As a hotel owner, you know that successfully taking and managing room reservations is fundamental for your hotel to thrive.
But this important task is not without its challenges—especially if you rely on manual reservation management methods.
Having your staff collect scattered reservation data from various distribution channels and then manually enter them into your systems is time-consuming, laborious, and, worst of all, error-prone.
Luckily, there is a solution that can help make these pitfalls go away: a central reservation system.
In this article, we are diving deep into everything you need to know about this software solution: from why you need it and how it actually works, to what functionalities it covers.
So, let’s jump right into it.
Why Your Hotel Needs a Central Reservation System (CRS)
A central reservation system, also known as CRS, is a software solution that hotels—both big and small—rely on to manage all their reservation-related processes across various distribution channels.
As such, a CRS is nowadays an indispensable tool in every hotelier’s arsenal.
Why?
Simply put, it consolidates all the important reservation data in one place and makes the task of reservation management effortless for you and your staff.
Source: WebBookingPro
Without up-to-date, accurate reservation data readily available, the odds of seamlessly running your hotel operations become very slim.
After all, the success of your establishment largely hinges on your ability to properly manage your reservations, no matter what distribution channel they come from.
Imagine a scenario where your staff has to manage your room inventory and update pricing across various distribution channels, as well as input each new reservation—manually.
Firstly, manually handling those tasks—on top of everything else they do around the hotel—would likely rob them of several hours each day.
Secondly, manual processes are error-prone by nature and, as such, carry financial risks.
All it takes is for your staff to incorrectly enter one digit while updating room prices for your hotel to miss out on revenue.
Yet, many small hotels still rely on labor-intensive and error-prone methods when it comes to room bookings.
Steven Reffin, Head of Partnerships for the hotel management system RoomRaccoon, states that automating these processes is essential for streamlining your operations and reducing the manual workload.
Illustration: WebBookingPro / Quote: RoomRaccoon
Aside from helping you manage your pricing and room availability, a robust central reservation system makes the process of managing booking modifications and cancellations a breeze.
Whether a guest wants to change their arrival date or completely cancel their reservation, without a CRS, your staff will have to enter those changes manually.
This translates to extra time being spent on a task that can be easily automated, or completely forgetting to change the status of the canceled room back to “Available”, thereby losing you money.
With a CRS, though, this isn’t a concern, explains one Tripadvisor user.
Source: Tripadvisor
As you can see, implementing a central reservation system at your hotel is bound to bring you a plethora of benefits.
From helping you streamline your operations and maximize your revenue, to reducing the amount of manual tasks your staff needs to handle, a good CRS is pivotal for successful reservation management.
How Does a CRS Work?
Now that you understand why your hotel needs a CRS, let’s talk about how it actually works.
A central reservation system contains data about your hotel's availability, rates, and inventory, and is often part of a bigger hotel technology ecosystem, integrating with other solutions you may be using.
In order to visualize how these systems interact with each other more easily, take a look at the diagram below.
Illustration: WebBookingPro / Data: AltexSoft
As you can see, your CRS is primarily connected to your PMS and channel manager, allowing you to control various aspects of your operations from one place.
For instance, if you decide to raise your room rates due to an increase in demand, you can make the change directly in your CRS.
From there, the CRS—which is connected to your channel manager—is going to automatically adjust your pricing across all distribution channels your hotel is present on.
Then, when a specific room gets booked on one of the channels, the CRS pushes that information to your PMS, as well as updates the change in room availability on other distribution channels.
Seeing as the CRS tracks the availability of your room inventory and updates it automatically, you never have to worry about accidental double bookings or overbookings.
Source: WebBookingPro
Conversely, when a guest’s check-out is recorded using the PMS, the CRS “receives” that inventory from it and transfers the information about the room being available again to your distribution channels.
In the simplest terms, a central reservation system bridges the gap between the operations taking place in the PMS and the distribution channels your hotel is present on.
It plays a central role in inventory and room rate management, processes reservation requests, and facilitates seamless communication between all of your systems, allowing you to always stay on top of your reservations.
Basic Functionalities of a CRS
At this point, it is clear that a central reservation system is going to be an essential tool for every hotelier wanting to seamlessly manage and distribute their room inventory, maximize their revenue, and achieve high operational efficiency.
But in order to be able to utilize your CRS to its fullest potential, you need to understand what functionalities such a software solution offers in the first place.
Without further ado, let’s dive right into the most crucial ones.
Reservation Management
First and foremost, a central reservation system facilitates the tasks of taking and managing room reservations.
It allows you to create, alter, and cancel reservations on your end, but it also collects reservations made through various distribution channels and synchronizes them.
In doing so, it helps ensure that you always have an up-to-date overview of your room availability.
Our own CRS, WebBookingPro, is a great example of a system that provides you with that kind of holistic view.
As you can see in the screenshot below, WebBookingPro allows you to filter your reservations based on the property (in case you have multiple), reservation status, and various other factors in order to give you the information you’re looking for.
Source: WebBookingPro
On top of that, WebBookingPro also tells you what distribution channel the reservation was made through, as well as whether the booking has been canceled.
Not having to actively search for that information and then manually refund and release the canceled room back onto the distribution channels leaves your staff with more time to focus on other tasks that require a human touch.
With reservation management this easy, everybody wins: your guests get to have a seamless booking experience, and you and your staff get to experience a higher level of operational efficiency.
Revenue Management
Aside from streamlining your operations and automating reservation-related processes, a robust CRS can help you improve your revenue management.
Many central reservation systems come with a revenue manager feature, making it possible for you to optimize your room pricing and maximize revenue.
Let’s break down how this works.
A revenue manager facilitates the dynamic pricing strategy by automatically correcting your prices based on the criteria you set and the objectives you aim to accomplish.
Whether you’re trying to increase your occupancy during the low season or maximize your profits during the busy season, the revenue manager is there to help you achieve your goal.
The WebBookingPro CRS also comes with the revenue manager feature, making the task of price correction easy and intuitive.
Source: WebBookingPro
All you have to do is define the desired IF-THEN scenarios that are going to help you maximize your occupancy and revenue.
For instance:
IF the occupancy rate for the upcoming weekend is below 60%, THEN decrease the room rates by 10% for bookings made during the next 48 hours.
This smart and proactive approach can help keep your guests happy and your rooms full—even when there is less demand.
Hospitality Technology and Revenue Management consultant Ira Vouk sums it up well:
Source: HospitalityNet
Overall, the ability to automate your dynamic pricing is one of the essential functionalities of a good CRS, making this software solution extremely helpful for hoteliers looking to maximize their revenue.
Distribution Channel Management
As we’ve already mentioned, a hotel CRS is a solution that helps bridge the gap between the distribution channels your hotel is present on and your PMS.
To recap, once a reservation is made on any distribution channel, the information about the booking is transferred from the channel manager to the CRS.
Then, the CRS transmits the booking data to your PMS, where a reservation record is created.
This is going to allow your staff to prepare for the guest’s arrival and ensure their check-in goes smoothly.
All of this wouldn’t be possible without the channel management functionality.
Source: WebBookingPro
With so many distribution channels available—from various OTAs and metasearch engines, down to your own website—making sure that you maintain rate parity and accurate availability on all of them can be an arduous task.
However, with a channel manager connecting them all to your CRS, it becomes a breeze.
Simply put, a channel manager is going to automatically update the room pricing and availability across all the distribution channels you sell your rooms on.
This means no more rushing to mark a room as unavailable on Booking.com and Google Hotels after it has been booked, for instance, directly on your website.
But aside from synchronizing rates and availability, the channel manager updates your CRS each time a reservation is made, thereby making it easier for your staff to manage those bookings.
All in all, the connection between your CRS and channel manager is a powerful one, allowing you to achieve wider distribution while maintaining a clear insight into all the bookings—no matter where they come from.
Reporting and Analytics
Aside from helping you better manage all your reservation-related operations, a CRS can also provide you with valuable data, helping you to analyze your hotel’s performance and take steps towards improving your processes.
Given the fact that a CRS serves as a central hub for all things reservations, it is not surprising that it also has the capability to collect a wealth of data.
From information about trends in demand and reservation patterns to gross average daily rate (gADR) and gross revenue per available room (gRevPar), this functionality can help you determine which areas of your business need improvement.
In the screenshot below, you can see only some of the metrics that the WebBookingPro Central Reservation System keeps track of.
Source: WebBookingPro
With the help of our Analytics feature, you can create unlimited reports for desired periods, allowing you to make comparisons.
But once you’ve collected and compared the data, what can you actually do with it?
Walter Alala, Dy Group General Manager at the La Maison Royale group of hotels in Kenya, believes that the reporting and analytics functionality of your CRS solution can help you make data-driven decisions and promote your hotel’s growth:
Illustration: WebBookingPro / Quote: LinkedIn
In other words, you can use the data from the reports generated by your CRS to observe where your hotel is falling short, and then take action to fix that.
For instance, if your RevPar is low during the off-season, you can compare your rates to those of your competitors to see if this is what’s causing the issue.
If that is the case, you can adjust your prices accordingly, and then monitor this metric for the period under the new pricing to see if there has been a RevPar increase.
While the other CRS functionalities we have presented throughout this article focus more on the day-to-day aspect of reservation management, the reporting and analytics features can help you improve your operations as a whole—so don’t underestimate their significance.
Conclusion
We hope that this comprehensive guide has provided you with valuable insights into the fundamental role that a central reservation system plays in reservations-related operations.
Not only does it increase your operational efficiency and consolidate a large amount of reservation data—it also helps increase your revenue and improve the overall success of your hotel.
With a plethora of functionalities that make reservations—a crucial aspect of your business—a breeze, a central reservation system is truly an indispensable software solution for any hotel.
