Taking The Blind Out Of Blind Bidding.(Graves World Hospitality introduces online booking services)

Hotels July 1, 2009 | Kirby, Adam By Adam Kirby, Associate Editor A new reservations system from Graves World Hospitality could revolutionize online booking.

Ben Graves understands the perils of cutting rates–that doing so inherently devalues a hotel in the eyes of consumers, and that it can take many years for pricing to return to previous levels.

So the president of Minneapolis-based hotel management company Graves World Hospitality began brainstorming with his staff, trying to think of a way to gain a competitive advantage in the recessionary economy without actually putting rooms on sale.

“We’re seeing, especially in the luxury market, a lot of rate erosion,” Graves says. “Basically, we were trying to figure out a way to hold the rate erosion but still grab some business in pockets that might need it.” He thought about one of the industry’s most successful discounting models–the blind-bidding concept made famous by opaque online travel agents like Priceline.com –and then he realized a way to improve the concept for hoteliers and consumers alike: remove the opacity.

Graves World commissioned New York-based reservations systems vendor Open Hospitality Inc. to create a platform that merges a standard hotel Web booking system with the name-your-own-price functionality of Priceline. The result is a proprietary hosted booking system that lets guests bid on hotel rooms while also knowing exactly which hotel is being bid on.

“It’s more of a known commodity than going to Priceline, obviously, and bidding for just a 4-star hotel in a given market,” Graves says.

Most significantly for Graves World, the “Place A Bid” option lets the company capture additional price-sensitive business without actually lowering published room rates. If the published rate is more than the guest is willing to spend, the bidding option gives the hotel a second chance to capture the business.

“By offering this directly, we pass savings on to our guests. We allow the market to tell us where the room rate should be,” says Scott Fischburg, vice president of sales and marketing for Graves World.

Indeed, rate integrity is preserved–and as an incidental bonus for guests, the bidding process is exciting in and of itself. Rooms booked via bid must be prepaid, and cancellations are not permitted.

Graves World’s Place A Bid option is one of those simple, why-didn’t-I-think-of-that ideas. Would-be guests select their dates and then enter a bid amount; if the bid falls within the hotel’s predetermined range of acceptability, the reservation is automatically confirmed. this web site bidding for travel

“In one sense, it just seemed like, ‘Of course we should do this.’ It is almost so basic that it didn’t seem like that big of an idea,” Graves says. “But when you explore the marketplace, nobody has done it besides Priceline, and that is different.” The range of acceptable rates is set by hotel revenue managers using the same parameters they would use to establish rates on third-party sites. Rates are manually set while Place A Bid is evaluated and tweaked, but it will eventually become automated, Graves says.

Unlike Priceline, which limits one bid per 24 hours, Graves World is not placing a limit on bids. Theoretically, a person could submit an absurdly low bid and incrementally raise it to assure the lowest possible rate. If that sort of system abuse becomes frequent, Graves World may reevaluate bid policies.

“We have blockers set up, but we haven’t had to implement it yet,” Graves says. “Why make a rule for that one-tenth of a percent? If that one-tenth of a percent becomes 4%, then we’ll have to take another look at that.” Place A Bid is now being piloted on Graves601Hotel.com , the Web site for the 255-room Graves 601 Hotel, Minneapolis, and eventually will be rolled out to each of the company’s independent hotels. Graves also would like to add the feature for the company’s branded properties, if legal hurdles and brand-standards concerns can be satisfied.

In the first week Place A Bid was active, 49% of the submitted bids were accepted. If Place A Bid catches on, Graves may explore the possibility of instituting actual room night auctions for high-demand dates or for limited-space promotional packages.

Graves World is now in talks with Open Hospitality about whether to make the Place A Bid system available to other hotel companies. Graves admits the concept would not be difficult to replicate, but he welcomes the inevitable mimicry from competitors. go to website bidding for travel

“If every hotel did this, then so be it,” he says. “Then everyone could put their public rates even higher.” Direct comments to: [email protected] Pan Pacific’s Panther Integrates Reservations, CRM Adam Kirby Following the migration of Parkroyal Hotels and Resorts from a third-party distribution provider to a proprietary system, Pan Pacific and Parkroyal Hotels have launched a new single-database central reservations and distribution system named Panther.

The new distribution platform provides a single point of inventory control across hotel properties, preventing transaction duplication and ensuring rate and inventory parity. It enables operational synergy while also optimizing revenue opportunities.

Panther integrates central reservations, customer relationship management, sales-force automation and customer-facing Web functionality for reservations, customer profiling and meetings bookings. The solution supports rich integration to both the property management and sales and catering solutions, providing Pan Pacific with a single-image environment. “This is a long way from where we started with a basic disconnected reservation booking system,” says Mark Fancourt, vice president of information technology for Pan Pacific Hotels Group.

Panther is a single database product that combines several Micros products–Opera Central Reservation System, Customer Information System, Sales Force Automation and Web Suite. It also integrates with GHA.net through the MyFidelio platform, and with the Opera Property Management System and Sales & Catering system.

“Traditionally, there are multiple disconnected systems to manage and update,” Fancourt says. “We have reached the point where we are able to control the environment from one system. The end result of this is that rate parity and the application of our revenue strategies are applied equally across all of the channels of business.” Following the launch of Panther, the brands posted a 26% gain in revenue and a 23% increase in total room nights year-over-year.

Vendors (This is not a complete list of reservations systems providers.) Agilysys agilysys.com Amadeus amadeus.com GenaRes Worldwide genares.com GuestCentric guestcentric.com Micros Systems micros.com Newmarket International newmarketinc.com Northwind-Maestro PMS maestropms.com Open Hospitality openhospitality.com PAR Springer-Miller Systems springermiller.com Passkey International passkey.com Pegasus Solutions pegs.com RezStream Hospitality Solutions rezstream.com Sabre Travel Network sabretravelnetwork.com SoftBrands Hospitality softbrands.com SynXis synxis.com TravelClick travelclick.com Trust International trustinternational.com Vizergy vizergy.com Kirby, Adam