On-line

In January Grand Heritage Hotels, a consortium of 50 independently owned hotels, will launch a service for direct booking on the Internet. The booking system they will use is one of the first to make this possible for small independent hotels.

Live Internet booking is not to be confused with electronic or e-mail booking. Instead of the customer sending a message and the hotel receiving and then responding to the request, live booking provides the customer with the same immediacy as a telephone booking.

The customer can see on the screen whether there is a room available and book themselves in by filling in a form and giving a credit card number. Unlike e-mail booking requests, the booking goes directly into the hotel booking system and is confirmed almost instantly with a booking reference.

In some ways live hotel booking is nothing new. With the increasing popularity of the Internet, companies which run global distribution systems (GDS) for travel agents' use are adapting their systems for use by the public on the Internet.

Predictably, Microsoft is the latest to provide an adaptation, with a new Internet travel site called Expedia which uses the Worldspan distribution system to offer live bookings. These booking systems cater mainly for large hotel chains that are already linked to the GDS network. At present they are unable to offer live booking for hotels not linked to a GDS.

But the system used by Grand Heritage Hotels offers live booking services for hotels without links to a GDS. The provider is Places to Stay, a US company specialising in independent hotel reservations on the Internet. Prologic International has developed a similar system, called Terian, in conjunction with IBM Spain.

The systems cost hundreds of thousands of pounds to develop and works in a similar way to GDS-based systems. The Internet user makes a booking as if they are connecting to the hotel direct, but in fact there is a special service that processes the booking. Hotels use a password to access the booking system, allocating available rooms on a daily basis and collecting bookings processed by the system. Places to Stay provides a link between the booking system and the automated reservation systems of a hotel.

To take part, hotels without a Web site pay an initial fee of a few hundred pounds to have their details included in the Places to Stay or Terian directories. They then pay for use of the booking services. Terian charges a set fee of £100 per month, while Places to Stay charges a commission of between 5% and 7% on every booking made. Hotels with a Web site will pay the same amount for use of the booking services but they can put their details in the directories free of charge. They can also use the booking services on their own Web sites.

The GDS-based operations have thousands of hotels taking part. It will take some time for the others to build such a substantial network. Terian has about 50 hotels on-line and another 500 expected to come on-line over the next few months. Places to Stay was launched in the USA in June last year and has about 400 hotels on-line at present, with another 100 waiting to be connected. Hotels can register on-line with both companies.

Although live booking has been running in the USA for almost a year, are there any tangible benefits?

TravelWeb, the Internet site owned by Pegasus, says there is a 40% growth in hotel booking through the Internet. Since the company launched in March, offering on-line booking for nearly 8,000 hotels, it has processed $2.4m (£1.4m) in room sales.

Grand Heritage Hotels says that since going on-line its first hotel, the Clift in San Francisco, has received more than £5,000 of business in its first month.

Concern over high cancellation rates is unwarranted, according to TravelWeb and Places to Stay. They say cancellation rates are on par with normal industry rates. And those potential customers who are using the Internet to book are the highly desirable ABC1s, more than 30 years old with plenty of disposable income.

For hotels without access to GDS, hooking up to the Internet could provide the coverage they are looking for.