Chapter 1: Information Technology in the Hospitality Industry

Information Technology (IT) covers a broad spectrum of hardware and software solutions that
enable organizations to gather, organize, and analyze data that helps them achieve their goals. It also
details technology-based workflow processes that expand the capacity of an organization to deliver
services that generate revenue. IT includes a combination of hardware and software used together to
perform the essential functions people need and use every day.

IT impacts and assists the growth of practically every industry in the present age. Hotel industry
too isn't insulated from its effects. Companies in the hospitality industry face a highly competitive
environment in which differentiation and innovative customer experiences are key elements in improving
revenue by building brand awareness and loyally among customers. They are under such pressure to keep
up with expectations of guests that they are implementing new technologies to regain their edge. Leading
hospitality properties are using technology products to differentiate themselves from their competition
and thereby increase market share and improve revenue.

The success of a business. To certain extent, depends on its ability to acquire and utilize updated
information to assist its management and marketing processes. Hence, Information Technology (IT) assists
organization to manage information dynamically and influences business competitiveness through
assisting decision makers to make appropriate investments and decisions. IT helps to meet the demands
for timely and accurate information by customers and thoi1 diffusion in the tourism and hospitality
industries has recently increased at an unprecedented rate: This is evident by the ubiquitous presence of
IT systems artwork cooperatively to assist managers to deliver quality service to their customers and to
enhance operational efficiency and control costs. Researchers have stated that IT, by acting as a protector
and enhancer, directly influences the experiences and behavior of tourists.

It is advantageous for tourism and hospitality managers in general and marketing managers in
particular to be aware of the recent changes in IT and their relationship with customer service. As IT
development becomes more sophisticated. Industrial practitioners, educators, and policy makers may
find increasing difficulty selecting, analyzing, implementing, and operating new IT systems. In order to
satisfy tourism demand and survive in the long term there is no choice but to incorporate technology and
enhance the interactivity with the marketplace.

With travelers becoming increasingly tech-savvy, hotels who do not embrace the latest
technology to deliver innovative services to their guests standout to lose big lime. However, keeping
abreast of the changing technology, and developing cutting-edge solutions based on such technology is a
big challenge for hotels and would in any case, be a drag on their core focused.

Advantages of Information Technology in the Hospitality Industry

Listed below are the advantages of utilizing information technology in the hospitality industry:

 Reduce Operational Cost. The use of information technology can replace the role of human in
performing some routine tasks. E.g. computers in the front desks can perform night auditing
functions. Hotels may not need employ night auditors with rich accounting knowledge or they may
consider recruiting less staff for overnight shifts since all calculations are automated. Therefore, the
labor cost can be reduced in the long run.
 Reduce Workload of Staff. Some IT applications are also designed to reduce the staff’s workloads by
assisting them in performing their job duties. E.g. by installing CCTVs (closed-circuited televisions) in
different locations of the hotel will allow the security staff to monitor the key areas in the control
room without patrolling in person.
 Increase Efficiency. As customers always expect quick services to be provided by the service staff,
some applications have been specifically designed to simplify some time-consuming procedures. E.g.
it only takes less than 10 seconds by using a credit card validator to verify a guest’s credit card. It
replaces the needs of calling credit card enterprises for credit approvals which may take more than a
few minutes for processing.
 Increase Revenue. IT applications also facilitate new services to customers. E.g. the in-room
entertainment system allows customers to enjoy movies and video games while they are staying.in
the guest rooms. It helps the hotel to generate extra sources of income if such a system is installed.
 Access and Share Information. Computers and some hotel interfaces enable sharing of information
among departments. E.g. while a room attendant has finished cleaning a vacant room, he/she can
change the room status by a telephone input. This action will simultaneously update the room status
in the front desk's computers (changed from VD to VC).Front desk receptionists would then be able
to tell if the room is ready for sale afterwards
 Achieve Better Planning and Management. Customer information, including their preferences and
consumption records are kept in the customer database. Hotel or restaurant management can fully
utilize this valuable information to examine the characteristics of their target segments and plan for
some new services and facilities which cater for their needs. Marketing activities can also be
implemented accordingly by using information, such as postal addresses or email addresses of
customers and enterprises.

Issues and Concerns of Information Technology in the Hospitality Industry:

 Lack of Knowledge of Top Management. Without much IT training in their work experiences, top
management normally has limited knowledge of the most updated IT being applied in the
accommodation sector. They tend to be more conservative and would like to keep the old ways of
doing business instead of implementing changes. Their reluctance to accept new technologies has
therefore, slowed down the pace of IT development to ascertain extent.
 Huge Investment Cost. Although the applications of IT may improve the service efficiency and lower
down the operational cost in the long run, some applications may involve huge investment in
installation and long-term maintenance. Continuous innovation also means that a new technology
will soon become outdated with new replacement. E.g. the innovation of TV models from a classic
cube to flat 'liquid crystal display' (LCD) which is then followed by a 'touch-screen' feature and the
latest of 3D versions. It can be estimated how much a leading hotel would spent for TV installation for
all rooms once a new model comes up. Obviously, it may not be affordable to those hotels with limited
financial resources and scales.
 Resistance to Change of Personnel. There are two potential problems to be faced by the existing staff
worked in the accommodation sector. On one side, staff who are doing fine in their own ways of
practice would be reluctant to change and learn new technologies that they are not familiar with. On
the other side, there would be pressure given to staff once they think IT can easily replace their roles
 in performing services to the customers. All these can lead to low motivation and high turnover rate
of staff in the industry.

The Internet and the World-Wide Web

While thriving to be competitive in the global market, exactly the hospitality industry is exposed and
overburdened by exclusively high costs for:

 promotion in the global market,

 immediate communication / interactivity with the clients / tourists,
 booking by guests from distant tourist generating destinations,
 market research

The costs mentioned above can be reduced by using WWW in tourism business. The Internet and its
application (WWW) have created information infrastructure which now rivals the Plain Old Telephone
System (POTS) and other traditional ways of performing business in size, coverage and popularity Many
people use the terms Internet and World Wide Web (aka. the Web) interchangeably but in fact the two
terms are not synonymous. The Internet and the Web are two separate but related things.

The internet is a massive network of networks, a networking infrastructure it was conceptualized

during 1969 by the Advanced Research Projects Agency (ARPA). It connects millions of computers together
globally, forming a network in which any computer can communicate with any other computer as long as
they’re both connected to the internet. Information that travels over the internet does so via a variety of
languages known as protocols. In everyday life, the Internet has been called different names that often
interchangeable to a lay person. It has been called the Net, the Web, the Information Superhighway and
the Worldwide Web When someone use an app on their phone, send an instant message, transfer file
directly from one computer lo another via file transfer protocol (FTP) or simply send an email, they are
using the Internet - but not necessarily the Web.

`The World Wide Web, or simply web, is much newer compared to the Internet and was initialized during
the 1990s. The WWW is such an immensely popular Internet facility that for many users, it has become
synonymous with the Internet the World Wide Web is a collection of web pages linked together with
hypertext links. These are the very same links that can be click on when browsing the internet (i.e., clicking
on gifs and Buzz feed lists). It is an information-sharing model that is built on top of the internet. The web
uses the Hypertext Transfer Protocol (HTTP), only one of the languages spoken over the internet, to
transmit data. Web services, which use HTTP to allow applications to communicate in order to exchange
business logic, use the web to share information. The web also utilizes browsers, such as Internal Explorer
or Firefox, to access Web documents called webpages that are linked to each other via hyperlinks. Web
documents also contain graphics, sounds, text and video.

Alternatively, the Internet can be viewed as a big book-store while the Web can be viewed as
collection of books on that store. At a high level, we can even think of the Internet as hardware and the
Web as software.
 Internet World Wide Web
Estimated year of Origin 1969, though opening of the network 1993
to commercial interests began only in
1988
Name of the first version ARPANET NSFnet
Comprises Network of Computers, copper wires, Files, folders & documents
fibre-optic cables & wireless networks stored in various computers
Governed by Internet Protocol Hyper Text Transfer Protocol
Dependency This is the base, independent of the It depends on Internet to work
World Wide Web
Nature Hardware Software
Figure 1. Internet vs World-Wide web

Benefits of Internet and the World-Wide Web

The hospitality and tourism industry has always been among the first to capitalize on new
technology. Because it is an information rich industry, it depends heavily on finding and developing new
means to distribute travel and hospitality products and services, marketing information to consumers,
and providing comfort and convenience to travelers. The rapid expansion of the Internet and WWW
provides a unique mechanism for organizations' marketing and distribution as it holds the unprecedented
ability to disseminate in depth information and receive direct feedback from consumers in an open
environment. Innovative small hospitality operators also discover that the Internet can provide an
international representation at very reasonable cost and thus restructure their marketing function to reap
these benefits. Hence the Internet is also emerging to become a fundamental facility supporting the
functions of everyday personal and professional life. The hospitality industry activities presented on the
Internet have many advantages, but one should not underestimate possible disadvantages this new
medium might cause.

Competitive Advantages of Using the Internet in the Hospitality Industry are:

1. Service improvements concerning:

1. Large choice of access to a website

2. Faster payment processing

3. Reduced delivery time for many products

4. Faster and greater availability of support literature

5. More detailed and particularized

2. Low costs of:

1. Marketing

2. Processing of booking and payments

3. Automation of tasks
4. Establishing direct links between the producer and the consumer distribution

3. Differentiation from competition: creating. presenting and selling ligh.3.quality, distinctive

products
4. Creating up-to-dale enterprise image
5. Information usage including the following concepts:

1. Addressability

2. Interactivity

3. Flexibility

4. Accessibility

6. Efficiency in operational management and communication

7. Obtain know-how through discussion with news groups on the Internet

Potential disadvantages or threats of Internet usage in the hospitality industry are:

1) Standardization of legal procedures of doing business over the Intermit

2) The problem of inefficient accessibility to the website / unfavorable indexing by search engines

3) Spam

4) Bad quality of individual websites which might damage whole destination image

5) Nonprofessional determination of purpose the website is supposed to full.