Corp. Client Adopts Hotel System Bypassing GDS

<B> Corp. Client Adopts Hotel System Bypassing GDS</B>

By Amon Cohen

A Web-based hotel reservations company that keeps rates low by bypassing the global distribution systems has signed the British Council as one of its first major corporate clients.

The Corporate Team does not charge hotels to appear on its system but instead makes its money by acting as a travel agency and collecting the commissions on each room sold. Corporate Team operations director Jay Virdee said GDS fees and other electronic distribution costs can cost a hotel as much again as the original 8 to 10 percent commission it pays on each booking. Using the new system effectively halves the cost of selling each room.

This has two important consequences for travel purchasers: One is that hotels can pass on some of the distribution savings in the form of improved rates to the customer; the second is that small, independent properties that cannot afford GDS fees now have an electronic reservations outlet for the first time.

The ability to bring these smaller properties online is one of the principal attractions for the British Council, an organization that promotes cultural, technical and educational cooperation between the United Kingdom and the rest of the world.

The British Council reserves 68,000 room nights a year from its U.K. offices. Although some of those rooms are upmarket hotels used by visiting foreign dignitaries, many are for students looking for cheaper accommodations.

The Corporate Team has built an online reservation system on the British Council's intranet site that includes the council's preferred suppliers. Using an intranet means those properties can now be booked direct electronically from 109 British Council countries worldwide.

"It is much easier using this system than a GDS to get our own preferred suppliers put on the database," said British Council travel manager Kevin Watts. "And the British Council has business in hostel-type properties--and you cannot find those on the GDS. We wanted something more flexible. There are no GDS charges for the hotels and hostels and it is free to us because the fees we have to pay are covered by a proportion of the commission."

Another attraction of the intranet system is that the ease of using it should encourage all British Council offices to buy through the same approved source, Watts said. "That will allow us to consolidate our hotel purchasing and negotiate a better deal," he noted.

Other plus points for Watts were the ability to keep the British Council's preferred rates confidential by maintaining the system on its private intranet, and the visuals included in the booking system. All preferred properties will have photographs and some will even include virtual walk-throughs, enabling remote offices in Africa or Asia, for example, to pan around the interior of a hotel conference room in Manchester.

The Corporate Team has been set up by hotel booking agency British Hotel Reservations Co. Founded in 1972, it claims to book more than 250,000 room nights per year. BHRC launched a corporate division in 1991, and in 1996 moved its reservation system on to the Web and made it available to business customers. This system, rebranded as The Corporate Team, was launched this summer, using development tools that in some cases have only become available over the last few months.

Virdee said that The Corporate Team's biggest advantage is the fact that it uses a system it designed from scratch, whereas established hotel reservations companies like Utell run off existing GDSs built on older technology.

Even hotel chains that say they are bypassing the GDSs are in fact using them and paying for a switch into their own systems.

"A lot of well-established companies have old legacy systems that are difficult to integrate with the Internet and are not designed to handle that sort of information, such as graphics," Virdee said.

At present, there are 5,000 British hotels on the database. But Virdee plans to add the same number of overseas properties by year-end.

Virdee is happy to work on a management-fee basis, passing hotel rates on a net basis to the client in return for a fee calculated on alternative criteria.

The system's reservations pages look similar to those of most Internet hotel booking sites, with plentiful information on each property, often accompanied by pictures and maps.

Travelers can search the hotel database for properties meeting any desired criteria or by specific amenities, pulling up only those that offer room service, parking or meeting space, for example. This is an important feature for booking independent hotels, at which such amenities are by no means a given.