Latest Advances in Hotel Computer Systems - Term Paper Example

Latest advances in Hotel computer systems Research Essay Teacher’s June 12, 2009 Executive Summary In the past years, therapid growth of both demand and supply in the tourism industry called for powerful systems to handle hotel operations. Computer technology became the answer for this challenge. Hotel chains quickly seized on the opportunity offered by the technology because the system posed dramatic potential in regard to centralizing day-to-day operations as well as addressing the emergent challenges that came with global expansion and the dynamism of the hospitality landscape. Through the years, it has significantly altered the way the hospitality industry conduct its business. The impact is remarkable particularly in the efficiency of hotel operations and the increase in profitability. This paper will explore the latest advances in hotel computer systems, particularly focusing on the applications available and employed both in the front-end and back-end of the hotel operations. In the process, this paper will outline a brief backgrounder of the subject, the future technologies as well as the existing challenges and limitations of the hotel computer systems. The main thesis of this paper is that the latest advances in hotel computer system, which is characterized by high-technology and increasing reliance to the internet, demonstrates the immense benefits of using the computer technology in order to support the expansion of hotels globally and the streamlining of operations that increase profitability. Background As early as the 1960s, computers were already used in the operation of hotels. However, it was not until the 1970s that technological advances in computer technology allowed for a significant opportunity for the industry to save cost and streamline their operations. It was during this period when technology made possible the right combination of compactness and versatility for different sizes of hotels. Savings encouraged many individual hotels to install computer systems and that today, these are set up in large numbers and are widely accepted in the industry. The computer system and all its technologies have proven to be reliable to hotel operations particularly in the accurate dissemination of information at a click of the mouse. In addition, it has been increasingly recognized that the hotel computer systems achieve better internal and external control and, through the use of analysis methods, provide the opportunity to improve the overall profitability of the enterprise. (Sinha 2005, p. 16) Applications The integration of computer systems to hotel operations are leading to dramatic structural changes within the industry and that they are becoming central to the marketing and day-to-day operations of hotels. This is mainly due to the fact that it streamlines the hotel operations by facilitating the smooth functioning of the hotel, better guest relations, increased efficiency of staff and the overall profitability of the hotels. Hotel systems around the world are conventionally divided into two main areas: the front office application areas and the back office application areas. The system that are developed for the front office usually incorporate reservations, registration, guest accounting, night auditing, and communication operations, among others while the back office area cater to financial management, inventory control systems accounts, profit/loss accounts, general ledger, and credit card verifications. (Sinha, p. 1673) The Point-of-Sale (POS) system is the most widely used technology in the hospitality industry today. (Brown 2003, p. C11-3) It is basically an offshoot of the electronic cash register and, therefore, a system designed for the front-of-the-hotel area. The newest machine for this technology is called the touch-screen POS system. It is consisted of two parts – the hardware and the software. This system allows reservations people to key in their reservations as soon as customers make them. Fullen, Arduser and Brown (2004) identified some of the benefits of the POS system, which include: boosting sales and accounting information, custom tracking. Reporting occupancy usage, tracking of credit card purchases and accurate addition on reservation checks, prevents errors, report theft of money and inventory, recording of employee timekeeping, sales forecasting and the reduction of time spent walking to the front office from housekeeping or to any part of the hotel. (p. 115-116) Recent POS systems offer added functionalities and features such as home delivery, guest books, online reservations, frequent diner modules and fully integrated systems with real-time inventory, integrated caller ID, accounting, labour scheduling, payroll, menu analysis, purchasing and receiving, cash management as well as reports. The Computer Reservation System or CRS is also one of the popular computer systems that used in hotels today. It is widely seen as the most important catalyst of the rapid development of the tourism industry since it establishes a new travel marketing and distribution practice. (Giaoutzi and Nijkamp 2006, p. 24) The big hotel chains are now dependent on this system and the information which these systems generate are utilized in the development of marketing strategies. Marriott Hotels, for instance, has a CRS which provides the company with a massive database of marketing information which the company uses in a number of ways including the accurate targeting of customers and potential customers. (Horner & Swarbrooke 2005, p. 121) According to Giaoutzi and Nijkamp, CRS allows hotels to manage its inventory and distribute its capacity, allowing control, promotion and sale of products globally, while assisting them to increase their occupancy level and to reduce seasonality. (24) Specifically, CRS offer hotel administrators several advantages which include: 1) a convenient method of booking; 2) automatic invoicing systems; 3) marketing information opportunity; and, 4) manipulation of room rates to improve profitability. Giaoutzi and Nijkamp also stressed that consumers benefit since, through the CRS, they can easily access transparent and comparable information on a wide variety of destinations, holiday packages, travel, lodging and leisure services, including the prices as well as the availability of such services over a certain period. An improvement over of the CRS is the so-called Global Distribution Systems (GDS) that allow users to access more than one CRS. The best of these systems function as switches that are connected on one side to many different supplier systems and on the other side to many end-users Then, there is the wider system called property management system or PMS. It helps manage interactions in the hotel and at the same time acts as an information hub for the other computer systems. Peter O’Connor (2004) broke the functions of PMS into four main categories: registration, housekeeping, guest accounting and night audit. (p. 207-298) The PMS, CRS, GDS and the numerous softwares available are called stand alone systems as they are not part of the POS system that requires both hardware and software to work. There are other applications and computer systems that cater to the back-end area and this are not limited to management or inventory alone. These may include those belonging to ancillary or supporting system such as systems that save energy, electronic door locks, call accounting systems and many others. Catering systems are also available operating in hotel environment such as the EPOS systems and minibars that interface with the PMS. These systems mechanizing hotel operations function more efficiently in a centralized and integrated hotel computer system. Back office systems span a large number of areas that promises great control of costs. Pinha stressed that with the use of computers, management can, monitor the progress of individual restaurants and other sales outlets against targets and budgets which may be set for various items. (p. 1674) New Technology The previous systems mentioned were the existing and recent technologies that are in place in hotel operations. The trend nowadays however leads to the elimination of middlemen or intermediaries. The new systems that are being introduced in the market, or those that already setup – in place – by advanced large hotels are characterized by direct communications. This is due to the integration of the numerous high capacity communication channels in the Internet. As with the other sectors, the Internet has also provided the hotel industry with the infrastructure for the sales of products and services. Information is delivered on any destination and any type of service. The Internet, wrote Giaoutzi and Nijkamp, has solved the problem of marketing remote, peripheral and insular destinations, whose suppliers, namely, SMEs, are able to communicate directly with their prospective customers and differentiate their products according to their needs. (p. 25) Finally, as has been mentioned elsewhere in this paper the current computer systems used in hotels have the capacity to collect data and information from the customers that are used to develop organizational strategies. In the same way, such functionality is important in the development of future hotel computer systems that would transcend the current limitations of existing systems. In addition, the data collected also help in introducing innovations in the development of systems and applications that could allow hotels to deliver better services. Challenges Of course, computer hardware and software are susceptible to internal failures, power losses, flood, lightning, earthquakes, accidents and other perils. And so this is a primary consideration in setting up a stable computer system. The available solutions today do not cover all of such failures and so they pose as a serious challenge to system administrators. Then, there is the issue about security in hotel computer systems. There are times when the system will be invaded by high-tech thieves and hackers. So far, this has been the most important as well as complicated of all the challenges that the sector must contend with. Because of its significance, there are numerous attempts and efforts at developing not just a separate security solution but an integral security feature in computer systems. According to Li et al. (2004), there are three fundamental requirements that must be satisfied in order to produce a stable and secure system. To quote: One is to keep the contents confidentiality and integrity – that is to ensure nobody ever tempers or steals the data transferred through public networks. The other is to control access to web services. Before using web services, end users must pass the authorization procedure. Finally, but not least important, protecting the server from malicious attacks is practical and imperative problem because there are always not enough security when services are opened to the Internet. (p. 1008) The impact of the computer glitches varies and that it depends on where and when they happen and the severity of the problem. However, most often the consequence is inconvenience – a factor that is too negative for hotel establishments. As with other sectors in the IT industry that are characterized by rapid changes and development, a problematic area for hotel computer systems is the IT standardization. At present, there are numerous hotel organizations and alliances already but that these groupings do not include data exchange standards between enterprises. And so it appears that a cohesive attempt at standardizing the use of computer technology for the hotel industry is still far from being achieved. Another issue that plagues computer systems is that because of the degree of mechanical integration as well as the sophistication of networking, a single glitch in one PC may produce a domino effect on other computers within the system. An account was demonstrated by Lewis Branscomb (1995) in a case study of a hotel client. A respondent narrated in an interview: I was once told by a New York hotel clerk that I couldn’t register, despite my insistence that I had a reservation, because the computer was down and the hotel could not determine which rooms were available. (p. 114) Aside from the technical issues that pose as problems in regard to hotel computer systems, there are also those that concern social issues especially in regard to security and privacy. For example, a customer provides specific details to the hotel’s database about his background, preferences, and so forth. Now, say, he always requests for a room in the ground floor because of his fear for heights. Once this kind of information is accessed by a third party such as travel agencies or criminals, they could be abused and used to damage the client. These challenges underscore the need for proper legislation from the governments of countries where hotels operate in since there are, as of the moment, quite a few and most of them obsolete statutes that cover and regulate computer technology. Conclusion Computer systems that have been integrated in hotels have so far been so beneficial because these systems revolutionized the hotel information systems that brought about a greater degree of satisfaction from among the customers and profitability for the hotel management. Efficiency in communication, information-sharing, speed in delivering services, among other factors allow for better services available to customers. The key to efficient and, therefore, successful operation of hotels rests on the information system which the computer technology handles accurately and effectively. As a communication medium the hotel computer systems facilitate a better coordination among various departments within the organization as well as the interaction between the customer and the hotel. In addition, the computer systems were able to relieve the hotel staff of the many routine jobs. This, in effect, increase productivity in the labor force as they are able to focus their energy and attention to the needs of the customers. Out of all these, it must be highlighted that while the computer and all its entailing technologies are awesome because of its capacity and speed to process accurate information, it is not perfect. This line of thinking is very important in the hotel industry since their product is all about excellent service. Policymakers, managers and those responsible for the integration of computer systems must take into serious consideration the fact that IT is constantly evolving and that user experience determines the behavior of computer systems. Bibliography Branscomb, Lewis. Confessions of a technophile. (Springer, 1995). Brown, Douglas. The restaurant managers handbook: how to set up, operate, and manage a financially successful food service operation. (Atlantic Publishing Company, 2003). Fullen, Sharon, Arduser, Lora and Brown, Douglas. How to open a financially successful bed & breakfast or small hotel. (Atlantic Publishing Company, 2004). Giaoutzi, Maria and Nijkamp, Peter. Tourism and regional development: new pathways. (Ashgate Publishing, Ltd., 2006) Horner, Susan and Swarbrooke, John. Leisure Marketing: A Global Perspective. (Butterworth-Heinemann, 2005). Li, Minglu, Xian-He, Sun Deng, Qianni and Ni, Jun. Grid and cooperative computing: second International Workshop, GCC 2003, Shanhai [sic], China, December 7-10, 2003 : revised papers. (Springer, 2004). OConnor, Peter. Using computers in hospitality. (Cengage Learning EMEA, 2004). Sinha, P.C. Encyclopaedia of Travel, Tourism and Ecotourism. (Anmol Publications PVT. LTD, 2005) Read More