Contemporary hospitality management - Essay Example

Introduction: The word "Hospitality" generally refers to providing care and kindness to people in need. In the context of hospitality industry, the industry itself is a multibillion dollar industry which deals with hospitality units. A hospitality unit is any place which provides services to people such as dining, lodging, travelling or even entertainment. Hospitality management is a vast field of study and a very interesting area of work. It encompasses various domains under it which deal with the management of hotels, restaurants, travel agencies, events, transport and other areas. In terms of a field of study, it includes the study of the hospitality industry and its management needs. The industry is huge and very diverse. Every time a person travels, stays in a hotel, eats out or goes to the movies, they encounter some unit of hospitality industry. The management of such units is highly challenging, as the needs of the customers can be varied and challenging. Apart from this, they must also need to look after tasks such as training workforce, setting standards and benchmarks etc. The hospitality industry has a number of organizations which offer food service, accommodation, travel, entertainment etc. Normally the industry is dominated by major ‘players’ which own large shares in the industry and operate as branches or franchises. These would include the chain of restaurants, hotels and airlines. In terms of opportunities and contribution, the industry offers employment to millions of people worldwide. The industry is one of the oldest industries and has undergone through lots of development and innovation. In the light of that, we shall be analyzing one aspect of contemporary hospitality management. Introduction to Ecommerce: Technology has brought massive changes in all industries which not only has altered the ways in which existing business processes and transactions were carried out, but has created several more opportunities for new and existing businesses to explore. A major component of modern technology is the use of computers and internet. Using computers for data processing, storing, transmitting and analyzing has become a widespread phenomenon. Addition to this is the internet which connects several resources together to create integrated networks and makes communication faster and cheaper. The use of internet and computers for carrying out business is known as electronic commerce or simply ecommerce. This concept is being increasingly used in all industries and has made a huge impact in the hospitality industry as well. In this research paper, we shall be looking at how ecommerce is affecting the hospitality industry by considering the various domains of the industry. Prior to that, it is also important to know in detail how ecommerce works. The root of ecommerce is the word ‘commerce’. Commerce refers to the exchange of goods and services between buyers and sellers whereby they enter into an agreement and carry out a transaction. In short, commerce refers to any economic or business activity where people exchange the commodities they have in place of the commodities they need. This could be as simple as buying a drink from a store to as complex as purchasing an entire building. People have been carrying out trade or commerce since centuries. However, the advent of ecommerce is a very recent concept which came with the invention of internet. Basically, ecommerce is a way or a method which allows people to carry out transactions of goods and services over the internet. Just like traditional commerce, there are a number of components which make up the process of ecommerce. These are (How Stuff Works): A product or a service that is being exchanged A place to sell the product or service - this is a website where the seller places the product or service and buyers visit the site to buy it. A way to accept orders – this is done through an online form which customers fill A way to accept money – there are a number of ways to do it. Typically, people use their credit cards to pay though there are other ways. Facility to ship products to customers or to provide services to them. A way to accept returns of products or services A way to handle claims for warranty A way to provide customer support – normally this is done through emails, online forms or other electronic methods. Ecommerce is one of the major trends today which is wiping out traditional means of trade. The annual volume of ecommerce transactions carried out in the US is more than $30 billion and is growing at a tremendous rate. Ecommerce offers several advantages to the buyers and sellers. Firstly, it breaks time barriers; which means that buyers can place the order at any time and not have to follow the seller’s timings. Secondly, the buyer can be located several miles away from the seller and still place the order and get the goods. The existing physical businesses now get an extra channel to sell their goods and hence get more sales. Overall, the cost of transaction has come down greatly with the use of electronic means to carry out the transaction. Impact of ecommerce on Lodging Industry Lodging is industry is commonly used to refer to the hotel industry; however it is not limited to that. Basically, any organization which is a part of lodging industry provides people with space to temporarily live. Apart from this, they also provide other services such as food, laundry, transport etc. The industry is a huge part of the hospitality industry. Major component of the industry are hotels. Hotels have been there from the time when people started to travel to new places for work and other reasons. Traditionally, without the presence of ecommerce, travelers had to visit a hotel and then make their bookings. The records of the bookings would also be manually maintained. Moreover, the payment was also done through cash mostly and there was no other means available. Ecommerce has changed the operations of the industry drastically. There are several ways in which the use of electronic communication has redefined the processes and has also created several new exciting opportunities. Firstly, ecommerce helps in promoting the hotel. Every good hotel now maintains a website to interact with the customers and potential customers. The website allows the customers to have a look at the hotel’s premises and facilities. In some cases, the hotel also gives the customers a virtual 3D tour of the hotel. All this serves as an important marketing tool in conveying the message to the customer and attracting him to make a booking at the hotel. Booking is one area which is also definitely been affected by ecommerce. Ecommerce has completely revolutionized the booking procedure for hotels. Firstly, the hotel websites offer an interface to the users to make their bookings online. This saves them the trouble of using phone line to do that. Not only is this cheap for customers, the hotel management too has to keep less staff for handling the customer’s calls. The customer can specify everything beforehand while booking the room. Secondly, there are many websites which are dedicated towards planning trips and making bookings for people. These websites specialize in making travel, lodging and transportation arrangements for the people. The hotel can get associated with these websites and the customers can book the hotel while they are making their other bookings. This increases the hotel’s revenue greatly. Even during their stay at the hotel, the customers can use the ecommerce facility to make purchases at the hotel. For instance, most hotels offer a computer to the customers in the room. The hotel has an internal website which lists the products and services the hotel offers to the customers. The customers can easily order food through the website or take some massage services. This makes it very easy for them to request these. In essence, ecommerce is one of the major aspects of hotel management today. Managers looking after their hotels need to be aware of how to make use of ecommerce systems for better performance. E commerce in the restaurant industry The use of electronic commerce in the restaurant industry is a fairly recent concept. Although there have been implementations of e commerce in numerous other industries people generally thought that bringing e commerce in the restaurant industry would be disastrous. For example, when Papa John’s launched it’s online ordering system in the year 2001 many information system critics commented upon the move to be disastrous for the company. On the contrary, the idea paid off and the company saw increasing sales and growth in the consequent periods. According to Papa, online customers appreciate the convenience so much that 75 percent of them use the system again to reorder and hence contribute significantly to the sales of certain places. Papa John’s was a success but it does not necessarily mean that all restaurants will succeed when they employ this strategy. Restaurants should consider the main characteristics of online order processing and delivery before launching their online order services. One of the main factors to consider before launching the online ordering is the demographics. The varying demographics in different regions will have different affects to the success of the system. A few factors that should be considered before launching the online ordering are: Location The location of the restaurant plays a prime role in determining if its online delivery will succeed. Usually crowded or high traffic areas have a higher probability of online ordering to be a success. If the journey is not that painful an average customer will want to get things himself. Access to high speed internet Internet is the driving force behind online ordering and if the restaurant does not have access to a high speed internet connection the online services are bound to fail. Similarly, the people who live around the restaurant should have access to high speed internet so that they can avail the facility. Population density and nearby location High population density areas have more chances of getting a higher sales and similarly if the restaurant is close to universities or colleges the student population will be a significant portion of the overall consumer base. Another important characteristic for the success of the online ordering system is the concept of the restaurant. The service will succeed if delivery orders comprise of 15% or more of the revenue. This means that there is adequate potential in the restaurant to sell its offerings to the nearby locations remotely. Advantages of online ordering system The online ordering system will increase the efficiency of the staff working at the restaurant, as the staff will have to receive lesser calls they will work more efficiently. Hence, the service time for the average consumer will decrease which in turn will increase customer satisfaction and will lead to repeat purchases. A high level of customer satisfaction leads to increased profitability. Another important benefit of online ordering comes from the advantage of having the menu and specialties in-front of customers and giving them the ability to control the order process. This display will help in up selling their products depending upon the needs of the consumers. The best restaurants websites provide up-selling to the customer depending on the contents of their current order. Similarly, online ordering also helps restaurants in gathering data about their customers, i.e. email addresses and telephone numbers. This information can later be used to target these customers for any promotional activity. E commerce in the event planning industry The event planning industry has always been an industry where innovation and ideas are welcomed. Hence, the use of e commerce in this industry did not seem as disastrous as it did in the restaurant industry. Since, the aim of an event planner is to plan, arrange and execute an event in the most spectacular manner. Event planners relied on new ways to differentiate themselves from others. Thus, some planners started offering their services over the internet. Internet has played an important role for these planners. Now these event planners can organize and plan weddings, birthdays, graduation parties’ etc using internet and communications technology. Using modern day sophisticated technology the event planners can plan and execute these plans more effectively by monitoring the slightest details using their computers. There are numerous facilities offered by event planning systems and they offer these services online so that the clients have ease in accessing the details. Some of the facilities offered by these systems are wizards to simulate the entire party and the details. It gives the organizer an idea of how the actual decorations and the layout will be on the day of the event. Hence, an organizer can ask for changes before the very last moment. Another advantage of simulating is that it will help in eliminating the smallest of errors that may be done during execution. Once a simulation is made the planner and the organizer both know exactly what is required and therefore the room for error decreases. For the event planner the software provides an online staff management module through which managers are able to monitor the performance of their staff from remote locations. The management system will also help in allocating the resources more effectively so that wastage of money and effort can be prevented. Similarly, the online communication module will help the organizers and planners to reach out to the invited guests through the Internet. The system provides facility to load names and details of the guests so that it can email invitations to the people. Since, the use of physical cards is decreasing online invites are becoming the next thing. Planners can also keep a track of the responses and then plan accordingly about the final number of guests. A comprehensive financial control module helps to maintain the overall budget constraints while at the same time lets the clients know about the costs incurred for the various services. The financial control can then suggest suitable options for the event based on the amount and the nature of the event. Thus, using such online tools will not only help in organizing events but will also help the end customers in reducing cost, increasing efficiency in terms of service provided to the guests and above all helps to portray the ideas before the final execution of the event. E commerce in the transportation industry Internet has been used widely for many different business processes and its importance will continue to grow, even after the world has seen stock market crashes and the global economic crisis. However, the use of information technology and the internet has been the core competency for the transport and logistics sectors throughout the world. The transportation and logistics industries have occasionally used the B2B e-commerce in their daily operations. Fulfilling customer orders has always been a challenge for the transportation companies and for years there have been issues in between logistics providers and the manufacturers. Logistics providers have had a issues utilizing e-commerce solutions to fulfill customer supply chain expectations especially when these solutions also offer tracking and tracing. Therefore, it has become clear that e commerce and internet have become one of the core competencies for businesses. In the manufacturing or the retailing concerns physical processes will have to be adapted to fulfill the customers’ demands. These demands are varying over different periods of the year and vary from one market to another. Today, with the use of internet and sophisticated technology, businesses can predict the demand for their products in various markets. Consequently, they can use their websites to sell products in a more knowledgeable manner. The logistics providers can have real time access to the demand data or the number of goods that need to be transported from one place to another. Thus, it helps in reducing the time for deliveries by optimizing the delivery force. Similarly, using internet the logistics providers can communicate data to the retailers etc about the inventory they have at hand the different types of products. Apart from the transport of physical goods e commerce has also affected the service industry in the transport sector. Today, online services are being offered for taxi’s, rent a cars and car pooling. This enables buyers and sellers of the service to meet and interact at a common point i.e. the web and then decide the price for the service and consume these services. As a result, e commerce has changed a lot of things in the transport industry. Above all it has brought competency and the effectiveness which was not possible a few years ago. Today, people can interact and transact without meeting each other and their goods will be delivered to their stipulated positions. Hence, the entire logistics and transport has been revolutionized by e commerce and the ability to trade without a physical presence. Conclusion In this research paper, we have analyzed a major aspect of contemporary hotel management, which is ecommerce. Ecommerce is short for electronic commerce and refers to the use of computers and internet to make transactions online. Ecommerce has become a widespread phenomenon recently and has greatly affected a number of areas including the different sub-industries in the hospitality industry. In this paper we have studied how ecommerce is important for managers who are involved in the lodging, restaurant, event-planning and transportation industry. In all these industries, ecommerce has played a vital role in improving existing business processes and creating new ones. In hotels, ecommerce has allowed customers to make their bookings online. In restaurants, ecommerce allows customers to order food online. In transportation, ecommerce allows people to make their reservations for travel online. Not only has ecommerce made the work easier for customers, it has also resulted in reducing costs. Further, the businesses now have additional channels to make their sales in addition to the existing ones. Hence, having thorough knowledge about the working and the use of ecommerce is very important for managers who are working in the hospitality industry. Bibliography Ecommerce Education. Benefits of Ecommerce. . Hospitality Industry. . How Stuff Works. How E-commerce Works . . Read More