The Hotel Industry in the Peninsula Hong Kong - Essay Example

? The Peninsula Hong Kong: ICT, E-Tourism and Service Table of Contents The Peninsula Hong Kong: ICT, E-Tourism and Service 3 0 Introduction 3 2.0 Literature Review 6 2.1 Customer Service and Satisfaction 6 2.2 Local Capacity and Social Adaptation 7 2.3 Liberalisation Strategy 8 2.4 Summary 11 3.0 Methodology 12 4.0 Case Study 14 4.1 Website Evaluation 14 4.1 Guest In-room Experience 15 4.2 ICT Capacities 17 4.3 Intranet & Internal Electronic Communication 18 4.4 Summary 19 5.0 Recommendations and Conclusion 20 5.1 Recommendations 20 5.1.1 Adopt IT to housekeeping 20 5.1.2 Express Check In 21 5.2 Conclusion 22 References 24 The Peninsula Hong Kong: ICT, E-Tourism and Service 1.0 Introduction The hotel industry has come into the modern age through high integration of customer services. The Peninsula has created a wide level of ICT services that work both internally and for the benefit of customer use. Examining this high luxury hotel’s website in order to survey its customer services as well as the development of its internal ICT capacities has provided a modern system. Creating a high technological environment has benefits to the surrounding region as well as for the customer base. Technology requires infrastructure in terms of energy, internet capacity, and other services to the community. Tourism is not a separate activity, but is integrated into the region in which the events of tourism occur. The liberalisation theory provides context for how technology can increase the economy and socio-developmental capacities of the surrounding region. 1.1 Background The Peninsula Group is one of the divisions of Hong Kong and Shanghai Hotels Limited (“HSH Group”) and operates nine luxury hotels in major cities in Asia and the U.S.A. As they expand into Europe, The Peninsula Paris will open in late 2013. The Peninsula Hong Kong is one of the nine luxury hotels and opened on the 11th December 1928 when it was the only five star luxury hotels in the city. It has been awarded No.1 in the 2012 World’s Best Business Hotel – Top Hotels by City International by Travel + Leisure U.S.A., No.3 in WorldBest City Hotels by Blianz Switzerland, Winner of Worldwide City Hotel of The Sunday Times Travel Magazine (U.K.), and Best Business Hotel in both The World and The Asia-Pacific in 2011. All of these reputations not only have made Peninsula Hong Kong one of the best choices in Hong Kong for both business people and leisure travellers from all over the world but also provide all visitors a glorious and glamorous experience. A visitor’s impression of the Peninsula Hong Kong begins way before he or she steps into the hotel. Beginning at the reservations stage, potential guests can check the Peninsula website for information regarding availability, rooms, restaurants and also other information regarding the hotel and Hong Kong. In September 2012, The Peninsula Hong Kong proudly unveiled the first phase of its landmark room enhancement programme that offers guests the highest levels of comfort, with a HK$450 million project that will see all 300 guestrooms and suites transformed into technologically advanced spaces. Complementing the chic elegance of the new room design is the revolutionary in-room technology, setting new standards for guest personalisation. The system has been developed in-house by The Peninsula Hotels’ Electronic Services Department, a pioneer and industry leader in the research and development of innovative guestroom technology. The Peninsula is the only hotel company in the world with its own research and development facilities to design build and customise equipment to serve its guests. 1.2 Research Study The Peninsula Hong Kong provides an excellent model to study on traditions of quality and services combined with Information and Communication Technologies (ICTs) to maintain or even enhance the competitive edge for the hotel. In general, The Peninsula is one of the most expensive hotels in Hong Kong. While there are many new high technology hotels in Hong Kong, the Peninsula Hong Kong is a famous city landmark and one of the legendary grand-hotels of the world, targeting wealthy visitors looking for the finest traditions of quality and services. The use of technology has become a way to access higher levels of customer service. Through an examination of the case study on The Peninsula Hong Kong, this study will show how ICT has the capacity to increase customer service capacities. In addition, secondary research shows that through the liberalisation theory, the need for infrastructure to support higher levels of ICT can improve the surrounding region fulfilling the needs of nation and state. The connection between business needs and national needs shows how ICT can increase opportunities on multiple levels. 1.3 Summary While some people may think that the high room rate may put The Peninsula in a weak position especially during the recent downturn of the worldwide economy, however, the room rates never cease to attract newcomers and retain existing guests because most visitors are rich people who don’t mind to pay high prices as long as the services provided is satisfactory. ICT is a new and very important way for The Peninsula to move forward as visitors look to technology to enhance their hotel experience. 2.0 Literature Review 2.1 Customer Service and Satisfaction In the service industry, it is the customers perceptions of what they expect/demand compared with what they actually receive that gives us the knowledge of whether there is room for improvement. ICTs make is easier for staff and customers to communicate with each other. It is a two-way process for the guests needs to be also “taught”, what facilities are available to them, in the room for example, how they should respond and what the procedure for complaints is if they are unhappy. Whilst there are various “encounters” that a guest makes with the hotel and its staff/facilities during their stay, these can be defined into 3 broad categories: check-in; room facilities including room service and check-out. These might be referred to as the “moments of truth” when the desire on the part of the guest is either met by the appropriate response, or that response falls short of what is expected. Guest can evaluate the services according to their perception, needs and their own experience. The SERVQUAL model can be used to explain the guest perceptions of service. The elements of the model include reliability, responsiveness, assurance, empathy and tangibles. Also, it will judge the service by comparing with the services last time they encountered before. Numerous studies on residents’ perception toward the guest’s choice, the most common models in the literature today rely on understanding the decision-making process through an information processing, or problem-solving, approach. According to Holbrook and Hirschman (1982) and Mowen (1988) explain broadening the information-processing model into the “personal experience” of customer satisfaction. Using ICT solutions for facilitating the communication process of satisfaction has improved the ability of hotels to respond to needs in relationship to satisfaction. Personalization of the experience of tourism, specifically hotel stays, can be accomplished through technology that tracks personalized information, providing deeper resources for satisfying customer desires (Page, 2007). E-tourism and ICT solutions for hotels vary in their capacity to improve customer satisfaction. Hotels were originally considered slow movers in using ICT solutions because it was believed that their strength is centred in service, which at first appearance has limited benefits from ICT. As e-tourism concepts have evolved, however, service has been the primary benefit from ICT solutions for hotels. ICT provides the ability to improve internal operations, but also allows for relationships with customers to be improved through easier online booking, comments, the ability to send requests, and the assurances that on arrival everything has been pre-booked and available (Egger & Bruhalis, 2012). 2.2 Local Capacity and Social Adaptation During the past three decades, tourism researchers have paid considerable attention to residents’ perceptions and attitudes toward the impact of tourism (Lindberg & Johnson, 1997; Andereck Vogt, 2000). On the positive side, researchers have found that a personal needs and desire affects guests’ expectations and these change from time to time, from person to person and from culture to culture. Therefore, guest perception has the capacity to impact economic development, tax revenues, and tourism, and also has become an increasingly accepted leisure activity (Nicholas et al, 2002; Hing 2001; Piscitelli & Albanese, 2000; Seung & Harris, 2000). Utilizing ICT solutions for tracking expectations and changes allows the tourism industry to have immediate knowledge of individual tastes, familial changes, and any other record that can increase guest perceptions of higher level service (Page, 2007). The down side of personalized strategies that utilize ICT is that personalization can negate broader socio-cultural understanding of satisfaction (Moffett & Peck, 2001; Piscitelli & Albanese, 2000). When travellers are from other cultures and visiting somewhere they would consider ‘exotic’ comfort and satisfaction should also be attended from a broader perspective. The magnitude of the socio-cultural change is, in part, determined by the extent of the differences between the host and guests (Atsuko Hashimoto, 2002). Inskeep (1991) suggests these differences include: basic values and logic systems; religious belief; traditions; customs; lifestyles; behavioural patterns; dress codes; sense of time budgeting; and attitudes towards strangers. Broader concepts of satisfaction can dampen the impact of culture change for travellers from foreign locations, allowing them satisfaction without disruption. 2.3 Liberalisation Strategy Akis et al (1996) examined residents’ perceptions towards tourism development based on Butler’s life-cycle theory, hypothesizing an inverse relationship between levels of tourism development and perceived impacts. They associate changes in residents’ attitudes toward tourism to different stages in the tourism development of the destination. Butler’s theory proposed that tourism progresses through different stages: exploration, involvement, development, consolidation, stagnation, and decline. As a result, residents’ quality of life improves in the initial phase of development but reaches a “ carrying capacity” or “level of acceptable change” when further development brings about negative impacts. The study by Long et al (1993) reveals that residents’ support for additional tourism development initially increased with increasing levels of tourism, but became less favourable when a carrying capacity level reached stagnation which could then set in because of resident opposition to growth or because of the reaching of a social capacity threshold. Applying these theories to Peninsula as a leading hotel in the worldwide, it seems that the Liberalisation strategy has been addressing the need to revitalize the destination, which could use more visionary strategies to take its tourism industry to a new level of development and international exposure. Hseuh (2011) defines a liberalisation strategy as “policy and company level measures that introduce competition and influence, and enhance the role of markets” (p. 22). In other words, in order for Peninsula to raise their profile they need to compete at a global level through tools that help them to communicate and interact. This can be accomplished through ICT that provides for e-tourism advantages. One of the ways to take advantage of e-tourism, according to the UNCTAD secretariat (2005) is through enabling an environment in which e-tourism can flourish. The UNCTAD suggests that e-tourism should be a multi-dimensional approach, or a holistic approach, in which all stakeholders are taken into consideration. ICT strategies within a company need to be in line with national ICT strategies so that access and liberalisation can be achieved. Liberalisation includes infrastructure, capacity building, telecommunications, and adapting legal and regulatory frameworks that can create security. This is also related to the creation of secure online payment capacities (UNCTAD secretariat, 2005). Creating higher levels of capacity in ICT through national liberalisation and company liberalisation may be met with a variety of reactions within the state. Ap and Crompton (1993) explained that residents experience stages of embracement, tolerance, adjustment, and withdrawal throughout the development of tourism, while the community attitude research by Doxey (1975) proposed that as tourism arrivals increase, so does resident hostility toward the tourists, going from resident euphoria to antagonism. In contrast, the “social disruption theory” (England & Albrecht, 1984) has argued that in the initial phase, residents feel a loss of control and a sense of crisis. After adaption and adjustment to the impact has occurred, by means of the introduction of supportive facilities and service, the quality of life is expected to improve. This means that as ICT infrastructure improves, resistance to tourism may decrease through the advantages that have come from liberalisation. Persue et al. (1999) found support for the “social disruption theory” by comparing the tourism development cycle and social disruption hypothesis as alternative theories to explain changes in rural residents’ quality of life resulting from the legalization of gaming development. Besides the cycle of tourism development, personal factors, perceived positive and negative impacts of development, proximity to casinos, length of residence, and frequency in visiting casinos also influence resident attitudes to various extents ( Carmichael et al.,1996; Perdue, et al, 1990; Perdue et al., 1995; Ko & Stewart, 2002; Spears & Boger, 2002). Minimizing the impact of the “social disruption theory” may include building capacity within the local residence. As capacities improve the standard of living will improve. Detschew and Kalifab (2007) write that increasing the infrastructure for ICT means improved communications, improved energy capacities, and improved opportunities for investment. Increasing ICT capacities per user creates overall incentives for increased investment and demand. This produces jobs, economic benefits, and globalisation. Reaching the critical point where demand and service meet provides for increases in the marginal return on the investment, but increasing too rapidly will mean that ICT capacities have overreached demand and will sink in value. 2.4 Summary The nature of ICT as a method of reaching consumers allows for personalized service, easy access through e-tourism, and increased social benefits through approaching liberalisation for policies, regulations, and building infrastructure. Having capacities for increased ICT means that the local population will benefit from investment opportunities that are created through the appropriate infrastructure and accompanying policies as well as making the relationship of local populations with tourism more amenable. Accelerating ICT capacities must be done with care, but the end result if done well benefits both the individual company and the nation. 3.0 Methodology The research methodology includes website evaluation and examining of the technologies that Peninsula offers to its customers. The review of literature and the details of the website were correlated in order to define the position of the Peninsula in relationship to ICT strategies and technologies. Secondary research was used to give context to the information that was given through the website. Secondary research carries the advantage of previous work done by other researchers who can give depth to the discussion. Secondary research was achieved through searches of the internet, academic journal databases, and online books. Secondary research was conducted by connecting information from literary resources to the discussion that was developed for this study. Primary research was conducted through personal search and experience of the Peninsula website. The website was explored for the many ways in which e-tourism advantages were used, as well as looking for any gaps that existed. The search of the website provided information that guests could recover during their own search of the website and provided context for discussing the current capacities of the Peninsula Hotel. 4.0 Case Study 4.1 Website Evaluation The website is very often the customer’s first interaction with the hotel. Whether they will ultimately make their reservation directly with the hotel or go to their travel agent, the customer will get their first impression from visiting the hotel’s website. The Peninsula Hong Kong website is a very comprehensive one. It showcases its unique features such as a Rolls Royce fleet, helicopter and heli-pad. It also lets the customers tailor-make their experience according to leisure, business, travelling with family or for celebrations. The ‘Celebrations’ and ‘Occasions’ sections cater more to local customers who may want to celebrate their wedding or anniversary in the hotel. A unique feature of the Peninsula website is the ‘Gift’ section. The visitor to the website can purchase a dining, spa or cash certificate as a gift for their loved-ones. This shows the thoughtfulness and personal touch of the Peninsula Hong Kong. The potential customer can finally go-ahead to Reservations section to check if the desired period of stay is available for booking and the prices. At the bottom of the Peninsula’s website are links to various external sites: Facebook, Trip advisor, Youtube and Youku, which is a Chinese search engine site intended for Chinese travellers because Mainland Chinese people are not allowed to access Facebook in China. While trying to make a booking for this current case study, one could observe that many Flash and Plug-in applications are used in the website. This may cause loading time to be delayed. Also, some customers may not have the most up-to-date computer systems and this may affect their initial interaction and impression of Peninsula. 4.1 Guest In-room Experience With the aim of delivering a new superior room experience where guests can choose how they access the hotel’s services through technology, guests’ expectations continue to develop at a high rate. The Electronic Services Department (ESD) is an internal department that is tasked to not just keep up with, but stay ahead, of requirements. The ESD’s latest offering at The Peninsula Hong Kong takes these initiatives to a new level of creativity and innovation, with a truly personalised in-room experience. Fully customised interactive digital bedside and desk tablets are pre-set in one of five languages – English, French, Traditional and Simplified Chinese and Japanese. This language integration changes all facilities and information throughout the entire room according to the guest’s preference. No doubt, when the customers step into the room, they will be impressed at such attention to detail. Full control of all in-room functions is a mere touch away via the wall, bedside and desk tablets, including the in-room compendium of restaurant menus, hotel services, the new “PenCities” virtual city guide, personalised streaming terrestrial TV, Internet TV and radio, mood lighting, curtain, valet call, weather, thermostat, language and privacy options. The impressive lacquer desk is complete with high-speed Internet access, international Internet radio, weather panel, iPod docking station and more. The Peninsula’s signature en suite marble bathrooms offer LED touch-screen panels for terrestrial and Internet TV and radio. Mood-lighting with a customised ambient spa setting delivers a luxurious, integrated light and sound experience for indulgent relaxation. State-of-the-art audio visual centres with flat-screen, Blu-ray LED televisions offer a vibrant, enriched entertainment experience via tablet with terrestrial TV, 90 Internet TV channels, 460 Internet radio stations and complimentary HD movies, iPod/iPad docking station, memory card reader and sound bar speaker system with powerful sub-woofers. Wireless connection to personal electronic devices and to the all-in-one fax/printer/photocopier/scanner, enables the seamless functionality of a home office, plus multiple device chargers for added convenience. Complimentary high-speed wired and wireless Internet access also means that international VOIP calls are free, both in-room and when travelling in the hotel’s Rolls-Royce fleet. 4.2 ICT Capacities “Innovation is – and has always been – an integral part of The Peninsula Hotels’ DNA,” says Peter Borer, Chief Operating Officer. “The guest-focused technology we are unveiling will elevate our guests’ stays to a whole new echelon of experiential luxury.” The Peninsula is the only hotel company in the world with its own research and development facilities to design, build and customise its own equipment, all in-room technology is developed and then tested to perfection by the ESD, comprising a team of 27 electronic, software and hardware engineers who are able to respond to guests’ every need through a combination of observation, innovation and technological know-how. Located in Aberdeen on Hong Kong Island’s south side, ESD General Manager Research and Technology Ingvar Herland and his team of white-coated engineers strive to provide user-friendly, intuitive technology for today’s increasingly demanding and sophisticated hotel guests to enhance comfort and the overall hotel experience. Whether on business or holiday, the technology is there to assist guests with work or simply to relax and “repair” with the room as their sanctuary. Tasked to deliver what guests want before they know they want or need it, the ESD’s twin mantras are “technology is all about people” and “you shouldn’t have to think – it just happens”. Thus, every element must serve guests, help them unwind and keep them connected, informed and at their best. At its heart, the issue has always been a continual evolution of design – always asking, “How does this work?” and “What can we do better?” 4.3 Intranet & Internal Electronic Communication The Intranet and electronic systems are critical to the smooth running of any company. Various systems for reservations, check-in, sales, housekeeping and events are linked together so that staff can access guest information and create the personal touch. Despite the common use of the Internet, some customers may still call or email the reservations department for enquiries. These may be special requests such as long-stay rate or corporate rate. The reservations associates can take note of requests such as king-size beds, travelling with children, handicapped rooms or special requirements needed upon check-in. The check-in staff members rely heavily on the check-in systems to ensure that each room is assigned and updated. The input of guest information such as passport number, home address and payment methods are required by law. During check-in, the staff can also get preferences from the customer (eg. newspaper choice, time of cleaning-service) and input them into the system for their housekeeping colleagues. Events department and the Food & Beverage outlets work closely through email and meetings for wedding and banquet preparations. The Peninsula Hong Kong is well-known among prominent people in the local community and often hosts large-scale weddings and balls. With the press at hand to cover these social events, any slight mistake can be picked up and highlighted in the newspapers. Communication among valet parking, security, events, food and beverage all need to be seamless and flawless. Currently, all guestrooms carry a comment form for customers to fill in upon check-out. Customer comments are highly valued in Peninsula and any guest comments are input into guest history profile for their next visit. 4.4 Summary Since its inception in 1985, ESD have created, designed and developed cutting-edge in-room facilities for the group’s nine hotels, and continue to work closely with manufacturers of off-the-shelf items such as TVs to re-design remote control devices to be as simple and user-friendly as possible for guests. While each hotel has an ESD team in-situ, Herland and the team can also control the electronics in every guestroom around the world from an elaborate control panel in their laboratory at HQ. A catalyst to invention, the thought and development process comes from a variety of sources, including intense observation when travelling (in Peninsula Hotels and elsewhere) ranging from how guests move around the room to staff efficiency and beyond. 5.0 Recommendations and Conclusion Although there is no service quality shortfall that has been detected, we still recommend The Peninsula can further enhance its top status in the hotel industry. It includes that The Peninsula can make more use of advance technologies like “ wireless” housekeeping and mobile check-in service and introduce more value-added services related to ICT capacities. 5.1 Recommendations The following concepts are a few recommendations that can add to the overall ICT services that are used in the hotel. 5.1.1 Adopt IT to housekeeping Making use of advanced IT to upgrade its housekeeping services and making guests feel that their needs are recorded and addressed is one way in which the Peninsula can increase its service level. Holbrook and Hirschman (1982) and Mowen (1988) saw in the 1980s how ICT would be the future in creating higher levels of service through integration. Since the Peninsula is famous for its superb services, it is already providing top-quality hotel services that are superior to ordinary 5-star hotel standards. In order to bring world renowned opulence and comfort, the rooms at the Peninsula must be perfect at all times – exquisitely clean, elegantly appointed and every aspect flawless. Hence, housekeeping is critical to achieving such perfection and thus complete guest satisfaction. In order to make the housekeeping operation more efficient and make the housekeeping staff more productive, we would recommend the Peninsula to improve the traditional housekeeping processes by developing technology for integrating housekeeping service with customer satisfaction. One of our suggested solutions is discussed below. Each housekeeper carries a handheld tablet as he/she cleans rooms, receiving updated assignments on the device. The housekeeper can then communicate his/her progress and location. Information about the status of vacant rooms is sent to the hotel’s central processing system so that front desk personnel always know which room has been opened so that mini-bar checkers know which units to inventory. The supervisor can quickly and easily tell if one housekeeper is running behind schedule and whether someone else on the staff can lend assistance. If a housekeeper goes home sick, the supervisor can quickly re-assign that person’s tasks to other housekeepers. This would create minimal disruption in the service process. The hotel will be able to save its operational costs by these more efficient processes in mini-bar stocking, housekeeping operations and handling of guest requests with the deployment of technology. 5.1.2 Express Check In Significant value can be delivered to guests via a mobile guest check-in solution with handheld devices by reducing the time spent in traditional reception queues. As the ultimate in courtesy and personalized service, the Peninsula can bring the front desk to wherever their guests are – at their vehicle, at convention centre entrances, or in lounges. Bardi (2011) identified this technology as the next best practice for hotel front desk management solutions. In particular, large convention groups checking in and out will appreciate the speed and ease that this leading-edge wireless technology offers. With the same handheld device, hotel clerks can check-in guests, process credit cards, print receipts and program room keys at any location on the property, and produce receipts – on the spot. By introducing this express check-in service, the Peninsula can strengthen relationships with frequent guests and create loyal guests among new visitors. 5.2 Conclusion The Peninsula Hong Kong should continue to produce ideas and possibilities related to ICTs in order to maintain both the existing high standard and also improve the quality service which should ensure that the Peninsula Hong Kong remains one of the world’s great hotels. Through connecting their needs to national capacities, the liberalisation theory can be used in order to support improvements both within and outside of the organisation. Furthermore, the Peninsula pays great attention to the communication among the group, its employees and guests. The company successfully solves the problems that commonly occur, including inadequate management of service promises, guest expectations, guest education and internal communications. As far as we are concerned, there has not been any over promising in advertising, personal selling or though physical evidence cues. In short, we can conclude that Peninsula’s service quality truly stands out and currently no service quality shortfall has been detected. Looking forward, in order to maintain its flawless service quality, the management of the Peninsula should conduct regular assessments and evaluations to monitor the effects of service programs and to track whether guest expectations of the service are changing over time. References Accolades - http://www.peninsula.com/Hong_Kong/en/default.aspx#/Ho ng_Kong/en/About_Us/Accolades/ Bardi, J. A. (2011). Hotel front office management. London: J. Wiley & Sons. Daft, Richard L. (2003) “ Organization Theory and Design, 8th edition”, Thomson, South- Western U.S.A. Detschew, S., & Kallfa?, H. H. (2007). Impact of ICT in the developing countries on the economic growth: Implications derived from theory and empiricism. 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