Benefits Of Ebusiness And Its Impacts For Hospitality

Published Date: 02 Nov 2017

It encompasses e-commerce, which relates to buying and selling, but also includes servicing customers (ie business to consumer) and collaborating with business partners (business to business).

Application of  Internet in business is a recent major trend adopted by many industries, according to Wagner (2001) there are over 400 million computers that are in more than 400 thousand networks communicating all over the world, as a result the internet has become a very powerful and convenient for business communication, marketing and new opportunities. Small firms in the hotel industry are now able to compete with other larger firms by simply having better presentation on the internet through their websites. The internet allows the firm to offer competitive prices, advertise its products and also services all over the world.

This communication provided by the internet between the service and product provider and customer enhances businesses opportunities by making transaction much easier and cheaper where consumers can buy the products and services over the internet. According to Schulze (1999) the internet also offers an opportunity where consumers can make the right decision with the information provided and also offers an opportunity where consumers can shop online.

According to Deegan (2003) online booking has increased rapidly in the recent past where in 1999 total online booking amounted to 1.1 billion dollars and in 2002 this increased to 6.3 dollars, the availability and ease of online booking has increased the frequency of travel internationally and locally and as a result the increased demand for hotel products and services.

Recent development of E-business application in the hospitality industry.

The hospitality industry and leisure industries are widely regarded as being extremely competitive and fast moving. Given this situation, it is hardly surprising that there are so many examples of established organizations acting entrepreneurially,

According to Morison et al Hospitality is a booming industry all over the world today and through Internet, selling their hotels, facilities offered, picturesque backgrounds, food, comforts, cultural attractions, social functions, religious peculiarities are showcased without much expense or difficulty.

E-business is having a huge impact on the hospitality industry, an impact that looks set to continue.

An increasing number of people are booking and viewing restaurants and hotel rooms online, and they are working with the smartest time-saving electronic systems.

Businesses are using the internet to communicate better with suppliers, and are increasingly bypassing intermediaries in order to communicate directly with customers.

Learners will explore the benefits for consumers and businesses. However, alongside the benefits there are barriers.

For businesses, these barriers include issues connected to employee resistance, planning, resources and training, while for consumers, they include website design and payment security. Learners will look at ways in which these barriers can be overcome.

Learners will have the opportunity to evaluate hospitality websites.

They will identify the main criteria by which websites can be judged, both in terms of usability for consumers and the usefulness for hospitality businesses.

For consumers these issues include usability, such as navigation, quality of information, ability to make bookings and user friendliness.

For businesses they include search engines, advertising, and the capture of information about customers.

Benefits of e-business and its impacts for hospitality businesses

Increased visibility 24-hour information; up-to-date availability of information; worldwide

Accessibility ease of taking bookings and payment processing; low promotional costs; opportunity to use

Web and email marketing; ability to obtain customer information; opportunity to protect and build brand;

Impact on customers: increased choice; speed; greater independence; more information example services, appearance, location, virtual room tours; ability to compare prices; increase in direct booking, less use of intermediaries

Impact on businesses: better communication with suppliers and customers; ability to bypass intermediaries; marketing opportunities; effect on prices (increased transparency, downward pressure); costs of meeting technological requirements for e-business

Relevant features of effective hospitality websites and key sales and

marketing issues

Types: service providers For example hotels, restaurants suppliers ,food and beverage, equipment other industry bodies

Features of effective websites: ease of navigation for example navigation bars, links back to home page; content that is up to date and trusted by consumers; provision of information for example prices, services, availability, maps, contact details, virtual tours; ability to take bookings user friendliness for example site map, search tools, foreign language pages; well-written content; professional appearance; fast download times for pages

Sales and marketing issues: use of website optimization strategy; importance of search engines as source of traffic; positioning on search engines; use of pay-per-click advertising; capture of customer contact details; email marketing for example e-newsletters and promotions; analysis of traffic

Barriers to the development of e-business within hospitality businesses

Technological barriers for business and customers for example slow connections, inadequate hardware, slow download times, staff resistance to change, lack of staff training, requirements for web maintenance; inflexibility of business structure; lack of business planning ,cash flow forecasting, marketing strategy; poor website design; security for payments (perceived and real)

Overcoming barriers:

Organisational issues for example business planning, staff development, recruiting new staff; customer education and awareness campaign; support issues eg government support, support for web design, dedicated technical support

PRIORITY AREAS OF E-BUSINESS FOCUS FOR HOTEL COMPANIES

While some hotel companies are successfully entering the e-procurement business and others employ Web-based reservations networks, the industry as a whole is not yet where it should be when compared to other industries. E-business is quickly spreading throughout all aspects of the business. Some of the priori-ties are briefly described.

Customer Oriented e-Business Initiatives

In the guest room, for example, guests in some hotels can use the Internet to do a variety of things: access entertainment, shop, plan tours, make reservations, and plan further travel. Several hotel companies, for instance, Hilton.com, are extending their reach to offer services and purchase options to customers outside the hotel environment through their commercial

Web sites and Customer Loyalty Program. As hotel customers increasingly adopt a self-serve view of the world, those properties and chains that capitalize on this trend will be able to differentiate themselves from the competition and gain market share.

Wireless applications relating to customer self-service are addressed in another section of this publication. E-business initiatives are underway to connect with and service corporate accounts as well, with proprietary Web-based programs and services and on-line bookings of meetings and catering events.

Hotel Back-Office Functions

Another area with potential is the use of the Internet to facilitate hotel back-office functions. The financial, human resources, asset management, and other back-office needs can be effectively addressed through this new channel.

Back-office managers, by out-sourcing IT infrastructure and business applications management, may no longer have to worry about maintaining their own systems or having the right technical people to sup-port them. They can "have their cake and eat it too." They can have access to what applications they need through the Internet, when and where they need it. They can focus on their core competency and be business managers who can get the data that they need to manage their operations effectively and turn their organizations into effective and profitable entities.

E-Integration of Disparate Systems

Hotel companies generally have disparate systems that support individual needs, such as reservation, property management, revenue management, financial management, human resources, payroll, sales and catering, marketing, and many more. Each of these systems is very vital to the operations of the hotel.

Each hotel application stores and produces valuable data that needs to be transformed into information that various resources throughout the organization can access and use to perform their jobs more effectively. Having consistent, accurate, and timely information can position a hotel with the information that it needs to manage itself more effectively and produce results that can increase revenue, control and reduce expenses, and finally increase profits.

The Internet can serve the vital purpose of providing a foundation for integration of various systems and business applications across a wide spectrum of business constituents, including hotel companies, their franchisees, corporate customers, and dispersed business units. This is accomplished by deploying middleware solutions to link legacy back-end business applications to Web front-end applications.

Data Integration

The need to have access to the right data to manage the hotel operations is compounded for the owners of proper-ties with multiple hotel chain affiliations. Since they use different chains’ systems, being able to roll up their performance data into a single database that can be used for management and reporting purposes across all properties and chains becomes a significant critical success factor.

The ultimate questions for any hotel owner or operator is how to get good customer data and how to store it in a proper repository so it can be utilized as needed. Many organizations can gather data, but don’t know how to consolidate it by different names or variations, such as Bill Smith, William Smith, or W. Smith. Furthermore, a long-standing challenge is to be able to determine who are a hotel’s best customers and subsequently tailor specific services for them. For many companies, this is still an impossibility.

However, in this day and age and with the new tools available in the marketplace, this should become a reality. In order to achieve the out-lined objectives of integrating data across a company or portfolio of properties, hotel companies need to integrate the data from these disparate systems, maintain the data in a single data repository, provide tools that transform the data into information, and facilitate access to the right data at the right time from any location within the hotel company.

A good vehicle to access the data from any location is the Internet or the World Wide Web. There are new tools that help with data integration, transformation, analytics, and Internet-based access. Using these tools, coupled with a thin client application, staff managers and headquarter personnel can access the right level of data that is pertinent to their need from any location. By using this approach, the dream of knowing who are the right customers can, and will, become a reality.

Single Image Room Reservations Inventory

Having an integrated environment, coupled with an integrated database, can help achieve another long-standing hospitality dream. The dream is to have a single image inventory system where the total room inventory for any major hotel entity is maintained in one place, and all reservation sources access the same database to book rooms.

The value of the single image inventory system is in eliminating all unnecessary intermediary reservation steps, thus avoiding over and under bookings. Although many claim to have this capability, it is not yet widely available.

The first organization that can fully achieve this capability will enter a new era in reservations and will be able to achieve tremendous success. A number of e-business initiatives are under way to de-couple rooms inventory management from PMS applications and distribute reservation data and information over the Web from centrally hosted applications.

A number of Web-based reservation services, like Worldres.com and others, are providing fully Web-based solutions for hotels.

Vertical Web Portals and Hotel Chain Extranets

The industry needs an effective Web portal, perhaps on a chainwide or even an industry wide basis, that provides operators and owners with information, tools, business applications, and industry best practices to help them run their businesses.

Topics could range from labor issues, including how to hire the best people, what incentives to offer to properties for sale, the availability of service companies, and many other functions.

A number of hotel chains, such as Cendant, Choice, and others, have established extranet information portals to push vital information and business tools out to franchisees.

A number of hospitality industry vertical Web portals, such as Vertical Net’s hospitality portal, have also been introduced recently to offer similar capabilities and information to independent hotels.

E-Procurement

E-procurement as a viable business-to-business Internet solution has taken hold in a major way in the hospitality industry. One major e-procurement consortia, Avendra, involves a joint venture between Bass Hotels, Marriott International, Hyatt, and Club Corp. These companies have pooled their buying power and are in the process of implementing an integrated catalog ordering system linking a variety of suppliers to their hotels and clubs. This is in an effort to dramatically stream-line the purchasing process. Other competing e-procurement exchanges, including Zoho.com, PurchasePro.com, and H-Suppy.com, are also gaining significant traction within the hotel industry.

Challenges

The main challenge to the e business practised by the hotels is that some customers are afraid of giving away their personal information such as credit card information which is a security concern,

Other disadvantage of the internet booking process is the speed of delivery of goods and services and also the reliability of these services, booking and other processes require some time to process and also may be unreliable to consumers and therefore this might turn to be inconvenient to the customer and the business.

CONCLUSION

Many companies in the hospitality industry are mired in legacy technology, and too often owners are more open to putting money into new carpet than into technology. As a result, many of these systems are held together with band aids. In the long run, however, this approach will be more costly to maintain than the new systems. The hotel industry is behind other businesses when it comes to issues of e-commerce and, more specifically, e-integration and data ware-housing. The financial services, retail, and some other travel industries are more advanced.

In the future, the difference between properties and companies that maximize profits, and those that don’t, will be competencies in the new technologies. Using effective technologies can make the difference between good decision making and bad. Appropriate systems and efficient system integration are an absolute must to making good management decisions. The Internet will be the factor that will propel the hospitality industry into the development of next generation business applications and technology solutions, and finding new ways to integrate interactions with employees, suppliers, and customers over the Web. A viable e-strategy is the basis for launching into appropriate e-business initiatives and making a proper selection, implementation, and integration of appropriate hospitality systems.