Chapter 1

Background of the Study

Adopting industry-specific technologies in hospitality has continued to peak, starting

from the early 1970s (Collins & Cobanoglu, 2008). This rise in the number of organizations

embracing new technologies is as a result of the beneficial implications of these technologies,

such as improving their service delivery. In tourism, the use of new technologies has resulted in

the gradual development of a quality tourist experience. Upcoming digitization methods are

causing large-scale transformations of various aspects of tourism, such as hotel service delivery

and the value of individual business processes. The implications of having this digital revolution

in tourism are raising questions and causing primary contests regarding the overall outcome of

implementing new technologies (Gretzel et al., 2015). The improvements in technology have

enhanced most methods of conducting business operations that improve user interaction and

service delivery. Firms in this sector have to venture into the digitization of all business

processes and value chains related to hotel booking and other services in hospitality (Rus &

Negrusa, 2014). The entire hotel accommodation framework is enhanced through this

technological growth. The efficiency and effectiveness of business processes are pushed further

by incorporating technological innovations such as artificial intelligence (AI), machine learning,

deep learning, and big data, among other techniques. AI is the simulation of human intelligence

in executing machine processes (Bughin et al., 2017). Machine learning and deep learning are

subsets of AI.

The 2013 Travel and Tourism Competitiveness Report reported the Philippines ranking

16th regionally and ranking 81st among 130 countries surveyed. The Philippines was also listed

as the most improved country in the region, being the only Asean nation registering a significant
improvement. With the outlook for the Philippine travel and tourism industry remaining positive,

other industries are also expected to benefit, from transportation to recreational and lodging

facilities, cultural centers, and a wide constellation of community-based handicraft makers and

local scenic attraction. One hundred fifty hotels and resorts will undergo the quality assessment

activity against DOT standards. Apart from focusing on quality over and above the provision of

facilities, the project will also zero in on the service, hospitality, efficiency and food provided by

the pilot hotels and resorts. Accommodation businesses will also be graded according to their

environmental practices, comparative review against international quality assurance systems and

wider guest experience even before the customers arrive at the hotel or resort until their

departure. (Theldm, 2018)

Davao City has numerous tourism advantages which make the city as one of the top cities

that is visited by tourists. As tourism industry increases, Davao City continuously uplifts its

regional economy that contributes to the services, employment, and infrastructures. A tourist of

Davao City comes from domestic and foreign countries. Domestic tourist usually comes from the

adjacent places and foreigners are from adjacent Asian countries, America, Europe, Africa, and

Australasia. Tourists visit Davao City for business, recreational or governmental purpose.

Davao City has been named by the Department of Tourism in 2008 as the most liveable

city in the Philippines. The city is very competitive compared to the rest of Asia in terms of cost

in doing. In fact, based on the evaluation of Foreign Direct Investment Magazine in 2007 and

2009, Davao becomes one of the top five most cost-effective cities in Asia and the most cost-

effective city in the Philippines. Yet, it recognized as the 10th “Asian City of the Future.”
 Statement of the Problem

We have three research questions focused on extracting the required information in this

field of tourism:

1. How is Business Intelligence applied in the hospitality industry?

2. What are some of the benefits achieved by providing competent solutions through the

application of a high-quality Business Intelligence?

3. What are the business challenges of using low quality BI?

Review of Related Literature

The current understanding of BI involves business processes viewed from historical,

present, and predictive perspectives (Kimball et al., 2008). Functions within the BI are

categorized into data collection, text and data mining, prescriptive analytics, business

performance management, benchmarking, predictive analysis, and reporting behavior. The

technologies supporting BI must, therefore, be capable of handling these huge chunks of

structured and unstructured data (Rud, 2019). An in-depth literature review has been provided

below. Dzhandzhugazova et al. (2016) describes various ways through which different

innovations are introduced and adopted into the hospitality industry. BI encompasses all aspects

of the innovative types below, leading to a high adoption and integration process. Innovation in

BI covers new supply methods, new products, and service delivery systems, the ability to exploit
new markets, and new business organizations making up improved BI leading to better strategic

decision-making processes as well as new methods of production. All these aspects form a

hotel’s BI (Dzhandzhugazova et al., 2016). Some newer applications of BI in the top-rated hotel

tourism industries seem like something out of a fiction movie. The featured capabilities include

facial identification, voice pattern recognition, task automation, conversation through chat bots,

and real-time management of distributed applications (Bughin et al., 2016). An innovative trend

is observable in the diverse technological advancements forming a large scale implementation of

BI in some firms, the combination of particular analytical techniques gives them the ability to

create new products and services

Davao City as a premier city in Mindanao and one of the largest cities in the Philippines

enjoys a pleasant climate all year round. Being a typhoon free-zone, Davao remains balmy the

whole year, characterized by an even distribution of rainfall, temperature, humidity and air

pressure. Because it is being situated outside the typhoon belt area and it is also shielded with

mountain ranges in its borders. That’s why it is an ideal place to sun your buns or trek your booty

off and spend the night enjoying a quiet evening under the open sky or enjoying some great night

life in the urban developed areas that boast a multitude of clubs, open markets, spas, and a

variety of restaurants.

It is home to the Philippine Eagles, which are held captive, cared for, and bred. It also

houses other species of birds, mammals, and reptiles. The Center is tasked to protect and provide

sanctuary to Philippine Eagles. While it is primarily a conservation breeding facility of the

Philippine Eagle Foundation, it is open to the public for educational purposes. Simulating a

tropical rain forest environment, the Center offers visitors a glimpse into the Philippines’s forest
ecosystem. The facility is also considered a major tourist attraction in Davao City with its lush

gardens and scenery.

Meet and greet Pangil, the biggest crocodile at the resort and the many small ones in their

respective ponds. Witness how they are being feed or you can feed them yourself for a minimal

fee. Smile and pose for the camera with that big python on your shoulders. You can also see

tigers, monkeys, ostrich, birds of different species, and many animals not endemic in the

Philippines. You can also visit the nearby Butterfly House and learn how they metamorphosed

from pupa to a lovely butterfly.

When comparing the cost of living in Davao with other progressive cities in the

Philippines, Davao is really cheaper. Rates of public utilities, real estate, rentals for commercial

spaces, accommodations, labor, raw materials, and other business-related inputs are

comparatively cheaper than other major cities in Asia. Its pomelo, durian, and mangosteen are

sought-after by many, yet these remain affordable and accessible to the locals on a daily basis.

Quality products and services do not necessarily equate to high cost. This factor is seen vital in

achieving a healthy return on investments.

There is availability of cost-efficient electricity through hydropower generation, 24-hours

a day power is assured by the cable distribution of Davao Light with the availability of a back-up

generation plant. State-of-the-art telecommunications facilities that connect its people to the rest

of the world and also having the cleanest water supply in the country. The city is also the first in

the country to have an adaptive traffic signalization system and has a state-of-the-art traffic

system similar to the system in Los Angeles, California, USA.

 Strong partnership with the private sector is a major reason Davao City continues to be

the center of trade, commerce, and services in Mindanao and the gateway to Southeast Asia.

Public-Private Partnership or PPP ordinance in Davao City opens more opportunities for private

sector participation in priority development projects in the city.

Theoretical Framework

Significance of the Study

Significantly, this study is Enhancing Competitiveness in Tourism and Hospitality

Industry in Davao City through the Use of Business Intelligence and will be helpful to those

individuals who plan to invest business in Davao City. It will also be a very great help to

everyone who wants to stay and live in Davao City. As this research provide information not

only on the performance of Davao City’s tourism industry for 2008-2012 but also it adds more

knowledge on the joyful life that the city has acquired.

Scope and Limitation

This study tackles about the Enhancing Competitiveness in Tourism and Hospitality

Industry in Davao City through the Use of Business Intelligence. In this research, it discusses the

reasons why tourists visit Davao City, importance of tourism in the regional economy and its

total tourist’s population.

 Reasons why tourists visit Davao City is because of its climate, nature, wildlife, cultural

and nightlife experience, nearby getaways, adventurous escapade, cost advantage, highly skilled

human resources, fast response emergency unit, safe and clean destination, availability of public

and private utilities, and city government strong partnership with the private sector. Tourism

industry also affects the service sector. It also includes total tourist population with its purpose

and the top 5 tourist visitor in year 2008-2012.

All these ideas cover the research study which shows the completeness and consistency

of the main idea.

Definition of Terms

Business Intelligence – s the process by which enterprises use strategies and technologies for

analyzing current and historical data, with the objective of improving strategic decision-making

and providing a competitive advantage.

Availability – the quality of being able to be used or obtained

Cost-efficient – productive relative to the cost.

Enhancing – intensify, increase, or further improve the quality, value, or extent of.

Competitiveness – possession of a strong desire to be more successful than others.

Tourism – the commercial organization and operation of vacations and visits to places of

interest.

Hospitality – the friendly and generous reception and entertainment of guests, visitors, or

strangers.
Industry – economic activity concerned with the processing of raw materials and manufacture of

goods in factories.

Investments – the action or process of investing money for profit or material result.

Tourist – a person who is traveling or visiting a place for pleasure