How Hotel Reservation Systems Work

What is a hotel reservation system?

A hotel reservation system is an online platform that allows hotels to manage bookings all in one place and enables guests to secure hotel reservations easier. It can also be known as a central reservation system.

Hotel reservation systems work best when they connect with other key software such as a channel manager and a booking engine. This real-time integration ensures the hotel’s rates and availability are always up-to-date and that valuable direct reservations can be accepted. It also means the hotelier can access insightful performance data to help with decision making.

A hotel reservation system helps hoteliers get more bookings through their most profitable channels. This might include powerful online travel agents (OTAs) like Booking.com, Expedia, and Airbnb, the hotel’s own website and Facebook page, or metasearch engines like Google Hotel Finder and TripAdvisor.

Hotel reservation system example

A good example of a hotel reservation system is Little Hotelier. Thanks to being an all-in-one solution, Little Hotelier includes all the vital elements of a hotel reservation system. 

Perfect for small hotels and accommodation providers, Little Hotelier houses a front desk system, channel manager, booking engine, and website builder so that reservations are always taken care of.

Types of reservation systems in the hotel industry

It can seem like there are many types of reservation systems in the hotel industry, and it can get confusing for hoteliers. 

Often different terms for a reservation system mean the same thing, but there can also be some differences between tools. Let’s take a look at five of the most common types of systems you may come across.

1. Manual hotel reservation system

A manual hotel reservation system is a traditional system that does not involve advanced technology. This means the hotel would manage reservations via pen and paper, logbooks, phone calls, in-person, or with other physical means.

Manual reservation systems are far less common in hotels these days, since using online tools makes everything so much simpler, quicker, and more effective. If hotels want to be successful, often they need to leave outdated manual methods behind.

2. Web based hotel reservation system

A web based hotel reservation system, or an online booking system, uses the internet to manage tasks and integrate with other online systems. It’s a much preferred method of managing reservations, availability, and distribution when compared to a manual system.

Using a web based system allows for automation, synchronisation, and simplicity. This gives hoteliers more time and freedom to live the life they want and also make better business decisions.

3. Hotel central reservation system

A central reservation system (CRS) is used by hotels to manage room inventory, rates, and reservations. Often it can be an element of the hotel’s property management system, but it can also be a standalone system. 

A central reservation system is just another name for a hotel reservation system, and the terms are used interchangeably within the industry.

4. Small hotel reservation system

Small hotel reservation systems are the same as most reservation systems, but are designed in a way that caters specifically to small accommodation providers.

This means prioritising ease of use, affordability, and reliability. 

Often small properties have a few select goals and features they are looking for to make life easier. A good provider will deliver this without making the hotelier pay for what they aren’t going to need or use. Little Hotelier is an example of a reservation system that specifically targets small accommodation providers.

5. Motel reservation system

A motel reservation system is the same as a hotel reservation system. While a motel owner may look for providers that meet all the unique requirements of their property, the uses and benefits of the reservation system should be very similar.

Why do you need a hotel reservation management system?

A hotel reservation system is a necessity for today’s accommodation providers, both large and small.

Hotels of all sizes have had to adapt to the increasing demand for online bookings. Consider that a third of all spending on travel – to the tune of $145 billion – goes through online booking.

An increasing number of travellers are relying solely on online reservations in order to book their accommodations, and without this capability, you will lose a significant amount of business.

Today’s hotels are expected to have reservation systems in place, because it’s more convenient for guests as well as staff. Instead of having to wait for you to be at your desk, guests can quickly check your availability, book and confirm their stays – all without speaking to you.

When you invest in hotel reservation software you’ll also:

Gain a competitive advantage

There are still many small hotels today that do not have online reservation capabilities. Less people are staying at those locations because they are less visible and not as convenient. 

You can get a competitive advantage by being front and centre when travellers are researching, and by making the booking process simple.

Improve operational efficiency

Your hotel’s availability is updated immediately upon receiving a reservation, not only in your own system, but across all of your connected channels. 

You will save time on administrative tasks while also minimising the risk of overbooking the rooms at your property.

Features of hotel reservation systems

It’s important to know which features of a hotel reservation system are essential, not only for your business but also for your customers. It’s not just about generating as many reservations as possible. You also want to leverage technology to automate everyday tasks, so you can focus on providing an authentic, personalised experience to every guest.

Some basic features include:

• Integration – It’s imperative that a hotel reservation system can integrate seamlessly with other systems a hotel is using such as a booking engine or channel manager – otherwise tasks are just as clunky as they were without technology.
• Online payment processing – Guests have become more comfortable with making payments online, in fact it’s now their preferred method of payment. To avoid abandoned bookings it’s important to ensure you can accept online payments that are secure, fast, convenient, and multi-currency enabled.
• Guest reservation management – Creating guest profiles and having the ability to send guest communications is vital to maintaining a good guest experience. A reservation system should make it easy to add and edit guest details, and create personalised guest emails.
• Mobile app – Investing in a provider that has a good mobile app will make a huge difference. With a hotel mobile app you’ll get alerts and notifications and the ability to manage reservations remotely. This will give you valuable freedom, so you don’t have to constantly monitor your front desk or office.
• Reporting – Access to reports and performance insights should be a natural feature of a reservation system. Understanding your performance and having a clear view of all your property insights will allow you to make better decisions.

On top of all this, perhaps the biggest feature of all is support. A hotel is essentially a 24/7 business so your system has to be operational at all times. If something goes wrong, it’s crucial that you can get support quickly to resolve the issue.

How does a hotel reservation system work?

A hotel reservation system works by sending and receiving reservation data, usually in partnership with a property management system and channel manager.

Information is shared on a two-way basis between the channel manager and connected channels, and the property management system. The CRS is a helpful middle-man which ensures all data is accurate, up-to-date, and available when needed.

Other systems that integrate with a reservation system in your hotel

As mentioned, a reservation system is often enhanced or completed by the other systems it integrates with. Take a look at a couple of examples.

How a hotel room reservation system works with your website

When direct reservations are taken on your website via a booking engine or other means, the hotel reservation system will take this data and store it securely. 

It will also ensure the data is communicated to your channel manager and property management system. This will mean your availability is always accurate, no matter where or how a guest makes their booking.

The relationship between a reservation system and a hotel front desk system

Your front desk system is the centre of all operations at your property, so the reservation system needs to be providing all the booking information. This data will affect rates, availability, guest check-in and check-out, housekeeping and more.

You can only manage your property efficiently and successfully when you have all necessary information communicated in real-time.

Common hotel reservation system problems and solutions

Not all systems and tech providers are made equal. It’s also unrealistic to think there won’t be technical issues occasionally.

Here’s some common problems hoteliers encounter and how to solve them.

Double bookings caused by lack of integration

Overbooking not only causes guests to be unhappy, but it can also result in lost revenue. Solve this problem by using an all-in-one system that supports seamless integration will allow your inventory to be accurate across all channels at all times.

Lack of required features

When you use a system but still find yourself doing manual work and spending too much time, it means something isn’t right. This makes you look unprofessional or causes you to lose out on revenue because you’re missing opportunities.

Overcome this challenge by thinking carefully about what problems you are trying to solve. For example, you may simply be looking to increase bookings and save time. Or, you might want more detailed features such as the ability to close rooms for arrival or departure at certain times.

Inaccurate information or not enough information

If the current system you are using doesn’t allow you to request key information, or some information isn’t being passed along, this will create problems. For example, if you don’t have the arrival time for a guest it will be hard to prepare for their check-in adequately.

With a leading all-one-solution that prioritises seamless integration, you should have all the data you need. You’ll also be able to access it at the click of a button and even print out the information you need to keep handy.

Poor guest communication

If you forget to send communications or send messages at all different times it will be a negative experience for the guest. You’ll never have to encounter this struggle again when you use a reservation system that enables you to automate guest communications and personalise your messaging for each guest.

You don’t know what works

With a small budget, it’s important to know which tactics are providing value and which strategies need to be adjusted. If you don’t have enough performance insights easily available, you won’t be able to make informed decisions.

Being in the know can become less difficult when you utilise a system that has advanced reporting capabilities. Instantly view guest information and generate performance reports without having to worry about using spreadsheets.

Can you use a hotel reservation system for free?

While you can’t secure a quality hotel reservation system that’s free forever, most providers offer a free trial of their system.

The free trial will enable you to enjoy all the benefits of the product for a set period of time free of charge. You can use this time to learn the system, measure any results, and decide if it provides enough value to your business to warrant an ongoing investment.

In the case of Little Hotelier, you can trial the system for 30 days risk-free. When you do become a paying subscriber there will still be no contract, you’ll simply pay a set monthly fee based on the size of your property.

To see how your property might be priced, visit Little Hotelier’s pricing scale here.

Taking a hotel reservation system tutorial

Besides a free trial you can also get an online tutorial, or demonstration, of the system you are interested in.

The demo will give you a quick but comprehensive overview of the features and functionality of the system so you can make a better decision about whether you want to use it at your hotel.

See an example by watching a demo of Little Hotelier here.

The process of implementing a hotel reservation system

With the right provider, implementing a hotel reservation system at your property can be quick and painless. Depending on your needs and your previous system, you can even be up and running within 24 hours on your new system if self sign-up is an option for you. Your provider will include helpful guides and support along the way.

When you express your interest you should be contacted within one business day to get setup; configure your system and begin your training. The first month will be considered a free period. After the month is up you can choose to become a billed customer or simply stop using the product.