THE WEB RESHAPES VOICE RESERVATIONS

1 June 2003
John Burns
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What changes in booking patterns mean to CRO Management

It has become apparent that many travelers are using the Internet to research their hotel options, regardless of whether they ultimately book online or not. This shift to Internet research prior to booking has many profound consequences for the hotel industry. No operational area is affected more than reservations, both on-property and at central reservation offices (CROs).

BACKGROUND: A CHANGED WORLD

To determine if my impression of significant impact and implications on reservation booking patterns and processes were accurate, I contacted four reservations executives –

  • Don Brockway, vice president, worldwide reservations, Choice Hotels International
  • Debbi Haacke, corporate director of reservations for Rosewood Hotels & Resorts
  • Pierre Lerouge, general manager – reservation center, Omni Hotels
  • Bill Peters, vice president reservation services for Outrigger Hotels & Resorts.

I asked each of them about trends they are seeing at their central reservation operations. Each person said:

  1. The number of calls has decreased
  2. The rate at which calls are being converted to bookings has increased

The decrease in the number of calls has been significant. At Choice Hotels International, according to Brockway, it was sufficiently large to allow Choice to reduce the number of reservation centers the organization operated and to consolidate their operations. Brockway reported that the impact of this drop in call volume has been balanced by an increase in the rate at which calls are being converted to bookings. Where that rate had previously been 30 per cent to 32 per cent, it is now averaging 35 per cent with some days exceeding 40 per cent.

Similar productivity increases were reported by both Lerouge and Peters. Lerouge said that conversions at Omni’s Omaha CRO facility had increased five points. Peters indicated that Outrigger has seen an even greater improvement, with conversions now ranging between 40 per cent and 45 per cent daily in contrast to 30 per cent to 32 per cent several years ago.

DRIVING THE CHANGE

Brockway, Lerouge and Peters all attribute the call volume and call conversion changes, either partially or completely, to the increase in use of the Internet to research hotel choices. Some travelers are electing to make their reservations online rather than call the CRO, reducing call traffic as a consequence. A higher proportion of those who opt for the telephone are committed buyers, not just shoppers.

The conversations with the travelers who elect to call a hotel company’s toll-free telephone number have changed. Lerouge said that Omni’s reservation agents receive fewer shopping questions. He said that callers have visited hotel Web sites and are now much better informed about the hotel and its services. According to Lerouge, “They know the product better; they know what they want, including the specific rate.” Haacke of Rosewood Hotels & Resorts agreed. Haacke said, “People are ready to book more quickly. They have researched before calling us and, more then ever, they want to know the detailed cost of what they are buying.”

As an organization representing multiple brands and, often, numerous properties in a single city, Don Brockway said that evidence of the Web’s impact often appears early in callers’ conversations with Choice reservation agents. “Where in the past they typically asked about our properties in a city, now they know the specific hotel they want, and its street address”.

Offering accommodation at primarily leisure-oriented hotels and condominiums in Hawaii, the South Pacific and Australia, the booking process experienced by Outrigger Hotels has typically involved multiple, lengthy telephone conversations. Peters sees a change in this regard. He said, “The vast majority of our callers have done research on the Web before they call us.”

Unique among the reservation professionals interviewed for this article, Peters identified a three-stage research and booking process being witnessed at Outrigger. “We find that people want to discover information for themselves on the Web, then many of them chat with us via our LivePerson facility (liveperson.com) on our Web site. That chat is handled by an agent at our CRO. Then, after the research and the chat, they call our CRO to make their booking.” Peters finds that because of significance of a vacation trip to a relatively exotic destination, many travelers still value the reassurance of human contact when they make their lodging reservation for an Outrigger property.

THE WEB DRIVES DECISIONS

So what does this change in booking patterns mean to CRO management? And is the impact the same for on-property reservation/revenue managers?

For individual properties and for hotel companies alike, the most important development is that many travelers – clearly many more than would be suggested by the number of Internet booking that are being received today – are using the Internet to review their hotel choices and to eliminate some hotels from further consideration.

The urgency of an easy-to-use, highly informative Web site presenting extensive, well-organized and compelling descriptions of the property and its facilities/amenities is clear. Travelers are making buying decisions based on Web content alone. Those hotels and hotel companies whose Web sites lack sufficient, and sufficiently appealing, descriptions as well as competitive rates and polished support services for their site visitors are in serious jeopardy of losing potential business.

NEW RESPONSIBILITIES, NEW NEEDS

Central Reservation Offices have been fundamentally impacted by the integration of the Web into travel planning.

  • Callers expect reservation agents to have an unprecedented level of product knowledge. Omni’s Lerouge said, “People are much more demanding than they used to be. They want more detail, including a great deal more about the neighborhood that the hotel is in and about the city”. His sentiment was echoed by Outrigger’s Peters who said, “Callers now expect our agents to know our hotels like the back of their hand”.
  • In many cases the CRO has become the support center for the hotel company’s Web site. Callers expect reservation agents to know what information is available on the site, to be able to lead them to it and to be able to amplify every aspect of that information.
  • Many CROs have taken on the e-mail processing function for sales-oriented queries.
  • As real-time chat facilities are more widely installed on hotel Web sites, conducting online dialogues with customers will be an additional resource demand at many CROs. Peters reported, however, that his reservation agents currently handle up to fifteen simultaneous “chats” with consumers.

EQUIPPING THE RESERVATION AGENTS

Our conversations with these four reservations professionals identified several actions that some or all of them are taking; actions which have relevance for every on-property reservation office. They were:

  • Expansion of the information available to reservations agents. Through appeals to the hotels in their organizations, each CRO had collected considerably more detailed property information. Lerouge at Omni reported that maintenance of that property descriptive information on the Omni intranet is now his data base department’s single largest task.
  • Additional of supplemental data resources. Most CRO reservation agents are now being given limited or full Internet access, providing access to the chain’s site, to sites for maps and weather, as well as to other information resources.
  • More training in three areas. The first is in product knowledge in order to speak more fully about the properties, and about the neighborhoods and the cities in which their hotels are situated. Next, in sales skills, both verbal and written. And, thirdly, in customer service skills, as CROs take on responsibility for support of Web site visitors.

THE FUTURE

All four of the reservation executives interviewed agreed that the pattern of decreasing call volumes and increasing Web bookings will continue. In different words, each also saw their operations continuing to evolve and, ultimately looking very different from today. The next generation of CRO will, to paraphrase Bill Peters, bring everything together – phone/Web/e-mail/fax – into integrated service workstations, achieving efficiencies of both service and scale.

Haacke proposes that the better-informed callers offer her organization new opportunities to up-sell. Those callers, she said, are more receptive to hearing about, and reserving, multi-service packages.

As the demands placed on the staff at the reservation centers change, the profile of the reservation agent will change. Proficiency in selling though multiple channels will be important; so will the ability to change and grow as their workplace evolves. As Brockway said, “We will look increasingly for multi-skilled labor. We will pay them for both their expertise and their sales skills”.

The far-reaching implications of the Internet for our traditional distribution channels – such as the CRO – are becoming clearer. Hoteliers will need to show a willingness to recognize the changing shopping environment, to use new tools to serve those shoppers and to learn new skills. These implications, and challenges – to recognize, to retool and to retrain – are equally applicable at CROs and at every hotel property.