Global Travel and Tourism Solution Company Sabre and
Long-term Partnership... Laying the Foundation for Technology
First Korean Hotel to Obtain GDS Chain Code 'LL'
Applied to Worldwide Reservation Systems
Lotte Hotel is scheduled to open 'Lotte Hotel Seattle' in downtown Seattle this September. It was acquired last December from the American private equity firm Stockbridge.
[Asia Economy Reporter Cha Min-young] Lotte Hotel has achieved a technological collaboration as a preliminary step to becoming the first global hotel chain system in the Korean hotel industry. Despite the COVID-19 crisis, Lotte Group Chairman Shin Dong-bin's 'love for hotels,' which declared a commitment to global hospitality, has materialized into concrete results.
A Lotte Hotel official stated on the 8th, "We have signed a strategic long-term partnership with Sabre, a global travel and tourism specialized solution company, to leap forward as a world-class hotel chain." This matter had been prepared even before the COVID-19 issue arose earlier this year and has been pursued from a long-term perspective.
A representative achievement of this partnership is that Lotte Hotel will have its own unique GDS (Global Distribution System) chain code, 'LL.' This is also the first achievement for a Korean local hotel. Among famous global hotel chains, Hilton (HL) and Marriott (MC) are examples. This is similar to airlines having their own three-digit unique codes. It also signifies breaking free from the limitations of being a regionally confined local hotel and transforming into a professional management company with a systematic membership system and hotel operation know-how.
Having an independent GDS chain code in the hotel industry can be interpreted as a stepping stone toward becoming a global hotel. This is because it enables the listing of all Lotte Hotels worldwide under a unified GDS code on global OTA (Online Travel Agency) channels. It also provides a more advantageous position in overseas marketing and sales targeting global business customers.
Through Sabre's Sabre Hospitality Solutions SynXis reservation system, Lotte Hotel will connect with over 600 online channels and more than 9,000 travel agencies worldwide. Especially as the OTA industry, which is online-based travel agencies, is growing and the complexity of the travel business is increasing, the need for a solid technical foundation has also grown.
In particular, since Chairman Shin Dong-bin of Lotte Group has expressed a strong will to elevate the hotel business to a global level, there is great expectation that the group will provide substantial support for the hotel business. In an interview with Japan's Nihon Keizai Shimbun in March, Chairman Shin actively expressed his intention to expand the hotel business globally, saying, "We will expand the hotel business, which was centered in Korea, to the world." The plan is to grow Lotte Hotel to 30,000 rooms, double the current size, within five years through M&A and other means. Promising expansion regions mentioned include the UK and Japan.
Lotte Hotel is expanding its global footprint, including opening a hotel in Seattle, USA, on September 24. Although the opening was initially scheduled for June, it was delayed due to COVID-19 variables. However, the plan is not to postpone the opening itself. Additionally, Lotte Hotel operates 21 hotels domestically and has 3 in the USA including Seattle, 4 in Russia, 2 in Japan, 2 in Vietnam, 1 in Myanmar, and 1 in Uzbekistan.
A representative from a global chain hotel said, "Even 5-star luxury hotels located in famous spots in Seoul may face limitations in overseas sales as local hotels," adding, "The reason for paying expensive royalties to global chain brands is because there is a globally dense reservation system."
Meanwhile, Sabre is a technology company operating in 160 countries, and in Korea, there is Asiana Sabre, a joint venture with Asiana Airlines specializing in airline, ticketing, and reservation solutions. Its software, data, mobile, and distribution solutions are used by airlines and hotels worldwide for passenger and guest reservations, revenue management, as well as airline, network, and crew management.
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