Managing online bookings a “daily waltz” for hotels
Guests staying at the stately Butler House on Grand, whether they’re from Iowa or Pennsylvania, are likely to have checked the place out online before booking. And it’s a good bet they also reserved their room at the Des Moines bed-and-breakfast inn using its online reservation page.
“The Internet has always been strong,” said Butler House co-owner Lauren Kernan Smith, who with her husband, Clark, established both the business and the Web site in 1999. At that time, printed guidebooks were the standard means for locating B&Bs.
“Now, by far we get the majority of our business from the Web,” she said.
Travelers are clicking on the “reserve online” button more than ever. Last year, one out of four people who booked accommodation reservations did so online, up 9 percent from 2004. According to a study released in April by the Travel Industry Association of America, hotel chain Web sites were used most often to make Internet reservations, followed by online travel sites such as hotels.com and expedia.com.
The shift in how Americans are booking their hotel rooms reflects an overall trend toward travel bookings being made online. In fact, 2005 marked the first year in which online reservations were the predominant means of booking a trip, according to the TIAA.
“It’s an interesting phenomenon,” said Terry McLane, general manager of the West Des Moines Marriott and president of the Iowa Lodging Association. The number of reservations made online for his property has probably doubled since 1998, he said. A key factor behind the trend is the increasing comfort level people have using Web-based systems and their credit cards online.
“I think of my own children, who are between the ages of 19 to their mid-30s; the younger ones are certainly more computer-literate and comfortable with it,” he said.
They may be more comfortable with the technology, but it’s the Baby Boomers who are most likely to book their travel online, according to a study released last month by Compete Inc., a Boston-based online market research firm.
According to that study, more than 10 percent of the 17 million Boomers who research travel on the Internet each month will also book their trips online, outpacing younger travelers, who tend to window-shop, and seniors, who are likely to be uncomfortable about making purchases over the Web. To attract these latter groups, reservation systems must consider last-minute deals targeted to younger travelers as well as live customer service representatives to assist seniors, according to Compete.
Whether the property is a major hotel chain with several hundred rooms or a small bed-and-breakfast, maintaining control over pricing and room inventory is important, say local managers and owners.
“It’s a daily waltz that you do,” McLane said. “If you book 15 rooms at $49 through Priceline, if we’re not paying attention to that, our average daily rates would drop.” Hotels also have to pay attention to local events that the large reservation Web sites will not be aware of, such as the Iowa State Fair, and ensure they’re not offering discounted rooms at those peak-demand times, he said.
“Marriott has taken a proactive approach; we work with (the discount Web sites) rather than against them,” McLane said. “Obviously, if you have 200 rooms to sell, you’d like to sell every one of them at a discount, but at state fair time, none will be discounted. So we set up parameters – to work with them to be partners rather than adversaries.”
Smaller lodging operators should carefully consider how much control they want to maintain over their room stock when dealing with third-party discount Web sites, Smith said. In one instance, another local bed-and-breakfast’s rooms were overbooked by hotels.com, she said.
“That (control) was not something we were willing to give up,” she said, noting that the Butler House reservation form is not a real-time system, but rather sends the owners an e-mail for them to check availability and then reply by e-mail.
Smith acknowledged that people are increasingly demanding more instant gratification. “I think that’s what the consumer is moving to: I want to know what’s available and I want to know it right now,” she said, so the couple may have to weigh whether adopting real-time capability would make sense. For now, their present system “is the right mixture between keeping control and having a high personal touch with the guest.”
Hotels are striving to refine their online reservation systems to become more high-tech by adding refinements to customize the reservation to the guest’s individual tastes.
Marriott, for instance, has a “virtual concierge” service that sends e-mail confirmations to guests two to three days ahead of their arrival date to confirm the rate and inquire whether they have any special needs, from a roll-out bed or crib, or even having a six-pack of Corona waiting in the refrigerator.
“To me, that’s pretty cool, as long as you deliver,” McLane said.