Applied Business Tools and Technologies

Applied Business Tools and Technologies

Chapter 1
Information Technology in the Hospitality Industry
Learning Objectives
At the end of this chapter, the students should be able to:
1. Identify the advantages of information technology in the Hospitality Industry;
2. Understand the issues and concerns of information technology in the
Hospitality Industry;
3. Differentiate internet from worldwide web;
4. Determine the benefits and the potential disadvantages of using internet
 Introduction

Information Technology (IT) covers a broad spectrum of hardware and software

solutions that enable organizations to gather, organize, and analyze data that
helps them achieve their goals. It also details technology-based workflow
processes that expand the capacity of an organization to deliver service that
generate revenue. IT includes a combination of hardware and software used
together to perform the essential functions people need and use everyday.
IT impacts and assists the growth of practically every industry in the present age.
Hotel industry too isn't insulated from its effects. Companies in the hospitality
industry face a highly competitive environment in which differentiation and
innovative customer experiences are key elements in improving revenue by
building brand awareness and loyalty among customers. They are under such
pressure to keep up with expectations of guests that they are implementing new
technologies to regain their edge. Leading hospitality properties are using
technology products to differentiate themselves from their competition and
thereby increase market share and improve revenue.
The success of a business, to certain extent, depends on its ability to acquire and
utilize updated information to assist its management,and marketing processes.
Hence, Information Technology (IT) assists organization to manage information
dynamically and influences business competitiveness through assisting decision
makers to make appropriate investments and decisions. IT helps to meet the
demands for timely and accurate information by customers and the IT diffusion in
the tourism and hospitality industries has recently increased at an unprecedented
rate. This is evident by the ubiquitous presence of IT systems that work
cooperatively to assist managers to deliver quality service to their customers and
to enhance operational efficiency and control costs. Researchers have stated that
IT, by acting as a protector and enhancer, directly influenced the experiences and
behaviour of tourists.
It is advantageous for tourism and hospitality managers in general and marketing
managers in particular to be aware of the recent changes in IT and their
relationship with customer service. As IT development becomes more
sophisticated, industrial practitioners, educators, and policy makers may find
increasing difficulty in selecting, analyzing, implementing, and operating new IT
systems. In order to satisfy tourism demand and survive in the long term there is
no choice but to incorporate technology and enhance the interactivity with the
market place.
With travelers becoming increasingly tech- savvy, hotels who do not embrace the
latest technology to deliver innovative services to their guests stand out to lose
big time. However, keeping abreast of the changing technology, and developing
cutting- edge solutions based on such technology is a big challenge for hotels and
would in any case, be a drag on their core focused.
Advantages of Information Technology in the Hospitality
Industry
•Reduce Operational Cost
The use of information technology can replace the role of human in performing
some routine tasks.
E.g. computers in the front desks can perform night auditing functions. Hotels
may not need to employ night auditors with rich accounting knowledge or they
may consider recruiting less staff for over night shifts since all calculations are
automated.

•Reduce Workload of Staff

Some IT applications are also designed to reduce the staff's workloads by assisting
them in performing their job duties.
E.g. by installing CCTV's (closed- circuited television) in different locations of the
hotel will allow the security staff to monitor the key areas in the control room
without patrolling in person.
•Increase Efficiency
As customers always expect quick services to be provided by the service staff,

some applications have been specifically designed to simplify some time-

consuming procedures.
E.g. it only takes less than10 seconds by using a credit card validator to verify a
guest's credit card. It replaces the needs of calling credit card enterprises for
credit approvals which may take more than a few minutes for processing.
•Increase Revenue
IT applications also facilitate new services to customers
E.g. the in-room entertainment system allows customers to enjoy movies and
video games while they are staying in the guest rooms. It helps the hotel to
generate extra sources of income if such a system is installed.
•Access and Share Information
Computers and some hotel interfaces enable sharing of information among
departments
E.g. while a room attendant has finished cleaning a vacant room, he/she can
change the room status by a telephone input. This action will simultaneously
update the room status in the front desk's computers (changed from CD to VC).
Front desk receptionists would then be able to tell if the room is ready for sale
afterwards.

•Achieve Better Planning and Management

Customer information, including their preferences and consumption records are
kept in the customer database. Hotel or restaurant management can fully utilize
this valuable information to examine the characteristics of their target segments
and plan for some new services and facilities which cater for their needs.
Marketing activities can also be implemented accordingly by using information,
such as postal addresses or email addresses of customers and enterprises.
 Internet Worl Wide Web
Estimated year of Origin 1969,though opening of 1993
the network to
commercial interests
began only in 1988
Name of the first version ARPANET NSFnet
Comprises Network of Computers, Files, folders and
copper wires, fibre-optic documents stored in
cables and wireless various computers
networks
Governed by Internet Protocol Hyper Text Transfer
Protocol
Dependency This is the base, It depends on Internet to
independent of the work
World Wide Web
Nature Hardware Software

Benefits of Internet and the World- Wide Web

The hospitality and tourism industry as always been among the first to capitalize
on new technology. Because it is an information rich industry, it depends heavily
on finding and developing new means to distribute travel and hospitality products
and services, marketing information to consumers, and providing comfort and
convenience to travelers. The rapid expansion of the Internet and WWW provides
a unique mechanism for organizations' marketing and distribution as it holds the
unprecedented ability to disseminate in dept information and receive direct
feedback from consumers in an open environment.
Innovative small hospitality operators also discover that the Internet can provide
an international representation at very reasonable cost and thus restructure their
marketing function to reap these benefits. Hence the Internet is also emerging to
become a fundamental facility supporting the functions of everyday personal and
professional life. The hospitality industry activities presented on the Internet have
many advantages, but one should not underestimate possible disadvantages this
new medium might cause.

Competitive Advantages of Using the Internet in the

Hospitality Industry are:
1. Service improvements concerning
A. Large choice of access to a website
B. Faster payment processing
C. Reduced delivery time for many products
D. Faster and greater availability of support literature
E. More detailed and particularized
2. Low costs of:
A. Marketing
B. Processing of booking and payments
C. Automation of tasks
D. Establishing direct links between tbe producer and the cinsumer distribution
3. Differentiation from competition: creating, presenting and selling high- quality,
distinctive products
4. Creating up-to-date enterprise image
5. Information usage including the following concepts:
A. Addressability
B. Interactivity
C. Flexibility
D. Accessibility
6. Efficiency in operational management and communication
7. Obtain know- how through discussion with news groups on the Internet
Potential disadvantages or threats of Internet usage in the hospitality industry
are:
A. Standardization of legal procedures of doing business over the Internet
B. The problem of inefficient accessibility to the website/ unfavorable indexing by
search engines
C. Spam
D. Bad quality of individual websites which might damage whole destination
image.
E. Nonprofessional determination of purpose the website is supposed to fulfil.

SAINT TONIS COLLEGE, INC.

Formerly: Kalinga Christian Learning Center
Bulanao, Tabuk City, Kalinga 3800

Name:_______________________________________________Date:_________
Time:________________________________________________Score:________

Test 1. Write the correct answer in the space provided based on the advantages
of information technology in the hospitality industry.
__________1. Customer information, including their preferences and
consumption records are kept in the cuatomer database. Hotel or restaurant
management can fully utilize this valuable information to examine the
characteristics of their target segments and plan for some new services and
facilities which cater for their needs.
___________2. Some I.T. applications are also designed help the staff by assisting
them in performing their job duties. E.g. by installing CCTVs (closed-circuited
televisions) in different locations of the hotel will allow the security staff to
monitor the key areas in the control room without patrolling in person.
___________3. It helps the hotel to generate extra sources of income if such a
system is installed.
___________4. Computers and some hotel interfaces enable sharing of
information amomg departments. E.g. while a room attendant has finished
cleaning a vacant room, he/she can change the room status by a telephone input.
___________5. Marketing activities can also be implemented accordingly by using
information, such as postal addresses or email addresses of costumers and
enterprises.
__________6. I.T. applications also facilitates new services to costumers. E.g. the
in-room entertainment system allows customers to enjoy movies and video
games while they are staying in the guest rooms.
___________7. The use of information technology can replace the role of human
in performing some routine tasks. E.g. computers in the front desks can perform
night auditing functions.
___________8. As customers always expect quick services to be provided by the
service staff, some applications have been specifically designed to simplify some
time-consuming procedures. E.g. it only takes less than 10 seconds by using a
credit card validator to verify a guest's credit card.
____________9. It replaces the needs of calling credit card enterprises for credit
approvals which may take more than a few minutes for processing.
____________10. Hotels may not need to employ night auditors with rich
accounting knowledge or they may consider recruiting less staff for overnight
shifts since all calculations are automated.

Test II. Enumeration.

1-5. Disadvantages or threats of internet usage in the hospitality industry

6-12. Benefits of Internet and the World-Wide Web

13-15. Issues and concerns of information technology in the hospitality industry

Test III Essay
1. Differentiate internet from worldwide web.

2. Discuss the importance of information technology in the hospitality

industry.

3. What recommendation can you make with regards to the three issues and
concerns of information technology in the hospitality industry?