The Comprehensiveness of North American Online Reservation Systems - Essay Example

? Rosenbluth International Business Administration Introduction Rosenbluth International is the premier in the industry of travel management andhospitality. Offering several travel-based and travel-related customers to a host of companies, Rosenbluth International boosts of an extensive service portfolio which encompasses the provision of travel business services namely flight booking, negotiation of pricing and contracts in addition with hotel reservation. Despite of the highly competitive nature of the global travelling services industry in which Rosenbluth operates, the company has been able to carve a name for itself as one of the most dominant player in the market. While, Rosenbluth has been successfully able to deliver its mission and fulfill its vision of offering high quality services to existing and potential clients, drastic modifications and changes in the competitive environment in which the company operates has adversely impacted the prospects and current operations of the business. As stated by Clemons and Hann (1999), companies which are successful find it difficult to change their policies in accordance to the changing business environment. This notion identifies and sheds light on the difficulty and complexity that is associated with the implementation of an effective change management strategy and reorganization of business operations. In the case of Rosenbluth International, this required alteration in company operations has been prompted by the prospects of disintermediation that the organization currently faces, which in turn have been triggered by the continuation of a significant period in the industry of travel brokerage that is essentially marked by a major restructuring of the entire industry (Clemons and Hann, 1999). According to Clemons and Hann (1999), the drastic changes that are being experienced by the travel industry can be associated with dynamics of the competitive environment. Before the extent of the impact of these modifications in the wider market is assessed and analyzed from a comprehensive perspective it is necessary to highlight the fundamental challenges which Rosenbluth International currently faces. Clemons and Hann (1999) state that an extensive trend which has been observed within the industry by analysts highlights the alarming situation for travel agents as hotel chains and airlines intend to raise the scope of their revenue generation by launching electronic distribution systems. Furthermore, Carroll and Siguaw (2003) claim that the popularity of internet-based room reservation has allowed hotel owners to gain complete control over various methods of distribution which is threatening to the wellbeing of Rosenbluth International. Another challenge faced by Rosenbluth is not only rooted in external competitive pressures that are posed by other travel agents but is also caused by the commission cuts which have been introduced by hotels and rental companies thereby, prompting the organization to raise its charges by $10 to $15 (McCubbrey, 1999) to soothe the incurrence of unexpected expenditures. An examination of the case suggests that the challenges being faced by Rosenbluth are largely based on an increase in expenses and a decrease in the revenues being generated by the firm due to the introduction of electronic distribution systems by major travel-based businesses and a reduction in commission caps that are being earned by competing organizations. However, once the case is viewed from a varying perspective it can be comprehended that the issues which Rosenbluth is currently experiencing are also a consequence of the widespread availability of substitute services such as bargain prices and the incorporation of effective and pioneering business models such as reverse auction and auction. Discussion Given the present scenario and the challenges posed by the competitive environment in which Rosenbluth International operates, it would seem most appropriate to install an online reservation system to equip the organization with the technological tools that are needed to address the challenges that have surfaced in recent years. As suggested by Buahlis and Law (2008) recent trends are indicative of a strong growth and expansion in the use of ICT to assist and aid the process that is associated with travel and tourism. Due to the emergence of this aspect, the role of travel agencies and agents in assisting their customers in fulfilling the necessary conditions such as making a hotel reservation or booking an airline ticket before embarking upon their journey has declined drastically (Morrison et al., 1999). According to Buhalis and Law (2008), key players of the hospitality industry have realized that the popularity of the internet across the globe is a source of opportunity that must be capitalized upon which is why each of these actors in the market have a dominant presence in the virtual world to capture and cater to their customers. This online presence essentially allows companies to reach to a wider international audience which is not accessible via traditional methods of contact. According to Smith and Rupp (2004), online reservation systems that are incorporated by leading airlines across the United States have essentially empowered their customers by granting them with the liberty of choosing their flight and destination as per their needs and requirements, thereby, eliminating the notion of the travel agent. This concept has therefore, introduced the dimension of E-Travel and the paper proposes that an online reservation system adopted by Rosenbluth International should be consistent with this innovative and dynamic aspect of the travel industry. Since the airlines’ online booking and reservation system has granted customers a complete access to the database of airline, travel agents should offer value-added and personalized services to attract customers who may prefer to utilize an airline’s online services for booking and reservation purposes. Applying this principle would enhance the strategic position of Rosenbluth International in a highly competitive industry. The popularity of the World Wide Web has also impacted the ways and methods of conducting and offering tourism services, with the dimension of online reservations taking the shape of internet applications to target and serve a larger clientele. Within the context of an online reservation system, the provision of an extensive range of travel-related services is critical to the success of the internet-based medium. These characteristics include policy and profile management in addition with travel technology. Identifying the importance of the tool of website in the sphere of e-travel and e-tourism, Law, Qi and Buhalis (2010) postulate that the maintenance of an effective website can be termed as the foundation of a successful tourism. This notion implies that the two key benefits which can be attained by Rosenbluth International as a result of installing the online reservation system are that of 1) ability to apply the principles of customer relationship management (CRM) to enhance customer value and 2) attract a larger clientele which prefers online reservation methods due to their convenience (Law, Qi and Buhalis, 2010). Aiming to assess the impact of installing an online reservation system within the context of service and hospitality businesses, Lin and Lee (2009) examined the consequences of launching the technological model in various hotels in the city of London. The study analyzed the dimension of an online reservation system as a varying channel of distribution amongst several other distribution methods that are executed by the management of independent or chain hotels. The evaluation of Lin and Lee’s (2009) research concluded that the effectiveness of an online reservation system does not share a relationship with the investment of the hotel management in establishing, developing and subsequently maintaining an online reservation system. Thus, additional investment for the enhancement and advancement of the system does not guarantee an increase in the rate of reservation that is conducted by the means of the web-based method in comparison with traditional modes of hotel booking. The most fundamental implication of this assessment highlights the observation that hotel managers can indeed integrate and incorporate the online reservation system as a possible channel of distribution to aid profit maximization and utilize the technological framework as a competitive profit strategy (Lin and Lee, 2009). The profit maximizing capabilities of the system can be linked with the model’s potential of providing a service differentiation strategy to Rosenbluth International. As stated by Minghetti (2003), a notion that is critical to the achievement of service differentiation is an acknowledgement of the significance of adopting a customer-centric approach which results in the creation of value for the organization’s clientele. This notion outlines that installing an online reservation system would assist Rosenbluth International in tackling the challenges that it currently faces due to pressures from the external environment in which the business operates. Law, Qi and Buhalis (2010) postulate that the development of an online reservation system can be attributed as an adoption of the recommendations of customer relationship management (CRM) principles. As a comprehensive framework, customer relationship management aims to transcend traditional principles that are rooted in business oriented management concepts by thoroughly integrating the customer driven side of management to contribute towards organizational success. In accordance with this view, the implementation of an online reservation system can be assessed as a strategic move on the part of Rosenbluth International to provide convenience to its customers by offering its services through an internet-based medium. This strategy would enable the company to reach a larger audience that has not been exposed to the services of Rosenbluth International previously. In the light of Lin and Lee’s (2009) research findings that are based on a sample of London City Hotels, the installation of an online reservation system can be viewed as an expansion of the organization’s distribution channels to enhance company profits by reaching target markets in an effective manner. The benefits of an online reservation system as a distribution channel can be categorized in terms of availability, accessibility and convenience, all of which are integral elements to the success of this implementing this technological tool at Rosenbluth International. In his empirical assessment and evaluation of tourism websites in Taiwan, Wan (2002) found the option of making an online reservation as a critical component of the ratings system for the medium. This study incorporated the significance of customer-company interaction that is supported by the facility of an online reservation system through the provision of additional features and facilities such as credit card functionality, e-mail and fax services (Wan, 2002). The implications of this research assert that the integration of an online reservation system in the existing web-based platform of Rosenbluth International will increase the probability of greater customer access and user traffic as the presence of an online reservation system is viewed as a criteria which enhances the users’ experience on a travel and tourism website. While, the discussion that has been conducted thus far has covered various benefits of implementing an online reservation system including an assessment of the role it can play in contributing towards the creation of an effective, comprehensive and successful customer relationship management system and attracting a global audience through the medium of the internet the concept of service differentiation is yet to be assessed in this regard. According to Minghetti (2003, p. 141), the use of technology in the field of marketing has given a lot of opportunities to the hospitality industry as a whole. The foundation of this observation is rooted in the concept of advancing marketing efforts through technological mediums in order to achieve service differentiation. In the case of Rosenbluth International, service differentiation can be viewed as a leading factor that can guide the organization towards the achievement of its objective. This concept is about establishing an online reservation framework that is far superior to that of the competitors’ to divert customer perceptions in favor of the company. Minghetti (2003) postulates that service differentiation can only be achieved once an organization builds and develops customer value by developing an information system that is customer-centric in nature. This view coincides with the hypothesis presented in the paper regarding the accumulation of client history to provide a customized and personalized service in the future. The incorporation of strategic information systems is possible through the installation of database systems that boost of “data mining” features to boost marketing capabilities. This component of the information system will also provide tremendous competitive advantage to Rosenbluth International. Conclusion The comprehensiveness of North American online reservation systems that are utilized by several airlines across the continent can be viewed as an inspiration for the development of a similar service for Rosenbluth International. The integration of an online reservation system within the wider scope of the business can be attributed as a competitive profit strategy. The achievement of this competitive advantage and competitive profit strategy is rooted in the identification of the fact that the competitive nature of the industry demands from an organization that it offers differentiated services to its clientele. Furthermore, the need to install an online reservation system is also prompted by an identification of customer perceptions regarding online travel reservation systems in comparison with traditional systems of reservation. Law and Leung (2000) postulate that there are four dimensions on which an effective online reservation system can be assessed and these include 1) the characteristics of the online reservation service 2) the provision of added advantages to customers 3) the length of time required for making a reservation and 4) availability of value-added-services and bonus features. Moreover, the effectiveness of the proposed system can also be evaluated, assessed and examined through E-QUAL to determine the extent to which the services provided by an online travel agent and provider of related services such as Rosenbluth International meets the requirements and set standards. The integration of an online reservation system within the wider scope of the business can be attributed as a competitive profit strategy (Lin and Lee, 2009). Elhaj (2012) asserts that the key factor which governs customer selection of online reservation over traditional methods is that of price, while, other elements that may guide the decision are that of policies, regulations and the brand name of the company that is providing travel services. Minghetti (2003) states that implementing an online reservation system is integral to the promotion of customer loyalty which can boost the name of the brand as customers identify with the organization that is providing hospitality services. The concepts of customer loyalty and brand loyalty can be linked with a greater possibility of customer retention which has the potential of lowering business costs, research suggests that a growth of five percent in the customer base can help to increase the profits by 25-125%. (Minghetti 2003, p. 143). References Buhalis, D., & Law, R. (2008). 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