Use of ICT in Hotels

Marketing and Distribution

The electronic business environment is rapidly changing, being driven by advances in technology.One primary effect of the development of web communications has been the "shake up" in electronic distribution channels, placing pressure on, and bypassing, traditional intermediaries (especially travel agents) and enabling the direct business-to-customer (B2C) marketing contact. There are an increasing number of channels available, technology providers are working feverishly to reengineer their travel systems to provide booking interfaces through the internet to bypass both  the GDS [Global Distribution System] and the travel agent to create a direct link with the customer.

Hotel Reservations

While airlines lead in terms of take up of these new web opportunities, hotels are starting to adopt new models and take advantage of them. However, hotels must choose among many technology options to enable reservations, some of which do not necessarily need sophisticated booking interfaces. Indeed it would be wrong to categorise all Internet reservations (e.g., the simple direct email messages, email forms, compared to the more complex interactive online) as equally effective for the hotel or indeed equally convenient for customer. Nysveen and Lexhagen (2001, p. 243) note in their study of hotels in Sweden that the mode of Internet bookings was an important determinant of their success in terms of booking time for the reservation clerk:

   ... the Internet does not seem to make booking much more effective.

   One reason for this is probably that most hotels offering

   Reservations through the Internet, offer email based booking

   systems. These systems do not offer a large potential for more

   effective booking procedures because inquiries received by email

   have to be manually registered  through the hotel's computer

   reservation system (CRS). Email based  bookings also require manual

   feedback and confirmation, and is  therefore about as time consuming

   for the receptionists as bookings through fax and phone ...

Managing Internal Operations
Hotels need ICTs to manage their inventory. Hotel chains in particular use group-wide systems to focus on the management for single properties as well as the distribution through a variety of electronic distribution channels. Most hotel properties around the world operate a property management system (PMS) that enables them to integrate their ‘back-office’ operations. As a result they can improve general administration, as well as specific functions such as accounting; marketing research and planning; yield management; payroll; personnel management; and purchasing at individual properties. Increasingly these functions move on Intranet platforms, improving interfaces and allowing easier employee training.
PMSs were also introduced to facilitate the front office, sales, planning, and operation functions. This was achieved by employing a computer reservation system (CRS) to administrate a database with all reservations, rates, occupancy, and cancellations.

PMSs and CRSs facilitate the following business functions:
- Improve capacity management and operations
efficiency
- Facilitate central room inventory control
- Provide last room availability information
- Offer yield management capability
- Provide better database access for management
purposes
- Support extensive marketing, sales, and operational
reports
- Facilitate marketing research and planning
- Enable travel agency tracking and commission
payment
- Enable tracking of frequent flyers and repeat
hotel guests
- Allow direct marketing and personalized
service for repeat hotel guests
- Enhance handling of group bookings and
frequent individual travelers (FITs)

The proliferation of the Internet supported the development of a number of additional electronic distribution options. These include direct bookings to the hotel; hotel chains’ own reservation central offices; independent reservation agents; hotel representation and consortium groups; airline CRSs and GDSs; hotel aggregators (such as Hotels.com) and destination management systems. For hotels to manage their distribution best they need two integral components, namely yield management and guest history. The yield management assists hotels to maximize both their occupancy and room rates contributing directly to their profitability. 

The guest history is effectively an early CRM software which records data for past guests and other intermediaries, assisting the personalization of the hotel. Revenue and yield management systems ensure that hotels optimize their revenue, by taking into consideration past and forecasted performance, as well as a wide range of additional factors. Therefore, the CRM software advocates and speeds up this process with its collected data.

In conclusion, the above are just some of the ways ICT has helped hotels improved their services and reservations to assist their customers and also develop ways to enhance their system to gain comparative advantage and to stay competitive in this ever growing tourism industry brought about by globalisation.

Business-to-business (B2B) is also growing very fast.
Marriott has begun to partner with large corporations to bring its website into their intranet’s travel page creating a B2B environment and enhancing electronic collaboration. This enables corporations to benefit from special rates and added value benefits whilst it assists Marriott to increase it loyalty and profitability. 

The strength of the hotel brand and the fact that consumers have always relied on booking hotels directly, instead through intermediaries, are playing a critical role in developing B2B and B2C solutions in the marketplace. Effectively these systems are managed through extranets that facilitate interorganizational communication, allowing partners to share information and processes.

e-Procurement & the supply of goods
e-Procurement is also a successful application of extranets for the hospitality industry. Hotels are highly dependent on regular supplies of good quality and cost-efficient materials and ingredients. 

Eventually hotel e-procurement will integrate all aspects of the purchasing process electronically. As soon as the level of demand can be predicted from reservation levels and past data/experience, orders can be generated automatically, authorized by departmental heads, delivered and paid with little human involvement. 

As a result, a number of B2B applications and companies emerged to serve this demand. For example, Avendra, a procurement company, was founded in early 2001 by Marriott International, Hyatt Hotels Corp., Club Corp., Six Continent Hotels and Resorts, and most recently Fairmont Hotels and Resorts. It is an independent company providing the largest, most comprehensive procurement network for the North American hospitality and related industries, with a market estimated at $80 billion annually. Ultimately Avendra aims to integrate systems of sellers and buyers in the hospitality industry in order to automate the entire purchasing process. Therefore, e-procurement pledges to end the hurdles of an inefficient buying system through cost controls, fully automated order processing, and corporate power to require properties to be compliant with purchasing policies.