With the rapid pace of technological advancements and the fast rate of implementing it into everyday life, people need the latest IT facilities. They demand this from hotels as well. But the industry has always been lagging behind the needs, not being able to offer the latest advances in technology. Now management has started to take note of the guest’s needs and is aware that technology is a very competitive advantage and is starting to adjust their strategies in consequence. Boutique hotels offering sci-fi levels of technology are starting to emerge and may be prefiguring the future of hospitality as a whole.
With technology advancing now faster than ever before, everyone needs and demands using the latest technological means just to survive. Such is the case in the hotel industry too, especially in the upper-class and boutiques hotels area of the market. With hotels always lagging behind other sectors in adopting new IT systems ( PLUGGED IN, 2009; Buick, 2003), keeping the pace with customers’ demands becomes a pressing issue to hospitality providers. This problem is acknowledged by the players in the industry, being debated in trade-specific publications, conferences and academic literature. There are two sides of the use of technology in hotels: “back of house” systems (property management systems, revenue management systems, internal control instruments etc.) and technology that is used directly and mainly by the consumers. The following review aims to put the current technological state, future trends and most pressing issues of the hotel and hospitality industry into perspective.
II Literature review
The newest trends in the hospitality industry show an emphasis on the experience delivered to the customer and not so much on the tangible aspect of the product. With the service sector beginning to dominate the world’s economies, there is a growing concern on delivering meaningful, memorable customer experiences (Meyer and Schwager, 2007). This can be seen from a practitioner’s point of view with The Ritz-Carlton Hotels Company, which prides its self with becoming an “experience and memory creator” (Nixon and Rieple, 2010). The next generation of clients demands continual technological updates for every business and personal user and hotels often can’t keep up the pace.
Property owners are understandably reluctant to renovate as often as needed to support the latest technology, meaning major renovations never happen often enough to keep the tech-crazy guests satisfied (Russ, 2008). No longer are people going to hotels to experience something new, but hoteliers are looking at guests as technology consumers and supply little more than the average customer demands (Freed, 2010). The use of modern technology can help hotel employees deliver a service of better quality and also enhance the stay for guests by satisfying their needs, thus creating a better all-round experience.
This view, however, is not unanimous across the whole of the industry. Even though 82.4% of managers believe that IT is important for increasing customer satisfaction (Brewer et al, 2008), they also worry that the benefits provided by investments in technology are not as high as expected (ITGI, 2007). Research shows that companies around the world are losing out on their investments because they can’t derive sufficient value from these investments in IT (Bowen, Cheung and Rhode, 2007; ITGI, 2007). Value from IT can be defined as a function whose primary focus is delivering the promised benefits (Mathe, 2009) and as a provider of strategic, informational and transactional benefits (Gregor et al, 2006). Therefore, all definitions show that value added by IT leads to successfully achieving business goals and strategies.
So a contradiction appears between managers’ beliefs and actions. The majority is certain IT helps their organization but has failed to fully take its benefits yet. Customer satisfaction with the hotel begins shaping before the service is provided, with the process of making the reservation preceding it. The new trends using of mobile platforms such as smart phones, tablets and laptops for shopping (Gupta, 2012) dictate that these means of communication should be targeted by hoteliers. The number of mobile users researching travel options on their mobile devices is expected to grow by 51% in 2012 and another 15% by 2013 (Saio, 2012).
A market study by Reuters Synovate Global (plugged in) shows that 47% of potential clients demand the latest technology from the hotels they choose. Also, one third of guests assess a hotel by its website and 50% do research and comparisons online, before making their choice. The same report found that seven out of ten consumers would rather stay in a less expensive hotel and that hi-tech facilities are the top criteria in choosing a hotel. The latest study conducted by Motorola Solution, Inc. (2011) concludes that information technology (IT) spending in the hospitality industry is expected to have increased in 2011, with guest experience being the primary driver for investments.
And yet, 57% of the industry’s leaders admit they don’t know how to launch, track and achieve mobile platform success (Eyefortravel, 2012), proving the same contradicting views towards technology. This proves one of the critical challenges for hotel technology managers is convincing upper management to approve investing in the latest technology (Petiza, 2011). According to Gregor et, al. (2006) the failure to measure the value added by IT is due to measurement errors, management practices and time lags between the investment and ROI. The alignment of IT with business strategy and its use may allow competitive advantage to be achieved (Levy and Powell, 2005; Peppard and Ward, 2004). The same opinion is presented in a study conducted by Amadeus (2011), which states that if hotels are to secure growth in the next three years they must align strategy and IT priorities.
Peppard and Ward (2004) suggest that IT has become pivotal to the existence of most organisations and that should the technology used by organisations come to a halt, they would cease to function. Now that the importance of using technology is recognized unanimously there are two schools of thought emerging: the first believes that IT should be present to aid the guests inconspicuously from the shadows and the other approach that puts technology in the forefront of the operations and makes it the core theme. Choosing one or the other dictates the whole strategy of the hotel or company. Some guests are not comfortable with technological changes in the lobby, in the room or when trying to make a booking (Withiam, 2007). Others, as shown above, need and demand hi-tech facilities from their hotels. After choosing the market you target, the strategy should be adjusted in consequence. A tool for creating market segments based on consumers’ opinion on technology is a so-called Technology Readiness Index (TRI) (Verma et al., 2007). This is a 10 question survey that guests should fill in (Appendix 1).
This measures their view of technology on four dimensions: optimism, innovativeness, discomfort and insecurity. Tech-focused individuals are usually thought of in terms of their willingness to innovate, but the research behind TRI measures the extent to which people think IT helps improve their life (optimism), or if they feel overwhelmed by technology (discomfort) or whether they don’t trust devices to operate correctly (insecurity). The over-technologic approach can be best seen in boutique hotels. Taking the forefront in this arms race is somewhat easier with smaller, non-chain, exclusive hotels because they don’t have to maintain the same standards in thousands of rooms across hundreds of hotels around the world.
An article by Myers (2011) showcases the latest boutique hotels that offer now desk-free check-in aided by tablet PCs, hybrid cars with Wi-Fi for the guest, 42 inch LCD TVs (The Upper House Hotel, Hong Kong), retina scans just to enter the room (Nine Zero Hotel, New York), touch-screen room controls and bedside iPads (Establishment Hotel, Sydney) or Wii exercise rooms where guest can play virtual tennis (Le Parker Meridian, New York). The latest trends in hotel technological development include converging technologies that complement each other to reach the common goal of customer satisfaction. The hotel room would automatically set itself up to the guest’s unique tastes, based on the pervious information provided through guest profile forms. When the front desk clerk checks-in the guest or the guest checks-in using the self service kiosk in the lobby, the lights in the room automatically turn on and the thermostat sets itself to the users preferred temperature.
The entertainment system turns on, playing the guest’s favorite music, TV program or radio station. These services would please the guest but also reduce energy costs by keeping everything turned off when the guest is not using the room. The list of computer operated can include such luxurious services like automatically drawing a bath to be ready at a certain time or automatically open the drapes in the morning in order to wake the guest with natural light and not the old fashioned wakeup call. (Russ, 2008)
In order to offer a variety of payment options, some hotel managers have adopted cashless payment systems via the use of radio frequency identification (RFID). RFID utilizes computer chips and antennas, allowing the chips to wirelessly communicate with a receiver. In the hotel industry RFID systems are being integrated with POS systems to process credit card and debit account transactions (Kasavana, 2005). Some hospitality companies even accept biometrics, such as fingerprints, iris scans, facial scans or hand geometry analysis systems to increase physical or data security.
Customers are more demanding from hotels in terms of technology than ever. They need it for entertainment, business, communication and socialization. And with technology advancing in a rampant pace, people more aware of the latest gadgets and devices and techno-fear decreasing as new generations come along using technology from infancy, hotels are being pressed into making monumental investments more often just to cater to the technological needs of the guests. Added to these there are the other investments to be made in “old fashioned” hotel operation, property management systems etc. Studies show that even though customers demand it and managers recognize its importance the hotel industry is still lagging behind in offering the latest IT facilities. However, there are innovative boutique hotels that have reached an almost sci-fi level of technology.
These hotels are shaking the position of the big hotel chains and are attracting more tech-crazy guests. On the other side there are hotels that focus more on the environment, nature with a more traditional approach. Both have their own well established market segments that usually don’t overlap because of being on different ends of the spectrum. Only the future can say of this arms race to demand and provide more and more technological means will prove effective. It is commonly known that too much of something can become harmful.
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Topic: Technology in Hotels
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