Benefits and Drawbacks of IT in the Hospitality Sector - Essay Example

Over recent years there has been a significant increase in the amount of Information Technology found within hotels and resorts. This has affected nearly every aspect of management, operations and the guest experience. Concern have been raised that “Technology is destroying service within Hotels and Resort!”’ Introduction: (152) Technological developments have been immense over the years in all sectors. The hospitality sector has also been affected by this. There are always advantages and disadvantages. This essay aims at understanding the effects of technological developments in hotels. The essay aims at understanding whether IT has really helped the hotel industry to grow? Technology can be a rather empowering at times but often can also be very frustrating. The essay points out all the benefits a hotel can face from implementing higher technology and also how this higher technology can cause the fall of hotels. To enable us to come to a conclusion whether IT is a blessing in disguise for hotels else if it is destroying the service within hotels, it is important that the benefits and drawbacks of IT in the hospitality sector are discussed. The next section focuses on the benefits and drawbacks of IT on the hospitality sector. Hoteliers and Technology: Technology is shaping our world. It has become a part of everyone’s lives and it rules almost every action of ours. The hospitality industry being such a massive industry also needs to be aware of the latest technological developments. Every year there is an event held called HITEC the worlds best and unbeatable hospitality technological event! This event is for all hoteliers to meet up with their fellow hoteliers and to attend sessions held by industry experts. These sessions that are held are to help attendees learn the basics and make them informed buyers. The main idea of the event is to give hoteliers an exposure to the latest technologies, products and services from over 300 companies. The event is generally held somewhere between mid to late June. This years even has brought about a very interesting innovation was addressed, the progressive hotels are now willing to engage online and trying their best to gain as many customers as possible and make their stay as comfortable as possible(Mce, 2008). Technological Development in the Hotel & Resorts Sector: There have been several technological developments in the hospitality sector. Some of these developments go unnoticed by customers since they are mainly used for management purposes and operational purposes. However there are a lot of other developments which can be appreciated by the customers since it directly relates to customer experience. The developments have been many, from changing of a regular door key to a key card, to implementation of Customer Relationship Management (CRM) systems to ensure complete comfort for the customer (Schweisberger & Chatterjee, 2001). It is very clear that technology has in all the different ways acted as a catalyst of change for all businesses. However, it sometimes becomes very difficult to differentiate the benefits of technology and the challenges of technology. Over the last couple of years hotel have improved the technologies used in many ways. The systems that are used are very advanced and can capture every minute detail. These systems are user friendly and flexible. The software help the management produce reports and also act as backup for the information of the hotel. The systems generally used have to be chosen very carefully. It is essential that the management keeps in mind the kind of resources they have before choosing any system since having the most sophisticated systems with the best features but not having employees who are trained and who understand the systems would make it the systems worthless. It is essential that a hotel has the culture and well trained employees to have a sophisticated system else the positives of the system would be the cause for the downfall of the hotel. In the recent years a few of the hotels have brought in the Customer Relationship Management tool into their business. This tool is very popular in major tech companies who believe that CRM will revolutionize the business. The CRM systems help hotels get every single detail of the customer, like the customer room preferences, travel history, travel itinerary, transaction data, even the most minute detail like what kind of drink they normally order. This system can be very beneficial for the hotel and can open up a lot of opportunities for the hotel, if the information is used to its complete extent and the employees are well trained to deliver services in accordance to the information (Watkins, 2007). The presence of the excellent property management systems for the room reservations, rooms rate control, travel desk controls, guest message/mail control, Identification of VIP guests, room allocations, cashier functions, payments, ledgers, etc are very beneficial for the hotels, the systems allow reporting of a lot of cases like guest arrivals, departures, stay-over, historical reports, group lists, general performance reports and forecast reports (Stutts, 2001). This is very beneficial for the management of the hotels and helps smoothen out the operations process. The only drawback of this system is that it requires a set of skills to be operated and employees need to be well trained to be able to operate these systems. Since these systems work on real time basis hence it is essential that only well trained employees deal with the systems, else it could cause a lot of confusions. A small error by an employee could cost the hotel a lot of money. If the systems usage is not well understood the hotel could end up with double bookings, error reporting, forecasting errors and misleading information. The main benefits of these systems however are that they have been developed to be very user friendly, they are straight forward, provide multiple status views, automated integration, they are sturdy web based and have a synchronized flow of information. Also with the growing influence of the internet in our daily lives it is to be noted that the existence of any business truly depends a lot on their presence on the web. The average person uses the internet to find any information, make reservations, pay bills etc.. Hotels that have built a website which allows customers to make reservations online, and allows customers to plan their trip with great content on the website have seen unbelievable growth rates. Hilton group of hotels, one of the best hotels in the industry, have a fully well developed website. The company has seen an annual growth of 30% after implementing the website. Other hotels as well, like the Starwood group of hotels and resorts, who were one of the first few to start their own website for reservations etc., believe it to be very useful and a much cheaper mode for reservations. The online process has made it much simpler for both the customers as well as the hotel for smoother functioning of business and better service. The only drawback to this is the fact that even if the website is well developed and everything is perfectly planned out and all the processes are automated it would not be effective enough if the website was not well marketed, i.e. it requires to come up onto the top list on all search engines. Hence the main factor behind this technological development is that it requires to be well developed, with excellent content, needs to be interactive, user friendly and most importantly search engine optimized. It is a clear fact that owing a website which provides customers with the benefit of making reservations and getting in touch with the hotels directly has proved to be more effective than having a third party’s involvement. As stated by Hanson of PricewaterhouseCoopers, “As consumers become more comfortable with the internet, they become more demanding. To keep their rooms filled, hotels will have to continue improving their websites.”(Luxenberg, 2007) Conclusion: Looking at the various factors that influence the smooth operations and the management of hotels and resorts, it would be safe to say that technology has not caused any damage to the service provided by hotels and resorts. As Mike Leven (the founder and ex chairman of US Franchise System, Inc.), recognized as an industry icon once at a Strategic Conference on Hospitality Operations and Technology told a story which highlighted that how people who don’t understand technology or its potential can be terrified of using it! Thus as every industry the hotels and resorts have gained a lot from technological developments too (US Franchise Systems, 2008). Hotel Technology Next Generation (HTNG), is a group of 150 companies who put together the strengths of hotel and hospitality members as well as technological vendors, companies, academic experts, etc., HTNG work group creates practical solutions to specific business problems of the hospitality industry (Microsoft, 2005). Hotels have seen a growth rate much higher than they could have had without the introduction of technological improvements. Taking the example of Hilton hotels, they have seen an annual growth of more than 30%, once they put the online reservations system in place for the customers. Most of the hoteliers believe that it is more beneficial for them to get in touch with the customers directly rather than having a third party getting the reservations done for them (Luxenberg, 2007). In conclusion, it is safe to say that the world is moving in track with time and the technological developments are on the rise each day. Hence it is very beneficial for any business to adopt newer technologies and develop their business along with times to ensure complete customer satisfaction and excellent overall service. Hotels and resorts as well have seen much higher growth rates and have been able to improve their services to much greater heights with the introduction of technology. The statement “Technology is destroying service within Hotels and Resort!” is not true as long as the hotel is able to correctly and fully use the benefits of the technology they have adopted. References Luxemberg, S., 2007, ‘Wooing Hotel Customers Online’, National Real Estate Investor; Feb2007, Vol. 49 Issue 2, p86-89, 4p Mce, J., 2008, ‘Technology for Hotels and Hoteliers’, 11 August 2008, Accessed on 4September 2008, Retrieved from http://www.articlesbase.com/technology-articles/technology-for-hotels-and-hoteliers-516737.html Microsoft, 2005, ‘Hotel Technology Next Generation makes the hotel room more personal’, 6 July 2005, Accessed on 5 September 2008, Retrieved from http://www.microsoft.com/industry/hospitality/businessvalue/htngarticle.mspx Schweisberger, J. & Chatterjee, A., 2001, ‘Effective Customer Relationship Management (CRM) Implementations’, 1 November 2001, Accessed on 5 September 2008, Retrieved from http://www.hotel-online.com/News/PR2001_4th/Nov01_EffectiveCRM.html Stutts, A., 2001, ‘Hotel and Lodging Management – An Introduction’, Wiley, West Sussex US Franchise Systems, 2008, ‘Mike Leven of US Franchise Systems Retires from Hospitality Industry’, 2008, Accessed on 4 September 2008, Retrieved from http://www.usfsi.com/news/release.asp?id=305 Watkins, E., 2007, ‘The Technology Conundrum’, Lodging Hospitality; 1 April 2007, Vol. 63 Issue 5, p2-2, 1p Read More