E-Business in the Hospitality Industry

Describe some recent development of e-business application in the hospitality industry.

Answer 1

E-BUSINESS:

E-business (electronic business), derived from such terms as “e-mail” and “e-commerce the conduct of business on the Internet, not only buying and selling but also servicing customers and collaborating with business partners. One of the first to use the term was IBM, when, in October, 1997, it launched a thematic campaign built around the term. Today, major corporations are rethinking their businesses in terms of the Internet and its new culture and capabilities. Companies are using the Web to buy parts and supplies from other companies, to collaborate on sales promotions, and to do joint research. Exploiting the convenience, availability, and world-wide reach of the Internet, many companies, such as Amazon.com, the book sellers, have already discovered how to use the Internet successfully.

Increasingly, much direct selling (or e-tailing) is taking place on the Internet of computer-related equipment and software. One of the first to report sales in the millions of dollars directly from the Web was Dell Computer. Travel bookings directly or indirectly as a result of Web research are becoming significant. Custom-orderable golf clubs and similar specialties are considered good prospects for the immediate future.

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E-business is a term used to describe businesses run on the Internet, or utilizing Internet technologies to improve the productivity or profitability of a business. In a more general sense, the term may be used to describe any form of electronic business – that is to say, any business which utilizes a computer. This usage is somewhat archaic, however, and in most contexts ebusiness refers exclusively to Internet businesses.

The most common implementation of ebusiness is as an additional, or in some cases primary, storefront. By selling products and services online, an ebusiness is able to reach a much wider consumer base than any traditional brick-and-mortar store could ever hope for. This function of ebusiness is referred to as ecommerce, and the terms are occasionally used interchangeably.

IMPACT OF E-COMMERCE IN HOSPITALITY INDUSTRY:

Face of consumerism through e-commerce has radically changed in the last few years. Buying or selling through Internet and online shops depending on websites, has become an ordinary part of consumer life today. Higher expectations, less tolerance, more demanding and choosy customers are becoming more common. Economic, social and technological factors have created a highly competitive business environment in which customers are becoming more powerful, Turban and King (2003, p.25). The highly professional search machines make this possible for them. E-Commerce is becoming a steadily bigger part of life without our realising it. To make e-commerce work well, constant development and improvement of adjoining functions is necessary. E-commerce solutions are varied, and seller, buyer compatibility with it is necessary to work with a chosen one. Also it should be affordable for the provider. Online selling is the main growth area for the Internet. Elegant sites, easy requirements, less cumbersome process, more information sharing, animation, attractive information presented in the most fascinating ways are bases of a sound e-commerce. E-commerce website should offer a stimulating experience with reliable information that could motivate the customer. Easy Channelling and navigating the customers to full portfolio of all necessary and essentially correct information is very important. Websites should be searchable, price should be competitive and eShop information should be easily available.

E-Commerce has brought revolutionary changes in tourism and hospitality industry. Advantages are many. It facilitates local community access to tourism market and minimises the financial information leakage. It links local communities and hospitality industry directly with the tourists. It could help building up local finance along with the national foreign exchange. It increases small enterprises by directly marketing the local products and industries anywhere in the world. Local communities get a direct share in the income while traditional cultures, social structures of the hosts get appreciated and extraordinary skills make a come back.

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. Tourists have all information through search machines with the current data and rates. They could directly talk, write, book and pay for their stay much in advance, with all information about reaching, being welcomed, how and where, meeting points, weather, forecasts, dangers, attractions and day-today itineraries intact with them months in advance. Availability of souvenirs, food requirements, comforts, access to religious places, historical sites, internal travelling, places of attraction, are all managed by people at hospitality points. Trade opportunities, reservations, tickets, transport, instantaneous information about any place nearby are provided through hotels. In the current performance criteria for service operations, fast service delivery and prompt and reliable service have been identified as two key competitive priorities for the future Web-based service delivery operations (Verma and Young, 1997), while time-based competition through better customer service has been re-emerging as a major tool of delivering high-quality services to customers through a total operation cycle – including planning, design, processing, marketing, and distribution.

E-Booking:

The first role of the internet in the hospitality industry is online booking. As aforementioned in the past, travel agents were the most common source for booking hotel rooms and other travel components like flight tickets and travel tours. However, the internet has changed this; manual booking and reservations have been transformed to E-booking or online booking via Central Reservation Systems (CRS). As of March 2008, there are over 1.4 billion internet users (Internet World Stats, 2008) and according to the Computer Industry Almanac, this number is assumed to increase to 1.80 billion in 2010 (Clickz Stats, 2005). The Travel Industry Association in the United States stated that in 2002 about 64 million out of 619 million online users were online travelers and used the Internet to purchase travel-related services and products (Zhang, 2004, p.3). “Online leisure travel sales totaled $20.4 billion in 2002 and hotel booked online reached $3.8 billion” (Ibid). In 2005 the online travel revenue reached $27.7 billion in the U.S. alone and has steadily increased (Webmetro, 2005). Now imagine how big these figures would be on a global basis.

Internet as Marketing Tool:

Another important role of the internet is the use of it as a marketing tool. Before a hotel can offer e-booking it has to set up its own website. The hotel can apply attractive designs and offer guests a virtual tour of the entire property and show various room types. This strategy is considered a minor but may get a lot of appeal from online users. The internet also allows hotels to reach more customers by using search engine optimization (SEO), which is a tool that helps increasing the traffic and page ranking in search engine results (Hotel Travel Check, n.d.). Another internet marketing strategy for the hospitality industry is electronic customer relationship management (eCRM), which are activities to manage customer relationships by using the internet and web browsers (Hotel Marketing, 2007).

Another popular internet marketing strategy in the hospitality industry is consumer generate media (CGM), which consists of discussion board, forums, blogs, review sites, social networking sites, etc. (Ibid). CGM comprises of three approaches that can help market hotels:

1. Brand Defensive Strategy

To Protect and Monitor Chatter on the Web about hotels (Ibid).

2. Corporate Sponsored CGM Initiatives

To leverage the expert knowledge that currently exists at hotels out there on the web.

3. Advertising and Marketing Medium

To communicate to readers by advertising on high traffic CGM sites (Ibid).

Employment and Recruitment:

Another important role of the internet in not just the hospitality industry but in fact in all industries is online job advertisement and recruitment. Traditionally, hotels would advertise on magazines and newspapers, where it was quite expensive to do but since they developed their own websites, job openings are usually posted there under the career section. People seeking a career in the hospitality industry can browse through the various job openings and send their resumes in via e-mail. However, larger hotel chains like Starwood Resorts and Hotels, Marriott Worldwide and the Intercontinental group usually require applicants to sign up as members; this also enables users to post their resumes on the web and allows employers to browse quickly and chose the most matching criteria; this as you can see benefits both the employer and job seeker. Nonetheless, there are also indirect websites where hotels may advertise their job openings, such as jobsdb.com in Thailand or monsterjobs.com in England.

Hurdles In online hospitality industry:-

Lack of good IT security support

Slow connections

Complex IT environment

Improper business planning and structure

Even though these hurdles affect this industry, still many new innovations and improvements are made keeping in view the scope and extend of this industry. At present many institutes are providing degree and certificate programs in hospitality sector with computer and use of internet in its core curriculum. With these efforts more and more trained professionals with better qualification and knowledge are coming into this sector .With this new developments are taking place each day and more dedicated efforts are made for its growth and development.