How ICT Is Applied To The Tourism And Hospitality Industries - Essay Example

?Critically Evaluate How ICT Is Applied To the Tourism and Hospitality Industries Table of Contents Introduction 3 Aim of the Study 4 Literature Review 5 Application of ICT in Tourism and Hospitality Industries 5 Impact of ICT in Tourism and Hospitality Industries 8 Case Study: Practical Examples of Implementation ICT in Tourism and Hospitality Industries 11 Research Methodology 15 Discussion and Conclusion 16 Discussion 16 Conclusion 18 References 19 Appendices 22 Introduction In the contemporary business environment, companies operating in the global and domestic markets need to strategize their moves in an efficient manner in order to enhance their sustainability for a longer period of time. Arguably, it is the reputation of the company that enables it to ensure a distinct position for itself among the competitors in the market. This aspect is evident irrespective of the scale, nature or the type of industries the companies are identified to be operating in. Contextually, it would be crucial to mention that organisations operating in the tourism and hospitality industries also face immense competition amid themselves owing to the increasing numbers of entrants and established brands offering similar products and services. Companies possess the need to develop effective strategies to deal with such scenarios. They need to perform effectively in every aspect of their business so that they can outdo the performance of their competitors and obtain greater advantages that can suffice their long-run sustainability needs. It is often argued in this regard that proper execution of the plans and decisions of the business is the ultimate approach that can substantiate effective performance demanded by a modern day organisation (Pride & et. al., 2010). In this regard, Information and Communication Technology (ICT) performs a key role in the proper execution of organisational operations, keeping in mind the needs of modern companies, which can be explicitly observed in the context of tourism and hospitality industries. ICT is often considered as one of the extensive constituents of Information Technology (IT). However, unlike IT, the concept of ICT stretches more on the aspect of communication. The concept of ICT in any form of industry including the tourism and hospitality industries commonly involves the execution of activities such as incorporation of telecommunications technology with computers and other essential software, which further allows the user companies to access, store as well as share information among their various operational departments. It would not be erroneous to depict in this regard that ICT has its influences in various sections of the business and it acts as a major driving force in deciding the performance of the business operations of companies functioning in any sector including tourism and hospitality sectors. The significance of ICT for companies operating in any sector can be affirmed from the fact that it is actively implemented in certain specific and vital sections of tourism and hospitality business constituted with the various dimensions of production, marketing, research and communication among others. ICT is also a prime tool for tourism and hospitality companies operating in the contemporary business environment in the context of accomplishing daily tasks, which comprise generating business reports and executing continuous communications with the stakeholders of the business (Hooff & Wijngaert, 2005). Hence, it can be apparently stated that ICT is quite vital for businesses in various distinct domains as it attempts to make significant contributions towards enhancing the value and performance of the businesses operating in any particular sector. Aim of the Study With reference to the determined purview related to ICT, it is evident that it is used in various domains of the business context in the modern era. Consequently, in order to provide a comprehensive understanding regarding the aforementioned aspect, this study evaluates various literatures, studies and practical scenarios with regard to depicting the implementation along with the importance of ICT in the tourism and hospitality industries. Literature Review The tourism and hospitality industries of the world have emerged as amid the major industrial sectors on a global context rendering a considerable influence on the world economy. The sector makes major contributions towards strengthening the economy and ensuring development of every nation separately. Owing to such vital features, operational efficiency of business has become an important area to focus on for companies operating in this sector (DNB, 2008). In this regard, the application or the implementation of ICT in the business can certainly be regarded as a significant approach of companies in tourism and hospitality industries, which necessitates broader study. Application of ICT in Tourism and Hospitality Industries ICT is extensively applied in the tourism and hospitality industries globally. Correspondingly, a report published by The Higher Education Academy (2013) highlights that ICT is one of the most widely implemented approaches by companies over the last 50 years in the tourism and hospitality industries. The use of internet is one such example of the use of ICT in travel and tourism industry. The report also depicts that products or services related to travel and tourism have been supplied by a handful of leading sellers on the internet for a considerable period of time, rewarding them a certain degree of monopolistic advantages in luring customers, especially from the international realm. Arguably, customers in this industry mainly prefer to buy products or services via internet as it is convenient along with time saving at the same time (The Higher Education Academy, 2013). In precise, it can be stated that internet which is an important part of ICT is an essential component in this particular industrial sector. Furthermore, in similar context, the report of Pearson Education Ltd (2013) depicts that ICT is implemented across a wide range of functions in the travel, tourism and hospitality sectors. Among these, the most vital is its use in strengthening communication with the customers and other stakeholders. With the help of a few of the communication tools of ICT, companies operating in the tourism and hospitality sector keep in touch with various stakeholders of the business 24/7. This commonly includes communication tools like company websites, emails and blogs among others to interact with various members associated with the business one way or the other. For instance, company websites allows interaction with investors who can obtain greater knowledge about the whereabouts of the company. Additionally it also serves customers by informing them about new deals and offers. Similarly, emails and blogs tend to act as promising sources of feedbacks from the stakeholders of the company (Pearson Education Ltd, 2013; BBC, 2013). Apart from ensuring effective communication, ICT is also implemented in other areas of business by companies operating in the global tourism and hospitality industry. According to Frew (2013), ICT has a major role in assuring information security in the modern tourism sector. ICT tools, such as firewall and Secure Server Technology (SSL), are used to secure the exchange of data among various departments of businesses. Implementation of ICT security tools, e.g. the SSL, in the travel and tourism sector ascertain that companies are able to interact with their customers and other stakeholders through the medium of websites, which are secure and free from any external threat; thereby, reducing chances of distortion in the process of data transmission (Frew, 2013; European Commission, 2006; ABE, n.d.). According to the study of Petti & Passiante (n.d.), ICT is one of those vital elements that provide opportunity for growing as well as strengthening the tourism industry and the global economy altogether. Contextually, the authors state about how ICT is applied in the field of marketing in the travel and tourism industry. ICT is best used in expanding along with improving marketing efficiency of companies in this sector. It will be vital to mention that all the aspects of marketing, as involved in travel and tourism industries, ranging from the development of database to website handling and from market research to advertising, ICT is a key and a common component. Tools of ICT such as Internet based advertising, telemarketing and promotional presentations are all crucial components that decide the marketing and sales efficiency of companies operating in this sector. Petti & Passiante (n.d.) also makes the statement that these ICT tools enable companies in the travel and hospitality industries to reach as well as execute every marketing approach efficiently, which in turn ensures maximum probability of economic benefits to the business (Petti & Passiante, n.d.; ABE, n.d.). Information management is another crucial aspect for which, ICT is applied in the tourism and hospitality industries. In this regard, Buhalis (n.d.) states that ICT allows effective management of information and data for companies operating in this particular sector. ICT uses cost-effective technologies, which further enable companies to access information relevant to their operations. It can be depicted in simple terms that with the use of ICT in business, companies can be able to store data in a particular system and access it with ease when they are in need for the same (Buhalis, n.d.; ABE, n.d.). ICT, as a vital component of advanced information system, in tourism sector mainly deals with formulating, integrating, planning as well as managing important data and information of organisations. Emphasising this particular aspect, Shanker (2008) states that another aspect related to the application of ICT in tourism and hospitality industries requires developing effective strategies in the domain of finance management. With the implementation of ICT, conducting day-to-day financing activities of business becomes more accurate and reliable. Shaker (2008) also depicts that the application of ICT for financing, further enables error-free financial management and that too in a systematic manner, which acts as a support for businesses for better execution of long term operations in tourism industry (Shaker, 2008). Hence, from the above analysis it is apparent that ICT is applied in companies of the tourism and hospitality industries for various purposes. However, apart from these factors, the report of ABE (n.d.) illustrates certain other areas where ICT is applied. The report depicts that ICT is used for revenue management, waste management, conducting office functions as well as maintaining public relations among others (ABE, n.d.). Apparently, the presence of ICT can be seen in various domains of operations of companies in the tourism and hospitality industries. Impact of ICT in Tourism and Hospitality Industries Based on the above discussion, it can be argued evidently that ICT is extensively implemented in companies operating in the tourism and hospitality industries of the world. This approach further has considerable impacts on the operational efficiency of the business in this particular industry. Emphasising this particular aspect, Griffin (2013) states that advancement of technology in businesses not only provides opportunities but it also results in the emergence of several noteworthy challenges. Owing to the implementation of ICT, companies operating in the tourism and hospitality industries become more and more active in conducting online activities including social networking owing to which, these companies have been able to interact more with the customers and build an appreciative relation with them. Furthermore, implementing ICT enables the companies to depict the source of their customers, which further allows them to strategize their marketing operations accordingly. Griffin (2013) further illustrates the extent of the impact caused by ICT on the tourism industry with reference to the fact that the tourism of Ireland had benefitted immensely from the social networking. It is deemed that in the post-participation to social networking, as a facet of ICT, Ireland has become the second most loved destination of the world being able to communicate with a greater volume of customers worldwide. It is apparent in this regard that tools of ICT like social media is much effective in solidifying the relationship between a destination and tourists. However, Griffin (2013) also shows other side of the coin and depicts about emerging challenges that is accompanied with the application of ICT. In an incident, one of the staff members of a renowned restaurant in Dublin used abusive language in a social networking site in reply to a criticism against the company. This led to heavy criticism of the restaurant in the media, which reflects that ICT might also deliver unfavourable outcomes for businesses by hampering its goodwill to a large extent (Griffin, 2013). Arguably, implementation benefits of ICT depend largely on the users’ capability to communicate. Buhalis & O’Connor (2005) correspondingly depicts about the revolutionary changes ICT has brought in the tourism and hospitality industries. The duo thus stated that ICT has initiated a whole range of opportunities as well as threats for the tourism industry. As a result of the application of ICT in an extensive manner, companies are now able to empower clientele, to identify and customize products related to tourism and further encourage them to purchase the same. Buhalis & O’Connor (2005) also illustrate that ICT is one of the major determinants that ensure organisational competitiveness in the global tourism and hospitality industries. Apart from this, ICT is also effective for the companies in this sector to develop customer centric and profit driven strategies that will further assure favourable results for the business. However, inefficiency in the use of ICT might ascertain negative results for the business (Buhalis & O’Connor, 2005). Shanker (2008) also emphasised a similar discussion regarding the impacts led by the extensive use of ICT on the tourism industry. The author depicted that the use of ICT has enabled information sharing of companies in this sector to a much higher level. This further allowed businesses to circulate them to a much wider audience base. Moreover, the application of ICT in this particular sector has also enabled the companies to share or access relevant information of the business at a minimal cost. In simple terms, Shanker (2008) explained the application of ICT in the tourism and hospitality sectors as an approach that enables companies to extend their operations across nations and states, removing all sorts of communication barriers persisting in the geographic and economic contexts. But conversely, Shanker (2008), when emphasising the inefficiencies of companies or countries to adopt ICT, postulated that it is particularly owing to the lack of technological competencies. This further obstructs optimum effectiveness of ICT in the tourism and hospitality industries in a collective manner (Shanker, 2008). Hence, it can be affirmed from the studies and researches of Griffin (2013), Buhalis & O’Connor (2005) and Shanker (2008) that ICT provides opportunities as well as challenges for businesses in the tourism and hospitality sectors having strong impacts on its communication functions. Case Study: Practical Examples of Implementation ICT in Tourism and Hospitality Industries In this section, some practical examples will be aligned with the inferences drawn from the theoretical discussion of the previous section in this paper. Likewise, the application of ICT in the tourism and hotel industries of Ghana and China will be considered in the following discussion. Contextually, the case of implementation of ICT in the chains of hotels in Ghana is vital to be analysed. The aspect ICT is believed to push business towards improvement, enabling the management in better decision making and execution of better services to the customers. In this contemporary society, hotel chains realised the fact that brand image is not enough to capture the attention of the customers; rather, a differentiated service design is also of prime importance. This aspect was also apparent in the case of hotel industry in Ghana. The industry analysed that operating with the help of ICT and its various tools can enhance the efficiency of the business as compared to that of operations concentrated more towards manual operations following the traditional way. The industry mainly focused on the implementation of ICT in its front office operations. In this regard, the Local Area Network (LAN) or Wide Area Network (WAN) was deemed to be vital tools of ICT. The ICT tool of LAN has the potential to enable the hotel chains in Ghana that allows secured and efficient sharing of vital business information within a particular hotel’s various dimensions, rewarding enriched coordination amid the dimensions and fostering greater stakeholder engagement. The ICT tool, WAN also has the potential of enabling business to share crucial business related information among the several branches of any particular hotel. This aspect of the ICT technology is believed to be significant because of the fact that it enables organisations to enhance their communication by lifting all sorts of barriers. Another vital tool for ICT that is deemed to be beneficial for operational purposes of hotels, franchises and chains is Central Reservation System (CRS). In precise, it is used to utilize data as well as other crucial information resources. This tool of ICT is significant in the sense that it enables a centralised networking system within a particular hotel or among various chains, which are quite cost effective, allowing faster communication along with efficient sharing of information (Ansah & et. al., 2012). From a critical perspective, it has been observed that front office operations are among the most important activities conducted in the hotel industry. It is considered significant owing the aspect that it is the first and the last place where customers have direct meeting with the managerial personnel of the hotel, assigned with the task of controlling all the customer related operations and ensuring utmost satisfaction of the customers. In this context, the aforementioned tools of ICT are considered important to the front office operations in Ghana owing to the fact that it has the potential to enable proper execution of all the stages involved in providing high quality hospitality to the guests comprising the stages of ‘pre-arrival, arrival, occupancy and departure’. These four stages include activities such as managing transactions of guests comprising reservations and check-inn’s, information providing services, baggage handling, managing telephone calls, keeping messages of guests, maintaining accounts and bill settlement among others. All these activities are deemed to become more efficient when proper ICT tools are implemented. It is worth mentioning in this regard that the hotel chains in Ghana assured some key aspects while implementing ICT in their operational approaches. The management also assured that all the staffs of the organisation (especially front office) are fully competent to operate IT and have acquired enough training to use ICT tools so as to avoid its most potential negative effects of improper communication (Ansah & et. al., 2012). Subsequent to the application of these strategies, the chain of hotels in Ghana were able to assure that successful implementation along with execution of IT is enabled in the business. Another example of ICT application is identifiable with respect to the tourism industry of China. It has been observed that the fast changing nature of technology and development of ICT tools has altered the overall structure of the tourism and hospitality sectors not only within its national paradigm but also in the international context. China can be observed to have developed a unique reputation often being referred as one of the premier tourist destinations of the world owing to its rich cultural and historical attractiveness. However, with the implementation of ICT and internet based technologies, the tourism industry of China, has depicted a revolutionary change where a total makeover of the entire industry was apparent. Use of internet as an ICT tool has evidently allowed the players in the tourism and hospitality industries, including airlines and hoteliers of China, to sell their products directly to the customers. The extensive incorporation of ICT and internet based technologies has further paved the way for dynamic changes in the outlook and characteristics of the tourism industry of the country i.e. China. The adoption of ICT was quite apparently observed in the airline sector of the tourism and hospitality industries of China. Accordingly, it was observed that the airline sector in China adopted ICT in four diverse categories comprising management of airline, ticket reservation, cargo handling and check-in services in airport. Slowly and steadily ICT has began to be actively implemented in more than 100 airports in China. Apparently, this approach of the airline industry in conducting the operations have enabled them to enhance their operational efficiency to a substantial extent, as they were able to execute their work in a cost effective and time saving manner including maximum accuracy (Ma & et. al., n.d.). Hotel chains in China were therefore impacted by the implementation of ICT in a favourable manner with augmented working efficiency. Hotels in China are mainly built through foreign investments in common instances. Accordingly, it can be argued that international influences on the operations of Chinese hotels have been quite extensive, wherein to enhance the effectiveness of their operations, these hotels have implemented some vital ICT applications like Fidelio, Landmark and other potential software, which are well compatible with their operations and hence, can be treated as noteworthy examples of innovation in the field. The implementation of ICT in the hotel sector has thereafter been concentrated mainly towards enhancing the front office operations, maintaining proper customer relationship management and improving marketing approaches among others. With the implementation of ICT application, the efficiency as well as accuracy of the internal information sharing process has reached to high level altogether. Moreover, the application of ICT has also enabled the players in the Chinese hotel chains to operate their front office activities in a cost saving manner (Ma & et. al., n.d.). Altogether it can be illustrated that with the application of ICT tools, the hotel industry of China has been able to develop their operational effectiveness upto a larger extent, which further favourably impacted the reputation of the entire tourism and hospitality sector in China. Conclusively, it can be affirmed with reference to the two cases discussed above that ICT has been an important tool for the hospitality and tourism industry of the world. Owing to the implementation of ICT tools, the travel and tourism sector has apparently been benefitted, which gradually led to total and a positive makeover of the entire industry altogether. Research Methodology With the help of a structured and planned research methodology, data was gathered both for theoretical research and also for obtaining practical evidences to substantiate the research objectives, i.e. to make a critical evaluation of the implications associated with the use of ICT in the hospitality and tourism industry. Research, in this particular study has been carried out with the help of a variety of sources comprising books, journals and reputed articles. Basically there are two approaches of conducting any form of research. These comprise quantitative and qualitative approaches. Quantitative approach mainly deals with the analysis of mathematical data implementing statistical technique to get an appropriate and accurate answer for the research question, which assures maximum reliability and validity. On the other hand, qualitative approach of research mainly deals with the analysis of theoretical information relevant to the topic of the research through secondary sources like books and journals (Kothari, 2004). This paper intends to develop an appropriate answer about how ICT is applied to the tourism and hospitality industries. In this regard, a qualitative approach was implemented, where information related to the use and importance of ICT in the tourism and hospitality industry were analysed. The process was executed using the approach of reviewing literatures, journals and articles that can provide any vital information related to the topic of the study. Furthermore, in order to ensure maximum reliability and validity of the outcome of the study, only reputed literatures, journals and articles were considered as eligible for their inclusion in the research. In order to assure thoroughness in the outcome of the study, the research also adopted approaches where practical examples related to the implementation of ICT in tourism and hospitality industry were analysed. Discussion and Conclusion Discussion Considering the arguments in the above section, it is apparent that ICT has become one of the most vital facets of business processes, as it provides severable unignorable benefits to the organisation and also to the industry on the whole. Every industry has been under the influence of ICT and its applications in the recent era. This can also be witnessed in the context of hotel and tourism industries operating within the global plethora. Apparently, ICT is extensively implemented by hospitality and tourism organisations, both in the national and international contexts. In support of this aspect, various literatures and articles were analysed in order to get an apparent view of the issue considered through this study. As was noted, the report published by The Higher Education Academy (2013) shows the extent of benefits obtainable through the implementation of ICT in the tourism and hospitality industries. The study depicted that ICT tools and applications have been implemented since the last 50 years, i.e. since the initiation of the modern era in one way or the other in this particular sector. The report also depicted about the most common nature of application of ICT in this sector, which is to sell products and services of tourism via internet to a wider range of customers reducing national, economic and geographical barriers. Correspondingly, the account presented through Pearson Education Ltd (2013) depicted that ICT is also applied in the tourism sector to strengthen the communication of business with the stakeholders of the respective company. This is also aligned with the aspect of building proper relationship with the customers, which further ensures their maximum loyalty towards the products and services provided by the business. The most common ICT tool to manage relationship is through company website which is used to interact with potential customers. Again, Frew (2013) stated about how ICT is helpful in maintaining security within the business. Applications of ICT tools, such as firewall and SSL have further been identified to ensure that vital information related to the operations of companies in tourism and hospitality industries remain confidential. Another vital use of ICT tools is in the domain of marketing and sales in the tourism sector. The study of Petti & Passiante (n.d.) correspondingly made it apparent that ICT has an active role to play in the field of marketing and sales of tourism sector. Companies operating in this sector mainly advertise their products and services via internet and other mass media now-a-days, which allow them to interact with their stakeholders actively obtaining feedbacks on the services delivered. It was thus argued by Griffin (2013) that the emergence of ICT in the tourism industry has developed a platform for companies to interact with the customers, which further allows them to know about the source as well as nature of the customers. This information is further used in developing more accurate marketing and sales strategies for the customers. Similarly, Shanker (2008) explained that ICT has enabled companies to operate beyond national and state boundaries removing all sorts of barriers, which were also substantiated with the examples of the cases of ICT application in the tourism and hospitality sectors of China and Ghana. These case studies explicitly revealed a revolutionary change and a complete makeover of the entire industry altogether in a favourable manner. Hence, the discussion can be summed-up as an approach that is concentrated towards providing important information related to the application of ICT in the tourism and hospitality sectors. Conclusion Now-a-days, every industry is deemed to be under the active influence of ICT and its tools and implement the same quite extensively. It is useful in the domain of communication, marketing, financing, customer relationship management and information security among others. These aspects can be justified from the scenario of applying ICT in tourism and hospitality sectors. The tools of ICT have been in wide use in this particular industrial context, wherein the applicant companies have understood about how these technologies might be helpful for conducting most effective business operations. It has been further observed from the research that ICT helps the players in the tourism sector to interact with the customers on a usual and efficient manner where they intend to build a healthy relationship with the same. This is done with the help of ICT tools like emails, company websites and social networking among others. The study further revealed that ICT also enables companies to strengthen their communication prospects within the internal and external business environments. Notably, through this approach, tourism and hospitality companies were able to enhance their performance along with operational efficiency. This aspect was justified with the example of performance augmentation of tourism industry productivity of Ireland rewarding better scope for effective communication among various business departments. Apart from this, the research was also able to depict the positive effects of ICT in the marketing and financing sector of tourism and hospitality industry. Nevertheless, secondary data used in this paper also revealed both favourable and unfavourable effects of ICT in the tourism and hospitality industries advocating that the benefits of its usage depends substantially on the credibility of its users. In support of this particular inference, case examples related to ICT application in China and Ghana tourism industries were presented in the research study. References Ansah, A. K. & et. al., 2012. The Use of Information and Communication Technologies (ICT) In Front Office Operations of Chain Hotels In Ghana. International Journal of Advanced Computer Science and Applications, Vol. 3, No. 3, pp. 72-77. ABE, No Date. IT in Hospitality and Tourism Operations. Home. [Online] Available at: http://www.abeuk.com/content/docs/syllabuses/L5_IT_in_Hospitality_and_Tourism_Operations_dec11.pdf [Accessed November 04, 2013]. Buhalis, D. & O’Connor, P., 2005. Information Communication Technology Revolutionizing Tourism. 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Information and Communication Technology in Organizations: Adoption, Implementation, Use and Effects. SAGE. Kothari, C. R., 2004. Research Methodology: Methods and Techniques. New Age International. Ma, J. X. & et. al., No Date. ICTs & Internet Adoption in China’s Tourism Industry. Centre for eTourism Research (CeTR), pp. 1-33. Pearson Education Ltd, 2013. Using ICT to Communicate. Home. [Online] Available at: http://www.edexcel.com/migrationdocuments/Functional%20skills1/2329_FS_ICT_L1-2_Cha8.pdf [Accessed November 04, 2013]. Petti & Passiante, No Date. Getting the Benefits of ICTs in Tourism Destinations: Models, Strategies and Tools. International Arab Journal of E-Technology, pp. 3-12. Pride, W. M. & et. al., 2010. Business. Cengage Learning. Shanker, D., 2008. ICT and Tourism: Challenges and Opportunities. Indian Institute of Technology, pp. 50-58. The Higher Education Academy, 2013. Information and Communication Technologies for Travel & Tourism. Home. [Online] Available at: http://www.heacademy.ac.uk/assets/hlst/documents/resource_guides/ict.pdf [Accessed November 04, 2013]. Appendices Fig 1: Implementation of ICT in Reservation System of China Airline Industry Fig 2: Framework for Chinese Travel Industry Adopting ICT Read More