The faceless receptionist looks over the top of his glasses and utters the phrase all weary business travellers have learnt to dread.
“I’m sorry, sir, there appears to be a problem with your booking. We don’t seem to have a reservation in our system under your name.”
The widespread use of the Internet by customers to book their travel has created a substantial opportunity for hotels to increase revenue and win loyal customers. But manually maintaining an accurate inventory across all online booking channels can be extremely time consuming and prone to error. Especially if reservations are not automatically delivered into Property Management Systems (PMS), which can lead to reservations being missed with the high potential of rooms being double booked.
This case study describes how Tauzia Hotel Management applied their culture of innovation to tackle the challenge of managing inventory and rate updates.
TAUZIA Hotel Management started out life delivering consulting services to support the growth of the Accor group in Indonesia, but in 2002 they took the decision to launch their own brand and hotel concept, HARRIS Hotels, aimed fairly and squarely at the mid-range, four star market. In 2010, after a great deal of success with HARRIS Hotels, they added the POP! Hotels brand aimed at the youth and budget traveller market segment.
“The results since deploying the SiteMinder solution have been impressive. We have seen a 150% increase in revenue from online bookings. It now represents 20% of our overall revenue and we expect that to continue to grow quickly. We have achieved an excellent ROI. We are really well positioned to support our future business growth.”
Innovation has always been a key component of Tauzia Hotel Management’s philosophy. From the moment they arrive, guests receive a friendly warm welcome and immediately feel like they are staying at a resort rather than a faceless business hotel.
All Tauzia Hotel Management hotels strive for a laid back, relaxed, modern atmosphere. As an example, the group made a decision right from the outset, a long time before it became standard practice, to make Wi-Fi free for guests.
Larry Denis is the Corporate Revenue and Distribution Manager for The Tauzia Group. With the launch of low cost POP! Hotel brand, Larry knew that he needed a really innovative solution to combat the challenge of managing inventory and rate updates across all the properties online. Furthermore, staff had to be kept to a minimum and had to devote as much time as possible to activities that generated increased revenue rather than administering inventory changes.
The management of inventory in an increasingly online world is a challenge for the industry as a whole. Hotels struggle to monitor availability and rates and take a huge amount of time to update each online channel. Not only is it inefficient, often hotels will stop selling early in anticipation of being fully booked, leaving revenue on the table. Equally if hotels sell for too long they run the risk of overbooking. Moreover, maintaining consistency of pricing is a challenge for hotels as this can create rate disparity across channels.
With the success of the HARRIS Hotels brand and the launch of POP! Hotels, inventory had to be managed across more than 20 hotels. With up to 15 online channels on the books, managing a single change to a room rate could potentially take hours of work.
They realised that if they could generate better visibility of their inventory without increasing the risk of overbookings they could access “long tail” revenue and drive up profits. Not only that, but if they could simply and easily update rates they could operate a much more dynamic pricing strategy. In order for this dynamic approach to be a successful, it had to be just as quick and easy to stop selling when there was no more availability.
Larry remembers the meeting with Kevin Tatem from SiteMinder well.
“As I listened to Kevin present SiteMinder’s offer I realised here was a solution that had the elements I was looking for. Most importantly for me it was an integrated approach and it addressed my three key requirements: The ability to simply update inventory across all our online channels simultaneously; A really easy to use booking engine we could use on our sites; And crucially, it fully integrated with our Property Management System.”
Utilising a pooled inventory model with reverse updating so all sites are updated automatically, in real time, was very appealing.
Larry saw it would maximise inventory sales. It also improved business relationships with the OTAs as now they didn’t have to update their systems manually and limit the availability given to each of them.
From a commercial perspective SiteMinder made the decision easy to make. A trial version was available to prove the concept worked.
As the solution was “out-of-the-box,” the installation and testing process was very quick. The system is very easy to use so the training required for the TAUZIA team was minimal. TAUZIA was up and running with SiteMinder in less than 10 working days. Larry added:
“I really like the ﬁxed monthly fee and the fact that there are no commissions to pay. It guarantees us a high ROI and proﬁt while distribution costs increase with the growing inﬂuence of OTA’s .”
In 2010, Tauzia took the decision to purchase the following integrated solutions from SiteMinder:
The Channel Manager – Allowed Tauzia to roll out online room inventory and rate management. It has 2-way XML connections to booking websites from one central cloud application. The Channel Manager ensures Tauzia can maximise their online exposure, increase revenue and reduce the time and cost it takes to update rooms. There are no reservation delivery fees.
TheBookingButton – A booking engine that allows POP! Hotels to take direct bookings through their own websites, 24 hours a day, seven days a week. TheBookingButton’s feature set ensures Tauzia can convert more website trafﬁc into conﬁrmed, commission free bookings.
PMS integration – By seamlessly integrating SiteMinder’s Channel Manager into their Property Management System (PMS), rates and availability are pushed out in real time to the brand websites and Online Travel Agents (OTAs) and reservations are automatically delivered into the PMS. Allowing for greater control, efﬁciency, data accuracy and ﬂexibility.