the joint wto & ih&ra; study on hotel classification - Hotel Designs

IND.D.004.16 April 2004IV. CURRENT TRENDS IN HOTEL CLASSIFICATIONNew Information TechnologiesElectronic distribution in <strong>the</strong> form of Cent<strong>ra</strong>l Reservation Systems (CRS) was initiallydeveloped in <strong>the</strong> 1960’s by <strong>the</strong> major airlines as a way of managing <strong>the</strong>ir inventory andcontrolling <strong>the</strong> rising number of flights and fares. Originally only used by airlinereservation staff, in <strong>the</strong>1970’s CRS were g<strong>ra</strong>dually made available to t<strong>ra</strong>vel agents tofacilitate <strong>the</strong> reservation process and give access to inventory data. As <strong>the</strong> systemsdeveloped, user demand and high capital costs prompted <strong>the</strong> owners of <strong>the</strong>se systemsto expand <strong>the</strong>ir product offering from solely airline seat to include hotel accommodation,car hire, cruises and almost every o<strong>the</strong>r t<strong>ra</strong>vel product. This gave rise to today’s onestop-t<strong>ra</strong>vel-shops,i.e. <strong>the</strong> Global Distributions Systems (GDS). Four main companiesdominate <strong>the</strong> sector – Amadeus, Galileo, Worldspan and Sabre – with a number ofsmaller GDSs active regionally. Most GDSs subsequently developed <strong>the</strong>ir own CRSWith data structures more closely adapted to <strong>the</strong>ir particular product (e.g. hotels), linking<strong>the</strong>m electronically to <strong>the</strong> GDS to gain access to <strong>the</strong> powerful t<strong>ra</strong>vel agent market andpaying a t<strong>ra</strong>nsaction fee to <strong>the</strong> GDS owners for each booking processed.The limited space available on <strong>the</strong> display screens in CRSs and GDSs stronglyinfluenced <strong>the</strong> choice of criteria and abbreviations in which a hotel could be described forselling purposes. From <strong>the</strong> perspective of <strong>the</strong> t<strong>ra</strong>vel agent, <strong>the</strong>se systems using a textbasedinterface are far from ideal as hotel sales and marketing tools, as <strong>the</strong>y can provideonly very sparse information.Since <strong>the</strong> emergence in 1994 of <strong>the</strong> Web as an additional and competing electronicdistribution channel <strong>the</strong>re has been a rising number of consumer-oriented websitesoffering a much wider <strong>ra</strong>nge of information, as well as booking facilities, some of <strong>the</strong>meffectively bypassing both <strong>the</strong> t<strong>ra</strong>vel agent and <strong>the</strong> GDS to create a direct link to <strong>the</strong>consumer. Once again, <strong>the</strong> question of categorising hotels for <strong>the</strong> benefit of consumersor t<strong>ra</strong>vel professionals (specifically <strong>the</strong> t<strong>ra</strong>vel agent) has come to <strong>the</strong> fore. 4This prompted one of <strong>the</strong> major third-party marketing and reservation providers, Utell, aPegasus Solutions Company, to introduce its own hotel classification system.Phoenix (June 4, 2001) – Utell today introduced Utell selections, an innovative approach thatcategorizes its portfolio of 6,400 hotels to assist t<strong>ra</strong>vel agents in finding <strong>the</strong> perfect hotel for clients.Utell selections classifies Utell properties into well-defined categories, and is based where possibleon <strong>the</strong> American global industry publication Official Hotel Guide (OHG).Utell selections provides global consistency in segmenting hotels, since some <strong>ra</strong>nking systems,such as <strong>the</strong> “star system,” vary from country to country. Utell selections enables hotels to matchcustomers’ expectations with <strong>the</strong> experience, and uses a universally accepted t<strong>ra</strong>vel publication,OHG, as <strong>the</strong> foundation for classification.Utell selections segments hotels into three core categories and four niche categories. All hotels areclassified in one of <strong>the</strong> core categories: luxury, superior and value. Hotels can be fur<strong>the</strong>ridentified as one of four niche categories – style, resort, apartment or airport, dependent upon<strong>the</strong> defined category criteria.4 Cf “An Overview of Hotel Electronic Distribution”, Peter O’Connor, PhD, Paper presented to IH&RA Chains Council, Dec 2003)- 63 -