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