There is reason for optimism in the hospitality & tourism industry. The 2010 Soccer World cup is expected to bring a flood of tourists to South Africa. The intense media interest will stimulate tourism. This will in turn translate into a cash injection for the hospitality industry. This bodes well for IT investment in this cash-constrained industry. For the IT supplier, it is useful to understand the factors that influence the IT usage patterns in the hospitality industry.

Thursday, September 24, 2009

Eras of IS Use in the Hospitality Industry

Source: Sigala M, Lockwood A & Jones P. (2001). Strategic Implementation and IT: Gaining Competitive Advantage from the Hotel Reservations Process

I found this article very useful in creating a perspective of IS use in the hospitality industry in the last decades. It basically differentiates between the following:

1) The DP Era (70’s +)
During this time the focus was on automation of manual functions. The first front-office process to be automated was the reservations process, starting with the recording of a guest reservation and ending with the invoicing of the guest, normally during check-out. During this era systems improved upon the firm’s efficiencies by doing the same “things” as before, but faster and using less manpower.

2) The PC Centric Era
This era coincided with the rapid propagation of PC’s into the marketplace. During this era, processing power was no longer an issue, hence more sophisticated pricing models could be devised. Property-level yield management pricing models replaced the old flat-rate pricing and instead determined the room rate based on demand and supply variables.

3) The Network Era
This era came into its own once with the increasing maturity of the WWW once connectivity had been enabled through the large scale rollout of networks. The Reservations Management function was increasingly performed at a centralised level. In line with this, yield management was done across properties, and this functionality was especially used by hotel chains, who often take demand across the geographic region into consideration when determining the room rate. Increased connectivity also enabled inter-system communication, and Point Of Sale (POS) and Telephone Management (TMS) Systems now commonly interfaced to the Property Management (PMS) System to post charges to the room.

4) The Content Era
This era is characterised by personalised applications, and the emphasis is on gaining competitive advantage through knowledge. Increasingly knowledge is inferred from customer interactions and this knowledge is then used to personalise the application. Marketing now focuses on “the segment of one”. The marketing thrust is on gaining a greater share of every customer, instead of simply focusing on attracting more customers.

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