APPLIED BUSINESS TOOLS

AND TECHNOLOGIES
WEEK 5
COURSE DESCRIPTION
This course identifies common business tools, technology
and techniques used in the Tourism and Hospitality
Industry. It includes an overview of the applications or
systems composed of technical processes, methods,
software and hardware that have evolved and streamlined
certain functions in the workplace.
INTRODUCTION
Technology is advancing at a faster pace than ever before, and this is
changing both the expectations of patrons as well as the way in which the
hospitality industry conducts its business. Some of the trends in industry are
leading to great improvements and savings for hospitality industry
companies; while some are changing how hotel developers plan their
buildings, infrastructure, management structure and staffing requirements.

Marketing, management and hotel developers can no longer work in silos

and these technology trends are giving them the opportunities, tools and
solutions they need to create memorable experiences that can lead to
positive change and growth in the industry.
 HOSPITALITY INFORMATION SYSTEM
LEARNING OUTCOMES:
● Identify the different functions of the hospitality information
systems
● Learn insights to practical handling of resources in the
hospitality industry through automated computerized
environment
●
Global Distribution System
● A world wide computerized reservation network
● For reserving airline seats, hotels, rental cars, other travel related items
by travel agents, online reservation sites and large corporation
 CRS and GDS: What is the difference?
Global Distribution Systems:
• Originally they were known as CRS: Computerized Reservation System or Central
Reservation System
• A CRS holds a vendors inventory. Originally a CRS was airline-owned and
facilitating air-travel reservations only, and used internally by the airlines
themselves
• Later, they were made available to travel agencies
• A Global Distribution System (GDS) holds no inventory, but is linked (in real time)
to a vendors’ reservation system. It developed into an all-encompassing
reservation system for flights, hotels, cars, tours, trains, ferries, events and are not
owned by the airlines anymore;
Core Function
• To facilitate the sale of travel services

• To do this in an efficient way (costs)

• To do this in an effective way (client friendly)

• Satisfying the needs of the distribution channel

– Vendors
– Middlemen
– Travelers
 Advantage of Global Distribution Systems
WIDEN YOUR RECEIVE MORE GOOD SOURCE FOR
DISTRIBUTION NETWORK RESERVATIONS MARKETING
Gain more exposure to agents Receive more reservations It’s If you want to gain better
and travelers by proactively important to connect your marketing exposure without
marketing to travel agencies, property to the global market stretching your budget,
consortia and corporate because the more visible you investing in a GDS is a wise
accounts. The GDS is perhaps are to travel agents and decision. The system places
the most common booking travelers online, the more your property in front of
mechanism for consortia and reservations you receive multiple clients without digging
negotiated corporate rates. into your marketing budget.

REAL-TIME INFORMATION ACCESS REDUCE MANPOWER

GDS has the ability to update product A GDS is the trustworthy middleman that
information in real-time. As rates change, can seamlessly transfer information from
revenue managers can easily make pricing point A to point B, so you don’t have to
changes or make special offers. Agents spend hours to manually manage
will immediately view these changes and inventories.
will be able to suggest the new
opportunities to clients without skipping a
beat.
Sale of Airline Tickets (1)
Airline-tickets follow, in principle, the normal sales process like any other
product:
Sale of Airline Tickets (2)
Sale of Airline Tickets: How it was
• Which players:
– Airlines
– Travel Agencies
– Travelers

• Interrelationship

• Regulatory bodies
– Government
– International organizations (IATA, UFTAA)
– Trade organizations (Nat’l Bodies)
 How it was...
• In the past, for each route, fares were the same, on every flight, with every airline
• Travelers had to go to a booking office (later to specialized travel agencies) for a
reservation
• Travel agency phoned the airline, requesting a specific flight for a specific time and
date
• Reservations staff retrieved an index-card for that flight/date from a Lazy Susan
(table with revolving index-cards) and checked availability
• Then the travel agency’s request could be answered!
• If the desired flight was available, the travel agency issued the ticket, collected
payment from client and received a commission from the airline. The index-card
was completed with the clients details
• Completing a booking took, on the average, between 45 minutes & two hours!
Lazy Susan
Reservation
Employees at a
Revolving Table
(Lazy Susan) with
Index Cards for
every day for
every flight!
How it was: Airlines used city ticket office
How it is now:
• Now fares for a certain itinerary are not the same anymore, they vary on a
daily base, with all airlines. This means there are a multitude of fares between
any two given cities
• Travel agent logs in to a GDS-system
• All flights and fares, with all airlines, are displayed in a neutral way
• Traveler chooses flight and fare that best fits his plans and budget
• Flight is booked by travel agent with some clicks and payment is fulfilled by
credit card
• Traveler receives an e-ticket or boarding pass (through his computer, tablet
or smartphone)
• Travel agent collects a fee from the client for his services
 Timeline: from CRS to GDS
• 50’s: Airline Reservation Centers get first electro-mechanical computers
• 60’s: First CRS Systems introduced by airlines
So, let's take a closer look at this

• 70’s: CRS Terminals enter the Travel Agencies

• 80’s: CRS become GDS • 90’s: Ownership Change: Airlines divest their
GDS
timeline!

• 90’s: Rise of direct sales and OnLine Travel Agencies through the
Internet.
• 00’s: GDS facing new entrants, Airlines reclaim the ownership of the
distribution channel, Low Cost Carriers, New business models, GDS loose
market share, …
• 10’s: Global New Entrants (GNE) and New Distribution Capabilities
(NDC)
1952: American Airlines Reservisor
The Reservisor was one of the first
electro-mechanical computers.

Still needing a lot a staff input.

Ticketing still complicated

However: with the Reservisor an

office could make 200 reservations
more on any day, with 20
employees less!
Back in 1953
• In that year, on a certain day on a flight from Los Angeles to New York, two
persons met by chance:
• Mr. C.R. Smith, President from American Airlines (AA)
• Mr. R. Blair Smith, Senior Sales Manager from International Business Machines
(IBM)
• Result: A plan to automate the AA reservation process with the help of IBM
hard- and software, in order to overcome the limitations of the Reservisor
• Result: In 1960 SABRE (Semi-Automated Business Research Environment) was
introduced by American Airlines
• In 1964 it became fully operational
Sabre was first used internally only.
Travel Agencies still had to make calls!
It took 400 man-years and an investment of USD 40 million in research
and development Initially, Sabre consisted of 2 mainframes, connected to
1500 terminals across the USA and Canada. In 1976, Sabre entered the
travel agencies. At first there were only 130 agencies with a terminal!

1964: PANAMAC: Pan American World Airways

1965: SYSTEM ONE: Eastern Airlines
1968: DATAS: Delta Airlines
1971: APOLLO: United Airlines
1971: PARS: Trans World Airlines
Benefits of a CRS for Travel Agencies
• Instant confirmation, faster reservations

• Fewer mistakes

• Be able to cope with the effects of the Airline Deregulation Act in the
USA (1978): more flights, more fares, more rules

• More business for travel agencies, because shift from airline city-offices
(very costly for airlines) to travel agencies

• Being able to offer clients a wider choice of flights and fares

• Being able to favor airlines, resulting in override commissions

Earl Days Equipment
• Only terminals: No computer in
itself, but connected through
dedicated phone lines, to the
mainframe computer, located
somewhere else.

• So-called ‘Dumb Terminals’: Such a

terminal does not process, nor
stores data. It’s just an input and
output device.
BUSINESS MODEL OF CRS
Red Arrows Represent Money Streams
From CRS to GDS
• CRS evolve into much more comprehensive distribution systems

• Offering other products and services than flights

• Becoming an effective and efficient link between all players in the travel
industry

• Offering complete supporting services to the industry like accounting,

revenue management, crew planning etc.
Europe:
European airlines develop their own GDS:
• 1987: Air France, Lufthansa, Iberia and SAS develop AMADEUS (based
on SystemOne)
• 1987: British Airways, United Airlines, KLM, Swissair plus others form
GALILEO (based on Apollo)

Asia:
• 1988: Cathay Pacific, JAL, Malaysian (and others) form ABACUS (based
on Sabre)
• Some Regional Systems: Infini, Axess, Fantasia (based on Sabre)
Consolidation and Mergers
• Over the years, there were many mergers of both airlines and
reservation systems
• Also, quite a few airlines went bankrupt
• As a result a consolidation of systems:
– PARS + DATAS II Worldspan
– System One Amadeus
– Sabre + Abacus Sabre
– Apollo + Galileo Galileo International
– Galileo International + Worldspan Travelport
GDS History: Founding Airlines
BUSINESS MODEL OF GDS
Red Arrows Represent Money Streams
Sources of GDS-Revenue:
• Booking Fees from airlines
• Traffic Fee (inquiries cost airlines also money)
• Subscriptions from agencies
• Sale of Management Information Data Tapes (MIDT)
• Hosting inventory other airlines
• Advertising and other additional services
• Booking Fees most important!
Today’s Global Distribution Systems
• Today the world is dominated by four systems, owned by 3 GDS companies

• Together they cover over 90% of the market Market shares are difficult to
obtain, because they are measured in different ways by GDS:
•Number of Agencies subscribed
•Number of Reservations made
•Number of segments (= flights) booked
Airlines divested from their GDS
• Airlines feared a declining role for the GDS due to the rise of the Low Cost
Carriers (direct sellers)
• GDS booking fees kept increasing, without any real advantage to the airlines
• GDS regulation forbid favoring own airline
• Airlines suffering heavy losses, so they want to avoid high GDS booking fees
• Also, GDS passed large part of these booking fees to travel agencies (airlines
felt it was their money!)
• US-Government and EU found the GDS market power becoming too strong
GDS: Ownership Today
• Amadeus: Amadeus IT Group S.A. = Publicly Owned
• Sabre: Sabre Holdings = Publicly Owned
• Galileo: Travelport (Hotels, Car Rental, Real Estate, ICT) = Publicly Owned
• Worldspan: Travelport (Hotels, Car Rental, Real Estate, ICT) = Publicly
Owned
Functions of a GDS
• After connecting to the CRS of the Airline, the GDS has access to the information of
the airline and can make reservations in that system
– Information about Schedules: Times and Routes
– Checking Availability / Booking Request
• Flights, Accommodation, Cars, Trains, Ferries
• Other Travel Services: Tours, Events, Cruises, Insurance
– Fare Quotes and other Prices
– Making Reservations
– E-Ticketing, Itinerary Management
– Store Passenger information: Seat, Special Requests
– Processing of Payment (BSP)
– Management Information (MIDT = Management Information Data Tape)
• After completing the reservation, the booking details are stored in a booking file
(PNR) in both the CRS of the airline and in the GDS
Connectivity Airline - GDS
• A GDS can be connected to the inventory of an airline in three ways:

1. Request from agency is sent via GDS to airline CRS, which sends a message back.
Seat is allocated only after the transaction is closed and a confirmation message is
received from the airline involved

2. Request goes from the GDS direct into the system of the airline. Seat is allocated
and guaranteed when the transaction is ended: Last Seat Availability

3. Request goes through the GDS direct into the system of the airline and is allocated
and guaranteed direct, during the transaction: Real Last Seat Availability

• Option (3) is the highest level and therefore the most secure!
• Option (3) is also the most expensive for the airline
How does a GDS work?
• Reservation starts with the request for a flight
• System looks into database for flight availability
• It checks fare and rules
• A booking is made
• Creation of a PNR (Passenger Name Record):
Itinerary – Passenger Name – Contact Details (Phone) – Date of Ticketing
– Received from – Fare - SSR/OSI – Seat
• Issue of Tickets (E-Ticket)
NEEDS ANALYSIS FOR A PROPERTY
MANAGEMENT SYSTEM IN A HOTEL
● TO EASE TELEPHONE SYSTEM
● THE AVAILABILITY OF ROOMS
● TO EASE RESERVATION PROCESSING
● THE DAILY OCCUPANCY STATUS
● TO EASE CHECK-IN & CHECK-OUT PROCEDURES
● GUEST PROFILE MAINTENANCE
● MAINTAIN CORPORATE/TRAVEL AGENTS RATES
● FRONT OFFICE CASHIER TO MAINTAIN GUEST ACCOUNTS
● COMPLAINT MONITORING
● TO EASE NIGHT AUDIT PROCESS
● F&B DEPARTMENT TO MAINTAIN F&B REPORTS FOR GUEST CHARGES.
● ENGINEERING DEPARTMENT TO MONITOR ENERGY USE IN GUEST ROOMS.
● HUMAN RESOURCE DEPARTMENT TO MAINTAIN PERSONNEL FILES.
PMS COMPONENT
● GROWTH AND FLEXIBILITY
● USER FRIENDLINESS
● OPERATING SYSTEM
● MULTI-USER
● REPORT GENERATOR
● STABILITY
 COMMON SOFTWARE OPTIONS IN A PMS:
FRONT DESK MARKETING AND SALES FOOD & BEVERAGE
➔ CHECK-IN ➔ CLIENT FILE ➔ POINT-OF-SALE
➔ TRAVEL AGENT ➔ MENU PROFITABILITY
➔ ROOM STATUS
➔ INVENTORY
➔ POSTINGS TO GUEST ACCOUNTS
➔ RECIPES
➔ GUEST CREDIT AUDIT HOUSEKEEPING
➔ ADVANCE DEPOSITS ➔ ROOM STATUS
ACCOUNTING
➔ CASHIER ➔ LOST AND FOUND
➔ ACCOUNTS PAYABLE ACCOUNTS RECEIVABLE
➔ LAUNDRY CHARGES ➔ GENERAL LEDGER
RESERVATION ➔ PROFIT & LOSS ACCOUNTS
➔ ROOMS AVAILABILITY MAINTENANCE ➔ PAYROLL
➔ YIELD MANAGEMENT ➔ WORK ORDERS ➔ BALANCE SHEET

NIGHT AUDIT ➔ HUMAN RESOURCES MANAGEMENT CALL ACCOUNTING

➔ ROOM AND TAX POSTINGS ➔ PERSONNEL FILE ➔ GUEST INFORMATION
➔ VARIOUS OPERATIONAL ➔ TIME AND ATTENDANCE ➔ PHONE CALL POSTING
REPORTS
DIRECT MAIL SECURITY
➔ FIRE SAFETY RECORDS
➔ MEETING ROOM INFORMATION
➔ EMPLOYEE AND GUEST MOVEMENTS RECORD
➔ GUEST HISTORY
Others
Hotel websites
❖ Generate direct sales and provide greater control over
inventory than other electronic booking channels.
❖ Avoid commissions.
❖ Features of successful hotel websites:
➢ interactive and easily navigable
➢ quality information
➢ online booking capability
➢ price comparison features
➢ maps
➢ multiple language support
➢ links to local points of interest
Electronic hotel reservations
❖ Online travel agents (OTAs)
❖ Metasearch engines
➢ Specialized accommodation search engines
➢ TripAdvisor
➢ Google Hotel Search
❖ Channel Managers
❖ Mobile apps
Guest Applications
❖ Customer relationship management
❖ Guest history system
❖ Guest room amenities
➢ Electronic locking system (ELS)
➢ Guest information and entertainment devices
➢ Guest services technology
Hotel communications
❖ Private branch exchanges (PBX): controls the connections of hotel
telephone calls to the outside world for guests and employees.
❖ Call accounting systems (CAS): allows the hotel to route and track
calls without using the local telephone company.
Activity 3.1: Hospitality Information System
1.If you were the manager of a campsite in a national park with 30 cabins of
different sizes and one restaurant, what functionality would you want from a
PMS? Describe the kinds of technology that would be appropriate for this kind
of lodging. Which channels would you use to sell your cabins? Why?

2.Explore the website of an international chain hotel and one of an

independently owned and operated hotel. Compare and contrast the two
sites.

3.Identify as many hotel booking websites as you can. Choose one hotel that
you would like to visit and investigate how it is presented on all the various
sites. Visit TripAdvisor and read some of the reviews for the hotel. What
conclusions can you draw from this investigation?