Should You be Using a Central Reservations System?

A majority of major hotel chains have been reaping the benefits of using a central reservations system (CRS) for at least a decade, and now many hostel chains are getting in on the action as well. If you have more than one hostel, perhaps a CRS is right for you. With a CRS, all reservations at all your hostels go to one location, stored in one database, before they are sent to your property management systems (PMS) for operational purposes (for more about PMS's, see here). Not only that, data about your guests from each location's PMS can be stored in their profile within the CRS. This way, your different hostels know the customers as if they are revisiting their previous hostels, which frees up time at check-in and helps your staff better customize their stay.

That is the main reason a CRS should be considered, but there is a bigger one that not many in hospitality are talking about. Hotels that run advance purchase rates can charge the reservation at the time of booking to the location of the CRS. If your CRS happens to be located in a tax-friendly country, this could be super beneficial as long as all your hostels work together under one business. The business and tax structure here can get complicated, so you should talk to an attorney regarding your specific needs.

Now that you have a huge database of your customer data, you can more efficiently price and market your hostel. You can hire a revenue manager to manage them all, or a cluster of your hostels depending on how big you are. You could play with that data using a revenue management system. Additionally, if your PMS has ancillary revenue streams, they can do some modeling and focus on the total revenue per average bed (tRevPAB) instead of yield. In hotels, revenue management systems have been known to produce an average increase of 7% in revenue. That should justify a revenue manager for a mega hostel or chain, and at least justify some time allocations to revenue managing duties for an individual.

Having all the data in one place means you can use one marketing manager for all your hostels too. They can use the data to better understand their customers and create email, social media, and search engine marketing campaigns. You could also have one sales manager working with groups and special requests for all locations as well.

As of now, only two systems exist that fully understand the needs of hostels. They are Guestcentrix and SIHOT. If you know of more, please add them in the comments.

In terms of integration with a channel manager (more about channel managers here), a channel manager would get your rates and availability from your PMS, and when reservations are made, they are sent to the CRS first, then the CRS sends them to the PMS. As you can see, keeping it 'central' has its benefits. Is it right for you?