Examining Property Management Information Systems Information Technology Essay

To investigation how a Hotel or Property Management Information System will help the Palma Rima hotel on their day to day running of the hotel.

To identify the impacts of a Hotel/Property Management Information System.

To identify how convenient it would be for the customers of the Palma Rima hotel if a Hotel/Property Management Information System is introduced.

1.3 Rational

As we are in the 21st century, the researcher has been inspired to carry a research on the effectiveness of a Hotel/Property Management Information System, if introduced at the Palma Rima hotel The Gambia which does not have one, but still using the traditional way of taking reservation, checking in and out of guest, taking payment, marketing of the hotel etc.

1.4 Structure of Report

The report will first introduce the Palm Rima hotels, methodology used to carry out the research, a literature review on Hotel/Property Management Information System (MIS) and will then analyse the data using relevant methods and interpret the findings presenting the report using methods and style appropriate to the audience.

2.1 Research Approach

In designing a research case study, there is the need to determine the research approach to be adopted. Theories are part of a research process and the ability to develop such theories and their testing will only be possible after a research approach is determined. In an inductive research approach, theory will follow data. In this case study, the research will use an inductive approach so as to gain an understanding of Introducing a Hotel or Property Management Information System (MIS) at the Palma Rima Hotel in The Gambia. Inductive research approach as noted by Saunders et al (2007) is more than just making a cause-effect link between particular variables but also enables the understanding of the way in which humans interpret their social world. Since the research using inductive approach is likely to be particularly concerned with the context in which events occur (Saunders et al, 2007), this research will therefore look at the effectiveness of a hotel or property management information system for the Palma Rima Hotel.

The five points below summaries inductive research emphasis as noted in Saunders et al (2007):

a close understanding of the research context

collection of qualitative and quantitative data

a more flexible structure to permit changes of research emphasis as the research progress

a realization that the researcher was part of the research process

Concern with the need to generalize

This research case study will use the above mentioned stages to arrive at a conclusion of how effective it will be to introducing a Hotel or Property Management Information System (MIS) at the Palma Rima Hotel in The Gambia. The fact that concepts in this research case study are operationalised made it easier to use an inductive approach

2.2 Data Collection Methods

Data collection is a time consuming process and also require enormous amount of tolerance. However, in this research case study, one method is employed to collect data and that was telephone interviews and was the only methods to be used to gather primary data. The researcher bought two international cards costing Five Pounds each to interview the front office manager at the Palma Rima hotel.

2.3 Research Methodologies

Each methodology represents a different approach to evaluation. The fact that there are so many approaches in common no single methodology is ‘the best’. Which one will be most appropriate depends on the type of questions framed. Seale, J. K. (2003)

2.4 Primary Research

Primary research is any type of research that you go out and collect first hand data. The researcher collected primary data through participant, observation, interviews and surveys. Driscoll, L.D. (2006)

2.5 Secondary Research

Secondary research occurs when a project requires a summary or collection of existing data. As opposed to data collected directly from respondents or “research subjects” for the express purposes of a project, (often called “primary research”), secondary sources already exists i.e. The researchers will used previous research reports from tourism academic books and journals.

2.6 Qualitative Method 

It is a research that consists of interviews, observations and questionnaires. The researcher found this method flexible to perform data collection subsequent analysis and interpretation of collected information.

2.7 Method of analysis

The researcher will use interviews to have knowledge of how useful it will be to PalmaRima hotel to introduce a Hotel/property Management System (MIS)

2.8 Reliability and Validity

The physical telephone interview has significantly increased the response to this research. The front office manager was asked to give his candid opinion about a Hotel or Property Management Information System (MIS). However, the questions asked were guided as such to avoid falsification and exaggeration of the fact that the Palma Rima hotel does not have a Hotel or Property Management Information System hence the methodology has clearly achieved a degree of reliability and validity.

3 Introductions

The use of information technology in the hospitality industry has grown tremendously over the past 20 years. This journey has not always been smooth, but it has become clear that information technology is now a critical competitive weapon in the industry. Brotherton B (2003:110). Information technology was first used in the hospitality industry in the 1950s, when multinational hotel chains began experimenting with the developing field of computer science. As in most other industries, the majority of initials applications focused on accounting and automating repetitive and time consuming tasks. Software was borrowed from other industries on the assumption that it could be easily adapted for use of hospitality companies. However, such conversions were usually only partially successful and a large number of changes to business processes and procedures were often needed to accommodate the requirements of the computerized system. Moreover, the expense and technicality involved in both developing and running systems made the use of computerization economical only for the largest companies. (O’Connor, 1999). Tourism is a very information intensive activity. In few other areas of activity are the generation, gathering, processing, application and communication of information as important for day-today operations as they are for travel and tourism industry (Poon, 1993). Unlike durable goods, intangible and variable tourism services cannot be physically displayed or inspected at the point of sale before purchasing, as tourism services are normally bought before the time of their use and away from the place of consumption. Tourism products are therefore almost exclusive dependent upon representations and descriptions, i.e. information in print or audio-visual formats. Often these representations are made by friends and relatives, as well as the travel trade, rather than tourism principals or destinations authorities. Communications and information transmission tools are therefore indispensable to the global marketing of the tourism industry. (Sheldon, 1997).

3.1 Brief Background of PalmaRima Hotel in The Gambia

Palma Rima hotel is a 3 star hotel in The Gambia and was opened to guest in 1989 on an undeveloped part of the coastline, between the Senegambia and kotu resorts, and 340 metres to kololi beach. The initial accommodation of larger than average sized bungalows of 23 which were dotted among the palms and trees, each of 4 double/triple rooms with shower and bath, colonnaded veranda and fan or a/c unit (supplemented). These units are now accompanied by a bathing area tenement block comprises of 3 floors. Of its 60 rooms half overlook the sandy through road used cattle and locals alike and the other half overlook the lopsided cloverleaf shaped swimming pool.

The pool itself is among the largest in the country and is surely among the most beautiful and equipped there are spacious sundecks with parasols, giant chess, a banana shaped children’s swimming pool area; a blue and mustard Andalucía Bar; a late rite fountain; a raised bar; an entertainment section and wooden African statues. From the moon light night club, stone sided watercourses crossed 3 min-bridges enter the bird garden.

4 Literature Review

4.1 Management Information System (MIS)

The principle aim of this system was to increase management effectiveness and efficiency by satisfying organisational information requirements. It commence in the 1970’s and it used local data processing linked to information resources to support decision making, information system were used primarily to address the needs of internal management and co-ordination. Emphasis was also given to administration and clerical functions, as purely accounting or inventory management, while delivering added value to customers was a lower priority (Strassman, 1995; Gamble, 1994a). The strategic information system (SIS) used by hotels was to improve competitiveness by changing the nature or conduct of business; integrated ICT networks were used to achieve organisational strategic objectives, to enhance performance, and to co-ordinate activities across functional and business units line as well as to support interaction with external entities, in pursuit of competitive advantage. Personal computers enable managers to manipulate data and create their own managerial reports, statistics and follow up mechanisms by using standard and fairly user friendly spreadsheets and statistical packages. It also helps them to forecast, budget and plan, using past data and simulate models, enhancing their ability to undertake strategic decisions. (Robson, 1997; Peppard, 1993; Mc Gee and Thomas, 1988; Earl, 1988, Jackson, 1989; Wiseman; 1985)

The introductions of the internet, intranet and the extranet have revolutionarized communication in the global hotel industry and enable multilevel integration and effective collaboration. It also supported both centralized and distributed computing to maximize the performances of available resources. However, this system is gradually altering the competitiveness of the hotels in the global market place and reducing the significance of location and size in the product delivery process. ICT’s are used as indispensable tools for almost all business functions from production to market as it facilitate:

Quick communication,

Reliable and timely information transfer and retrieval,

Integration of the different divisions within the organisation,

Flexibility of product specifications,

Sharing of information; and

Achieving of common objectives.

ICT offers the opportunity to target the market segment of one, i.e. each individual customer. This is only possible because ICTs support flexible and responsive value-added chains and allow consumers to repackage products through endless combinations. On the hand, ICT becomes instrumental for cost management in the industry and particularly for distribution and promotion costs. Organizations around the world have reduced their costs by reducing commission to intermediaries, by trading directly from their web page, or by paying lower distribution fees to electronic intermediaries, or by cutting commission levels and fees. In addition, redesigning processes and eliminating repetitive tasks reduced costs and increase efficiency. (Buhalis, 1998).

Perhaps more importantly for tourism, ICTs support the newly important element in generating competitive advantage, i.e. time. The later not only assists organizations to share information internally and with partners, and thus maximizes their efficiency, but also allows consumers to interact constantly with tourism suppliers. Consumers can undertake entire transactions from their office or home suing the internet, on a 24- hour, 365-days a year basis. Instant confirmation and purchasing means that consumers can also maximize their own efficiency and as a result appreciate the competitive advantage of organizations based on time. Increasingly, consumers will be able to interact through mobile devices and interactive digital television, developing their capabilities further as they will be able to be connected instantly through simpler equipment and interface without having to log on to their computer. (Puhretmair et al, 2001; Zipf and Malaka, 2001)

4.2 Fidelio’s OPERA Hotel Property Management System

Fidelio was found in 1987 in Munich and emerged as one of the leading and most innovative international system integrator for the hospitality industries. Changing the way hotels computerize and operate its software is adaptable to changing business requirements and integrates both the ongoing technological developments of industry standard computer and software systems and the organizational change experienced. Fidelio allows hotels and chains of any size and type, restaurants, cruise ships and catering and conference operators to computerize their operations and to integrate major industry software products through analysing individual requirements and appreciating their uniqueness. The latest Fidelio product is the OPERA Enterprise solution. The OPERA Enterprise solution is fully integrated suite of products consisting of modules that can be easily added or expanded allowing effective and easy deployment from smaller operators to global, multi-brand hotel chain environments. OPERA can be deployed in any size environment from a single property with just Front Office to a large, full service hotel with Sales & Marketing, Catering, Revenue Management, Quality Management, BackOffice, and Material Management. In addition, OPERA Enterprise Solution offers products for a hotel chain’s corporate office that includes a central reservations system (CRM) for both centralized guestroom and function space sales, and an enterprise information system, the customer relationship management (CRM) specially designed for the hotel industry. The system is also design for the use of hotel bedroom key cards replacing the traditional keys for the guest bed rooms. The system is programmed to instantly cut a key for a guest on arrival and can be cancelled if lost as soon as possible. The key cards are designed in way that some hotels are using the same card to insert on the lift to operate, which an additional security for the hotels, because without a key card one cannot go up in the rooms. The additional security is who ever last open the room can be traced if there is any problem. However it has its own problems, because it is so light in weight that guests always lost it.

The OPERA Property Management System (PMU) is designed to scale according to the requirement of any size hotel or hotel chain. The OPERA Back Office is a powerful financial software suit that provides hotels with a fully integrated, flexible financial and eBusiness solution. The OPERA Reservation System (ORS) manages the hotel inventory efficiently as it is integrated with the OPERA Property Management System and OPERA Sales and Catering system. The system emulates traditional CRS functionality. While at the same time integrating the bold new technologies shared in the OPERA Enterprise Solution. Including system access via web client or any Java enabled browser. With the power of the internet, ORS is easily deployable and globally accessible. The OPERA Revenue Management provides both property based and centralized yield management and is interfaced with the OPERA Sales and catering System to analyse the value of particular group business and maximize revenue. This system registers any consumptions made by guest from the mini bars in the rooms and will automatically add to the guest bill. The same goes for the restaurant as well, the restaurant staff will make put all bills through the system and a charge will be made to the guest main bill. The Customer information system collects and manages guest, travel agents, source group and company profile information from designated hotel properties in a centralized database. Guest stays with detailed revenue information are also collected. The system includes a whole range of interrelated modules, including,

Opera Property Management System

Opera Sales & Catering

Opera Back Office

Opera Revenue Management System

Opera Central Reservations System

Central Reservation System (plus web engine)

Opera Quality Management System

Opera Materials Management System

Opera Palm

Customer Information system

Enterprise Information System

All of these are interrelated and interconnected, enabling hotels to use the system internally, (Intranet), externally with partners (extranet) and as a window on the world (internet). Buhalis D, (2002: 19).

However, these few points are to be remembered when a hotel is operating using the OPERA system as system can fail at any time.

Local backups need to be made by local staff and stored offsite.

Web based and local based inventory need to synchronize regularly

Local hardware to be maintained including UPS and air conditioning

4.3 Distribution of Information

The industry’s use of technology has moved beyond one of merely controlling operations towards a more strategic role. However, a variety of challenges still remain if the industry is to maximize the benefits it can potentially gain. The greatest lies in the effective use of the data collected during the day to day operations.

Customer relations management (CRM), is a strategic orientation of offering individual services to guests based on their relationship with the hotel, is widely regarded as the managerial tool to achieve this kind of differentiation. Almost since the beginnings of the industry, luxury hotels have maintained comprehensive records of the preference and spending habits of their of their most frequent guests, known as history systems, such information systems were originally maintained on manually updated paper index cards and use to provide the exceptional personalized service for which such hotels were famous. (O’Connor, 1999). The growth in the use of hotel computerized systems means that most of the guest’s transactions are now being recorded in electronic format. Developments in communications means that such data can be collected and consolidated, allowing a central database to be updated automatically as guest transaction occur. As a result, instead of just storing the guest’s name, contact details and basic information on their aggregate spending to date, there is an increasing trend towards full-folio storage, where details of each individual transaction are added to the central data warehouse for subsequent analysis. This potentially allows an accurate, in-depth picture to be built up of each guest’s likes and dislikes, which could subsequently be used to provide a more personalized service. This could be done across multiple units, increasing the consistency of service and the value of the brand. The database can also be analysed for patterns, both at the individual guest and aggregate levels- a process often referred to as data mining (IBM, 2001). For the individual guests. This should result in more closely customized offers than perhaps actually interest them instead of the usual mass market junk mail. Taking such a one to one marketing approach is acknowledge bringing benefits in term of lower costs and increasing customer loyalty. Hotel companies such as Starwood, Bass and Hilton are leading examples of the successful use of such database marketing techniques. Each uses analysis of their corporate database to improve the targeting of marketing and sales efforts, resulting in increased response rates and reduction in the costs of direct marketing (O’Connor, 2001b).

4.4 Supply Chain Management

A review of various trade journals suggests that electronic commerce (e-commerce) required a new business model that allows lodging companies to proactively gather the necessary intelligence for understanding customers’ expectations in real time. By combining these two objectives, a hotel company can gain a powerful position and differentiate its lodging service from those offered by market competitors. Such an approach can be accomplished by implementing technologies to the supply chain by integrating front end applications such as customer relationship management with back office activities such as e-procurement (Turban et al, 2002, p.656). A complete e-commerce model for SCM combines both the front end and the back end systems as shown in Fig. 1. E-commerce offer enormous business opportunities to increase revenue while reducing operating costs. The complimentary between e-commerce and SCM also has been supported by many scholars (Corsi and Boyson, 2003; Frohlich and Westbrooke, 2001; Gurau et al., 2001; Lancioni et al., 2003; Skjott-larsen et al, 2003). However, studies in the tourism and hospitality industry have primarily focus on customer perspective (Heung, 2003). Front-end applications of e-commerce have been widely used in the lodging industry but not much has been explored on the back-end system or the operation side.

SCM has been defined by (Cooper, 2000 & Lambert et al., 1998) as the integration of key business processes from the end user through original suppliers that provides products, services and information that add value for customers and stakeholders. (Lambert and Cooper, 2000, p.66). For the lodging industry, the SCM concept or philosophy has been practiced to certain extend. The Aberdeen group (2000) characterized the US hotel sector as a highly fragmented industry, representing more than 50,000 hotel properties that purchased from more than 10,000 suppliers. With such fragmentized network vulnerable to the inefficient control of purchasing procedures, the lodging industry is facing significant challenges for managing procurement practices. To take on these challenges, the first step is to understand the core of SCM in the context of the lodging business.

4.5 The Procurement Process

Another that has attracted much attention, due to its potential for creating efficiency gains, is that of procurement. Here focus on IT that enables external integration with partners in the value chain, rather than narrowly focusing on automated internal operations. Traditionally the hospitality sector has had an inefficient purchasing process. Multiple units, fragmented supply chains and inefficient business processes all adversely affected the purchasing process by creating inefficiencies and increasing costs. In general, unit level staff managed procurement, and there was a high frequency of low value orders to multiple suppliers, which resulted in high administrative costs. Even where contracts existed for specific products, the unpredictability of hospitality operations meant that Maverick purchases from unapproved vendors were, and still are, common, further increasing costs. Using technology to facilitate the purchasing process over-comes many of this problems while potentially creating some others. By digitalizing the processes involved in purchasing, great efficiencies can be achieved when sourcing, specifying, ordering, tracking deliveries of and paying for, purchases. In effect e-procurement involves electronically managing the entire purchasing process from product identification through requisition to payment. The process requires extensive and accurate performance data. Not only will an e-procurement solution help to capture aggregate purchases by purchased product codes, but will also help to chronicle the derails in a supplier’s performance record including delivery and quality level performance.

4.6 Communicating Information

All telecommunications (telephone, telex and fax) have been used extensively throughout the tourism industry worldwide. Although telephone conversation is a personal and direct way of communication, linguistic problems, time zone differences and its prohibitive cost limit its international usage. Telex for years the most prominent communication method and has contributed greatly to communications in the tourism industry. As transmits text reliable and inexpensively without requiring the simultaneous availability of sender and receiver, it has been extensively used especially in regions with inadequate telephone networks. However as computer communications and faxes prevail, the telex is limited to communication with developing world countries with unreliable telecommunications infrastructures and it is gradually being transformed into a computer based system using a different communication network. The commercial introduction of the telefax in the 1980s allowed the transmission of images over phone lines and enhances the efficiency of tourism operations significantly. Although its operational is the same as transmission of readily available documents and graphics. Fax technology does not require technical skills or the simultaneous presents of sender and receiver, and therefore has penetrated the tourism market place very efficiently (Beckman, 2001).

In the pre-internet era, Electronic Data Interchange (EDI) used computer net-work to enable computer file interchange of standard transaction documents such as invoices bills or purchase orders between organizations. EDI transmits structured transactions with distinct fields, such as transaction data, amount, sender and recipient’s name. These assist organizations in exchanging information, order and invoices without human involvement. In tourism, for example, this can be used for travel agencies to transfer bookings to a tour operator’s suppliers. Invoices can be directed backwards and payment receipts can be generated automatically by the system. EDI therefore enhances communication efficiently and reduces labour transaction costs and encourages firms to continue doing business with their partners. Although EDI is still used for large amount of transactions mainly between large organizations, transactions and interchanges on the internet have replaced EDI with extranets and have also enable smaller players to take advantage of the efficiency that networking provides. (Laudon and Laudon, 2002; Reynolds, 1992)

5 Findings and Analyses

This chapter will give the synopsis of the data collected from the interviews and later give discussions in relation to the research questions

5.1 Management Information System (MIS)

Because the PalmaRima hotel does not have the Property Management System the hotel lacks a local data processing linked to information resources to support decision making, information systems are used primarily to address the needs of internal management and co-ordination. As there is no computer at the reception it makes it difficult for the front office manager to manipulate data and create his own managerial reports, statistics and follow up mechanisms by using standard and fairly user friendly spreadsheets and statistical packages.

5.2 Fidelio’s OPERA Hotel Property Management System

In response to this point, it is noted from the data collected that all reservations, checking in and out guest, Marketing, Catering, Revenue Management, Quality Management, BackOffice, Material Management are all done manually.

5.3 Distribution of Information

The growth in the use of hotel computerized systems means that most of the guest’s transactions are now being recorded in electronic format. Developments in communications means that such data can be collected and consolidated, allowing a central database to be updated automatically as guest transaction occur. This is not happening in the case of the PalmaRima hotel, which makes it very difficult for the front office to get their repeat guest profiles.

5.4 Supply Chain Management

Based on the research the PalmaRima hotel cannot implement technologies to the supply chain by integrating front end applications such as customer relationship management with back office activities such as e-procurement. The Aberdeen group (2000) characterized the US hotel sector as a highly fragmented industry, representing more than 50,000 hotel properties that purchased from more than 10,000 suppliers. With such fragmentized network vulnerable to the inefficient control of purchasing procedures, the PalmaRima hotel is facing significant challenges for managing procurement practices. To take on these challenges, the hotel first step is to understand the core of SCM in the context of the lodging business.

5.6 The Procurement Process

Using technology to facilitate the purchasing process over-comes many of this problems while potentially creating some others. By digitalizing the processes involved in purchasing, great efficiencies can be achieved when sourcing, specifying, ordering, tracking deliveries of and paying for, purchases. Not only will an e-procurement solution help to capture aggregate purchases by purchased product codes, but will also help to chronicle the derails in a supplier’s performance record including delivery and quality level performance for the Palma Rima hotel

5.7 Communicating Information

Computer communications and faxes prevail, the telex is limited to communication with developing world countries with unreliable telecommunications infrastructures and it is gradually being transformed into a computer based system using a different communication network. (Beckman, 2001). Based on research the PalmaRima hotel communicates internally by forms only but by introducing the MIS they will benefit by using the intranet to communicate internally and would be a great help to communicate externally by extranet especially to suppliers.

6 Conclusions

In other for the hotels to strengthen the organisations business initiatives and maximise profit, they need to overcome the obstacles presented its legacy technology system. In the case of PalmaRima hotel they realised that their manual reservation system becoming more and more ineffective, primarily resulting in loss of financial controls and staff productivity. As a result, the way we live and work in most societies around the globe has been significantly altered. Automated industrial production has enabled a greater total output as well as better planning and quality control. Over the last few decades, the progress in information technology has revolutionalized both the global economy and enterprises. The development and application of computerised systems has accelerated rapidly and enabled their use in a wider range of functions and activities.

Technological developments have also introduced a wide range of new tools for the strategic and operational management of organisations. Increasingly technological convergence integrates software, hardware and net ware and supports inter-operability and interconnectivity. In addition, the integration of the internet, extranet and intranets enables organisations to interact dynamically with different actors and stakeholder. The PalmaRima hotel can enhance their performance by empowering their strategic marketing and management efforts through supporting their functions with advanced ICTs. This will enable them to improve their networking and ultimately to improve their virtuality. Technological change alters jobs, creates new skills, makes occupations obsolete, and revises what employees need to learn and be trained to do. Sometimes, new technologies require new job designs. Technology can also be used for recruiting, training and maintaining database for employees. E-recruitment is being used by a lot more companies now, since Internet usage is becoming common amongst potential employees. In fact, selection methods can also be made computerized to reduce biases and at the same time be cost effective and recruit the right people for the right jobs.

If IMS is introduced by the Palmarima hotel the automation of the procurement process will offer costs savings potential and potentially generates economies of scale. Increased integration means that PalmaRima hotel can posses a valuable bank of customer data that can be exploited to personalized customer service. On the other hand, the potential of CRM has largely failed to be recognised by the PalmaRima hotel. PalmaRima hotel failed to participate in the electronic market place, therefore, will face severe competitive disadvantages in the term and will probably lose considerable market share. The researcher has to emphasise that new technology has proven its efficiency, cost effectiveness, etc based on testimonials of PalmaRima hotel.