David Wardell

The hotel industry is currently the most under-automated sector of the international travel industry. In comparison to the airlines, its reservation systems are often archaic and a high proportion of bookings are still received at individual properties direct by telephone or telex. This relative under-automation prevents the collection of consumer profile data essential to developing effective marketing strategies. and the development of adequate yield management. A number of chains--notably Hilton and Sheraton--are now investing in improving their reservation systems. The airline CRS vendors are also looking to establish joint programmes with hotels. So far the chains have been reluctant to partrc1pate. However, Covia's incorporation of Hilton International and likely expansion by Murdoch of Utell and a related Videotext system is likely to encourage them.

Airline computerized reservation systems (CRS) are the primary form of travel agency computerization in the world. These systems manage the millions of reservation requests and cancellations, fare, and reservation pricing requests that are initiated by travel agencies using these systems—not to mention the thousands of database changes that occur daily. The CRS function as extremely powerful and valuable distribution and marketing tools for their airline owners. Today's travel agency competitive environment is largely defined and controlled by airline CRS. This report describes: Airline reservation and distribution systems CRS processing and communication concepts Relationships between CRS and other industry components CRS and airline competitive strategies, as these pertain to reservation technology Non-reservation systems that interconnect with airline CRS Profiles of the major international airline CRS

"Once again a new year brings another round of what passes for industry research. Although notoriously over-surveyed, the travel industry remains awash in bad data, ill-conceived and poorly executed research projects, and self-serving studies that are relevant more to the next round of funding or the next newsletter sale than to developing a real understanding of markets and trends.

Eventually the industry may get better at labeling useless research for what it is (the trend is not positive, however), but for now the very few good studies routinely drown amidst the hyperbole of research that can’t connect with real insight—or those that connect all too well because the result was fairly evident before the process began."

Among the pervasive attitudes of the computer industry is one which says that devotion to technology must be complete—even if excellence means that products or services are unusable or never introduced because they are not yet perfect.  An equally unbalanced counter-argument is that products must be usable and practical before all else—including whether or not they are good for anything.

Advocated in practice if not openly by many computer developers, these Practices illustrate many technology users’ challenge:

“How can l select products that are truly appropriate for my needs? If neither position is reasonable, how can I recognize companies practicing either, and where is the balance between technology and practicality?”

Managing for peak performance is one of the most difficult tasks you’ll ever attempt.  Whether your business is large or small, and whether you have major development projects in progress or simply want someone to handle training for three people, the formula for managing technology routinely eludes most people.

The first key to managing is recognition that management is the wrong word and the wrong premise.

I’ve always taken the somewhat extreme position that few things of real worth were ever built, assembled, found or perfected by managers.  True excellence in any field comes from differentiating between managers and leaders.

Airline computerized reservation systems (CRS) are the primary form of travel agency computerization in the world. These systems manage the millions of reservation requests and cancellations, fare, and reservation pricing requests that are initiated by travel agencies using these systems—not to mention the thousands of database changes that occur daily. The CRS function as extremely powerful and valuable distribution and marketing tools for their airline owners. Today's travel agency competitive environment is largely defined and controlled by airline CRS.

This report describes:

Airline reservation and distribution systems
CRS processing and communication concepts
Relationships between CRS and other industry components
CRS and airline competitive strategies, as these pertain to reservation technology
Non-reservation systems that interconnect with airline CRS
Profiles of the major international airline CRS

The hotel industry is currently the most under-automated sector of the international travel industry. In comparison to the airlines, its reservation systems are often archaic and a high proportion of bookings are still received at individual properties direct by telephone or telex. This relative under-automation prevents the collection of consumer profile data essential to developing effective marketing strategies. and the development of adequate yield management. A number of chains--notably Hilton and Sheraton--are now investing in improving their reservation systems. The airline CRS vendors are also looking to establish joint programmes with hotels. So far the chains have been reluctant to partrc1pate. However, Covia's incorporation of Hilton International and likely expansion by Murdoch of Utell and a related Videotext system is likely to encourage them.

Experts routinely describe new travel agent technology in the context of electronic travel commerce. There are few other technology topics with similar market potential or emotional appeal—to the extent that new business start-ups, product announcements, and seminar programs are dominated by predictions of the potential of e-commerce.

This is usually described as an exceedingly simple business proposition: either the demise of travel agents is imminent as vendors adopt new strategies to bypass them or else vast new frontiers are opening to anyone with the most modest travel credentials provided only that they are able to operate a World Wide Web site on The Internet. The idea that reality might be less certain and that traditional and non-traditional channels may both flourish in the future appears to have been lost.

The true effects of electronic commerce are complex and intertwined with emerging business strategies affecting more of society than just travel. The opportunities opened to all segments of the industry, vendors and agents alike are substantial. So is the task of sorting fact from fancy. The businesses able to prosper through electronic commerce in coming years will those able to find sustainable strategies and develop business models that deliver what their customers truly want to buy. Unfortunately, there is often little relationship between sound business practices and the “Internet Hysteria” that has swept the travel industry for several years.

This report discusses electronic selling as contrasted with traditional travel sales and describes what the travel industry may realistically expect from electronic commerce. It describes the overall state of the electronic travel sales scene in the U.S., predicts what characteristics successful competitors will likely possess over time, and attempts to put the current euphoria in proper context.

The development of computer reservation systems has been one of the most dramatic events in the US a1rline industry over the last ten years. Spurred by deregulation, which outlawed fare fixing and standard agency ticket distribution systems, the carriers have used CRS as a vital tool for spearheading sales control in the travel agencies. These dealerships have provided some mutual advantages to agency and earner but, increasingly, the agency is locked into restrictive agreements and excessive dependence on the CRS vendor, a type of "golden handcuff". New forms of direct selling, bypassing the agent, and including direct agency ownership by carriers, will pose increasing threats to agencies in the medium term.

Refining yield management techniques is a primary objective for most travel service vendors.

It's important enough to be among the most extensive “behind the scenes” automation projects now in progress at most major airlines, many hotels, and several independent software suppliers to the industry.

It's implications are widely appreciated in upper management circles, but it's application occasions considerable controversy among travel providers, because it's one of those subjects many would just as well you didn't understand too thoroughly and were unprepared to deal with.

Yield management, minus polite trappings, is basically the combination of processes, analysis, and techniques a vendor applies to the types of products it offers in order to induce (or compel) its customers to pay as much as possible. Airlines employ yield management not only to keep their airplanes full, but equally as important, to sell as many high priced seats as efficiently as possible.

Hotels, likewise, want not only to fill rooms but to fill them at the best (meaning highest) possible rate.

To be successful, these techniques are usually highly automated, because they entail difficult and complex calculations, real-time monitoring of sold inventory, and constant updates. The techniques can be quite basic (simple overbooking, however managed, is a form of yield management), but the trend is decidedly toward the greater precision and reliability that comes only from more sophisticated automation.