Web-Based Reservations ‘Nets Guests

• 03/07/2000

Shilo Inns, a growing hotel chain based in Portland Ore., is one of the largest independently owned and operated hospitality providers in the West, with 45 hotels in nine Western states. The company’s properties range from resort hotels along the Pacific Coast to a hunting lodge in Enterprise, Ore., to the Portland Airport Suites, a business conference facility in Portland, Ore.

As is the case with most hotel chains, potential guests normally book reservations with Shilo Inns by calling an 800 number that connects them with a central reservation center in Portland, by calling an individual hotel directly, or through a travel agent. Depending on the time of year, daily reservations total between 650 and 1,200 from all sources. Reservations made through the reservation center are forwarded to the hotels and the hotels return information to the reservation center regarding room availability.

Shilo management saw the advantage in giving guests the ability to reserve rooms via its Web site, says Jennifer Hauge, Internet distribution manager at Shilo. Because the reservation center makes current information on room descriptions, rates and availability for all its properties available to travel agents over the Global Distribution System (GDS), it seemed a logical step to make the same information available to the public over the Internet. “We distributed this information already,” she says. “By adding the Internet it would just be adding another marketing channel. We were already doing it for one set of customers, why not do the same thing for our other customers?”

The company’s initial attempt at a Web-based online reservation system was less than successful, however. That Web site was new and outsourced, according to Hauge, and because the outsourcer did not have the room rates and availability information, communication between an interested customer and Shilo Inns was by e-mail. “We didn’t have control. We didn’t have any way of offering room rates and availability without having the ISP make constant changes to the Web site.”

People coming to the Web site filled out a form and e-mailed it to the reservation center. “We’d e-mail them back saying, ‘This is what we have,’ and they’d e-mail us back again with more questions,” Hauge says. “There was a lot of back and forth getting all the information necessary to complete the transaction.”

The reservation center only received between five and 10 inquiries per day via the Web site, says Hauge. But, unlike a call to an 800 number, which the reservation center was set up to handle quickly, each and every Web-based reservation required roughly two hours processing time. “One person would answer e-mail all day long,” she says. “It was very time consuming.”

It was also annoying to potential inn guests. “When they hit Submit after filling out the form, customers expected us to have rates and availability right there. They couldn’t understand why we didn’t,” Hauge says. “We decided we needed to change when we started getting more and more inquiries from our Web site. We thought that this was definitely where the future was going, so we had better expand on it.”

In early 1999, Shilo Inns decided to host the Web site in-house and implemented an Internet-based reservation system from Chouinard & Myhre (Cotati, Cal.), running on Shilo Inns’ AS/400 Model 720 with OS/400 V4 R3. The system now offers customers current room information at all of its 45 hotels from the Web site with no human intervention.

“People send an inquiry from the Web site directly to the AS/400 where we have up-to-the-minute rates, availability and room descriptions,” Hauge says. “The information is returned automatically. They can book a reservation online and receive instant confirmation. We just sit there and watch it happen.”

Reservations made at the Web site have increased nearly 500 percent over the past year to 30 to 40 per day. Why the jump in activity? “I think people expected us to have this information at our Web site,” she says. “Once we did, it was just so easy to make reservations this way. Everything is going to the Internet and people are happy with it. They can take their time and choose exactly what they want.”

Hauge also sees a trend emerging where guests are choosing to use the Web site rather than calling the individual hotels for information. “People can get answers to their questions right online so they don’t need to call. We’re getting much more educated callers now. When they call they know what they want to book.”

Hauge doesn’t expect transactions over the Web site to affect business received from travel agencies. “I think it will go hand-in-hand with the agents,” she says. “They typically offer much more full-service sites, with airlines and car rentals, which is something we aren’t doing at this point. There are some people who are only going to book from full service sites and there are others who are already familiar with our brand and will go ahead and book from our site.”

The system paid for itself in the first year of operation, she adds. Although exact figures are proprietary, she says that the increase in reservations via the Internet, and therefore in revenues, has been dramatic. In addition, Shilo Inns is saving money by eliminating the Web site outsourcer and by having a direct channel from the Internet to the reservation system without a third-party provider. There are additional savings from reduced 800 calls and reduced length of calls from more educated callers.

There are other advantages to Web-based communications, as well. “It is opening up another marketing channel for us,” Hauge says. “We can market directly to our guests over the Internet. We can tailor our marketing messages now by targeting specific properties with specific dates, for example, to coincide with local events, or add services like restaurant reservations.”

A future move Hauge envisions is developing a membership program by building on the information from the reservation system. “It would be a ‘frequent-stay’ program, tailored to individual guests,” she says. “We would be able to recognize guests as they come on to the Web site and say: ‘Hello, Mr. Smith. Thank you for coming back to Shilo Inns. Would you like your usual room?’ That’s just a goal right now, but it makes you smile.”

Related Information: