SOURCES OF RESERVATIONS

Learning Objectives:

After reading this INFORMATION SHEET, YOU MUST be able to:

Identify the sources of reservations

Determine the differences of each type of room

SOURCES OF RESERVATION
A source is classified as an individual or a body that actually pays a
hotel for its services. A reservation agent has a large market from which
he/she receives reservations. The principal sources of reservation are:

GLOBAL DISTRIBUTION SYSTEM (GDS) which is a network of

providers that brings products and services geographically spread to
the doorstep of consumer anywhere in the world.
The notable GDS are the Sabre computer system,
Amadeus computer system, Galileo central
reservation system, Worldspan and the Scandinavian
Multi Across Reservation for Travel Agents (SMART).
These are computerized networks that can be
accessed by any traveler or other service providers to
book rooms anywhere in the world.

TOUR OPERATORS package tour programs and sells them in bulk

worldwide. They are wholesalers who coordinate with hotels, surface
transporters, airlines, cruise ships, tourist offices, etc. to put together
an all inclusive trip to a destination. We often hear advertisements of
“three days and two nights in Boracay” or a week pleasure to El Nido,
Palawan”. These programs are compiled by
tour operators who market them to travel
agents. Hotels prefer to deal with tour
operators as room business come in bulk.

TRAVEL AGENTS are retailers located in

convenient places in cities and up country.
They take a commission from the tour
operators to sell their travel packages. Ordinary citizens would find
attractive posters and brochures displaying these travel packages in
their show window. In addition to selling tour packages, travel agents
also independently promote hotel accommodation and airline
bookings taking advantage of special discounts and commissions from
these establishments.
Hotels usually follow the following practice in dealing with travel
agents:
Give 10% commission on rooms.
Bookings on American Plan will attract a commission on boarding and
lodging charges.
Booking on European Plan will attract a commission on
room only.
Commission is payable for the entire stay of the guest up to
a maximum of 21 days.
Commission is payable on rack rate. However, if discounts
are given on room charges, the hotel has the right to deny
the commission.
Hotels planning a partnership are obliged to fill any
questionnaire submitted by the travel agent.
Either party cannot place a condition to advertise each
other. This is purely a relationship basis.
Travel agents are forbidden to quote rates in excess of rates agreed upon.
Travel agents must at least get one month notice before revisions of room
tariffs.
Hotels agree to give one complimentary room to a bonafide tour leader
for a group comprising 15 members and above. A discount of 50% is
given to the tour leader of the group is less than 15 but more than 10
members.
Should a hotel not able to give the room negotiated it is obliged to give
a superior room at the rate of the original booking. If an inferior room
is given then the lower price is charged.
Hotels operating on European Plan only, may accept bookings on American
Plan provided it is a group booking of 15 persons or more.

AIRLINES business is sought after by hotels for the image factor and
certain volume business throughout the year. Airline crews bring a
lot of glamour to a property and though the airline squeezes as much
of discounts of room rates because of their business, hotels still
pursue them to get business. Airline contracts are negotiated by the
management who welcome such business.

CORPORATE HOUSES are another source of volume

business because they have better funds. Rates are
negotiated for minimum room nights a year. The
more the business the better is the rate. The sales
and marketing department of the hotel actively
pursues this business as they are lucrative and reliable. Other
aspects of the corporate business are the company training programs
and corporate meetings. By harnessing this business, hotels can get
volume business. Resorts try to capture this business to give
business and pleasure, especially during off season months when
corporate who uses can avail of season discounts on rooms.

EMBASSIES AND CONSULATES are source of lucrative business for

hotels located at cities where they have established office. Diplomatic
officials travel throughout the year and a good hotel would like to
capture that business. Under this category, come the United Nations
employees who visit the city on assignment. The local UN office would
then be the source for bookings.

FREE INDIVIDUAL TRAVELERS (FIT) provides the bread

and butter business on a regular basis. FIT’s are
individual guests who book rooms directly with the hotel.
They choose property based on the quality of service,
recommendations of others, image of the establishment,
budget and convenience. Hotels try to get their repeat
business through recognition programs and by
maintaining guest history cards. FIT’s nowadays are
becoming greater source of business because of the
convenience of booking directly through the web from
the comforts of their homes and offices. Website
provides all information including virtual tours of
properties to assist the FIT to make a choice.

CENTRAL RESERVATION OFFICES (CRS) are another expanding

phenomenon to make booking easier. These establishments are one-
stop-shops and have reservation tie-ups with all corners of the world.
The central reservation system is ideal for independent operators who
have limited budgets to promote their property
worldwide. They register with Non-Affiliate reservation
systems on a subscription basis, like the Leading
Hotels of the World, Preferred Hotels, Distinguish
Hotels, Steigenberger Reservation System etc.
Another facility for independent hotels especially is
the Intersell Agency that represents
other companies in the travel chain like the airlines,
rent-a-car, cruise liner etc. They have the benefit of receiving hotel
reservation request for travelers using other services that they
represent. For example, a person renting a car may want a
suggestion for a suitable hotel enroute when he is travelling cross
country.

HOTEL WEBSITES are the new popular way to get bookings. Hotels
have spent a lot of investment in making hotel websites user friendly.
Guests can fill on-site reservation forms and send to the hotel directly
 with all the relevant details. They can also get instant confirmations.
Websites have reached a level of sophistication that offers virtual
tours of the hotel before they choose a room.

ASSOCIATIONS are great source of business. Associations like the

Medical Association, Automobile Association, Free Masons, Trade
Association, Hotel Federation, etc. have business meetings, local
conferences and annual conventions during the year that brings n
volume business. Reservations agents would like to tap local
associations to tie-up their yearlong business. Local association
network with regional and international offices and therefore, can
produce worldwide business.

GOVERNMENT OFFICES often have their own guest houses and

hostels for stay. However, they do give their senior officials and guest
superior accommodations in hotels. They are valuable source of
business. While government business is often on low budgets they
add image and credibility to the establishment.

REFERRAL HOTELS are those independent hotels that do not have

the clout of chain operations and therefore get-together to recommend
each other to guests staying in their property, provided the
establishment does not have a hotel in that location.
An airline ties-up with referral hotels to attract
passengers. In such tie-up, airline staff recommends
hotel stay when booking an airline seat. We often hear
the cabin crew of the airlines recommending a hotel
before they are due to land at a location. Below is a
chart of famous hotels that are promoted by airlines.
Many of these hotels have change hands due to
economics and airlines now resort to referral hotels.

MODES OF RESERVATIONS
E-mail is the modern mode of reservation and most reservation
transaction nowadays is done by e-mail. This modern reservation
software gives instant confirmation to guests via the web.

Post, telexes and cables. This mode of reservation is still the form of
communication in most of the remote areas where resorts are located.

Telephone calls are still a common mode of reservation.

In-person or personal visit or by representative. Many guests still

want the comfort of human contact when making reservation.
Reservation agent is still an important personality in the business
tourism industry.