ISORG Mini Project 2010

Question: How info-communications technologies change hotel room reservation services?

Objective: Evaluate how new technologies (and new e-business models) change and affect business processes.

Definition of ICT

Information communications technologies (ICT) is often used as a synonym for information technology (IT), but it is term that stresses the role of communications in the modern world. ICT is concerned with the storage, retrieval, manipulation, transmission or receipt of digital data. Hence, it consists of all technical means used to handle information and aid communication which includes computers, network hardware and the necessary software.

Impact of ICT on business environment and process

The use of ICT has affected every aspect of business, transforming the way business is conducted. Some businesses can be carried out electronically (e-business) through the use of technology such as the internet, email and smart phones, resulting in emerging digital firms.

ICT offers benefits for a wide range of business processes. At firm level, ICT and its applications can make communication within the firm faster and make the management of the firm’s resources more efficient. Seamless transfer of information through shared electronic files and networked computers increases the efficiency of business processes such as documentation, data processing and other back-office functions.

ICT on the operations of hotel operations in general

ICT increases efficiency of certain business processes. Some instances are checking of occupancy of rooms, allocation of rooms, checking inventory and generation of reports. Also, ICT allows for automation of certain decision-making process such as accepting another request for room reservation.

Furthermore, ICT crucially impact on traveller’s knowledge attitudes and behaviour. The increased online price/product transparency and e-business models enhance tourists’ purchasing power, which are becoming more price sensitive. The hotel industry is also experiencing increased globalisation, competition and rising customer expectations. This in turn means that hotel’s performance and competitiveness is significantly dependent on their ability to satisfy customers efficiently and effectively.  Therefore to enhance profitability and guest loyalty, hotels must nowadays focus on implementing Customer Relationship Management (CRM) strategies that aim to seek, gather and store the right information, validate and share it throughout the entire organisation.

ICT on the room reservation processes

A) Consumers

In the past, room reservation used to be done mainly through phones or email. The contact can either be direct to hotel or through the help of tour agency. Tour agencies do not operate 24/7 and hotel may not respond to email that quickly, therefore, the reservation process is considered slow.

Furthermore, information can be easily obtained via online resources such as the hotel’s website. E-forms and online Frequently Asked Questions (FAQ) are also readily available at the touch of the fingertips which provides consumer with a much easier alternative for their queries to be answered.

  

However, with the current ICT technologies, consumers can easily visit the hotel’s website to view photos of the room or hotel, check out the facilities available in the room or hotel, use its system online to check the availability and then make room reservation if the hotel is satisfactory. Special request can also be made during online reservation process.

Besides direct contact with the hotel now, consumers can go through “online tour agency” – transaction broker to reserve their rooms.

 B) Transaction Brokers

A transaction broker crafts a transaction by bringing a willing buyer and a willing seller together and assists with the closing of details. The transaction broker is not a fiduciary of any party, but must abide by law as well as professional and ethical standards.

The business model of a transaction broker is mainly B2C (Business to consumer). It can be considered a C2C at the back-end as it has to link up with the various hotels and Google maps. 

Case study: www.agoda.com

Here at Agoda, consumers can conveniently search for hotels based on their holiday destination, date of arrival and duration of stay. Consumers can easily compare prices, locations and ratings of the various hotels and choose one which best suits them.  

Other than a more convenient and fast way of reservation of hotel rooms, Agoda also provide special offers for consumers. This may be exclusive offers by Agoda which consumers may not enjoy if they were to reserve room directly with the hotels. Furthermore, consumers accumulate points whenever they make a reservation with Agoda and can redeem the points for more savings and rewards in the future.  

 

 Lastly, unlike tour agencies that operate during office hours, consumers can get 24/7 live support and help at Agoda through email or by contacting them online. 

C) Hotels

In the focus of implementing CRM, hotels share the information of customer throughout all organisational levels for creating unique guests’ experiences. In the case of room reservation, hotels are able to prepare personalised rooms for their guests based on their previous visit. One example will be Ritz-Carlton. Feedbacks and request from previous accommodation can help provide an idea for the hotel in providing such services.

Other issues

A) Security issues

There can be drawbacks when carrying out transactions in the virtual world. One of them is security issues. Most payment for transactions, such as reservation of hotel rooms, are done using credit card. Hackers may maliciously steal this information and use it for transactions. Hence, it is important for hotels’ website or transaction broker to ensure that transaction details are safe and secured.  

At Agoda, consumers’ credit cards are protected with secure online Cardholder Information Form through secure socket layer (SSL) technology and Hypertext Transfer Protocol Secure (HTTPS. The SSL certificate is issued by VeriSign. 

 B) Reliability of information from the websites

Consumers can go to complaints board to check out on the transaction broker or the hotel they will be engaging for service.

A search on Agoda on http://www.complaintsboard.com/ had the following results:

There are actually a number of complaints about Agoda and so it will probably be wise not to engage its service.

Alternatively, consumers can go to http://www.tripadvisor.com/ to find out more reviews on various hotels.

Conclusion

All in all, consumers, hotels and transaction brokers benefitted with the advancement in technology. It allows things to be done efficiently. However, there are issues which consumer and businesses which they should take note of and that is, mainly security concerns.