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Secure more direct bookings with a robust hotel reservation system

Last updated on June 14, 2024

All hotels, regardless of size, can benefit from using a robust hotel reservation system that has the capability to take bookings directly through their websites. Comprehensive hotel reservation systems go beyond basic booking software by integrating payment processing, customer relationship management tools, reporting and analytics, and marketing capabilities.

What is a hotel reservation system?

A hotel reservation system is software used in the hotel industry to manage room inventory, rates, and bookings. Also known as central reservation system (CRS)  It may be integrated within the property management system (PMS) or may be standalone software connected to the PMS.

  • Hotel reservation systems are designed to handle every stage of the booking process, from displaying availability, room options, and prices, to completing the reservation, capturing guest payment information, and sending confirmation emails.
  • Using a comprehensive hotel management system enables bookings 24/7, and frees up time otherwise spent manually taking bookings via phone and email.
  • By enabling direct bookings through the hotel’s own website, hotel reservation systems provide higher profit margins, more flexibility, and greater control over the guest experience compared to third-party booking websites.

Benefits of hotel reservation system

Automation

Perhaps the most apparent benefit of hotel reservation software is that it automates the booking process, freeing up valuable time that would otherwise be spent taking bookings over the phone or by email. Integrating booking software reduces the workload of front desk staff and can even reduce the number of staff required to manage reservations.

24/7 booking capability

When taking bookings over the phone or via email, hotel operators are often limited to business hours. Hotel reservation systems make it possible to take bookings around the clock. As it’s likely for guests to be travelling from other countries and time zones, 24/7 booking capability helps ensure you don’t miss out on sales opportunities that take place outside of working hours.

Seamless customer experience 

A robust online reservation system will walk guests through each stage of the booking process, displaying room availability and prices, collecting their names and contact information, processing payments and/or temporary card holds, and emailing out booking confirmations and reminders. There are no breaks in the customer journey, no waiting for links to be emailed or separate forms to be sent through email. This seamless journey reduces the number of incomplete bookings, as customers are less likely to get distracted or confused along the way.

Customer insights and reporting

A quality hotel reservation system will come with built-in analytics and reporting tools that provide useful insights into how hotel operators can boost sales and offer more value to their customers. For example, the system may provide valuable information on the following:

  • Seasonal trends and patterns
  • Profitability, including revenue per available room (RevPAR) and the hotel’s average daily rate (ADR)
  • No-show rates and cancellations
  • Guest demographics
  • Marketing campaign performance
  • Occupancy rates

Hoteliers can use this data to make more informed decisions in all areas of the business, from optimising pricing strategies to tailoring advertising toward specific guest demographics.

Upsell opportunities

Many hotel reservation systems make it easy to integrate optional add-on services and products for guests, such as lake checkout, on-site parking, pet fees, spa services, and meals in the hotel restaurant. Hotel reservation system software can prompt customers to consider these options before they complete their reservation. It’s an easy and effective way for hotels to offer more value to guests while also increasing revenue.

Less reliance on external booking sites

By integrating hotel reservation software into their own website, hotel owners are less reliant on external websites (e.g. Booking.com, Hotels.com, etc.) to bring in bookings. Considering the costs and admin work involved in taking bookings through external websites, hoteliers tend to see higher profit margins for bookings taken directly via their hotel’s own website. Although external websites can be useful for increasing awareness and reach, they typically charge around 15% commission per reservation.

On top of the added costs, in using external booking sites, hoteliers give up a certain amount of control over the booking process. Common tasks like adjusting the booking date or processing refunds are managed through the third-party site, making it more difficult for hotel operators to quickly and graciously respond to the needs of their customers.

Hotel reservation system: features to look for

User-friendly (for guests and staff)

No matter how robust and comprehensive an online hotel reservation system is, it’s not worth much if staff and guests struggle to use it. Reservation software that’s overly complex, not intuitive, and cumbersome can frustrate staff, slow down operations and, ultimately, inhibit sales.

When researching different software options, hoteliers should ask to view a demo version where they can see the platform in action. A useful hotel booking and guest management system should be easy to use for both back-end users (staff) and front-end users (guests).

Customisable

To help ensure a seamless guest experience, hotel operators should choose a reservation system that’s easy to customise in regard to both appearance and functionality. It should be possible to adjust the platform's branding—colours, fonts, logo—to match that of the hotel. This keeps website users in a familiar, trusted setting and allows for a seamless booking experience.

A robust hotel reservation system should also make it easy to integrate the hotel’s unique intake process, services, and terms/conditions. For example, if a hotel has a minimum 2-night stay policy, the system should make it easy to enforce this. If a hotel provides optional add-ons, like breakfast or late checkout, the system should make it easy to promote these during the booking process. If a hotel requires guests to complete an additional form or waiver for any reason, the software should enable this as well. Ultimately, a high-quality hotel reservation system will be adaptable to the unique requirements of each hotel.

Responsive interface

With the majority of hotel bookings now taking place on a mobile device, it’s crucial that your hotel reservation system software can adapt and function across all screen sizes. Choosing a mobile-friendly platform will ensure that guests who are booking from their phones or tablets enjoy the same seamless experience as desktop and laptop users. Hotels without a mobile-friendly booking platform will likely lose out on bookings, as search engines and mobile users favour hotels with responsive interfaces.

For larger hotel chains that have their own mobile app, the hotel reservation software should allow users to complete their booking within the app, rather than directing them to a separate webpage.

CRM integration

Many online hotel reservation systems function not just as a booking tool but also as a fully equipped customer relationship management (CRM) platform, allowing hotel staff to efficiently manage guest profiles, preferences, and communications all in one place. If the hotel reservation system isn’t part of a larger CRM, it should at least integrate with the hotel’s existing CRM so that useful guest data—data that can be used to improve guests’ experiences and build loyalty—isn’t lost along the way.

Built-in analytics

High-quality hotel reservation systems will feature built-in reporting and analytics tools, providing insight into guest trends and highlighting areas of potential growth. In addition to standard reports, like revenue per available room (RevPAR) and average daily rate (ADR), a high-quality platform should make it easy to produce custom reports to reveal seasonal trends, guest demographics, and guest preferences.

A useful hotel reservation system should also come with financial reporting tools, showing year-on-year revenue and profits, outstanding balances, guest refunds, and data on discount/promo code usage. Hotel operators can use all of this information to make more informed, data-driven decisions for the business.

Payment processing

Whether you take payment upon booking or temporarily hold guest funds until they check out of the hotel following their stay, having the ability to capture payment information at the initial reservation stage is essential. An online hotel reservation system should include payment processing capabilities or should seamlessly integrate with a third-party payment processor to efficiently and securely process payments and card holds.

Since most hotels don’t require payment until a guest checks out, having only temporarily held funds during their stay, hotel owners should look for a reservation system that allows them to release the held funds and process the actual balance payment at the same time, all within the same platform. When these processes are fragmented, requiring staff to access multiple systems for small but related tasks, you’re more likely to see errors and for tasks to slip through the cracks completely. A fully integrated payment processor helps streamline the checkout process and ensures guests are accurately charged for their stay.

Multiple language and currency options

The hospitality industry is inherently an international marketplace, and international travel for both work and leisure continues to grow. As such, it’s vital that a hotel reservation system caters to guests from across the globe. Choosing a software platform that adapts the language and currency to match the user’s local region creates a familiar environment for international guests and helps ensure that they follow through with their booking.

Security

When choosing a hotel reservation system, hoteliers should enquire about the platform’s security features, specifically how it stores and transmits sensitive guest data. Is the platform compliant with data protection regulations like HIPPA and GDPR? Does its payment processing system comply with the Payment Card Industry Data Security Standard (PCI DSS)?

Some security features hoteliers can look for in a reservation platform include:

  • Multi-Factor Authentication (MFA) for guest accounts
  • One-Time Passwords (OTPs) for guest accounts
  • Encryption of sensitive payment data
  • Tokenisation of sensitive payment data
  • 3D Secure for verifying cardholder identity

FAQs

What’s better, third-party hotel reservation software or a custom-built reservation system?

Hotel software platforms are specifically designed around the hotel business model and can be customised to suit the specific needs of each hotel. They provide enough flexibility and adaptability for the vast majority of hotels.

Unlike most custom-built systems, third-party hotel reservation systems are continually updated to meet the evolving demands of the industry, including integrating new technology and security measures. Considering the costs involved in updating a custom-built system, it’s easy for bespoke platforms to quickly become outdated and, worse, non-compliant with modern security standards.

Even for large hotels and hotel chains with very complex requirements, many third-party hotel reservation software providers are happy to work with the hotel’s IT and web development teams to integrate custom solutions that extend beyond the platform's standard capabilities.

I run a small hotel; do I still need hotel reservation system software?

Yes, even small hotels can benefit from the automation and organisational tools offered by hotel reservation software. In fact, staff of small hotels, often tasked with managing multiple operational roles for the hotel, stand to benefit more from a robust reservation system than those at larger hotels. Being able to offload tasks to an automated system frees up their time for an all-around easier, less stressful work day. 

The other key benefit of hotel reservation software for small hotels is the increase in bookings and profit that comes from taking direct bookings online. Being able to book a hotel online is no longer just a nice feature, it’s an expectation among today’s consumers. Requiring people to book via phone or email will drive potential guests elsewhere. Taking direct bookings through your hotel’s own website will help ensure you don’t lose out on bookings and also results in higher profit margins than using third-party booking sites.

Is a hotel reservation system the same as a CRM?

In many cases, hotel reservation systems also function as customer relationship management systems designed specifically for the needs of hotels and their guests. These comprehensive platforms make it easy to take bookings, process payments, view guest information and booking history, manage guest preferences, facilitate workflows, issue communications, and collate guest feedback.

For standalone hotel reservation software that isn’t part of a fully equipped CRM, it may still be possible to integrate the reservation data into the hotel’s CRM so that important guest information can be collated and stored.

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