as ADR, pace of booking, occupancy rate, room type, and even cancellation characteristics. Housekeeping departments, on the other hand, collect and exploit information about room set up preferences, time of arrival, check out time, and in-room special requests. Depending on the software involved, moreover, a reservation's lifecycle can differ: for payment gateways, a reservation is mainly a one-time-thing, while tools such as CRM process data from hotel bookings based on their lifetime value.
Famous Hospitality Tech Consultant & Strategist, Max Starkov, interviewed for this article, remembered how, "back in the late 1800s, American Express used to make a reservation at London hotels for their American clients by sending a letter to the hotel advising them that Mr & Mrs Smith from Boston will be arriving on the 1st and staying for a month. The times when reservations with basic guest information was sufficient are gone forever. Today's hoteliers need much more than that: tie the guests from the reservation to the single-view guest profile in the CRM or PMS, check if these guests have VIP status and are social media influencers, trigger the contactless check-in protocols and pre-arrival CRM messaging, check what are their preferences from past stays, automatically issue work orders to housekeeping and front desk to take care of these preferences and then track the fulfillment of these orders, dynamically decide which room to assign to the guest and what upgrades and upsells are most appropriate for the guest, etc. So a reservation is no longer a basic confirmation of the arrival of a particular guest, but a carrier of rich snippets of data that trigger a chain reaction in the full hotel tech stack: from PMS and CRM to issue resolution, upselling, contactless check-in, and messaging technology applications, etc."
Starkov raises a central question, what is a hotel reservation? The answer is not as straight-forward as we initially thought: a reservation can be many things, depending on who asks. It's, literally, in the eye of the beholder. Or, even better, in the eye of the software involved.
The PMS would think: what's this? A reservation? Cool! What matters to me is knowing that a guest is going to arrive on a certain date and stay for X nights. The Market Benchmarking Tool may want to know that, on those dates, guests are paying a certain amount for a specific segment. Wait a minute! Echoes the CRM: I remember this guest! She has stayed in the hotel X times before, over the span of Y years. She usually pays this much money for the room, she gets a massage at the SPA and a couple of dry Martinis at the bar, though she loves going to the theatre. Her reservation gives me lots of opportunities to personalize her stay and create more brand loyalty. The RMS would be, as usual, the geekiest person in the room: it would check which dates are in demand, which ones are not, what type of guest from what segment and source is paying for what, and with what lead time to arrival. With all this information, it would use the reservations to make scientific decisions about rate increases or decreases by sensing demand. You get the point: perspectives are way different and unique, depending on who's processing the reservation.
Ira Vouk, Senior Director of Product Management, Data & Analytics at Duetto, also interviewed for this article, stated: "reservation, as an entity, resembles bitcoin. Due to the amount of data that it carries, its value keeps growing as days pass, as the hotel tech stack evolves, and as humans and machines develop more ways to utilize this information in more sophisticated ways. And this trend is likely to continue for years ahead. For example, take the concept of personalized pricing, one of the most recent buzzwords in the RM space. This can only be achieved using rich customer data that is carried by a reservation and then captured though CRM tools at the time of booking, pre-arrival, and during the guest's stay. This valuable information allows an RMS to build logic around pricing strategies, ultimately targeting each individual in the most optimal way, through the most optimal price point with the most relevant room type and package. Because RMS is not just the geekiest but also the greediest part of the hospitality ecosystem, it's always hungry for data. Sitting at the center of the hotel tech stack, RMS absorbs a myriad of data points, with reservation being the most valuable piece of the puzzle. We embrace any aspect of the reservation data that is available (the more, the better!) to be fed into our algorithms with an ultimate goal: come up with smarter ways of making hotels more successful, efficient and profitable."
"Snapshot," Martin Soler, Partner at Soler and Associates, added "had once published a chart on how hotel technology and distribution are connected. It became quite popular for portraying the beautiful complexity of hotel distribution. And that chart didn't even have all the players on there. Small hotels frequently prefer a single system that does everything. But as the hotel becomes more advanced, more sophisticated technology is needed. So add-ons are brought in which need to be connected and need data, etc. This is where the complexity sets in. Which one is the reference, what is the single source of truth? Or are they all their own reference in their own right? Finding the right tech partners who understand the industry is critical. And who understands you and your needs (and budget)."
And this is where the second part of this article's title kicks in: why won't a plumber fix your laptop? Because, precisely like plumbers, software developers are highly specialized people, and they tend to look at problems from precise, rigid perspectives, so that the main idea of a "hotel reservation" can get completely different meanings. Developers know-how is almost esoteric, and this can be seen in how the profession of a hotel IT manager changed over the years: from someone that knew EVERYTHING about ALL the systems in the hotel to somebody that's in charge of talking to vendors and "translate" this "secret knowledge" back to the hotel.
"When all you have is a hammer, everything looks like a nail." I think the proverb is quite fitting. When you are looking at the reservation from the distribution developer's point of view, it is just another head in a bed. When you are looking at it from a data scientist's point of view, while working on an RMS, it is a data point combined with other data points where knowledge can be teased out of it, and converted into real actionable rates. When you are a CRM developer, the reservation is a way to guide the hotel staff in interesting ways to interact with the guest in order to increase loyalty and improve the personalization of their stay.
The data contained within a reservation is truly a treasure trove. What can be learned from the data that it contains, and the data that can, in turn, be extrapolated from that data - is incredible. Of course, it tells me who is coming to my hotel, where they are from, what time they are arriving, and what extra services they may wish to procure. I can also guess things like what time of day do they prefer to book travel (for targeted marketing), will they be a high value (consuming lots of hotel services) or low value guest (eating and drinking out), how tech savvy they may be, how they will prefer to be communicated with during the stay, as well as pre- and post-stay, whether they are a potential long term guest (or very transient), and how hard should I try to convert them from being an OTA type of guest to a direct booker?
Keith Richards once said, "one of the great luxuries of The Stones is we have an enormous, great big can of stuff." Sciant is a bit like the mighty rock band, as we have accumulated over 200,000 person-hours (or 20 times the famous 10,000 hours theory popularized by Malcolm Gladwell) of hospitality systems integration experience, covering distribution, revenue management, CRM, upselling, guest services, mobile guest journey and more. We have seen and developed in practically any and all possible ways that you can technically use a hotel booking. And, during the process, we learned that a reservation is never just a reservation. It's what developers and the great products coming out of the hospitality technology industry make out of it.
At Sciant, we are privileged to work with so many different types of hospitality IT systems from distribution to revenue management, CRM to guest messaging, housekeeping to upselling, OTAs to PMSs, so we have a fairly unique viewpoint as we see first hand how the reservation data is utilized by so many different systems in the typical hotel technology stack. When the reservation leaves the originating system, it gets passed to, passed through and consumed (partially or completely) by around 10-30 different systems that typically exist in a modern hotel technology stack.
Just as you'll never hear your plumber ask you why your shower and your sink are connected to the same drainpipe, an experienced hospitality technology developer is never going to ask you why a PMS needs to talk to a CRS or what is a source of booking in the reservation record or which HTNG spec to use. They'll already know.
Sciant is an IT solutions development partner serving specific industry sectors including Travel and Hospitality, Logistics and Transport, Fintech and Banking, working worldwide for both large enterprises and fast-growth startups.
Sciant develops technical solutions including big data and business intelligence, machine learning, and blockchain, and forms robust and compliant integrations and interfaces, for new digital platforms and legacy systems.
Established in 2016, Sciant is headquartered in Sofia, Bulgaria, with a second office in Olomouc, Czech Republic.