Making the Impossible Possible: The Magic of Hotel Room Allocation & Distribution Technology

The average nightly rate for a hotel room in Nashville last year was $261. In Boston, the average was $257. [1] For the average four-night stay in either destination, a guest invests over $1,000 without anything to show for it but a tiny bottle of shampoo and good memories.

Know what else costs $1,000? A brand-new, stainless-steel refrigerator. And if the store delivered the wrong one, would they shrug their shoulders like a front desk agent? Of course not. They would take it back and bring the right one. The same goes for any other major purchase. In fact, I wouldn't buy a product with a $1,000 price tag without some guarantee that the company would deliver the exact item with nary a ding nor scratch.

How is it then that every day, the hotel industry delivers the wrong product to many of their guests—telling guests when they arrive that the room type or features they requested are no longer available? There are two issues at play. The first is that hotels have come to consider themselves synonymous with service. Of course, a hotel is only as nice as its staff however, it's more complicated than that. Hotels require product + service in equal measure. Having focused so much on service as of late, hotels have chalked product to social lobbies and WiFi rather than focusing on delivering guests the requested room—the actual product. Think of the money and time that is spent driving guests to the brand's website, only to knowingly accept that some will be disappointed in the end.

The reason for this is located in the second issue: technology. Hotels haven't had the technology to bridge the disconnect between distribution and allocation. It is this divide that has created the rift between what travelers buy and what they get when they arrive.

If what they receive when they arrive is anything but the room that was reserved with the features that were reserved, those good memories are already compromised, and they have only your hotel to point to, even if they booked through a third-party.

Hotels act as though there is no solution. "I'm sorry, the King on the high floor that you reserved? It is impossible tonight. We do our best to guarantee your reservation, but we aren't able to control this."

But it is not impossible. And making it so requires dealing with this issue long ahead of check-in, dealing with it at the point of the reservation.

It is now entirely possible to guarantee a guest the room type they purchase with the features they request—and to guarantee it no matter where the guest books. By using predictive future room assignments, hotels can ensure that whether the guest books on an OTA, a CVB, via metasearch, or any other third party, she will receive the room she booked. Using this intelligent technology, the studio suite with a view is shown during the booking process only if it is available, and it is allocated upon the reservation instead of the morning of arrival.

To do so, the technology communicates with the hotel PMS, enabling the booking path to be highly personalized. This means guests can select the relevant room type as well as room attributes and features and receive the product they ordered.

Hotels have succeeded in not delivering on their product promise for so long that guests have little trust that they will receive the requested room. Why else would "travel insiders" repeatedly suggest that guests call ahead to the hotel if they'll be late or if it's "really important." (To which I say, "When is it not important?") And the notion that a guest should have to call ahead after already having reserved their room is preposterous. However, because the industry has been without proper allocation resources for so long, those early adopters that are able to truly guarantee the guest's room and features will have a competitive edge until the industry catches up.

It's not magic; it's technology. And it is possible.

[1] Nashville Hotel Rates Ranked Highest in US. Tennessean. October 2016.

Revenue Management Travel Technology Lodging Industry