Importance Of The Industry

Published Date: 02 Nov 2017

Abstract :- Opportunities galore for the hospitality industry. While it tries to capture and captivate the opportunity, it embraces the latest technology and implements it, to cater to the expectations of customers. This advancement not only helps it arrest the cost of operation, but also helps it improve the profitability and sustain in a highly competitive industry. Technology changes at a faster pace. Success depends on the way it is implemented to reap the benefits.

Keywords :- Hospitality Industry, Technological advancements, technology implementation in hospitality industry

Importance of the industry

When we talk about hospitality, it would be relevant to know what makes it so important in the world economic map. As per World Travel and Tourism Council (WTTC) Travel & Tourism continues to be one of the world’s largest industries. The total impact of the industry means that, in 2011, it contributed 9% of global GDP or a value of over US$6 trillion, and accounted for 255 million jobs. Over the next ten years this industry is expected to grow by an average of 4% annually, taking it to 10% of global GDP, or some US$10 trillion. By 2022, it is anticipated that it will account for 328 million jobs or 1 in every 10 jobs on the planet. (World Travel and Tourism Council (WTTC), 2012) On the other hand, it commands an important role in the economic map of India as well. The direct contribution of Travel & Tourism to GDP was INR1,689.8bn (1.9% of total GDP) in 2011, and is forecast to rise by 7.6% in 2012, and to rise by 7.7% pa, from 2012-2022, to INR3,805.2bn in 2022 (in constant 2011 prices). The total contribution of Travel & Tourism to GDP was INR5,651.0bn (6.4% of GDP) in 2011, and is forecast to rise by 7.3% in 2012, and to rise by 7.8% p.a to INR12,891.2bn in 2022.In 2011 Travel & Tourism directly supported 24,975,000 jobs (5.0% of total employment). This is expected to rise by 3.0% in 2012 and rise by 1.6% p.a to 30,198,000 jobs (5.1% of total employment) in 2022 (World Travel and Tourism Council (WTTC), 2012)

Above figures gives us enough idea about why this industry has a major importance in the world economic map. Obviously, for every industry to sustain its growth, it is imperative that they embrace and implement the latest technology available in the world. That’s where they improve and increase their profits, while attract more customers and increase their margins. No matter how and what they implement, as long as it is acceptable for the customer, the provider would sustain, else he gets lost in the race.

Technology adoption

Technology adoption has not been so slow in hospitality industry. Accounting and financial systems were introduced in the industry during the 1960s, but these were exclusively used by large hotels as mainframe-based systems. Systems oriented to property management were introduced later in the 1970s. During the 1980s, systems were ported to mini-computer and micro-computer based platforms. Accounting, financial and property management systems finally became available even to the smallest operators. Sales and marketing applications were developed to provide a competitive advantage for properties. (Lars Hansen & M Owen, 2012)The 1990s was marked as the decade of integration, driven by powerful networking capabilities offered by client server technology. This technology brought no less than the dismantling of the management information system (MIS) paradigm as we have known it. Guest services also changed with introduction of televisions in every room, availability of in-room television sets having suite of interactive programs and services. Guests were given option to navigate through videos which could narrate the facilities available in the property. Smart cards for access to rooms and for other services available in the property were introduced for customer conveniences as well are increasing security at the same time reducing the cost. As per Ted Horner, an Australia based hospitality technology consultant who chaired the Hotel Technology Middle East conference in Dubai, "in the hotels business the biggest difficulty it faces is the speed at which technology evolves, making it impossible for hotels to keep up with the latest developments" (AME Info, 2010)

Customer – The king – Requirements varied

Every customer should be seen as special and unique, there lies the success, as the customer expects personalized service. This can be achieved with the help of technology – the customer requirements can be gathered by giving options for him to list down them at the time of reservation – for example pick up from the airport, sea facing rooms, non smoking rooms, food requirements, business meeting requirements and so on. (Anand, 2011)

With the advent of technology, the customer behavior also has changed. During the 1970’s customers used to write their complaints in a polite manner and they were ready to wait in long queues, the trends changed in 1990’s and the customers became more demanding, required better and personalized services at ease. The scenario has completely changed today. Customers are socially connected and not shy of speaking their mind online and they require instant gratification. (Doshi, 2011)

Interdependence

Hospitality industry is not a standalone industry. It is part of the "larger picture" called Travel and Tourism industry. It cannot survive on its own, as the customer for this industry gets generated from other industry as well. So, for example passenger flying in an airline landing up at an airport is getting picked up by the car rental company who then drops him at the hotel and so on. Here in this small example we can see the synchronization of three different parties. A close link and a good interlink makes it all possible and that brings business for all the parties. (Deloitte, 2010) Adoption of technology has made it all possible for the industry to make it easier for this interaction or rather it has made it possible for bundling the services and reap the benefits together.

Social Media and its effects

With the emergence of the internet revolution, social media has caught up. It is now a great "influencer ", among customers for hospitality industry. People tend to do so much of research prior to utilizing the services of properties through social media.

In a way, the services of social media could be listed as below

Helping to grow, growing to help – Social media growth at a rapid pace. They grow in their own sphere while it helps various industries to prosper and utilize its benefits.

Multiple purpose – Purpose of social media is to build a net based "society" who interacts and transacts on a daily basis. People use social media for varied purposes which cannot be listed in few words and they are numerous.

Feedback mechanism – If utilized properly, for hospitality industry, social media could be used as a feedback mechanism. We could track as to what people think about the business and what value do they give. These feedbacks could turn destructive as well. It would be the role of the relevant department to track these feedbacks and take necessary steps to rectify.

Marketing opportunity – Social media could be used as a marketing opportunity which would address a bigger group than what you could reach otherwise. It works in a similar manner as the word-of-mouth publicity. In short, it is "contagious" – news carried from one person to another and reaching a larger group.

Credibility and Trust factor for travelers – Information received from certain social media are treated as worthwhile by customers. For example Trip Advisor is one such social media which travelers – the general public visits, prior to planning a trip. They get details on properties, places and activities available in a particular country, city and so on.

Helps in decision making – As mentioned earlier, most techno savvy travelers rely on the information received from social media to derive at a decision.

Growing number of internet users adds scope – The information explosion happens beyond leaps and bounds. As per Internet Stats, a website that publishes data from reliable sources like Nielsen Online,  International Telecommunications Union, and GfK, there were an estimate of 6,930,055,154 internet users by end of December 2011 which was an increase of 528.1% over December 2010 figures when there were 360,985,492 internet users worldwide. (Stats : Internet World Stats, 2012)

There has to be proper follow ups to reap the benefit that the social media offers today. If not handled properly, it could turn disastrous for a business. In the social media world, there are certain groups who take active participation. (Chatterjee, 2011). 1) Sharers who gets the joy from sharing their experiences, irrespective of whether they are good or bad. 2) Ranters’ whose main aim is to crib on others 3) Suggesters who writes with the sole aim of providing a solution. 4) Influencers who are very critical to brand building. (Either a ranter or a suggester may turn out to be an influencer. 5) Followers simply follow the above four and try to maximize their gains by listening to the right netizen. Followers are the real executers and hence are critical to boosting sales. It would be imperative for a business to influence the influencers and to grab the opportunity from the followers.

As per Jake Hird, Econsultancy Australia's Director of Research and Education, taking 50

million as the benchmark, radio achieved this number of listeners in 38 years. Television took 13 years to reach , internet took four years and iPod only required three years to reach that same number of users while it look less than nine months for Facebook to reach 100 million users, while 1 billion iPod applications were downloaded in same time frame. (Hird, 2009) This shows the importance of social media as a player in reaching out to customers.

According to reports from Nielsen, 100million Indians are online and the number is growing rapidly, 45000 new users getting connected to social network sites each day. Indians spend more time on social media than they do checking personal email. India has world's 3rd largest facebook community. 67% of indians on the web use online reviews to make purchase decisions. Social media was key force in galvanizing recent anti-corruption movement. 60% of social media users in India are open being approached by brands. (Nielsen , 2012)

Journey before the trip

Virtual reality has changed the way the world looks and books. Today, customer knows much more than the provider can offer. The moment a customer lands up at the hotel, the customer has a list of requirements which he has gathered from various sources. It is no more possible for the provider to take the traveler for a royal ride. Gone are those days. Travelers spend weeks contemplating their holiday options and typically book months in advance of their trips. This has certainly been the trend in developed markets. In the U.S., the average discretionary traveler spends 21 days selecting a destination, and this selection is made 87 days before departure. This U.S. discretionary traveler will then spend 17 days choosing travel components like airline tickets and hotel rooms, and make his first booking 64 days before departure. In emerging

markets, however, the planning cycle is much shorter and varies substantially by country. Brazil looks most similar to the developed markets overall, but Brazilians spend more time weighing both their destination (30 days) and product purchases (25 days) before committing. Indian travelers have the shortest destination lead time (starting 50 days out), partly because they most often travel to domestic destinations. (PhocusWright, 2012)

Conclusion

Success of adoption depends on how well someone adopts technology and places it for his benefit. For example a wrongly built web site could lead to more looks than books. The look to book ratio would be higher while the money and effort spent would mean just a waste and hence, how well technology is used and utilized would have a direct impact on its success. Just because latest technology has been adopted, doesn’t mean that the success can be ensured. Trend setters in the field have tweaked the technology in their favor, placed it at the right place and at the right time. Hospitality is one of the first few industries who realized the value of websites and most importantly the value of search engine optimization (SEO). This, in a way led them to explore the possibilities of social media. Even today, the opportunities available using social media is underutilized. Social Media has to be seen as an opportunity to sell and a marketing tool to reach out to customers and generate interests which turns to business. Relationship built and maintained with customers will make them ambassadors and they would lead the marketing arm of an organization. To keep in touch and to keep linked with the customers, social media could be utilized as a tool. While a marketing plan is made, the property needs to ensure that they make social media an integral part in it, in order to ensure that they reap the benefits of social media.

With globalization and its effects, the actual market that needs to be focused has increased multifold. The reach of customers across the globe is more with the emergence of internet. Customers get generated from various parts of the world and to capitalize this, you need to differentiate to survive. (Deloitte, 2010) Technology tools available today, gives an opportunity for the providers to be different from what the rest do – in short standing out in the crowd and get noticed. So tomorrow we may see the hotels having alarm clocks which doesn’t make noise, rather it increases the light in the room to wake up the guest, giving a calmer start to the day. We might see televisions working based on voice recognition and so on.

When technology reaches new heights, the users also get to upgrade their knowledge. Like in every industry, the customers for the hospitality industry are also not the same as they were before. Today we face the well informed traveler/customer who has more avenues and options to grab more knowledge on what he wants and what exactly is he looking at. Thanks to information technology boom.

Today’s customer is a well informed well planned customer who would not be satisfied by a plain simple explanation. The "why" factor would pop up in his mind since he has more information than what you could give. Personal touch or personal charisma or the personal factor hasn’t still been eradicated from the industry, but the customer is well aware of how much he has to pay for each service. He comes well studied to enjoy your services.

During the earlier years, selling a hotel room was purely through direct traveler contact or through travel agent. Direct sale used to happen mostly by word of mouth. Gone are those days, now customer gets generated from various sources. Like discussed earlier, an airline could be a business partner or a car rental company could be a partner who would generate business for a hotel and vice versa. With use of technology and so called "bundling" of services, all parties involved in the chain gets benefitted. Hospitality is about interfacing and interacting with customers and other fellow providers within the industry. Technology can aide with the necessary tools to make this interaction smoother. In short, keeping the business up to date with technology is not optional for hospitality industry, they are inseparable.