Final Project of

Management Information Systems

Role of MIS in Hotel Management

Hotel Information System

Team Members:

IMRAN LATIF
FA09-MB-0055

ATIR HASSAN
FA09-MB-0192

ADNAN BALOCH
FA09-MB-0087

NABEEL YOUSUF
FA07-MB-0133

INSTRUCTOR

MAZHAR MANZOOR
Lecturer, Mohammad Ali Jinnah University.
 INTRODUCTION

Importance of Information Technology:

Information technology (IT) refers to the management and use of information

using computer-based tools. It includes acquiring, processing, storing, and
distributing information. Most commonly it is a term used to refer to business
applications of computer technology, rather than scientific applications. The term
is used broadly in business to refer to anything that ties into the use of
computers. Mostly businesses of today create data that can be stored and
processed on computers. In some cases the data must be input to computers
using devices such as keyboards and scanners. In other cases the data might be
created electronically and automatically stored in computers. Small businesses
generally need to purchase software packages, and may need to contract with IT
businesses that provide services such as hosting, marketing web sites and
maintaining networks. However, larger companies can consider having their own
IT staffs to develop software, and otherwise handle IT needs in-house. For
instance, businesses working with the federal government are likely to need to
comply with requirements relating to making information accessible.

Hotel Information System

Computerized Hotel Management System consists of a series of software

programs (or modules) including reservations, room management, and guest
accounting functions. A variety of stand-alone applications may also be
interfaced with an installed management system. Popular interfaces include

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microcomputers, point-of-sale systems, call accounting systems, electronic
locking systems, energy management systems, auxiliary guest service devices,
and guest-operated devices.

MODULES

FRONT OFFICE APPLICATIONS

• Reservation Module
• Rooms Management Module
• Guest Accounting Functions Module

SERVICE APPLICATIONS TO BE INTERFACED

• Micro computer interfaces
• Point of sale system
• Call accounting system
• Electronic locking system
• Energy management system
• Auxiliary guest service devices
• Restaurant Management System (RMS)
• Sales & Catering Applications

BACK OFFICE APPLICATIONS

• Accounting Applications
• Internal Control Applications
o Payroll Module
o Inventory Module
o Purchasing Module
o Financial Reporting Module

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CASE STUDY (MARRIOTT INTERNATIONAL)
MARSHA (Marriott Automated Reservation for Hotel Accommodations)

FRONT OFFICE APPLICATIONS

RESERVATION MODULE:

A reservations module enables a hotel to rapidly process room requests and

generate timely and accurate rooms, revenue, and forecasting reports.
Reservations received at a central reservations site can be processed,
confirmed, and communicated to the destination property before the
reservationists finishes talking with the caller on the telephone. When the
destination property uses a property management system, the reservations
module receives data directly from the central reservation system, and in-house
reservations records, files, and revenue forecasts are immediately updated. In
addition, the reservations data can be automatically reformatted into pre-
registration materials and an updated expected arrivals list can be generated.

ROOMS MANAGEMENT MODULE:

A rooms management module maintains up-to-date information regarding the

status of rooms, assists in the assignment of rooms during registration, and helps
coordinate many guest services. Since this module replaces most traditional front
office equipment. This module alerts front desk employees of each room’s status
just as room and information racks do in non-automated environments. For
example, with a room rack, an upside-down card without a folio covering it may
signify that the previous night’s guest has checked out, but that the room has not
yet been cleaned for resale. This status will remain unchanged until
housekeeping notifies the front desk that the room is clean and ready for
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occupancy. In a computerized system, the front desk employee simply enters the
room’s number at a keyboard and the current status of the room appears
immediately on a display screen. Once the room becomes clean and ready for
occupancy, housekeeping changes the room’s status through a terminal in the
housekeeping work area, and the information is immediately communicated to
the front desk.

GUEST ACCOUNTING FUNTION MODULE:

A guest accounting module increases the hotel’s control over guest accounts
and significantly modifies the night audit routine. Guest accounts are maintained
electronically, thereby eliminating the need for folio cards, trays, or posting
machinery. The guest accounting module monitors predetermined guest credit
limits and provides flexibility through multiple folio formats. When revenue
centers are connected to the Hotel Information System, remote electronic cash
registers or point-of-sale terminals communicate with the front desk, and guest
charges are automatically posted to the appropriate folios. At check-out,
outstanding account balances are transferred automatically to the main ledger
(accounts receivable) for collection.

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 SERVICE APPLICATIONS

MICRO-COMPUTER INTERFACES:

Microcomputer interfaces to larger hotel computer systems have become a

popular means of expanding data processing capabilities. Downloading
(transferring) data from the hotel systems to a microcomputer enables
management to use data contained in the hotel system’s software with software
applications designed for the microcomputer. For example, the lodging system
may maintain all of a hotel’s accounting data. When designing next year’s
budget, management may wish to base projections on actual transactions of the
current accounting period. If management is able to download the necessary
accounting data from the Hotel Information System to the microcomputer the
data can be used by microcomputer software applications that may include word
processing, electronic spreadsheets, database management, and
communications programs.

POINT-OF-SALE SYSTEMS:
A point-of-sale system, such as a network of electronic cash registers, is
capable of capturing data at point of sale (POS) locations and transferring them
to the system’s guest accounting and financial tracking modules. The ability to
communicate such data to both front and back office components can result in
numerous benefits derived through comprehensive reporting.

CALL ACCOUNTING SYSTEMS:

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Call accounting system (CAS) enables a hotel to take control over local and
long-distance telephone services and to apply a markup to switchboard
operations. A call accounting system can place and price outgoing calls. When a
CAS is interfaced with a front office guest accounting module, telephone charges
can immediately be posted to the proper folios. The hotel’s telephone
department, traditionally a loss leader, can become a potential profit center.

ELECTRONIC LOCKING SYSTEM:

Many types of electronic locking systems are available today. Often these
systems interface with a front office computer system, thereby enabling
management to exercise important key control measures. One kind of electronic
locking system functions through a computer terminal at the front desk. The
terminal selects a code which will permit entry and then produces a card for the
guest to use. Once a code is entered and a card produced, all previous codes
are canceled, and cards issued to previous guests no longer function.

ENERGY MANAGEMENT SYSTEM:

Interfacing energy management systems with a hotel computer system links
guestroom energy controls with the front office room’s management package. An
energy management system monitors guestroom temperatures by computer.
This may lead to significant reductions in energy consumption and lower energy
costs. For example, in the cold winter months, an unoccupied room may be
maintained at a temperature of 60oF (15.6oC). When a guest checks in and is
assigned a guestroom, the computer can automatically turn up the room’s
temperature to a more comfortable 70oF (21.1oC). By the time the guest reaches
the room, the temperature will be acceptable, and the hotel’s energy costs will
have been reduced.

AUXILARY GUEST SERVICE DEVICES:

Automation has simplified many auxiliary guest services, such as the
placement of wake-up calls and the delivery of messages to guests. These
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functions are often performed by devices (such as electronic message-waiting
systems and voice mailbox systems) that are marketed as standalone systems
that can be interfaced with the room’s management module of a hotel information
system.
RESTAURANT MANAGEMENT SYSTEM:
A computer-based restaurant management system (RMS) functions through
specific hardware components and a wide variety of applications software
packages.

Food and beverage service applications vary considerably depending upon the
type of operation (quick service, table service, or institutional service), kinds of
meals offered (breakfast, lunch, dinner, banquets, etc.).

The term service applications refers to software programs used by restaurant

management systems to process data related to front-of-the-house food service
activities. Service –oriented applications of a computer-based restaurant
management system rely upon electronic cash register (ECR) and point-of-sale
(POS) technology to monitor service area transactions through cashier terminals,
pre-check terminals, remote work station printers, and network controllers.

The term electronic cash register refers to an independent (stand-alone)

computer system. The cash register frame houses the necessary three
components of a computer system: an input/output device, a central processing
unit, and storage (memory) capability. A point-of-sale terminal, on the other
hand, contains its own input/output device and may even possess a small
storage (memory) capacity, but does not contain its own central processing unit.
In order for POS transactions to be processed, the terminal must be interfaced
with (connected to) a central processing unit that is located outside of the
terminal’s housing. Some food service properties may reduce the cost of
automation by interfacing several POS terminals with a large central processing
unit. Other operations may find a series of ECRs to be more effective.

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Like all computer hardware components, ECRs and POS terminals require
software programs that tell them what to do, how to do it, and when to do it.
Service related applications software programs include pre-checking, check
tracking, sales analysis, and limited attendance and inventory control packages.
SALES & CATERING APPLICATIONS:

SALES APPLICATIONS:

Hotel sales office staff and food service catering managers spend a great part of
each day processing paperwork related to information collected through
prospecting, selling, booking, and reporting. Today, at many properties, much of
this time consuming and costly effort is handled with computers.

In a fully automated sales office, every salesperson with a computer terminal has
immediate access to guestroom control information. Bookings and cancellations
can be quickly processed as they occur-even as the salesperson is on the
telephone with the client. This helps ensure that every salesperson has access to
exactly the same information, and that “definite” and “tentative” bookings are
clearly identified to prevent errors. Also, an automated sales office system can
produce reports that provide information on accounts, bookings, market
segments, sales staff productivity, average room rates, occupancy, revenue,
service history, lost business, and important marketing data. Many of these
reports would take several hours to produce manually.

CATERING APPLICATIONS:
Catering application monitors and controls the activities associated with each
stage of off-premises catering service. Many of the files created through the use
of catering software packages perform functions similar to computer-based
restaurant management applications. In addition to containing data on all
purchased food and beverage products, catering files include data on such non-
food items as labor, serving utensils, production equipment, rental equipment,

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disposable items, and entertainment options. The more complete this file, the
easier it becomes for the caterer to assemble an entire catering service package.

BACK OFFICE APPLICATIONS

ACCOUNTING APPLICATIONS:

The number of accounting software modules provided by a back office Hotel

Information Systems. A typical back office system contains application software

designed to monitor and process accounts receivable and accounts payable

transactions, payroll accounting, and financial reporting. Additional back office

programs include inventory control and valuation, purchasing, and budgeting.

The following sections present an overview of the applications typically included

in a PMS back office package.

Accounts Receivable Module. An accounts receivable module monitors

outstanding balances of guest accounts. An account receivable is an amount
representing charged purchases made by a guest who has deferred payment for
the products and services rendered by the hotel. Accounts receivable balances
can be automatically transferred from front office software applications, or they
can be manually posted directly into an accounts receivable program. Once
entered into the back office system, account collection begins. Account billings
and the aging of accounts receivable can also be monitored by this back office
software.

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Account Payable Module. The accounts payable module tracks purchases,
creditor positions, and the hotel’s banking status. Accounts payable activities
normally consist of posting purveyor invoices, determining amounts due, and
printing checks for payment. Three major files maintained by an accounts
payable module are;

• Vendor master file

• Invoice register file

• Check register file

The vendor master file contains an index of vendor names, addresses, telephone
numbers, vendor code numbers, standard discount terms (time and percentage),
and space for additional information. An invoice register file is a complete list of
outstanding invoices cataloged by vendor, invoice date, invoice number, or
invoice due date. This file becomes especially important when management
wishes to take advantage of vendor discount rates. The calculation and printing
of bank checks for payment to vendors is monitored through the check register
file. Check production and distribution is summarized into a payables report and
reconciled with bank statements.

INTERNAL CONTROL APPLICATIONS:

Payroll Module:
A payroll accounting module is an important part of a back office package
because of the complexities involved in properly processing time and attendance
records, unique employee benefits, pay rates, withholdings, deductions, and
required payroll reports. The payroll accounting module must be capable of
handling job codes, employee meals, uniform credits, tips, taxes, and other data
that affect the net pay of employees. The unique nature of payroll data indicates
that special care be taken to maintain an accurate payroll register, to closely

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control the issuing of payroll checks, and to protect the confidentiality and
propriety of payroll data.

Inventory Module:
A back office inventory module automates several internal control and
accounting functions. Internal control is essential to efficient hospitality industry
operations. By accessing inventory data maintained by and inventory master file,
a back office inventory module is generally able to address three of the most
common inventory concerns: inventory status, inventory variance, and inventory
valuation. Inventory status refers to an account of how much of each item is in
storage; inventory variance refers to differences between a physical count of an
item and the balance maintained by the perpetual inventory system; and
inventory valuation refers to the value of items in inventory.

Purchasing Module:
A back office purchasing module maintains a purchase order file and a bid
specification file. This module enhances management’s control over purchasing,
ordering, and receiving practices. Using minimum/maximum inventory level data
transferred from the inventory module, the purchasing module generates
purchase orders based on an order point established through usage rate and
lead-time factors. A purchasing module may also use a zero-based inventory
system and generate purchase orders based on projected sales volume.

Financial Reporting Module:

The use of a financial reporting module, also called a general ledger module,
involves the specification of a chart of accounts (a list of financial statement
accounts and their account numbers) and a systematic approach to recoding
transactions. The design of the general ledger module is often crucial to an
effective back office system. The financial reporting module is generally capable
of tracking accounts receivable, accounts payable, cash, and adjusting entries. In
addition, most financial reporting modules are capable of accessing data from
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front office and back office modules to prepare financial statements, which
include the balance sheet, the statement of income (and supporting departmental
schedules), and a variety of reports for use by management.

SUMMARY

Summary

This project is focused on information, one of the most valuable resources of a

hospitality business. Information can increase a manager’s knowledge of guests,
service, labor, finance, and other areas of concern. Information can also reduce
the uncertainty that managers may experience when making decisions. And,
after decisions have been made, information can provide managers with useful
feedback.

Information is the result of data processing that transforms raw facts and isolated
figures into timely, accurate, and useful reports. The conversion of data into
information is accomplished through a cycle of events identified as input,
process, and output. The primary objective of all information systems, including
computerized ones, is to transform data into timely, accurate, and useful
information. The system is often best achieved through electronic data
processing. The difference between data processing and electronic data
processing lies in the automation of the process and the addition of a memory
unit.

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An information system is a managerial tool capable of processing large quantities
of data much more quickly and accurately than any other data processing
method.

CASE STUDY

Organization:

MARRIOTT INTERNATIONAL

Management system:

MARSHA (Marriott Automated Reservation for Hotel Accommodations)

Introductory Overview:
Marriott International is a leading lodging company with more than 2,700
properties and approximately 499,000 rooms worldwide. In 2005, Marriott relied
on it’s integrate technology infrastructure that facilitate more than 69.5 Million
reservations an average of over 190,000 per day , while maintaining availability
of better than 99.9 percent. These achievements were made possible by
Marriott’s ambitious, long-term program of improvement so ensure that
technology shapes and enables the company s business Marriott’s agile, enter-
prise-wide infrastructure and scalable model for rapid growth in e-commerce has
solidified he company’s dominant market position, enabling Marriott to lead he

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global lodging industry online hotel room sales, while maintaining the industry’s
lowest cost per reservation.
Marriott’s technology infrastructure has followed a strong evolutionary growth
path; with the groundbreaking work done on MARSHA leading to the business
processes that today drive traffic to Marriott.com. In this way, Marriott put itself
ahead of its competitors in both systems integration and its ability to handle large
transaction volumes with 24/7 continuity. The result is an integrated business and
technology environment that runs smoothly, efficiently and cost-effectively,
enabling the company to achieve its distribution and customer service objectives
consistently, and to add new hotels and brands to Marriott’s integrated global
system practically overnight as the business grows.

MARSHA TECHNOLOGY:
Marriott’s MARSHA reservation system has set the standard in the lodging
industry for many years, providing the lowest cost per transaction, highest
contribution to occupancy, and highest revenue generated per call.

MARSHA is a powerful reservations engine, supporting seamless, multi-channel

booking for Marriott’s 2,700 properties world-wide.

MARSHA is more than a simple reservations processor. As a core system

connecting Marriott to customers, partners and suppliers, MARSHA presents the
company’s global room inventory as a consistent, single image for sale in real-
time across all channels. Hundreds of applications run on MARSHA, including
inventory control, sales, pricing, client data, rewards data, and more – basically
everything needed to maintain a global reservation system. All of that takes a lot
of horsepower, and MARSHA uses the IBM Transaction Processing Facility
(TPF) operating system, which is designed for high-volume, real-time
applications. Marriott runs TPF on an IBM z990 mainframe server.

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In fact, MARSHA is now capable of handling in excess of 400 percent more
transactions per second than it could five years ago, a significant boost to
customer service and business profitability, with no significant increase in IT-
related costs.

SUCCESS:
In discussing the success of Marriott’s integrated MARSHA reservations system
and Marriott.com Internet solution, the numbers tell the story. To serve more than
2,700 properties and more than 499,000 rooms worldwide, this infrastructure
enabled Marriott to:

• Book 69.5 million new reservations in 2005, averaging over 190,000 per
day or more than $100 million on peak days.

• Maintain availability of better than 99.99 percent in 2005.

• Enable 100 percent growth in sales from 2003 to 2005, logging single-day
sales records of nearly 14 million.

• Process 900 transactions per second and more than 1,200 transactions
per second on peak days with MARSHA, and yet Marriott’s cost per
reservation has decreased.

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