InterContinental Hotels Group (IHG) and Amadeus have announced plans to develop a next-generation Guest Reservation System (GRS) which will ultimately replace Holidex, IHG's proprietary reservation system.
So far, so good, but the announcement says that the new system will "revolutionise the technological foundations of the global hospitality industry. Amadeus will use a new cloud-based community model, a first in the hotel sector, and similar to the model it developed for the global airline industry."
This sounds as if transactional data might no longer be held in a dedicated data centre such as Amadeus's at Erding but a cloud server. Dedicated data centres are notoriously expensive; cloud servers are not. If this is the case, it would be fascinating to know what the new financials might look like. Suppliers have long bemoaned the high cost of their content being held on the GDS and the desire by hotels to shed expensive methods of distribution are no secret.
It also says it will "drive innovation in the industry for the long-term benefit of owners and guests.
These are very general phrases but the translation could be very specific. A cloud-based community model means participation by a group of people. That immediately suggests that the reservations will no longer be owned by the GDS but there will be shared ownership. Again, it would be fascinating to know the commercial formula attached.
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Amadeus' Data Centre in Erding, GermanyThe fact that it will be "similar to that developed for the global airline industry" sounds like we are probably looking at the merchandise model which GDS companies have developed for airlines so that the air booking experience can also include the booking of ancillaries, ie extras beyond the fare such as the fee for a seat reservation. As it's for the "long-term benefit of owners and guests", the likely surmise is that data on individual travellers can be retained and made use of. Such personalisation means that hotels can build up a guest profile to deliver more targeted service (ie the hotel will know that the guest always wants a room near a lift and prefers sparkling mineral water). It also means that hotels can target the sale of ancillaries.
In theory this should not be a worry for responsible travel managers who will have carefully outlined what is a reimbursable expense and what is not within a travel policy. The practice could be quite different.
For example, some room rates include breakfast, some don't. Some include free Wifi, some don't. Some include free parking, others don't. The point is that the negotiated price will specify all this in the contract. Whether the right rate for every property is always comprehensively and accurately loaded into the booking system and whether every traveller is always aware and alert to what is — and what isn't - included is another issue. Even when a traveller being charged for a breakfast that should have been included is noticed, obtaining a refund can be a cumbersome and time-consuming experience.
As the travel booker and the traveller are increasingly one and the same person, the potential for confusion about what is included or excluded, reimbursable or not also increases. After all, remembering the detail of rates is not foremost in a business traveller's mind.
Loyalty programmes incentives mean that both airlines and hotels are gathering more and more information about travellers — information that in some cases a corporate does not hold because of data privacy legislation. That information is invaluable for targeted sales and marketing.
Hotels and airlines should not be criticised for this. They are businesses that must do the best thing possible to increase their own companies' performance and that means developing and taking advantage of new technologies and solutions appropriate to changing markets and behaviours.
But travel managers need to be aware of these future challenges and plan now on how their own processes and policies will work in tandem with new supplier practices.
And the financials, too, could be interesting.