Why the CRS Is Fast Becoming the Central Hub of Hotel Distribution Strategy

The raison d’être of the CRS is to centralise and automate the process of setting and driving the hotel’s rate strategy across booking channels. This helps ensure that rates and availability are always consistent and up to date throughout the distribution network.

The hub of the CRS is the central inventory management function, where hoteliers manage rate plans, inventory, room descriptions, system configuration, reporting, and related tasks. Here, revenue managers can view business on the books, analyse performance by market segment, monitor rate parity, and open and close booking channels. 

For hotel management companies, these functions can be centrally managed for properties throughout the portfolio, allowing corporate and regional revenue managers to monitor hotel performance and ensure consistency across the brand. With most of the PMS-centric models available today on the market, on the other hand, revenue managers must log into each property’s PMS to view information and make changes.

For ARTOTEL Group, a collection of more than 100 hotels based in Indonesia, transitioning to a centralised distribution ecosystem is a key element of growth strategy. 

When managing rates and inventory from the CRS, hotels have more flexibility to set pricing and controls by distribution channel. They can prioritise channels that offer lower commissions and fees and create special promotions and packages that are only available on the hotel website. This helps drive direct bookings and reduces distribution costs.

Hotels can sell inventory by class of room rather than by room type, allowing the flexibility of committing only to a class of room, such as standard or deluxe or king or double, rather than a specific room type. This makes it easier to manage inventory. 

Since moving to an integrated CRS platform to ensure a seamless booking process, Ekosistem Hotels & Villas in Bali has seen direct bookings increase by 300 percent year over year, now representing about 35 percent of total rooms business. 

By pursuing a multichannel distribution strategy, hotels gain exposure to a broad range of travellers in regional and global markets, attracting more bookings, more revenue, and higher ADR. Critical to the smooth, timely flow of reservations, rates, and availability across channels and software is real-time connectivity. 

According to the h2C study, hotel chains distribute inventory on 18 third-party distribution channels on average, including 26 channels for large chains, 23 for medium chains, and 12 for small chains. However, an average of almost 20 percent of these channels are not connected to the CRS.

When a distribution channel isn’t connected to the CRS, rates and inventory must be updated manually via an extranet, a time-consuming and error-prone process. If channels are connected but there are lags or inaccuracies in syncing, it can lead to discrepancies in availability, rates, and inventory (ARI), resulting in duplicate reservations, overbookings, and missed sales opportunities.

While some PMSs offer limited connectivity to distribution channels, a portal must be developed and configured for each property. The CRS, on the other hand, is built for easy integration of channels and software. Connecting is even easier when the CRS features an open API. Advanced platforms like D-EDGE CRS provide rich connectivity features, including more direct connections and increased reach via local and global sales channels. Once connectivity is set up for a channel or application, it can easily be rolled out to all properties within the group, saving hours of setup time.

Payment processing has always been a major pain point for hotels. As more booking shifts to online channels and new payment methods emerge, the playing field is getting even more complicated. 

A CRS with an integrated payment gateway can simplify the payment process for hotels and guests alike, removing the friction from reservations made through the hotel website and OTAs via the channel manager. This includes automatically verifying credit cards, taking pre-payments, and accepting a broader range of payment types, all within a secure payment environment. 

More hotels are investing in Customer Relationship Management (CRM) or, better still, Customer Data Management (CDM) systems to effectively manage guest profiles, loyalty, and communications. According to the h2c study, 54 percent of hotel chains now have a CRM and 45 percent operate a loyalty program.

With so many touch points along the customer journey, guest data is often incomplete, inaccurate, or dispersed across multiple profiles. A robust CDM connected to the CRS features tools to automatically sort, cleanse, structure, and organise data under one consolidated profile. Hotels can personalise pre-stay, in-stay, and post-stay communications and have the confidence that the right messages are getting to the right guests.

Effective CDM practices not only boost profitability through direct bookings, upsells, and sales of ancillary services, they also boost guest satisfaction, loyalty, and online reputation. In the future, enhanced connectivity with the POS will provide valuable insights into guest spending on property, enabling further customisation of offers and pricing.