We live in the automated world in-hand era, where-in most of our needs are available at a button. Especially our travel needs, which are bundled up in an Application on our smart phones. Some of the examples are – a Meta Search Engine – Priceline, Travelocity, TripAdvisor, Kayak, Orbitz, and OTAs – Booking.com, Expedia, MakeMyTrip etc for hotel, flights, transfer and transport needs. For travel maps – Citymapper, For planning and sync of complete travel itinerary – Tripit, and Currency – XE Currency, etc. This electronic communication has allowed the hotels to reach consumers around the world, but how has the industry reached here before all of these modes came into being.
It is easy to forget that hotels did not always do bookings via electronic distribution. For hotels the electronic distribution was born when centralized reservation system or computer reservation system (CRS) was introduced in the 50’s to centralized the hotel bookings, control inventory, store and retrieve customer information, and conduct transactions over all. The system was introduced from the airline domain. Eventually the system was used by travel agencies, and further on was utilized on a global platform for operations to book and sell tickets for multiple platforms – airline tickets, hotel rooms, and car rentals. Further on known as Global Distribution System, it automated the marketing, sales, and distribution needs of the global travel industry in 60’s. GDS was the only distribution channel during this time.
In late 60’s hotels began to understand the scope and opportunities electronic distribution would provide and started developing their own system eventually known as Property Management Systems (PMS). These systems were majorly adopted from airline’s frameworks and city codes. PMS systems automated functions such as guest bookings and check-in’s, reservations, sale origin, materials, quantity management etc. As GDS was still the only distribution channel there were many issues to confront on hotels end. Each hotel needed their GDS distribution system to do things their way which resulted in massive inconsistencies. By this time the hoteliers were well connected in various markets worldwide, and were well-positioned to take advantage of the dot-com decade. Hotel brand.com sites were launched and travel web was thus born. Hoteliers made website information more consumer friendly, direct connects from website to PMS and GDS were established through improved IT operations and system designs. During this evolution in the late 80’s and mid 90’s revenue management systems and channel managers were developed to use complex algorithms that factored in a PMS data, competitors pricing, weather, local events, online reputation. Channel managers assisted in transmitting rates and availabilities to various distribution channels GDS and the online travel agencies (OTA’s) which were born in the mid-90’s to help consumer find and book competitively priced room nights for various destination on one platform providing various services – hotels, flights, car rentals, travel packages etc.
The OTA and the Meta Search phase in the electronic distribution in hotel industry is still evolving. The continuous focus is on the connectivity and consumer preferences. The smartphone platform has created more opportunities and expanded ways to reach out to consumers, with which the dynamics of the hotel booking business are ever changing to meet the needs of consumer.