Hotel Reservation Systems: How Do They Work?

Hotel reservation systems are a crucial part of how modern hotels operate. They are exceedingly helpful. As a hotel owner, you should know all about them and how to operate one. 

In this article, we’ll talk about what a hotel reservation system is and how they work. We will also run through some examples of these systems to enhance your understanding of them. 

What Exactly is a Hotel Reservation System?

Hotel reservation systems are also sometimes referred to as hotel reservation software. When someone in the industry uses this term, they are referring to a type of technology platform. In the hotel industry, such software is used to manage room bookings, rates, and inventory. At times, it might be housed within the hotel’s PMS, or property management system. However, it can also be standalone software that is connected to the PMS. 

These reservation systems act as the central hub of a reservation ecosystem. Such a setup may also include a revenue management system, channel manager, and a website booking engine. When integration of these various components takes place, the modules work together. They help a hotel manage room revenue, reservations, distribution, and availability.  

You might also hear terms like hotel booking engine. This is not quite the same as a hotel reservation system, though some people in the industry use the terms interchangeably. 

A hotel reservation system is the central hub that stores reservation information from various booking channels, such as an online booking engine, sales department, GDS, OTA, or by phone. Website booking engines, also sometimes called internet booking engines (IBEs), are examples of software that allow potential guests to make reservations directly on a hotel’s website.  

It is highly useful for a potential customer to be able to use an advanced reservation system. In addition to booking their room, a would-be guest might also decide to purchase extras at the same time. Those might include niceties such as wine, flowers, and other add-ons they will expect to find in their room when they check in or at a later time.

How Do Hotel Reservation Systems Work?

Hotel reservation systems accept bookings from would-be guests. When a potential guest visits your website, or one of the distribution channels you have empowered for the same purpose, they will be able to reserve the dates of their stay. They can do so according to a real-time display of your room rates. 

In other words, a would-be guest has a chance to see what one of your rooms will cost if they book with you at that particular moment. Since your room rates might change according to various factors, part of what a hotel reservation system does is to lock a guest into a particular price if they decide to move forward with the booking at that time.

The potential guest also has the ability to finalize their reservation by paying for it through this same system. They will do so through an online payment portal that is built into it. 

What Happens Once a Potential Guest Completes a Transaction?

Let’s say a traveler is looking at a room through your hotel reservation system. They like what they see, and they decide to commit to staying with you. They give you their credit card information or whatever other method they are using to pay for their stay. 

When they do so, the property management system, or PMS, automatically updates. This typically happens with help from another part of the system called a channel manager. When that occurs, all the room listings on reservation websites with which you have partnered get automatically updated. 

Now, let’s take a closer look at the step-by-step process that is put into motion when a potential customer interacts with your hotel reservation system.

The Details of a Guest’s Stay

We’ll use the scenario of a possible guest looking at your hotel’s website again. They might also be using other channels, such as the global distribution system (GDS), metasearch sites, wholesalers, or online travel agencies (OTAs). As a hotel owner, it is in your best interest to set up such a network, so your would-be guests have multiple ways to discover your property. This is called the billboard effect. 

No matter which of these avenues this traveler uses, they decide to commit to staying with you. When that happens, they will presumably give you the following information:

  • The specific number of people that are going to be staying with you
  • Their planned check-in date
  • Their planned check-out date

The system you have in place will be infused with a calendar. The guest will use it to input all of this data. 

The System Validates Their Request

Your hotel reservation system validating the customer’s request is what will happen next. It does so by confirming the availability of the kind of room or rooms the guest wants on the dates in question. Assuming the kind of room the traveler wants is available on those dates, the system will display the available room rates at that exact time.

Again, we should emphasize how crucial it is that the system shows the guest what the room rate is at that precise moment. Because you might change room rates based on various factors, your system should show the customer how much they will be charged at that time instead of a day or a week later. 

The Reservation Occurs

Assuming the kind of room or rooms the guest wants are available, and they feel that the price they are being asked to pay is reasonable, they will confirm their reservation at this moment. They will do so by providing personal information. That normally includes:

  • Their name
  • Their contact phone number
  • The details of their preferred payment method

This is also when a guest would give you any additional requests pertaining to that reservation. For instance, they might want a bottle of wine or champagne waiting for them when they arrive. That could be the case if they are going to be there with a spouse or significant other for a wedding anniversary or honeymoon. They might want flowers waiting for them or something else your hotel offers. 

It’s always nice to have these sorts of add-ons available, since that can quickly raise the amount of money you’re getting through this particular reservation. There are other requests a guest can make at this point in the process, though. 

They might ask for a room with a view. They might want one on a certain floor. Whatever the details of their request, the system will inform you of it to see if you are able to comply. 

The System Confirms the Booking

If you have the kind of room or rooms available that the guest wants, then once they have given you all of the required information, the system will confirm the booking. Your guest will get an email confirmation containing all of the details of their stay, including the dates, the total price tag, any extras they requested along with the rooms, etc. 

This email should also contain a confirmation number. The guest can refer to that number if they need to contact you at some point to modify the reservation.

At the same time, the system will automatically update your room inventory in your hotel’s PMS. This is another important part of what a hotel reservation system does. Again, it is this function that prevents the possibility of double booking and all of the customer frustration that will doubtless accompany it.

Now, let’s look at a few prominent examples of hotel reservation systems. 

Hotel App Store

Hotel App Store is the world’s leading hotel marketplace. It is always a solid choice because of the many options that you get with it. You can consider it to be a curated collection of the most trustworthy mobile apps with which a hotelier might wish to associate themselves. 

You can use it to filter through dozens of hotel and travel-related applications. You might look at ones that encourage guests to book directly, ones that promise you’ll make more money per booking, and so forth. 

Little Hotelier

Little Hotelier is another popular option. This is one that was designed specifically with smaller accommodation providers in mind. If you have a boutique hotel, you should certainly be aware of this choice.

Simplicity is perhaps Little Hotelier’s best feature. If you have a bed and breakfast or small hotel that targets a particular customer base, this might very well be the platform for you. 

Their bespoke small hotel reservation system is described as being one of the more user-friendly options you’re likely to find. Even if you are not the most technologically savvy, you should be able to navigate it with no problems. You can easily train your staff to utilize it. 


SiteMinder is another name in the industry that most hoteliers know about. It is a major player in the hotel reservation system industry. Probably its best feature is its seamless integration with many other hotel software platforms. 

If you use it, you should be able to easily manage this aspect of your business. Online distribution and day-to-day operations become much easier if you partner with it. However, smaller hotels might want to go with another option, like Little Hotelier.   


Cloudbeds, as the name implies, is a cloud-based hotel reservation system. It is a fully integrated hospitality management platform. It features a comprehensive revenue management system, a channel manager, a PMS, and a booking engine. 

Cloudbeds also has a highly-touted feature called Frontdesk Anywhere. It has all of the features mentioned above, but it is geared specifically toward management groups and independent hotels. 

Now, let’s look at some other platform options that feature both a booking engine and a PMS. 


Resnexus is based in the United States. It is another of the many cloud-based PMS options that have become popular with bed and breakfasts, inns, and boutique hotels. 

With it, you get both a booking engine and a website. There are various handy guest management features, automatic yield management, and rapid credit card processing capabilities as well.


Protel has become one of the more popular hotel reservation systems in Germany. It is a legacy PMS provider. It features events software, an easy-to-use mobile app, and a website booking engine as well. 


Mews is based in Prague. It is another cloud-based PMS. It has more features than many of the others on this list, including API, BI, and Marketplace solutions. It also has integrated operations, a streamlined guest journey that makes booking as easy as possible, and nearly instantaneous online payment options.

The next ones on this list feature a booking engine and a central reservation system.


Guestcentric is a hotel reservation system that was designed for both small groups and independent hotels. It has a CRS with a Partners Integration Marketplace and a powerful integrated booking engine. 


The full name of this one is SHR’s Windsurfer CRS. This one is mainly popular with hotel groups. It features call center services, a customer relationship management system, and revenue management software as well. 

Vertical Booking

Vertical Booking is part of the Zucchetti group based out of Italy. Their platform features a central reservation system with an integrated booking engine, a central reservation office, and a channel manager. 


Cendyn recently merged with another entity called Pegasus. This choice features inventory management tools and a scalable reservation system.

Now, you know a little bit about what hotel management systems are, how they work, and some of the players in this industry. There are many more options, and you’ll need to think about which ones it makes the most sense to partner with. As we mentioned earlier, the size of your hotel and the guests you’re attempting to target will probably come into play when you consider which of these choices can meet all of your particular needs. 

You might choose to look for a hotel reservation system with excellent reporting and analytics. Maybe you’re more interested in a commission-free booking engine or an integrated payment processing solution with a built-in payment gateway. 

No matter what features appeal to you, doing some careful research is certainly in your best interest before you commit to one of the many platforms competing for your attention in this crowded marketplace.

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