Behind the Scenes: How Hotel Booking Works

When you're ready to book that dream vacation or essential business trip, the ease of using (online) travel agencies or your corporate booking tool makes the process feel almost magical. But have you ever stopped to think about the complex systems and processes behind that simple click of the "Book Now" button?

In this article we will dive into the technical workings, pricing strategies, and major content providers underpinning the world of hotel booking, that ultimately drive your decision and of course make sure that everything is confirmed.

The Technical Dance: How Hotel Bookings Work

Inventory & Connectivity: Hotels often use a combination of (software) systems to manage their inventory.

Property Management Systems (PMS)

The backbone of hotel operations, managing their reservations coming from multiple sources like their website, travel agencies or even over the phone. Therefore a PMS contains relevant information like hotel room availability and of course guest data like their profile and history.

The property management system also comes into play for a lot of operational activity like guest check/in check/out, room assignment etc and overall guest communication like pre-arrival and post-departure communication, as well as managing their requests and feedback. In many cases the PMS is also used for housekeeping like room cleaning status and assignments for housekeeping teams.

Another important aspect is dynamic pricing and yield management tools to optimise occupancy and revenue. Most of them also seamlessly integrate with CRMs and payment gateways for revenue managers to have a full picture.

Popular PMS vendors are: Oracle Hospitality OPERA PMS, Cloudbeds, Mews, eZee Absolute, Hotelogix, but there are many more.

Channel Managers

These are systems that connect the hotel's PMS to multiple travel booking channels and other distribution channels, allowing real-time updates on room availability and pricing. It automates the process of updating room availability, rates, and reservation data across all connected channels in real-time. This happens through a two-way sync, where the channel manager connects to your PMS and synchronises your hotel's inventory and rates constantly.

Popular channel managers for hotels are: SiteMinder, Cloudbeds, Rategain, Profitroom, Eviivo, choosing the right one really depends on the hotel needs based on location, is it an independent hotel or part of a chain, what distribution channels will most likely providing them the most bookings etc.

The Booking Process

Well this is quite a straight forward process, but find below a summary:

1. Search: You head to a travel booking company and enter your travel dates and destination.
2. Results: The travel booking company accesses live availabilities of hotels that match your search criteria, pulling this data from their connected channel managers or directly from the hotel's PMS.
3. Selection: You select your preferred hotel , room type, room rate, extras.
4. Reservation: The travel booking company sends a reservation request to the hotel's channel manager or PMS.
5. Confirmation: The hotel system confirms availability and the travel booking company provides you with a booking confirmation.

The Pricing Model

Unveiling the veil of hotel pricing is akin to both an art and a science. It's a common misconception that room prices are solely dependent on the season or the type of room. In reality, a myriad of variables come into play. Imagine this: you’re planning to visit a city during a popular holiday or a major event. Naturally, the demand for hotel rooms surges, and so does the price. This is the simple law of supply and demand at work.

Now, consider the hotel you're eyeing is situated in a bustling neighborhood teeming with similar establishments. The hotel, in an attempt to stay competitive, strategically prices its rooms against these neighbouring properties. This is where the market competition comes into the picture.

But how do hotels determine the optimal price? This is where the science part comes in. Hotels employ sophisticated algorithms and software to optimise pricing. These systems forecast occupancy rates and analyse market trends, helping hotels strike a balance between competitive pricing and profitability.

And just when you thought you’ve got the hang of it, there's dynamic pricing. Much like a roller coaster, room rates can fluctuate in real-time, reflecting changes in demand and booking patterns.

Finally, in an attempt to woo customers, travel booking companies and hotels might sprinkle in some special offers and promotions. These could be enticing package deals, tempting discounts, or attractive loyalty programs. So, the next time you see a hotel price, remember the intricate dance of factors that brought it to you.

The Big Players: Main Providers of Hotel Booking Content

Several significant types of players dominate the landscape of hotel booking content. Here are a few heavyweights:

Global Distribution Systems (GDS)

Traditional behemoths of travel content like Amadeus, Sabre, and Travelport provide a vast network connecting hotels to travel agents primarily. However, they also increasingly work with travel booking companies. A GDS is a vast network that primarily connects hotels with travel agents around the world. While traditionally focussed on travel agents it's a distribution channel that nowadays also can be connected to over API with other travel technology solutions.

Bedbanks

Bed banks are B2B companies that act as wholesalers in the travel industry. They contract large blocks of rooms from hotels (and other accommodation providers) at discounted wholesale rates. They then resell this inventory to other businesses in the travel ecosystem.

Hotel Wholesalers

Similar to bedbanks, wholesalers contract blocks of rooms at discounted rates and distribute them through various channels, including travel booking companies.

Direct Hotel Connections

Some major travel booking companies establish direct connections with hotel chains and independent properties for real-time inventory and pricing updates. Direct connections bypass intermediaries like Online Travel Agencies (OTAs) and connect the hotel's Property Management System (PMS) directly with the booking platform, allowing for better margins.

The Takeaway

The world of hotel bookings is a fascinating blend of technology and strategy. As a traveler, it pays to compare prices across different travel booking companies, remain mindful of dynamic pricing, and perhaps even consider booking directly with the hotel in certain cases.

Find out everything you need about selling hotels & accomodation here and get access to one of the larget hotel booking content sources!