Hospitality industry has been through a rapid development and revolution. Based on Junior English dictionary, revolution is fundamental changes in power or organizational structures that takes place in a relatively short period of time and also brings a meaning of a great change in ideas, methods and others. An information system can defined technically as a set of interrelated components that collect, process, store, and distribute information to decision making, coordination, and control in an organization. Information systems contain information about significant people, places, and things within the organization or in the environment surrounding it. Many hotels have adopted information and communication technology (ICT) as a way to cope with rapidly changing environments.Room reservation systems, procurement and inventory systems, wireless internet, e-mail, electronic transactions, and hotel web sites are someof the ICT applications that have been broadly implemented throughout the industry (Berezina, 2010). Information systems are the foundation of fast paced supply chains. The internet allows business to buy, sell, advertise, and respond to customer online. The internet has stimulated globalization by dramatically reducing the cost of producing, buying, and selling goods.
Information systems are foundation for conducting business today. In many industries, survival and even existence is difficult without extensive use of inforation technology. Businesses today use information systems to achieve maximum efficiency that can lead to the successful. Technology brings business into e-business, e-commerce, and e-government. E-business or electronic business refer to the use of digital technology and the internet to execute the major business processes in the enterprise. E-business includes activities for the internal management of the firm and for coordination with suppliers and other business partners. Electronic commerce or e-commerce is part of the e-business that involve in buying and selling of goods and services through internet. It also involve in market transactions such as advertising, delivery and payment. Lastly is e-government. It refers to the application of the internet and networking technologies to enable government and public sector agencies’ relationship with citizens, businesses and others.
Hotel managers believe ICT adoption is a key success factor in enhancing hotel performance (Burca, Fynes, 2006). There are many benefits of ICT adoption in the hotel industry. These benefits include achieve operational excellence where by online software tool used to know transportation routes and choose the most efficient route besides it can help to calculate the distance between two points that can be use by hotel guest. It also include develop new products and services. Information systems and technologies are a major enabling for firms to develop new products and services as well as entirely new business models. It can also create customer intimacy and service, improve decision making especially in finding the most competitive price offered by supplier, promote competitive advantage and also to ensure survival.
Information technology (IT) investments play a critical role in managing hotels strategically. Efficient and timely deployment of new IT applications may offer opportunities for enhanced guest services to meet increasing customer expectations, improved cost control, more effective marketing strategies, and expanded opportunities for hotels (Piccoli, 2008). It is evident that IT investments will increase hotels’ productivity, reduce their costs, and at the same time add value to the services and products offered to their customers. Therefore, investments into IT applications in hotels have increased over the past decades (Armijos et al , 2002). Foodservice and hotels face similar IT issues including allocating resources, evaluating projects, and measuring how the adoption of enterprise-wide information systems affects the management and structure of hospitality companies.
Information systems support the major business functions like sales and marketing, manufacturing and production, finance and accounting and human resources. Sales and marketing systems able to help the firm know the customer that suit with the product and services offered develop products and services to match with customer want and need, promote the products and services, sell the products and services and provide ongoing customer support. Manufacturing and production systems deal with the planning, developmentand production of products and services, and control the flow of production. Finance and accounting system keep track of the firm’s financial assets and fund flows. Human resources systems maintain employee records, track employee skills, job performance, and training and support planning for employee compensation and career development.
Technology development also involved online pricing. Nowadays consumer can easily know the room price offered by the hotel and the consumer can make a comparison between each hotels compare to the traditional way whereby consumers have to ask in a reservation counter or know the price through brocher or banner made by the hotel. According to Berezina, (2010), online pricing are driving down hotel profitability. Noting that hoteliers use these networks without a clear understanding of their effect, she claims that they encourage based solely on price and urges a rethink of such hidden discounting. Price has become largely transparent and that consumers now book rooms at one price shop around for better prices and then cancel and rebook. Rather than yield higher total sales, discounting simply displaces customers from one distribution channel to another. Any increase in volume fails to offset the revenue lost from the discounting. Claiming that this is true for all industry segments, regardless of occupancy rates, hoteliers need to be more selective about the rates they provide to third party sites to insure that they are actually generating incremental revenues.
Technology influences hospitality consumer decision making. Seeking information is one of the first stages in the decision making process. Gursoy and Umbreit (2004) use 3,264 responses from a European Commission survey to investigate cultural differences in how travellers from 15 EU countries search for information, online and offline. They found five distinct market segments and suggest specific marketing communication campaigns for each segment. For example, travellers from Belgium and Italy use external information sources more often than other segments, while travellers from Denmark and Finland use the Internet most frequently. Marketers need therefore to align their marketing efforts with a culture's information search behaviour. Piccoli, (2008) claim that this is a powerful determinant of behavioural intentions, lodging operators must ensure that websites satisfy visitors’ information needs in order to expect online transactions. Specific website elements to note include accurate and reliable information, and easy navigation.
To account for such differences between consumer wants and website offerings, hotels need to reflect upon their website design. However, research on effective hospitality websites is an ongoing quest. Several studies specifically examined website layout and design. The first two introduce the notion of the experience economy and suggest how Web technologies can reinforce the customer experience. Websites, for example, should reinforce a hotel or resort's position by going beyond visual pleasures on the site and adding sensual, emotional and intellectual pleasures for online consumers. Other authors explore the practical and theoretical issues of how to accomplish this, investigating what features and functions hospitality operators should incorporate into their websites. For example, Jeong et al. draw upon past literature to develop six measures of website quality, namely information accuracy, clarity, completeness, ease of use, navigational quality, and colour combinations. Responses from 1,743 US respondents suggest that website quality is an important antecedent of information satisfaction, which in turn is a powerful determinant of behavioural intention. Of the quality measures proposed, ease of use shows the strongest relationships with both information satisfaction and behavioural intentions.
However, direct web distribution may affect the relationship between travel agents and hotels. Most hotels increasingly emphasise direct web bookings, often wooing consumers by promising best rate guarantees or loyalty club points. Since travel agents remain an important source of business, Tse explores their potential reaction to this strategy. Building on conflict theory, he highlights two possible reactions – negative (perhaps terminating the relationship) or positive (including constructive discussion to find a win-win solution or simply passive acceptance). Theory speculates that the reaction to expect depends on several factors, including the perception of damage; the injured party’s perception of relationship quality before the act in question; their perception regarding the motivation behind the act; and the level of interdependence between the two parties.
Information technology like internet can reduce cost compare to traditional way before technology widely spread because for example communication between a factory in China and a distribution centrein Malaysia is now instant and virtually free. Customer now can shop in a worldwide marketplace, obtaining price and quality information reliably 24 hours a day. Firms producing goods and services on a global scale echieve extraordinary cost reductions by finding low cost suppliers and managing production facilities in others countries. Internet service firm such as eBay is able to replicate their business models and services in amultiple countries without having to redesign their fixed cost information system infrastructure. Mudah.com is also one of the webs that offer online service.
Development in technology can enhance customer relationship management effectively. According to Piccoli (2008) this philosophy of intimate customer familiarity can lower marketing expenditures and increase sales through closer relationships and increased satisfaction. For this to occur, the entire hotel chain must cooperate in the collection, management and dissemination of customer information – an expensive and complicated process. It is inherently difficult for these three entities to share customer data. In addition to cooperating, they frequently compete with each other, which could limit successful CRM implementation. Piccoli et al argue that if these difficulties could be overcome, CRM would work best at the brand level, a claim supported by two case studies of brands with strong CRM programs – Wyndam International (Picolli et al., 2008) and Harrah’s Hotels and Casinos. The latter also exemplifies how successful CRM relies upon data mining. This procedure applies artificial intelligence and sophisticated statistical techniques to customer data to perform five tasks classification, clustering, deviation detection, associations and forecasting, and can be a valuable tool for hotels seeking to better understand and predict guest behaviour.
It is important to retain customer loyalty compare to make sure all staff are manage to adapt with developing technology by still focusing on how to treat customer well and at the same time giving staff training on newly technology. Failure to do so can cause the company to lose customer although they have moden technology.
The construction of this electronic highway and marketplace is an immense challenge, both financially and technically. The sheer size of the investment required in laying down the fibre-optic network is daunting. Telecommunications and cable companies will spend tens of billions of dollars improving the network and switches. Electronic service providers will spend billions of dollars creating their new production systems. An equal amount will be spent to outfit each home with a set-top box or other home electronics device) and to pay for the new services available on it. For example, business applications like home shopping will require a large volume of information in the form of catalogues, photographs, fining charts, promotional videos, inventories, and customer profiles. That information must be organized effectively to make it easy for consumers to browse through merchandise and purchase goods. Home shopping services will also handle enquiries, advertisements, purchases, credit checks, transfers and other correspondence that will have to be routed accurately and securely. Customers from all over the world, using a variety of different home electronics, set-top boxes, computer and cellular devices will need easy access to the electronic stores. Links to the databases and operations of other business suppliers, banks, shipping companies and credit bureaux will also need to be in place. Handling this diverse combination of requirements is a complex task.
There is some problems regard to raised in information systems because information technology is introducing changes for whichlaws and rules of accaptable conduct have not yet been developed. Increasing computing power, storage, and networking capabilities including internet expand the reach of individual and organizational actions and magnify their impacts. Some of the ethical, social, and political issues abaout information is property rights and obligations, accountability and control system quality and others. Besides that, internet brings challenges in privacy. Other company can easily know our latest promtion, advertising, bisiness profile and others that can be wrongly use for business purposes.
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Burca, S., Fynes, B. and Brannick, T. (2006), “The moderating effects of information technology sophistication on services practice and performance”, International Journal of Operations & Production Management, Vol. 26 No. 11, pp. 1240-54.
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