Information technology (IT) refers to the management and use of information using computer-based tools. It includes acquiring, processing, storing, and distributing information.
In the past, business dealings without Info-Communication Technology (ICT) used to be a manual process. Travellers needing a room for one night had to go door to door to find an accommodation. If they are unable to find a room for the night, they had to sleep in the streets.
As the world continued to evolve, the introduction of ICT has drastically made life easier for both the business dealers and the end users. Information is present right at our fingertips as and when we need them. In the same way, as long as hotels market themselves right on the Internet, potential customers will just be a few clicks away to finding their dream hotel. It has transformed from a ‘spaces of places’ to a ‘spaces of flow’.
ICT has also changed the way hotels around the world operate. Imagine a world class five class hotel having no less than a few hundred tourists staying over in the hotel for the night. This could possibly amount to a logistical and administrative paperwork nightmare.
Benefits of ICT
Since the introduction of ICT, information is present almost everywhere. It becomes very easy for the consumers to research on a hotel of their choice at anywhere and anytime as long as they have an internet connection.
Convenience is one main advantage here. Anyone who would want to travel overseas simply has to log online to book the room in the comfort in his/her home. It is fuss free and there is no room for miscommunication. All inputs are by the user and as proof of confirmation, the user can print out the receipt/ voucher almost immediately.
For example, Mr Tan wants to book an accommodation in Bangkok, Thailand. All he has to do is to log on to asiarooms.com, search for a hotel according to his search parameters and a list of appropriate hotels within his budget and preferences is shown.
In the past, one had to call up the hotel to confirm the date and time of the reservation, with many uncertainties, as well as incur costly international call time charges.
Hence, the presence of transaction brokers, such as Hotels.com, provides a one-stop location for consumers to shop for hotels all over the world. They consolidate all the hotels who want to be listed at their website, organise all the information collected and present it to the consumers. Hotels only need to pay a nominal fee to be listed.
With that, consumers get to ‘see’ the hotel’s environment via photos posted. They also get to read reviews, if any, about previous customer’s experience at the hotel. It allows for easier comparison of prices, amenities, services, environment, ambience, ratings and reviews of different hotels. This allows the consumer to make an informed choice and find a hotel that matches their expectations.
There are also online travel agents (such as ZUJI) and online travel advisors (such as TripAdvisor). They do not just sell the hotels room, they also bundle rooms as part of a package. This gives the consumers a choice to pick and choose a hotel in a list of recommendation by the website that is within their budget. For example, ZUJI bundles a few airlines at different prices with a recommended list of hotels for trips to Thailand. Purchase of travel insurance is also made available for those who have not bought any.
Apart from benefits for the consumers, the hotels also benefit from investing on their online presence. If the hotels lack funds to set up and maintain a website on their own, being listed with lodging websites becomes the best solution to create an online presence. They only need to pay a nominal fee and need not worry about other fees like salary and admin costs. This reduces the hassle of maintenance and operating costs.
Also, being listed in many different websites is an avenue of sales for the hotels as part of their yield management plan. They are not alone in selling their rooms over the counter, at their own websites or just depending on travel agents; they also get to sell rooms online at multiple websites. As such, it increases the probability of higher occupancy rate per night.
Credibility and trustworthiness are also benefits hotels can get by being listed, especially for hotels that are unheard-of. Awards given by and memberships with big players of the industry, like TTG and NATAS, gives consumers a sense of security when booking hotels with websites like ZUJI.
Marketing with ICT
In certain transaction brokers’ website, the use of Internet has brought about a new wave of marketing that utilises the efforts of others through affiliate marketing.
Here is how it works. The transaction brokers (Zuji.com/Ctrip.com) offer an affiliate program to various partners, such as online airline websites, travel comparison blogs, travel review sites and other individual travel blogs. The partner website recommends using Zuji.com as an intermediary to book their hotel rooms, airlines and tour packages by placing images, embedded website word links or by purely doing a good recommendation on zuji.com. The website visitor clicks on this link and purchase a tour package from zuji.com. The partner website will get a percentage of the sale of the bookings if it is completed successfully.
Examples of affiliate programs
Zuji.com
CTRIP.com
Even a individual can use Pay-per-click Marketing, through Google ‘s PPC by recommending Zuji.com and when people search for a particular term such as “travel to Thailand” . Although he has to pay to Google for his advertising campaign when his ads is clicked on by the web surfer, he or she will receive a commission from Zuji.com should the surfer books through his link.
Hence, we can see that there is a new wave of marketing resources to tap on for these transaction brokers who can rely on the expertise and effort of others in promoting their websites. Similarly, hotels can use this strategy as part of their marketing efforts.
Changes to Hotel’s Operations
Customer Relation Management (CRM)
Once the consumer has booked the hotel, it is now up to the hotel to manage the guests. Hotels need to set up proper procedures in handling the bookings. As such, hotels must get in touch with the guests, either via email or phone call, to confirm the booking made since both parties are in different countries.
They also need to start recognising authentic booking confirmation slips, in case of guests faking bookings. Security and identity checks on guests are hence required. It can be done through checking voucher serial number and passport of guests. Thus, it is vital that hotels set up a good Customer Relation Management (CRM) system to manage guests.
Apart from confirmation of bookings, hotels also need to take note of special requests guests may have, such as airport transfers and additional beds. The hotel on their part must coordinate and ensure the guests experience from the moment they arrive at the airport to transferring to the hotel until the moment the guests leave the country is a seamless experience. This is because every requests and confirmations are done online. Thus a seamless experience will create a positive lasting impression on the hotel.
In cases of repeat visits, the CRM system helps to capture and store a database of guest’s profile (e.g. guest’s demographics, preferences, payment mode, and the number of nights and which room he is staying). It helps the management to recognise the requirements by different guests, as not everyone have the same expectations. This information then is retrieved when the guest stays at the hotel again and pertinent information is shared among the hotel staff (as it may not always be the same staff serving the guests) and this can in turn enhance guest’s satisfaction. This gives the guests an element of surprise and show that they are valued by the hotel. Thus, it will value-add to guests overall satisfaction.
Since information is easily accessible online, the hotel owners who want to know feedbacks about their hotels may also look at the reviews on websites of their service providers. Based on the reviews, hotels can make the necessary changes and amendments to their business accordingly.
In cases of cancellation of bookings, the hotels need to ensure that the guests know the hotel’s cancellation policy. Some online providers, like Hotels.com, do not charge for bookings cancellation. However, they do warn users that the hotels may impose a charge. Thus, spelling out of policies and creating a Frequently Asking Questions (FAQ) section are important information hotels must make available.
Supply Chain Management (SCM)
Every business have their own unique product to sell. Pertaining to the hotels, their main core business is to sell rooms and services. Apart from rooms, they also have food and beverage operations, spa, gym and many other services. All these services need to run on supplies and each has different vendors supplying.
For example, the hotel’s restaurant has to order food from suppliers. When food supply is running low, having a SCM network can trigger a prompt for requisite of supplies. The manager will then process the requisite and send it out to their supplier via the system. This process becomes automated, hence reducing the manual process of writing a supply order form and submitting it to the supplier. Thus, all liaising with suppliers can be done through the system
Apart from stocking up of inventory, rooms are also part of the hotel’s supply. The management have to liaise with their online agents with regards to the room’s availability. Hence, the SCM automate the process of informing the hotel when the room is booked and update the hotel’s system accordingly.
With SCM, inventory and sales management of the hotel becomes automated.
Human Resource Management (HRM)
The human resource department is primarily concerned with the staffing situation, including aspects such as health and safety and employee rights.
Key hotel operations dealing with the payroll of the employees of the hotel used to be very manual, tedious and prone to human errors. However, with the use of ICT which diverts this task to accounting software and GIRO arrangements, the salary of each employee is automatically credited into their bank account every month.
The attendance of each employee can also be tracked through the use of a punch card wired to a computer system. The attendance record can be automatically computed and generated and be printed out at the end of every month to ensure accuracy and proof of an employee’s attendance.
A key aspect of the human resources department is to taking care of the welfare of the staff. In big chain hotels, the hierarchy is that of a top down approach, where the lower level staff is unable to contribute significantly to the hotel operations. Ironically, they are the ones who oversee the day-to-day operations and deal with hotel guests regularly. They may have a couple of implementable suggestions that could go a long way in improving the life of the hotel staff, for example, flexible work hours (plus or minus 2 hours from their designated shift reporting time), if there is an agreement with the next person taking the shift work.
The use of ICT in this case is that of a useful one. The department can set up a online feedback and suggestions intranet forum accessible only to their staff for them to contribute ways on how to cut down wastage, increase customers’ satisfaction and give suggestions on how to maximize productivity in the hotel. This will give a more rounded approach with a flatter hierarchy to moving the hotel forward in the right direction with recommendations coming from employees regardless of rank or number years served in the hotel.
Enterprise Resource Planning (ERP)
With so many business processes running in the hotel, there must be a system that integrates everything together. The ERP system integrates all the business processes (CRM, SCM, HRM, sales and marketing, accounting and finance etc) into one unified system.
For example, when the sales & marketing department receives a booking of ten rooms, the personnel in-charge will have to key in the data and make the reservation. With all the processes integrated together, the data that is keyed-in will immediately notify and update the relevant departments affected by the booking of the ten rooms (e.g. accounting and finance to record as accrued revenue, housekeeping to prepare the room, and front office to prepare to receive the guests).
Without the ERP system, manual labour will have to be used to inform, notify and update every individual department.
Issues of ICT
Although ICT provided enormous benefits and efficiencies, they have created new ethical and social problems, such as a leak in private information and fraudulent websites. These issues worry the potential customers when making hotel reservations online via transaction brokers, especially when it comes to financial transactions.
Therefore, transaction brokers such as (Hotel.com, ZUJI & Latestays.com) must be able to offer the best security to gain the consumer’s trust in the e-Commerce environment.
In order to address such concerns, most transaction brokers partner with GeoTrust, Verisign, Truste, and TrustSg in order to gain the customer’s trust and confidence in making e-payments. They act as a guarantee that the website the consumer is accessing is safe and sensitive information will be protected.
GeoTrust offers with Secure Socket Layer (SSL) Certificates that provides security for communications over networks such as the Internet. Since SSL Certificate enables 256-bit encryption, e-Commerce transactions with transaction brokers are secured and hence customer data is protected. This will build up the trust level of customers as GeoTrust is a trusted leader in online security services whose main objective is to address users’ privacy concern and at the same time promote customers’ trust and confidence.
VeriSign is the most trusted mark on the Internet. They offer the strongest Secure Sockets Layer (SSL) encryption and are one of the leading SSL Certificate Authority which aims to protect private information of consumers and maintain security of online services during transactions. VeriSign (Nasdaq: VRSN) is the trusted provider of Internet infrastructure services for the networked world. VeriSign helps companies and consumers all over the world engage in communications and commerce with confidence. VeriSign offerings include SSL, SSL Certificates, Extended Validation (EV SSL), VeriSign Trust Seal, two-factor authentication, identity protection, malware scan, public key infrastructure (PKI), DDoS mitigation, Managed DNS, and Domain Name Services. This increases customers' trust and confidence that their transaction details will not be leaked.
The leading Internet privacy services and seal provider since 1997, TRUSTe privacy seals help thousands of businesses promote online safety and trust, and guide consumers to Web sites that protect their privacy online. By displaying the TRUSTe privacy seal, Web sites can build trust with their customers and increase sales and registrations. Millions of internet users work, play and click with confidence on Web sites that rely on TRUSTe's online privacy services, including top-fifty sites like Yahoo, Facebook, Microsoft, PayPal, IBM, eBay, AOL, Disney, New York Times, Comcast and Apple.
TrustSg is a nation-wide trust mark initiative by the National Trust Council to boost the electronic commerce (EC) environment in Singapore. This is to help build confidence in e-commerce transactions especially in the area of privacy and security. The code covers the area of disclosure, privacy, fulfilment, best business practices, and protection of minors and the elderly. Consumers will recognize the transaction brokers as a trustworthy e-commerce operator when the website carries the TrustSg seal.Apart from verifying the security of a website via the trust seals displayed, consumers can also look out for ‘https’ at the front of the website address to ensure that the webpage is secured.
Conclusion
In conclusion, ICT has changed the world tremendously, be it the lifestyle of consumers or business processes for hotels. It has changed the way we organise and process information. Even though the benefits are always renewing, threats are constantly rising as well. As such, hotels must update and upgrade their systems regularly so as to stay competitive in the hospitality industry.
