Applications Of Ebusiness In Hospitality Industry

Published Date: 02 Nov 2017

The application of the Internet in the business world has become a major trend in practice and generated a hot stream of research in the recent literature. The Internet, as a collection of interconnected computer networks, provides free exchanging of information . Over 400 millions of computers on more than 400,000 networks worldwide , today are communicating with each other . As such , the Internet has been becoming a powerful channel for business marketing and communication and for new business opportunities - as it is often called as " e - business " or " e - commerce " today .

This new virtual marketplace allows small companies competing with business giants by just having a better web presentation of their products / services . Under the same wave , online customers can enjoy a wider choice of products or services, more competitive prices, and being able to buy their favorite items/services from the sellers located thousands miles away. It provides communication between consumers and companies and through electronic data interchange (EDI) . buyers and sellers can exchange standard business transactions such as invoices or purchase orders with remarkably easy .

E-business has been defined as " the buying and selling of products and services by businesses and consumers over the Internet " . The Internet and e-commerce give consumers an opportunity through the easy on-line information gathering and convenient online shopping - to be better prepared to purchase the right product (or service) at the right time . New entrepreneurs and traditional small to medium sized businesses are the pioneers exploring on the forefront of e-business .

According to a published survey , more than 90% of new entrepreneurs and starting businesses are using the Internet - to either enhance their existing business operations or to explore new business opportunities . Numerous studies have been reported about the Internet applications in business – including the application in the service operations , such as the health care industry ( e.g. webMD ) , banks and financial institutions ( e.g. e-banking ) , and the hospitality & tourism industry ( e.g. e-booking of hotel/motel rooms , airline tickets , etc ) .

HOSPITALITY INDUSTRY

The hospitality industry is a broad category of fields within the service industry that includes lodging , restaurants , event planning , theme parks , transportation , cruise line and additional fields within the tourism industry . The hospitality industry is a several billion dollar industry that mostly depends on the availability of leisure time and disposable income . A hospitality unit such as a restaurant , hotel , or even an amusement park consists of multiple groups such as facility maintenance , direct operations ( servers , housekeepers , porters , kitchen workers , bartenders etc ) management , marketing and human resources .

The hospitality industry is one that is primarily focused on customer satisfaction . For the most part , it is built on leisure or is luxury-based , as opposed to meeting basic needs . Hotels and resorts , cruise lines , airlines and other various forms of travel , tourism , special event planning and restaurants all generally fall under the realm of the hospitality industry .

RECENT DEVELOPMENT OF E-BUSINESS APPLICATIONS IN HOSPITALITY INDUSTRY

The Hospitality Industry ( HI ) can potentially use E-Commerce to enhance its primary and support activities by leveraging this new technology in the value chain. To investigate the potential for enhanced sales activity and revenue generation, a literature review of the industry's involvement with E-Commerce and the Internet was conducted to identify trends and the areas where HI and E-Commerce integration shows the greatest potential. In its simplest form the model of the HI is a one room/one customer proposition. However, the HI operates in a much more complicated environment consisting of a network of support and marketing functions and profit centers .

The typical HI organization has many facets of its operation to be considered, such as: an internal organizational fit, a business to multicustomer fit, and a business to business fit with both external suppliers and networked businesses as part of the actual firm's business processes. E-Commerce can enhance and extend this complex web of interactions and business processes. Most, if not all, of an HI organization's business processes lend themselves to use of information systems and E-Commerce technology. Timesharing is an example of how E-Commerce technology can be used. Timesharing fills the gap between the one room / one customer concept and can be leveraged through the use of E-Commerce to establish a virtual connection between customers and rooms.

E-BOOKING

It has been reported that the online booking in the hospitality industry (including hotel / motel , airlines , travel packages , etc.) is increasing at a very rapid speed recently , especially at the lower rate end . Online hotel room bookings has been increased by six times just during the last two - three years . More significantly, the groups who are now going online bookings are those of business travelers and above the average vacationers , who are traveling more frequently than the average publics . Targeting great deals while still in control of their search process , those online bookers claim that more than often they are able to book a hotel room at much lower rate online comparing traditional phone reservation systems or old styled travel agents .

First, now every hotel/motel chain has developed its own website in which bargain hunters can book their hotel rooms online – other than though an Internet travel agency. Another attempt by the industry is to change its early agreements with those online travel agencies – from old " merchant model " where hotels making rooms available to online travel agencies at wholesale rates and the agencies marking up those rates by 15% to 30% before peddling them to the public at fixed prices for fixed periods of time to a new " sharing model " where the hotels will have more control of their rooms via online booking by providing a higher priority to their own websites over the websites of those third-party travel agencies . Thirdly , other than allowing those online travel agencies to profit for an average 20% from original wholesale prices, some hotel chains now offer a more competitive price on their own websites to directly compete with those online travel agencies . While the e-booking of airline tickets has reached about 46% of total annual sales in 2012 , the online hotel room booking is just account for half of that proportion – 23% to total annual hotel room bookings , but the industry has predicted more quick increase in online room bookings during the next few years , as the Internet technology becomes more popular and the access to the Internet becomes more easy and convenient to the public .

AN INTERNAL AND EXTERNAL FIT

The Internet provides a means to internally network the hotel's business processes together from bookings , food , service and housekeeping to car rental , tours and even kennel services for dogs and cats . Centralized Internet based property management systems will eliminate the need for expensive on-site computer hardware and software . The Internet may also control such routine hotel processes as credit card authorization , travel agent commissions and point of sale transactions .

Station Casinos, Inc. has ordered InfoGenesis Revelation POS for an innovative "complexed" installation for its four Las Vegas hotel-casino properties . The four separate properties will use more than 190 POS terminals linked via a high-bandwidth wide area network (WAN) to a server cluster located at one property. The InfoGenesis POS check detail data warehouse will also be linked to Station's player-tracking application to enhance guest recognition and service . The Internet also provides a way for hotels to integrate external businesses into their supply chain as when Omni Hotels upgraded its reservations system to a seamless environment for agents both within and outside the company .

A BUSINESS TO MULTI-CUSTOMER FIT

The Internet facilitates the hotel's interaction and helps to transform relationships with three distinct customer groups: individuals as tourists , individuals on business and businesses looking for support facilities .

Bruce Rosenberg - Hilton Hotel's senior vice president for e-business and distribution states : " The Internet thus makes it easier for Hilton to book rooms and meeting facilities . " People who visit our web site stay on the site for five or six minutes , want to know more about the hotel, destination, services and rooms . The online environment is less structured , than the telephone and people will spend the time they think they need to spend at the web site they go at their own pace , they feel comfortable asking questions, digging deeper and have no pressure to make up their mind .

Web interaction with the tourist customer is evolving so fast that Trump Casino Services in Atlantic City plans to teach visitors to its web site how to play casino games . Individuals on business provide another opportunity for integration of web technology to attract and provide service to this unique client base . LodgeNet Entertainment Corp. will add Internet based services to all the 6,000 guest rooms LodgeNet serves . This will allow guests to access the chain's web-based hotel directory , reservations service and E-Commerce sites , in addition to having high- speed , general Internet access via the television's remote control or wireless keyboard .

A BUSINESS TO BUSINESS FIT

The Internet provides the ability for the HRI to engage in two types of business to business E-Commerce : back office integration with external suppliers and network integration with external businesses . " Hotel industry purchasing has long been regarded as a painful process - inefficient and bureaucratic and certainly ripe for radical overhaul ." The functionality of a web- based hotel purchasing system lies in its ability to provide substantial savings to hotels both in decreased product costs and increased departmental efficiency.

Increased functionality, efficiency and savings can only come about through back office integration . Back office integration allows suppliers direct access to the operation center of the hotel which reduces ordering time and inventory storage, thus reducing transaction cost. The Internet gives small suppliers an equal footing with larger suppliers and allows the hotel to find the best possible fit. Hilton Hotel views buying materials online as critical. They have formed a partnership with E- Commerce service and software provider PurchasePro.com to build Hilton's next-generation procurement system and start a purchasing exchange that will be opened up to other hotel chains. Hilton also provides hardware (digital distribution) to franchisees that lack their own systems for accessing the Internet . In addition to allowing two-way access to suppliers, the Internet makes possible the networking of suppliers and support companies directly into the value chain allowing them to replace functions normally carried on by an organization. It even provides a platform to permit competitors to share individual core competencies , thus increasing the worth of both companies .

TIMESHARING

Vacation Ownership "Timesharing" is the right to use specific weeks of a resort during a specific time period . Ownership of a timeshare is very similar to ownership of a condominium except that rights are limited to a certain week during the year . Timesharing is an example of how E-Commerce technology can be used . Timesharing fills the gap between the one room / one customer concept and can be leveraged through the use of E-Commerce to establish a virtual connection between customers and rooms .

The Internet has created a powerful opportunity for vacation ownership firms to better communicate, do business and provide services to its members. As an example of the kind of faith people have in this concept , TELUS Canada's second largest telecommunications company, signed a five-year, $6.5 million agreement with Intrawest Corp , a leading developer and operator of mountain resorts across North America, to jointly fund the development of state-of-the-art Internet services for Intrawest's North American timeshare resorts. TELUS will provide web site hosting, design and development, E-Commerce, Internet platform support services, web advertising and joint-content initiatives to Intrawest and its North American divisions .