Use Of Information Technology In The Hospitality Information Technology Essay

From the last 20 years, information technology is performing its role enormously and became vital competitive artillery in the hospitality industry. This article analyzes the current trends and issues related to hospitality industry. This article focuses our attention towards the use of information technology in hospitality which increases along with the advancement in 21st century, thus playing important part in international hospitality companies. Individual systems have developed to act as the information hubs of the hospitality organization.

Information technology in Hospitality

In 1950s information technology was first used with the growing field of computer science in multinational hotels. Initially many hospitality industries concentrate on automating repetitive and time consuming tasks. On the assumption hospitality industries borrowed software for use that was partially successful. A large number of business processes and procedures were frequently required computerized system. Economically on the large scale, computer was used which includes the expense and technicality in both developing and running system (Lashley, 2000).

In the early 1970s various aspects of management control like the automated reservations, punched cards, and check in, telephones and mini bars in each room were linked to the software automatically posting charges directly onto the relevant guest folio had been introduced in Paris by the St Jacque Hotel. Computerized system introduced the improved control which was justifying implementations from a cost perspective. But still computerization required expertise to the fact that they had to ultimately use by front line employees. Many people were unable to understand the technicality and proper usage of computer. The problem was intensified by introducing incompatible systems that could not be easily incorporated in industry. The hospitality industry became expensive, frustrating and complex from the use of information technology due to badly designed, inflexible and overly technical hospitality operations and management resulted in falling hardware prices (Carlson, 1999).

Many researchers as well as organizations were of the opinion that considerable resistance to the use of technology has built up as a result and was strengthened by the conservative nature of the industry, its widespread atomization, the absence of dominant seller and by a lack of IT knowledge on the part of many managers (Suchman, 1993).

In 20th century, the Internet has made computerized systems practically omnipresent throughout all sectors of the industry after the personal computer and graphic user interfaces. After internet computer is progressively becoming easy to use in every field of life. The role of IT within the restaurants and food services is performed by Electronic Point of Sales System and the function of IT inside the hotels and cruise ships is developed by Property Management System.

Over time, such system is developed around which all information rotate and interacts, as the central system which possesses good desegregation.

Future outlook: reaching outside the hospitality organization

Strategically advancement to information systems design and utilize, by attaining external hospitality to interact better with customers through electronic distribution and with suppliers through Supply Chain Management (SCM).


Information technology is a distribution channel that allows for sufficient information provided to the rightly targeted people at the exact time and in the best suited place to permit a customer to make a purchase decision, and provides a mechanism where the consumer can purchase the required product. Nowadays, information technologies play critical part to sell the product at its optimum price in the hospitality industry (Choi, & Chu, 2001).

Electronic distribution systems become potentially useful for incorporating dynamic data as having few capacity limitations, have a low borderline cost and offer geographical contact actively. Critics made emphasis on electronic system which works in a fraction of time, costs and allows travelers to make reservations

Concentrating on Global Distribution System (GDS) extended the most hospitality products and provides direct dealing system for travel agents. Manual reservation in airline was time consuming process simply Global Distribution System made this process cheaper and more efficient. This system frequently unscrambles the increased number of flight and other menu selection. Hotel Electronic Distribution Network Association proposed that electronically 95% of travel agencies are using Global Distribution System hence no booking is accepted till it can be processed. Global Distribution System is representing Hospitality Company who is wishing to sell its products through the travel agent market. Today, Global Distribution System can access through internet making them (Ekinci, 2002).

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Central Reservations Systems (CRS) is also formulated by many hospitality industries with more appropriate database structure and later on linked to the Global Distribution System but became too expensive for individual hospitality management companies. So as to minimize the expense a universal switch subscribes Central Reservations Systemto the numerous Global Distribution System programs, thus, interfacing single access to all of the major Global Distribution System. Hospitality industry consumers can now operate Global Distribution System directly through the Internet by studying their methods and structure of operation still concentrate on cryptic codes, the needs of travel agents, resulting in complex procedures and opaque information in this system (Pearlson, 2001).

Hotel Electronic Distribution Network Association again emphasizes the principal cost of upgrading and maintaining a reservation system electronically and many companies outsource in order to maintain a flexible workforce. In the early 1990s, through electronic system a cooperated system is developed rather than competitive system with others thus getting mutual benefits. Hospitality manipulator views effectiveness in electronic system but it is costly. Approximately 17% cost increases within 1993 till 1997 by the deputations and other reservations systems. Hence, the cost is directly proportional to the advancement in IT as it provides alternative ways to disseminate their products frequently (Brotherton, 1999).

Internet is one of the well-nigh challenging and rotator infrastructure which in turn became useable to the commercial enterprises and public. While one of the best avails of the Internet is the exploitation of the World Wide Web which supplied chance to the suppliers to communicate their customers directly and on time. This aids in cost effective communication which is only possible through information technology in the hospitality industry. Basically, Internet bids to two-way communications, which reduces the cost of distribution, which reduces the cost of distribution. This World Wide Web distribution has sold, distributed, accomplished, satisfied and marketed the industrial products in an efficacious manner. Researchers aimed that top fifty hotels study disclosed that approximately 90% hospitality industry use World Wide Web although 80% of them allow direct booking reservation facilities through this system.

Experts articulated their views in year 2000 that significant cost reduction approximated gross savings to reach US $1.3 billion or 1.7% of total industry profits forecasted from 2000-2003 period through information technology based on Internet.

In the arena of hotels, cruise ships, airlines and various other hospitality industries are motivated and advanced by the arrival of World Web Wide. Electronically products can be listed thus it is making essential for hospitality companies therefore theses benefits have changed the way in which travel goods and services are sold. A mutually exclusive point is observed that cooperation increases with the increase in competition by the use of information technology in the hospitality industry (Marković, 2004).

E-procurement and Supply Change Management

E-procurement means frequently increasing purchase or sale which is another area attracted our attention and consideration towards the efficiency profit and gain due to their potential creating. Therefore, E-Procurement offers the latent for upgrading both sides of the equation to decrease costs and gain new revenue flows. However, Information technology modifies external integration with cooperators in wide variety of range instead of modifying internal integration. The hospitality sphere purchasing process has had ineffective and inefficient performances for the industries. Creating ineffectiveness and raising costs are adversely affecting the procurement process due to multiple units, split supply chains and bad quality business. Cost is being increased by irregular purchases from unapproved and unauthentic marketers, thence stepping down in hospitality industry. The positive impact of using E-procurement which obviously affects on business function reduced the labor and other administrative costs associated with purchasing (Nadiri & Hussain, 2005).

Digitalization alleviates the purchasing processes and reducing the expense and cost. Great efficiencies can be accomplished when specifying, sourcing, ordering, paying for and tracking delivery of purchases. Digital market places, supplying various products and services are making the trade barriers fall and offering entry to the hospitality organizations and businesses of all sizes. In international market Deutsche Bank of New York currently estimates $100 billion for hospitality E-Procurement that includes furniture, fixtures and equipment, redecoration and building, service agreements, handling supplies of beverages and food stuff (Choi, & Chu, 2001).

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Cost savings from more efficient supply chain trades management at present predicted to be at $3.5 billion to approximately $4 billion in the US alone and around 7 billion dollars throughout the world (Travel & Tourism Intelligence, 2001). In the succeeding 1 to 1.5 years hospitality procurement of more than $20 billion internally and $10 billion externally is online forecasted (Travel & Tourism Intelligence, 2001). The industries larger chains are now in a position to purchase their size, knowledge and experience powered by using such technology to re-engineer the relationship with suppliers and provide lots of benefits for their members. Vendor’s comparison becomes easier and fastened by the proper use of computerized system. This system also ensure the quality standards and decrease off-contract purchasing as beneficial system can identify appropriate suppliers from various units (Marković, 2004).

E-procurement is promoted as a pathway to enhance revenue performance and reduce costs associated with the supply function. E-procurement permits smaller organization to focus on previously larger international companies activities. In many hospitality industry cases Internet is one of the ubiquitous interaction medium that eases e-procurement. Therefore in market place it digitizes the buyers and sellers on one platform where they substitutes goods and services in the form of three models;

Vertical Market Place

Horizontal Market Place

In company Market Place

Vertical market place bears the responsibility of all the process stages linked and connected with a certain industry. Horizontal market place share, participate in vendees, bid on products and handle their Supply Chain Systems. This place also works on the principle of cross-industry. In practical implication, there are many examples to be seen of hybrids. The last model is In-company Market Place which participates within the franchise or management contract company and attracts the purchasers for their products. Various other e-procurement models are also playing roles in hospitality industry (Choi, & Chu, 2001).

E-procurement is about value formation, for both the customer as well as for the seller and is about changing the organization into more efficient and effective business. Particularly outside the USA and Western Europe, the resistance to technology problems are due to lack of adoption, large investments, concern about privacy and security and reliability consequences which are linked to internet.


In the above discussion the mention points highlights that technology used today by the industries has changed not just controlling operations but to more strategic role. But still a number of ways are still there to upgrade and to maximize our potential profit. The major lies is the data collected on regular basis operations and there proper use. As much of our operations are supported and allowed by IT. A large amount of important data is regularly collected by some systems like PMS and EPOS but the data is snubbed completely. From the past 20 years hospitality industry products dynamically is being regarded as trade goods (Marković, 2004).

Customer Relationship Management refers to the strategic techniques and tactics that help businesses in managing their relationships with customers in a controlled way. This provides separate service to each guest. Customer relationship management tactics include few software and browser-based tools that gather and arrange information about customers and clients The Customer Relationship Management element is intended to trail all relationships with visitors to improve visitor service and marketing by maintaining guest history system in famous hotels. Guests feel highly valued when their information is automatically personalized as individual quality and unique personality by the hotel working staff. From the technology perspective, companies often buy into software that will help to achieve their business goals and storing significant data. For many, Customer Relations Management is far more than a new software package, the renaming of traditional customer services, or an IT-based customer management system to support sales people. However, IT is vital since it underpins Customer Relations Management, and has the payoffs associated with modern technology, such as speed, ease of use, power and memory. Good Customer Relations Management also helps you grow your business; customers become loyal with the organization; reduces the rate of customer churn; the satisfied customers recommend to other people as well which increases the turnover, and overall the operations and services of the organization run in a smooth flow (Lashley, 2000).

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Guest transaction leads to the development of communication automatically updating personal information One of the challenging task is recording personal folio along with name, contact details and common data of guests is saved as central data is stored for updated analysis. Thus company provides frequent and best service to their guests by judging their personal information. From their arrival till their departure all the information of guests is recorded by the hotel management system information of their food liked or disliked, check in & check out time and moreover their use of free time, to whom they talk to whom they meet. In short all the activities are taped by the hospitality hotel management system (Choi, & Chu, 2001).

The final reason and aim of Customer Relations Management, of any organization is to augment its profits. Where Customer Relations Management is concerned this is gained chiefly by giving services to your customers in a better and upgraded way than the way your competitors are providing. Customer Relations Management improves the services provided to customers as well as an efficient Customer Relations Management also decreases costs, wastes, and customer generated complaints. Successful Customer Relations Management also helps in eliminating staff stress. The complete integration of the systems in an organization especially dealing in service industry needs to be coordinated well among its different departments for which organizations use web based software like ERP, scheduling software, CRM etc. All these software needs internet to be implemented and an internal integration of department to bring these software in use and achieve the aims of satisfied customers.

Analyzing data and facts from various points of views and converting it into useful information that can be utilized to augment revenue, decrease costs, or both of the functions is Data mining (IBM, 2001). Basically retail, financial, communication and marketing organization is primarily used today by Data mining.

Bass, Hilton and Starwood are included among the best hospitality industries because of using successful marketing proficiencies. Costs are reduced and industrial value is raised by improving marketing and sales by their corporate data based analysis. Application Service Provider (ASP) borders on developing many hospitality industrial software applications (Lashley, 2000).

Researchers in more efficient manner compare Web in a computer with the nervous system performing their each and every task more accurately. World Wide Web is one of the challenging and exploiting technology. As discussed in distribution and procurements that Internet based hospitality industry has driven up to the large extent and decreases the cost valued is due to growing power of World Wide Web resulting in exploitation of digital hospitality industry a critical part. The successfully implement of E-business widen their operations all around potentiality for hospitality industry management (Lashley, 2000).


This article looks at the deployment of information technology in all service industry sectors, especially hospitality industry from luxury to resources, to disclose tactical differences and likeness. The development of Information Technology was great turn for some lodging kinds such as conference hotels, discussion centers, and other actions, and very low for other categories, such as a motor hotel and bed-and-breakfasts. Hotels which had their chains all over the world adopted to the development of Information Technology more than those in single property. The analysis revealed three broad research areas among which the Internet effects on distribution, on pricing and on consumer communication. Similar to aftermath of the dot com boom, the hospitality industry is realizing that the information technology has unintended effects. Thus, lack of understanding and cost expenses are the two important hurdled to enforced technology based system. But those who are linked to multinational companies are availing this technology based system.

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