Use of Computers in Hotels - Research Paper Example

 Use of Computers in Hotels Abstract This paper intends to fulfill three basic purposes; firstly to identify factors related to the success of computer systems in hospitality industry; secondly to determine whether hotel marketing perceived computers to be enhancing their job performances and finally to identify the latest applications of computer technology for use in marketing departments in the hotels industry. Effort has been made to elucidate each and every objective supported with facts with the help of extensive research of available literature on the topic. Use of Computers in Hotels Introduction John Naisbitt wrote in “Megatrends” (2000) about 10 major trends taking place in modern society. One of the trends he identified was the shift from an Industrial Society to an information society. He states The level of change involved is so fundamental yet so subtle that we tend not to see it or if we see it, we dismiss it as overly simplistic and thus we ignore it…The problem is that our thinking our attitudes, and consequently our decision-making have not caught up with the reality of things. (Naisbitt, 2000:3). Naisbitt further stated that Apple Computers, a pioneer in the field of personal computers, estimated that total sale of computers would grow at least 40 percent annually. On the other hand, scientific and technical information was increase 13 percent per year at the time of this study and was expected to increase to 40 percent per year thus creating the need for more powerful information systems and increasing the population of scientists. Naisbitt added that this level of information was clearly impossible to handle by present means. Information had become very important to modern society. In most business, demographic information about client was not readily available in the hotel industry however it was very easy to track down the demographic information of client because every guest or group must register when checking in (Geller, 2005). Goffe and Parker (2005) stated that computers can greatly simplify the task of managing large masses of information. Unfortunately at the time of this study the lodging industry in the world was about a decade behind other industries in incorporating computer techniques. Even in those hotels that were using computers their use was usually limited to the front office, and marketing applications were usually an after though if they were not neglected entirely. The problem of insufficient computer use in hotel marketing was discussed by several other experts in the hospitality industry Taylor (2006) stated that the sales and marketing function have always been deemed beyond the reach of available technique. Sales people still wrote booking in diaries instead of entering information in computers. With so many variables impacting upon hundreds of bookings, it was very easy to make costly mistakes for example salesmen might forget to log their room sales in diaries causing rooms to be overbooked. Insufficient computer use can also cause problems like delays in replying to customers about the availability of rooms because data is not immediately available to Goffe and Parker (2005:110); computer if utilized properly could bring many benefits to hotel marketers. They added that computers can be used for following things very easily. In Advertising, Sales promotion and Publicity areas: Measurement of the effectiveness of different advertising and commercials. Measurement of the effectiveness of different sales promotion. Preparing past clients mailing list. Monitoring of advertising budgets. Preparing publicity budget. O’Connor (2004) elucidates the different functions of computers for marketing purposes: In Sales and Sales Management: Preparation of market share analysis. Tracking and ranking how much business each geographic market brings. Preparing potential clients list. Tracking the reasons for cancelled reservation. Measuring sales-lead to actual sales ratios (comparing whether sales lead have brought in actual sales for the hotel). Tracking and updating of sales-lead age and status. Developing sale-call plans. Designing sales territories. Preparing future booking reports. Obtaining Up-to-the-minute information on available dates rates and rooms. Preparing sales contracts. O’Connor (2004) further stated the different faction of computers of marketing purposes: a) Agents and other intermediaries: Tracking and ranking how much business each travel agency brings in. Tracking and ranking how much business each Customer Transportation firm bring in. b) Room Rates: Developing a pricing model that determines optimal group rates. Developing a pricing model that determines optimal first time rates. Calculating rates for salesmen to quote to client in order to have the desired revenue figures. c) Quality control: Tracking quality levels over time. Producing a guest satisfaction index. d) Catering Generating banquet event order. Preparing beverage set-up and requirement reports Display menus and items already sold.” Powell (2007) also wrote about the uses of personal computers (PC) for marketing purposes: a) Office Follow Up Follow up on leads which may result in new business. b) Management Reports Data will be gathered about different promotions, and will indicate to management promotion are most successful in drawing leads for a particular product or service and which of them have the highest profile. c) Data Base Applications Tracking current customers and the products and services they bought. Tracking customers and their gains and losses. Managing mailing list. Managing inventories of brochures and other promotional supports. Maintaining a current list of products and services. d) Spreadsheet Applications Forecasting sales Client presentation Internal presentations a) Communication Application Sending electronic mail Distributing all electronic data Downloading data file Powell (2007) added that the unusual uses of PC are: a) Media Planning To model media placement scenarios with its clients b) Market Research The main menu allows the user to complete a brief questionnaire on a particular service or product which provides an instant easy analyzed survey base. c) Sales Strategic Planning Human Edge software sales programs which take the user through a psychological characteristic of the salesperson and the prospect after comparing the answer to a knowledge base developed through much research and contained in the software it prepares a complete report of recommended approaches to be used or avoided at sales meetings. Taylor (2007) stated that if computers were properly used they could benefit hotels by: getting closing ratios increasing sales call frequency providing better customer service which provides sales people more time to make sales calls using less time to prepare proposals and quotations getting great accuracy in forecasting getting more systematic work increasing quality of work and decreasing response time from clients. The above use clearly illustrate that computers could benefit hotel marketers with so many apparent advantages to the use of personal computers this research was intended to investigate the possible reasons for the apparent under-use of computers in the hotel marketing industry. Ein-Dor and Segev (1998) defined insufficient computer use as a problem they stated: A clear distinction should be made between the successes of a Management information system project. A project may be successful and yet result in an unused and therefore unsuccessful system. A project may be plagued by cost overruns and schedule slippage and still result in a widely used system. (p. 559) Prior to the research other studies had investigated this problem but none had specifically addresses the use of stated that despite the fact that the commercial use of computers was three decades old many of the systems being implemented might be classic failures even some computers were running over budget some were discontinued while others performed at a level far below expectations other systems required major expensive modification after implementation even before they were acceptable to users. Factors for the Success of a Computer System According to Tait and Vessey (2004) there were different theories of end-user attitudes which suggested different factors that may contribute to the success of a computer system. Some studies regard motivation as the key to MIS success (DeSanctis 2002) others find a positive relationship between User attitude and the unsuccessful use of an information System (Maish 1999). Age training Education experience numbers of years on the job are also found to affect the quality of information use (Fuerst and Cheney 2002; Lucas 2005) Rockart and Flanney (2003) Observed that user education is important and different types of users need different types of training. Motivalla and Pheny`s research (2002) found that “the characteristics of individual tasks and the environment in which the task take place have a strong and long lasting effect on information success” Lusk and Karsnick (1999) found that “job and information complexity affect decision quality “ Environment factors within an organization that are said to affect decision support system success include: environment stress (Motivalla and Pheny 2002) top management support (Rockart and Flannery 2003) and environment uncertainly (Schroeder and Benbasat 2005). It has been shown that successful organizations shift their management strategies to meet changes (Greiner 2002) and that effective support and comprehensive education is a dominant concern when introducing end-user computing (Henderson and Tracey 1996). Centralized help centers the introduction of consultant and a good reward structure have been shown to increase worker satisfaction (Henderson and Tracy 1996) and therefore influence a systems success in their 2007 study Nelson and Cheney found that computer related training was positively related to computer related ability and that computer related ability was positively related to the use of computer resources. Necessity of Computer Use for Hotel Marketing According to Perera (2006) marketing and sales lagged behind other business functions in the use of software technology and companies were proceeding slowly with sales and marketing automation. Computer use has become necessary to hotel to hotel marketing for the following reasons. a) Rising Cost In sales and advertising the cost to close a sale can be up to $5000 since 1984 there has been as 88percent increase in cost to place a full-page black and white advertisement in a trade magazine and a cost increase of 112 percent to put the same advertisement in a business publication. b) Intensifying Competition High productivity is required simply to maintain high profit levels the level of competition in marketing has become more sophisticated software is improving and computer based marketing information systems are expected to counteract these competitive forces. c) Information Processing Requirements To facilitate sufficiently rapid response to competitor`s actions and frequent changes in the market place adequate access to information is required. Steps for Computer Based Hotel Market Planning Dr. Peter C. Yesawich (2007) talked about the development of marketing plans for hotels and how computers could help to eliminate much of the tedium. In the development of marketing plan lodging establishments should follow these steps: i. Know the property profile It comprises the collective facilities and service. ii. Know the prime prospects They represent individuals with the highest probability of patronizing the property. iii. Know the competition It is necessary to know the competitors who have the same profile as your establishment. iv. Establishment realistic objectives Management must establishment occupancy objectives that are realistic goal that may be obtained given the amount of marketing dollars available. v. Formulate a marketing plan Match groups of prime prospects with the property profile. vi. Implement the plan Execute the component of the plans. vii. Monitor the effectiveness of the plan Measure the effectiveness of the plan. Dr. yesawich (1977) described the computer based system designed by the research company Robinsons incorporated in Orlando Florida intended specifically for use in the marketing department of the lodging industry the system requires no investment in computing hardware from the hotels but it capture comprehensive information on corporate association group travel agent and individual guest. There are two components of this system historical prospect research and current research. The first step in historical prospect research is the compilation of definitive information on all individual and group clients who have patronized a property over the past years Data like room rates number in party length of stay and total folio charge is provided second it analyzes movements within each media market by the time of the year and the profitability of special package plans third it analyzes several “aggregation procedures” designed to specify the characteristics of each segment. It will only take the computer several minutes to do the analysis whereas it would take a staff of four trained experts approximately six weeks to do the same analysis for a 250 room hotel. The advantage provided by the computer is evident. After the analysis has been done, the research results may be used to formulate a marketing plan. The plan consists of three components: 1. Creating a thematic approach for all advertising based on prospect characteristics dated through research (for example determining which advertisement appeals should be employed in selected media markets). 2. Determining what percentage of market dollars should be allocated to consumer media collateral material (brochures etc) and special promotion. 3. Devising a media schedule to achieve maximum impact in the major prospect market. Strategic Use of ICT for Hotels Although, of the international travel industry the accommodations sector has been regarded as the most under automated sector, then too irrespective of their size most of the hospitality businesses have been enabled to incorporated and actively engage with ICT with drastic development of internet (Buhalis, 2003). As intermediaries would often refuse to collaborate with hotels were unable update their availability online or receive emails or had no excess to the internet; in most of the cases the computerizations was done in order to facilitate the distribution functions of the hotels. This would be, in most cases, the immediate push factor for which computers were introduced into a particular business then afterwards computers were used in if not in all of the hotels functions but at least in core or most of the functions of a hotel. ICTs can support the accommodations facilities in an array of ways not only at process level but also at product levels. The introduction of computers is useful for the questions of differentiation and specialization, accompany strategic planning and promote the effectiveness and efficiency of operative processors. Moreover can be aiding in supporting coordination and communication with all stakeholders, and can be used vertically, horizontally and diagonally across a particular organization irrespective of its size, and nature of operations. For example the ICTs can support flexibility in terms of product structure and pricing, can facilitate the organizations and administration of inventory, permit the up-to-date information, reduce communication and distributions cost and open new markets (O’Connor, 1999). Moreover they support the creation of strategic partnerships emerging from the development of long-term customer relationships. In addition to above they permit well founded market research, and encourage inter-organizational know how and expertise. However the scope of the ICTs in not limited to the individual corporations but extends to support the central elements of the entire business model. For instance the Omena hotels are the perfect examples, as they questions the traditional ways of service provision and revenue generation as they have been successfully exploiting these ICTs to in their operations with involving no staff on the premises. However detrimental to the customer service, it has been suggested that there exists a segment where such nature of the service provision has been successful as suggested by the hotels success. Among the accommodation establishments it is an impressive demonstration of the penetration of ICT, that all of the hotels today have their own website irrespective of their size and organizational culture. In recent years the tourism industry has hugely grown and has become diversified as now customer play an important part determining the need for the change of paradigm in the understanding of market. In contrast only a few years back it was a customer centric market, however it is a totally customer driven world. With introduction in German markets of the Web 2.0 programs such as the Holiday Check and Tripadvisor, it has enabled customers to asses and review hotels easily. References Buhalis, D. (2003). “Information Technology in Tourism: The State of the Art”, Tourism Recreation Research, 24 (1), 41-58 DeSanctis, G. (2002) “An Examination of an Expectancy Theory Model of DSS Usage”, Unpublished Dissertation. Texas Technical University, Lubbock, Texas Ein-Dor , Phillip, Segev, E. (1998) “Organization Context and the Success of Management Information System”, Management Science, 24, No. 10, June, 1064-1075 Fuerst, W. L. and Cheney, P. H. (2002) “Factors Affecting the Percentage of Utilization of Computer Based DSS in the Oil Industry”, Decision Science, 13, 3, October, 554-569 Geller, N. A. (2005) “The Current State of Hotel Information System”, The Cornell Hotel and Restaurant Administration Quarterly, Volume 26, Issue No. 1, 14-17 Goffe, P. & Parker, A. (2005) “Marketing in the Computer Age”, Lodging Hospitality, 110-111 Greiner, L. E. (2002) “Evolution and Revolution as Organization Growth”, Harvard Business Review, 50, 4, July-August, 37-46 Lucas, H. C. (2005) “System Quality, User Reactions, and the use of Information System”, Management Informatics, 3, 4, 207-212 Lusk, E. J. & Kersnick, M. (1999) “The Effect of Cognitive Style and Report Format on Task Performance: The MIS Design Consequence”, Management Science, 25, 8, August, 787-798 Maish, A. H. (1999) “A User’s Behavior toward MIS”, MIS Quarterly, 3, 1, March, 39-52 Motivalla, J. & Pheny, F. Y. K. (2002) “Decision Effectiveness and Information Use: Effects of Cognitive Style”, Ann. Arbor, MI, 137-149 Naisbitt, J. (1996) Megatrends 2000, Smithmark Publications Nelson, R. & Cheney, P. H. (2007) “Training End Users: An Exploratory Study”, MIS Quarterly, December, 547-557 O’Connor, P. (1999). Using Computers in Hospitality, 2nd Edition, London: Cassell O’Connor, P. (2004) Using Computers in Hospitality, Cengage Learning Powell, Tim. (2007) “True Power of the PC may be a Strategic Weapon”, Marketing News, 21, No. 10, 22-24 Perera, P. A. (2006) “benefits and Drawbacks of Computer Based MIS”, Marketing News, 21, No. 23, November, 22-24 Rockart, J. F. and Flannery, I. (2003) “The Management of End-User Computing”, Communication of the ACM, 26, 10, October, 76-784 Tait, P. & Vessey, I. (2004) “the Effect of User Involvement on System Success: A Contingency Approach”, MIS Quarterly, March, 91-107 Taylor, T. C. (2006) “Computerization Helps Hotels Helps Sales Executives”, Sales and Marketing Management, July, 120-23 Taylor, T. C. (2006) “A Rep Writes his own Software to Success”, Sales and Marketing Management, December, 80-81 Taylor, T. C. (2007) “Hewlett-Packard Give Sales Reps A Competitive Edge”, Sales and Marketing Management, Feb., 36-41 Yesawich, P. (2007) “A Market-Based Approach to Forecasting”, The Cornell Hotel and Restaurant Administration Quarterly, Feb. 11-16 Read More