The sustained quest for personalization underlies decisions being made all across the travel industry - including how hotels choose to approach their central reservation systems (CRSs).
According to a new research report by h2c, guest-centric functionalities are a top priority for hoteliers as CRS services continue to grow, and in turn, hotels and IT vendors must work closer together to fill the gaps in the current landscape.
The primary motivator behind change and innovation in services is dissatisfaction with an existing CRS. What providers need to understand are differences in hotel chains’ requirements and market specifics to help identify areas of improvements.
What's missing?
For example, every third hotel chain is missing more than 30% of their required CRS services, and more than half of all chains are missing one key CRS feature. On top of that, of the offered CRS functionalities, hotel chains still don’t use 28% of features.
Share of hotels with no or poor CRS integration
Source: h2c's Global CRS Study 2017
What this means is many CRSs lack key features to increase direct bookings. While hotel chains can often identify these insufficiencies, they still struggle - for one because they’re not IT experts - to specify exactly what needs done for improvement.
Of the key missing CRS requirements, about half of hoteliers reported discounted and packaging functionality in real time as the most important, followed by seamless integration with existing systems and partners such as tour operators.
Demand for integration with customer relationship management (CRM) is also strong, but integrating third-party systems and partner channels still poses big challenges for hotel chains.
As every second hotel chain operates with no CRM integration, standalone vendors such as internet booking engines with integrated CRM modules are entering the field.
Direct booking impact
Online direct bookings also need improvement. Many chains lack the technology and speed of online travel agencies, and for all chains surveyed on a global scale, OTA bookings accounted for nearly three quarters of their total online revenue.
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Hoteliers in Europe, however, have higher expectations for direct bookings over the next three years. Though 68% of hotels count Booking.com as their top distribution channel, followed by the brand website (11%) and Expedia (5%), bookings via the brand website - including on mobile - are expected to increase to 19% over that time period to the detriment of Booking, which falls to 55%.
Contributing to the gain in direct bookings would be deliberate online strategies highlighting guest benefits in doing so, CRS-powered digital marketing initiatives (personalized content, guest reviews) and smarter use of metasearch channels for direct referrals.
Shifting strategy
Hotel chains also foresee a future in which dependence on profile management systems (PMSs) decreases, with two out of three expecting guest profile management to shift to another system. Though an uptick in use of CRM systems is expected, many chains are uncertain of which system will ultimately be used three years from now.
Whatever the distribution solution, hotel chains across the board are looking for customization. Innovative vendors with enhanced tech, the hoteliers’ ability to influence product development and the level of support and consulting services are all important drivers impacting decisions.
Systems Employed for Distribution
Source: h2c's Global CRS Study 2017
Interestingly, hotels are mixed on the need for sourcing one-stop-shop providers, and 69% aren’t concerned about commercial aspects such as operating costs when acquiring a distribution solution.
Small chains and independent groups are more likely to seek out all-in-one providers, while most chains opt for “best of breed” solutions that call for optimal single system selection, customization and extensive integration.
Another option, a hotel platform solution - where CRS, PMS and other applications run on one system - is a promising idea, though it’s not fully available to the industry yet.
Ultimately, the desired outcome for hotels’ CRS solutions depends not just on understanding missing functionalities. Hotels and IT providers alike need to use this information to define the requirements of best-suited distribution technology.