Rooms Division Management or Hotel and Resort - Essay Example

Rooms Division Management: Hotel and Resort Introduction In the advent of Information Technology, competing companies including those in travel and tourism were obliged to seek new ways to enlarge their market, attract, and retain customers. They realized the advantage of customizing their products and services to fit their needs. More importantly, they saw the need to “restructure their business strategy to boost their competitive advantage” (Gratzer 2003, p.1-2). However, although there has been reported significant increase in the utilization of Information Technology infrastructure in Hotels and Resorts and it has affected nearly every aspect of management, operations, and guest experience positively, some critics believed that it is in someway destroying services within these institutions. The soundness and merit of such criticism is the focus of our discussion while maintaining an impartial and symmetrical view of both arguments. This paper will present some issues concerning the availability of Information Technology infrastructures and competent strategic organization structures. It will also impart the roles of Information Technology as a new distribution channels for the hotel and resort industry and the negative effects of remote interaction in instigating further sales and trust development. Finally, it will discuss the importance of the Internet in gaining competitive advantage and conclude by discussing the most significant points of the arguments presented. In the argument that Information Technology nearly affects every aspect of business operation, the main driving force in these developments particularly in the accommodation sector is the powerful tools and possibilities offered by the Web or the Internet. It is an ideal, cost, and time effective platform to disseminate their products and services around the globe. An important element of international tourism involves the “linking together” of global headquarters (Shaw and Williams 2002, p.41). Increasingly, sales of hotel’s products and services are through electronic medium and the key motivators behind customer’s eagerness to purchase online are price and convenience. Another encouraging aspect of employing Information Technology as a distribution medium in an environment like the hotel and resort sector is its cost structure and perishable nature. Although there are a variety of traditional channels available for hotels to sell their product such as direct sales, intermediaries, travel agents, tour operators, and marketing conglomerates, the importance of electronic distribution channels has dramatically changed the way people communicate, search information, make decisions, and customers buying habit (Gratzer 2003, p.1-2). According to Sheldon (2001), technology has become the “main source of competitive advantage and a strategic weapon” particularly in the tourism and hospitality industries due to its pivotal role “information” plays in the description, promotion, distribution, amalgamation, organization, and delivery of hospitality and tourism products. Operational functions such as Property Management Systems is one good example of technological advancement powerful enough for any business. Tactical systems such financial modelling, yield and strategic management, and decision support systems definitely delivers unparalleled advantage. Furthermore, Information Technology is now a pre-requisite in forming strategic alliances, innovative distribution methods development, communicating with consumers, partners, and satisfying customer demands (216). Economist and Novel winner Robert Solow once said according to Sigala (2003, p.1) that “PCs are showing up all over the place, except in productivity statistics”. Solow is actually criticizing the questionable result of a research on the productivity impact of Information Technology. Another critic referred to the IT productivity paradox where the benefits of Information Technology expenditures have not shown up in aggregate output statistics. Apparently, the relationship between Information Technology and productivity is so far obscure as a number of researches are showing unfavourable results including its impact on the hospitality sector. However, there is some evidence that the relationship does exist but this is not adequate to debar many dysfunctional and negative statistical artefacts. For instance, one notable downside of Information Technology is its remote-oriented nature where online users and sellers do not have physical contacts. Some critics view this problem as a seller’s weakness to instigate further sales because remote interaction limits confidence building and trust. In relation to this is the technical downside provided in the Sheldon (2001) Table 3 of the Disadvantages of Internet Distribution for Travel Companies, bringing up the issues of security, which is no doubt still a major concern until now (Sheldon 2001, p.143). Furthermore, aside from the confusion over the vast range of channels currently available, the reason for the reluctance of some hotels to adopt the new technology and strategies is the fear of its known and unknown disadvantages and the fact that it will upset the entrenched relationship with intermediaries (O’Connors et. al. 2003, p.287). Analysing the situation further we will find that these surveys are producing multiple type of results and one of them remarkably reveals that Information Technology infrastructure availability alone does not affect productivity (Sigala 2003, p.12). This result is evidently pointing to the fact that Information Technology without strategic organizational restructuring and training is worthless. Apparently, an organization cannot acquire the full potential and benefits information technology if they hesitate to align themselves with its principles. For instance, Information Technology is supposed to collect and store information for data mining and other future requirements but if management do not make use of this information for their business decisions, all of these data is of no value and therefore IT is unproductive. Furthermore, the same research findings reveal that Information Technology supported activities is only effective on material and inventory management because it did not have significant productivity effect on the management of single resource. Obviously, the research based their productivity level on a single result, which is beyond the principle of Information Technology. For instance, networking and overall system design does not work in isolation thus the measure of their productivity is not by management of single resource but as a whole. This is in fact the overall conclusion of the research findings according to Sigala (2003, p.12), where they agree that the productivity benefit of Information Technology is maximized only when exploitation is focus on the efficient coordination, combination, and management of all resources. In short, a company’s Information Technology should aim at maximizing processes or combination of resources rather than resources’ efficiencies. In view of maximizing processes, larger hotels with greater needs for Information Technology tend to maximize its usage. In addition, according to IT experts and accommodation industry representatives, the Internet can help even those hotels that do no have distribution channels yet by creating a new channel through the Internet. This is apparently a great advantage considering the importance of the Internet as a distribution channel. Experts on the other hand also noted that the biggest threat is a company’s failure to adapt their Internet presence, as they would not be available in the marketplace and will not accessible to customers and their intermediaries (Gratzer 2003, p.8). In using the Internet, organizational problems such as faster reaction time and additional workload are seen as the most obvious threats which the hotel management themselves is not aware of. According to industry experts, these predicaments are generally organizational issues that need immediate resolution and the company’s ability to handle such problems will be a very significant success factor to increase competitive advantage. For instance, the advantage of using the Internet in last minute bookings along with lower distribution costs are all associated with a more competent organization of a hotel. A result of survey confirms the widespread use of services like homepage, email, and reservation activities and therefore, a good organizational structure must define specific business processes for the introduction of new Internet technologies. However, dynamic services such as online booking, newsletters, or personalization tools are used less or not at all. This is apparently due to the lack of information drive and encouragement from the organization and the customer’s intrinsic hesitations in trying new technology and apparently does not contribute to Information Technology’s productivity (Gratzer 2003, p.9). Conclusion Information Technology indeed affects every aspect of business operation particularly in the accommodation industry. The Internet serves as an ideal platform for products and services dissemination all over the world and therefore an important element of international tourism. More importantly, the importance of electronic distribution channels has dramatically business communicates, seeks information; make decision, and customer purchasing practice. However, although technology in general has become the main source of competitive advantage and strategic weapon in tourism and hospitality industry, there are reported downsides regarding its relationship with productivity. The negative results of surveys and research on Information Technology’s productivity issues led some critics to question the real impact of Information Technology investments. On the other hand, the same surveys after careful examination of multiple and varying results reveals some interesting facts about the true nature of Information Technology and business productivity relationships. The fact that the availability of Information Technology infrastructure alone does not affect productivity is a sign that there should be a strategic organizational structure to support its function. Furthermore, assessment of its productivity should be evaluated as a whole and not by single resource as the productivity benefit of Information Technology only comes with efficient coordination, combination, and management of all resources. Bibliography Sheldon Pauline, 2001, Information and Communication Technologies in Tourism 2001, Published 2001 Springer, ISBN: 3211836497 Shaw Gareth and Williams Allan, 2002, Critical Issues in Tourism: A Geographical Perspective, Published 2002 Blackwell Publishing, ISBN: 0631224149   Gratzer Markus, 2003, Challenges of the Internet for the SME Hotel Sector in Austria, E-Commerce Competence Center – EC3, Donau City Straße 1, A-1220 Vienna, Austria Sigala Marriana, 2003, Unravelling the Impact of Information and Communication Technologies on Restaurant Productivity, Strathclyde Business School, University of Strathclyde, 94 Cathedral Street, Glasgow, G4 0LG, UK O'Connor Peter, Frew Andrew, and Hitz Martin, 2003, Information and Communication Technologies in Tourism 2003, Published 2003 Springer, ISBN 3211839100 Read More