By: Lim Qing Shun
Classcode: F2
As defined in Wikipedia, information and communications technology (ICT) is often used as a synonym for information technology (IT) but is usually a more general term that stresses the role of communications (telephone lines and wireless signals) in modern information technology. ICT consists of all technical means used to handle information and aid communication, including computer and network hardware as well as necessary software. We'll be looking at how incorporation of ICT in hotel operations has significant impact on its room reservation services internally, like how ICT affects the internal hotel organization management and processes; and externally like how ICT causes competitions between rivals increases, security system as well as the increase in product knowledge of the IT savvy people.
Product knowledge
Traditionally, customers gain product knowledge like the hotel room prices, locations and promotions through television, radio, newspaper and word of mouth. With the introduction of ICT, customers can have an additional option to search for more information which they require more efficiently. Through internet, customers are able to access the hotels home pages and find relevant information like prices, map of the hotels and contact details all at once. For example, a family of four is planning for a holiday trip to china and wants to make a hotel room reservation. They can visit http://english.ctrip.com/ and the website will provide them a whole range of hotels in Shanghai, Hangzhou, Beijing and a lot more. They can specify the city they will be visiting, check in and check out dates, price range and hotel types and ratings. They can even book their flights there too.
Apart from the word of mouth from friends and relatives, customers can search for forums which include reviews from those who have stayed in the hotel before. ICT also make price comparison easier as the customers are able to obtain prices through surfing websites like http://www.asiatravel.com/, where it shows a list of Asia countries and the hotel prices within each country, than comparing the prices through the newspaper.
Payment mode
ICT offers more choices for payment modes. In the past, customers are required to prepare big amounts of cash in their wallet or purse to make payments for the deposits for the reservation of hotel room. The development of ICT enables electronic methods of conducting business transactions which is known as e-procurement. This allows financial institutions to introduce credit, debit, visa and master cards to make non-cash payments. Customer can use debit card to make NETS payment over the counter and do not require them to bring cash. If the customer is reserving rooms from overseas hotel, they can make online payments in any countries with their credit cards to ensure they have reserved the room.
Cost
Booking a room from overseas hotel through phone calls can be very costly due to international phone call charges. However, this cost can be reduced through email software like hotmail and Lotus Notes. Cost of searching for information is lowered as customer can search for details of the hotel by browsing through the internet, which is more efficiently in comparison to find relevant information via newspaper or magazines. ICT is also beneficial to the hotels as the staff can communicate internally through intranet and emails rather than faxing or phone calls which are more costly. Hotels overhead cost is also reduced as some operations are replaced by technologies like obtaining the room occupancy rate through software rather than having staff to manually check every single room to see if it is available.
Profit and Customer Relationship Management
A main advantage of online room reservation is that any potential customer can make reservation anytime. They do not have to worry about the closing time of the counter for reservation.
Hotels can also manage their distribution better with knowledge management systems for data mining like yield management and guest history software. The yield management software helps hotels to maximize both their occupancy and room rates which contribute directly to their productivity and profitability. Yield management systems ensure that hotels optimize their revenue, by taking into consideration past and forecasted performance, as well as other external factors. This software and systems are especially important for large hotels with numerous outlets.
The guest history CRM software is an asset for the hotel as it is cheaper and more practical to retain current customers than to attract new customers. This software, which records data for past guests, is essential for hotels to manage their guest since individual guess have different needs and wants. Some prestigious guest may only want to stay at presidential suite; others may want to have the seaside view rooms. It will be easier to retain and satisfy different segments of customers with the guest history databases. In addition, the hotels can keep every existing customers updated on their promotion and latest updates by sending email to the guest list.
Customers are able to provide feedbacks through email to improve the hotel room reservation services. If they are not satisfied with the hotel services, they can raise their concerns on the forums or websites like http://www.complaintsboard.com/ or http://www.tripadvisor.com/ which can be viewed by the public. As mentioned above, these websites provide third party view to first timers who are interested to stay in the hotel. Forum is a double edged sword. Positive comments act as free advertising and may boost hotel sales but negative reviews can bring down the sales and impression of a hotel.
Hotel Management
Hotels like Marriott and Ritz Carlton has a geographically wide span of outlets worldwide. With ICT, these outlets can be linked together through intranet and extranet. Operations can be better managed and the database of customers can be expanded globally. If a Marriott Hotel customer staying in Malaysia wants to go for an overseas trip to Singapore for holiday, Marriott Hotel in Singapore will be able to tap on the shared information of the customer which is stored at Malaysia which will hasten the administration process when the customer is booking for a Marriott Hotel room.
Security
Introduction of any products has its pros and cons. ICT has its disadvantages as well and one of them is internet security. Computers are able to communicate using TCP/IP. TCP/IP is a protocol which is simply a standard for transmitting and receiving bits of information. As long as all of the interconnected computers follow the same protocol, they can exchange information. Unfortunately, when data is sent from one computer to another on the Internet, every other computer in between has an opportunity to see what's being sent. This poses an obvious security threat to individual customer’s privacy as confidential materials like customers details are exposed to the danger of being hacked by third party.
The existence of internet viruses and hackers means that there is a chance that the online reservation web page will be down, and software may become corrupted. Since the hotel is dependent on these technologies, it may cause the hotel to malfunction. When this happens, room reservations and transactions may not go through. If the internet service provider is down, it may also cause a serious communication breakdown.
Competition
Since ICT enhanced information search which increases the product knowledge of IT savvy users, the rivals will be able to make use of these information to monitor hotels latest promotion and pricing strategies. Once the hotel introduces a price to attract price sensitive customers or offer packages, the competitors will come out with similar or even better promotions to keep up with the competition. Similarly, the hotel is also able to monitor their competitors closely.
Conclusion
In conclusion, incorporation of ICT to hotel room reservation definitely offers tremendous benefits. It not only improves efficiency and effectiveness of room reservation, but also provides convenience to the customers as well as the hotel staff. However, there is also security issues related to a network such as the Internet which may cripple hotel operations and may increase unemployment as workers are replaced by technologies.
