Hospitality Information Systems In Online Marketing: Strategic And Risk Management

Introduction

The use of information systems has made a very huge contribution to the development of the hospitality industry.As technology has advanced, there has been very stiff competition ti those who are in the hospitality industry as each one try to attract as many customers as possible. This has, therefore, led many organizations in the hospitality industry worldwide to depend on information systems in planning, managing, and marketing their services and products.

The hospitality industry has not been left behind; hence, most hospitality facilities have integrated their systems with information technology tools(ICT). Such tools that are used by hospitality facilities are global distribution systems(GDS), property management systems(PMS), and computer reservation systems(CRS), among others, for the overall management and marketing of their services.

Information systems play several roles in the hospitality industry among them which are;

• Online marketing
• Strategic management
• Risk management
• Relevance
• Marketing information systems
• Improve efficiencies
• Improve productivity

Online Marketing

In the present world, businesses are thriving hard to make themselves known to the outside world. This has been made possible by the use of the Internet for the hotel supplier to reach its customers and sell their products.

The Internet is very effective and efficient and has a low-cost marketing channel. Through the internet, hospitality suppliers can market themselves so that customers can get to know them. This can be done through marketing mix which are the tools that a marketer uses in influencing demand such as;

• The products are hospitality products and services, such as accommodation, food and beverage, and business services, that satisfy the needs and wants of business and leisure travelers.
• The price influences demand, and it includes setting tariffs and rack rates, all-inclusive packages, and price promotions during the low season.
• Promotion
• Place this is the location of the establishment. ( Kotler et al,2003)

The main disadvantage with the internet is that the direct human contact between the supplier and customer is greatly reduced.

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However, Stockdale 2007 proposed using self-service technology to handle customer relationship management.

According to Bai et al., 2006 saw the introduction of E-relationship marketing(ERM), which ensures a close relationship between companies and customers.

Christodoulou et al. (2007) found that the internet made changes to room allocation strategies and travel agents(Kozak,2006) due to changes in distribution channels.

Strategic Management

Any business has the purpose of performing well and maximizing profit. There are computerized yield management systems whereby managers find it easy to increase there revenue and yields to increases profitability and financial performance(Emeksiz, Gursoy & Icoz,2006)

With the adoption of information systems, the hotels have lowered their operations-related transaction costs(Chathoth, 2007).

Risk Management

According to Mistilis and Sheldon (2006), knowledge-based systems can help managers handle any arising crisis more effectively. This can be done by using websites as a crisis communication channel and as a tool for shareholders to share information in case of crisis(Volo,2007).

Risk management also includes customer data management as many hotels have introduced loyalty programs and promotional campaigns which calls for customers to register online through certain websites. Hotels should put into consideration both internal and external security.

Marketing Information Systems

As Law and Jogaratnam (2005) put it, the adoption of information technology in hotels has substantially enhanced customer services and operational effectiveness rather than merely replacing paper systems, but services enhanced by information technology vary according to hotel categories(Singh, Kim &Huh,2006).

Ham et al.,2005, and Kim &Ham,2007 examined the effect of information technology applications on performance and showed that guest-related interface applications are not as critical as front-office applications and restaurant management systems.

Marketing information systems utilize;

• Existing data from company sources that is, accounts, sales, guest history, etc
• Collected data from external marketing research, which is the brand performance consumer trends among others

Improve efficiencies

Recently, those in the hospitality industry are so much committed to environmental sustainability programs and energy reduction. The ecological goals include cutting water and energy use, which involves adjusting indoor lighting based on the amount of natural light from outside(Soule, A.,2015). This involves the sensor technology, whereby lighting is adjusted in such a way that it turns off automatically when not in use or it can also be used for temperature control in the rooms.

Improve Productivity

Sunny et al. (2005) conducted several studies to investigate the relationship between IT investment, business productivity, and performance. They concluded that investing in IT greatly improves business performance and productivity.

Relevance

Hotels should consider having information systems that meet and exceed guest expectations at all hotel/guest interfaces, such as public areas and in the rooms, food and beverage outlets, and front office(Parakevas & Buhalis,2002).

For example, property management systems become relevant because they are used for booking hotel rooms and managing operations on a day-to-day basis.

In conclusion, the hospitality information system has three influences (DiPietro & Wang,2010)

First, it is used for business process streamlining/automation and cost reduction. This ensures that individual processes are performed most effectively, and benefits are obtained from improved communication within a hotel (or a hospitality establishment). Lastly, marketing and customer relationships are improved by means of information systems. The majority of tourist products/services are sold before it is consumed, which calls for an emphasis on the quality and distribution of hotel presentations and the distribution of such information to the right audience(s). Information systems these processes, which is the source of its influence on the experience and purchasing behavior of tourists (Chiang and Jang, 2006; Law and Hsu, 2006). Additionally, consumers are increasingly aware of the opportunities offered by the Internet for collecting tourist-related information, as well as for communicating and engaging online customers (Buhalis and Law, 2008, Xiang, 2011). Therefore, website design (Gregory et al., 2005, Gruter et al, 2010) is proving to be essential for the success of hospitality enterprises. As the industry is also taking advantage of social software (Web 2.0) which enables networking with existing and potential customers (O’Reilly, 2005).

There are, also, the effects of information system application at the level of the entire tourist/hospitality industry (Connolly, 2005; Singh and Kasavana, 2005). Some applications, such as Computer Reservation Systems (CRS), even have a strategic impact with far-reaching implications (Buhalis and Law, 2008). Specifically, usage of such systems can be described as providing new opportunities, they also represent a potential threat to the existing profit levels, since online distribution channels might also erode pricing levels, due to their extensive bargaining power (DiPietro & Wang, op. cit.).

However, significant research questions remain to be addressed in the empirical analysis of the hospitality industry. Although the industry may have specific characteristics, it is even more important to determine which specific aspects of IS influence hotel performance.

References

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