| The information-intensive hotel industry has discovered | | | | particular periods, or was able to view and share |
| IT is critical at all points of the business chain | | | | customers' profile and service preferences. |
| Back then, making travel plans involves many | | | | Today, technology advances give us the ability to |
| processes. You call up your travel agent and she | | | | connect the different islands of information and enable |
| supplies you with a list of possible hotels, room | | | | us to understand what works, what doesn't, who |
| availability, rates and special offers. You pick the date | | | | customers are and what their buying patterns are. The |
| for the trip and confirm your hotel preference. She | | | | Internet has become an accelerator for the adoption |
| then makes the booking through the computer system | | | | of sophisticated technology that will enable the delivery |
| and off you go. Behind the scenes, she sends a | | | | of greater customer service and higher productivity. |
| confirmation fax to the hotel with your details. At the | | | | The Internet and VPN have allowed the connection of |
| receiving end, the hotel will enter your details into their | | | | different systems, bringing the data back into a central |
| computer system. When you arrive at your destination | | | | repository and be able to understand what it all means, |
| and you check-in at the front desk, the hotel staff | | | | in real-time. |
| verifies your reservations, assigns you the room and | | | | Lifecycles and priorities |
| hands you the keys. | | | | "Those hoteliers who view technology as a cost |
| Fast forward to today. Technology has caught up with | | | | center and afterthought to the successful operation of |
| the industry. As the travel agent issues a confirmation | | | | any property risk becoming out of touch with their |
| to your hotel about your reservation, the global travel | | | | customers. More dangerous, however, is that those |
| distribution system (Amadeus, Galileo, Sabre or | | | | who don't recognize and exploit today and tomorrow's |
| Worldspan) will connect to the hotel's back office and | | | | technologies for their competitive advantage will quickly |
| make the appropriate entry, minimizing error and | | | | be overtaken by those who do," added Hartmann. |
| ensuring accuracy of customer's details. | | | | But just as Hartmann is right in his assessment of how |
| Hotels have also adopted a more sophisticated | | | | business managers look at technology, CIOs like Izaks |
| system for tracking customer information. Hotels now | | | | must continue to grapple with the issue of technology |
| use data warehouses and data mining tools to better | | | | lifecycles and priorities. In good times and bad, budgets |
| understand their customers' individual preferences. | | | | remain a constant in the life of a CIO. |
| The Internet is used to communicate to their business | | | | Identifying the business priorities, evaluating and |
| partners -- travel agencies, airlines, government tourism | | | | recommending one standard for the organization, and |
| boards, cruise liners, car rentals and global distribution | | | | sticking to what's been given budget approval are part |
| channels -- and provide updates on room availability, | | | | of the challenge. Advances in technology offer |
| rates and special offers. | | | | numerous temptations to throw out what's been |
| Competition for a growing class of travel- and | | | | approved. But most hoteliers will agree that changing |
| tech-savvy customers has forced hotels to adopt the | | | | the strategy mid-stream is not easily undertaken. |
| latest technologies to ensure that partners are updated | | | | Technology is changing very rapidly. Things get |
| on the current hotel developments. The Internet has | | | | replaced faster with each refresh and the rate of will |
| spawned a new segment of customers who use the | | | | even be faster in the future. Just as technology is an |
| Web to scout for hotel rooms and seek weekend | | | | enabler of new business, it is also becoming an inhibitor. |
| bargains. | | | | Izaks laments that the inhibitor then becomes getting |
| Key component | | | | the right technology into the business, even as that |
| Chris Hartmann of global hospitality consulting firm, | | | | technology cycles through faster than our ability to |
| HVS International, said the technology used in the hotel | | | | integrate it in. |
| industry has evolved. "To look at the state of | | | | "This presents a challenge for the CIO: being able to |
| technology in hotels and resorts today, it's important to | | | | identify the technology we need, as opposed to what |
| understand that 'technology' today is not simply a | | | | we'd like to have, and allocating budget for it. We have |
| network infrastructure, computers and the IT | | | | a five-year budget cycle where we look at the |
| department. Technology is a key component of every | | | | technology we purchased last year and track its |
| aspect of hotel ownership. Management of, and a | | | | depreciation on our books. At the same time, we look |
| comfort with, today and tomorrow's technology is | | | | at our business needs today and start preparing for |
| necessary in every department," said Hartmann, who | | | | technologies we might need three or four years into |
| leads technology strategies for HVS. | | | | the future. To keep this picture top-of-mind as we |
| Technology investments require well-defined | | | | work our annual budgets makes for challenging budget |
| objectives aligned with overall business strategy. | | | | planning cycles." |
| Whether it is a hotel redevelopment, acquiring or | | | | The hotel industry, like others in the hospitality business, |
| repositioning hotel assets, scores of decisions require | | | | is in a constant state of battle readiness. The two gulf |
| technology insight and operational understanding. Failure | | | | wars, SARS, avian flu, and the Asian financial crisis |
| to take into account the importance of technology at | | | | have forever changed the way the industry looks at |
| the onset will result in substantial costs associated with | | | | its future. |
| retro-fitting, last-minute implementations, and ongoing | | | | The industry is accelerating the adoption of technology |
| operational challenges resulting from poorly selected | | | | to reap the benefits it has to offer in the shortest |
| systems. | | | | possible time. The challenge for managers like Izaks is |
| CIOs believe that the business of running an IT | | | | to stay abreast of the changes, keep an open mind to |
| organization has changed significantly from what it | | | | the future, and be prepared to lead every day, 7x24. |
| was ten or 15 years ago. Shane Izaks, general | | | | Convergence in a hotel suite |
| manager, information technology at the Hong Kong | | | | Thanks to the mobile phone, guests today avoid using |
| and Shanghai Hotels Limited (best known as Peninsula | | | | the hotel's phone system to place international calls, |
| Hotels) said to be an effective CIO today, you need to | | | | causing a fall in hotel communication revenues. |
| understand the business you are in to get business | | | | Because of this hoteliers have come to regard their |
| units to buy into your ideas. | | | | voice communication infrastructure as a cost center |
| High expectations | | | | rather than a profit center. In addition, with more |
| "You not only need to understand hardware and | | | | business travelers demanding for Internet connection in |
| software from a systems point of view but from also | | | | the room, hotels have invested in data networking. But |
| from a business point of view. This is how IT is able to | | | | for how long will hotels keep spending on two different |
| drive the business. Technology and processes have | | | | networks? |
| matured in complexity to the point that understanding | | | | Shane Izaks believes that convergence is inevitable. |
| the business is paramount to ensuring the successful | | | | "The Internet presents opportunities to introduce new |
| integration of IT into the business. The CEO, CFO and | | | | ways to enhance customer experience and thus |
| COO have high expectations of the role that | | | | differentiate ourselves from the rest of the industry." |
| technology plays in the business of running a hotel," | | | | Communication technologies allow a certain yet |
| Izaks said. | | | | needed differentiation, by offering more and more |
| Today's business unit manager, CEO, and his | | | | personalized services to this new wave of guests |
| management team - CFO and COO - understand the | | | | coming from China, Korea or Russia. Therefore, |
| importance of IT and expect the CIO to understand | | | | hoteliers are looking at building up their competitiveness |
| the business so that there is a tighter integration of | | | | by improving guest services, increase staff efficiency |
| technology into the business. The technologies today | | | | and maximize their return on investment. |
| are much more complex and the resulting integration | | | | Marc-Alexis Remond, director of marketing and |
| makes for a more successful alignment of technology | | | | business development at Alcatel, points to three |
| to business. | | | | beneficiaries of a converging network. |
| Izaks says the question is not whether technology is | | | | "Hotel guests want personalized services, fast |
| sophisticated enough to match the business process | | | | answers, first call resolution and access to advanced |
| "The real challenge lies in the IT team's ability to | | | | communications and entertainment applications. Hotel |
| understand the interdependence of IT and business, | | | | staff and executives need mobility and collaborative |
| and to build processes that would allow for the | | | | solutions that keep them connected and available, with |
| symbiotic co-existing of two different but | | | | access to information, in real time and easy |
| interdependent systems," he adds. | | | | interactions with guests and colleagues. |
| Years ago, hotels had isolated islands of systems that | | | | "Everyone wants a highly reliable data and telephony |
| didn't talk to each other. No one had a single view of | | | | solution that provides consistent user services across |
| the business; financial systems, CRM and bookings | | | | the enterprise while benefiting from the maximum |
| were on different systems that didn't talk to each | | | | operational cost savings for the minimum investment." |
| other, and data was often rekeyed in to spreadsheets | | | | The trick is to identify the right technologies and |
| to make sense of it. This was the only way for hotel | | | | applications and find vendor-suppliers with a strategy |
| chains with properties located in many parts of the | | | | for deploying enterprise IP telephony solutions over any |
| world to have some picture of what the overall | | | | data network (LAN switches, routers, etc), whether |
| business was like. | | | | provided by themselves or a third party. Staying with |
| At that time, no-one was able to know in real-time | | | | standards-based solutions will mitigate the risks of |
| precisely what was happening in properties within the | | | | vendor lock-in. |
| hotel chain, how the business performed during | | | | |