Hospitality Industry Business Model

Abstract

The hospitality industry incorporates several fields in the service industry and additional fields in the tourism sector. It is one of the fastest-growing industries in the world’s economy. It involves services like hotels, lodging, cruise line, event planning, and theme parks among others. It has been expanding in investment, service delivery and improving on all other aspects. This is an industry that depends solely on leisure time availability and availability of disposable income. The world’s economy is growing. This is making disposable income increasingly available to a large number of people. Therefore more and more people can afford to purchase services provided by the hospitality industry.

 

Since it is becoming increasingly popular, there is a need to make it even more convenient both for service providers and customers. One of the many ways of attaining this is through technological incorporation in the business. This is not to say that technology is not in use in the industry; not at all. The improvement witnessed in the industry is attributable to technology. There is considerable technology application in the industry, but there is a need to step up the technology and use it more expansively. This is a time when most industries are facing tremendous growth and technological advancement. The hospitality industry should not be left behind (Smith, 2013).

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The Hospitality Industry

Traditionally, hospitality firms depend largely on paperwork and cards at the front desk in order to keep in touch with their old, current and prospective customers. They waited for vacationers to come at their will, or their staffs’ efforts to lure customers at the slightest chance possible. With current technological advancements, such inconveniences are long gone. Currently, firms in the hospitality industry are using new technology to market themselves as well as keep in touch with old, current and prospective customers. This has made services at the industry easier to offer and more enjoyable both to offer and to buy. These advancements, although gradual, have seen great improvements over the years. They are now considerably convenient for service providers and customers in the hospitality industry.

The most remarkable technological advancement is electronic billing. It became a landmark in the industry since owners of the firms can now tell the situation of their businesses. Previously, firms had a lot of paperwork especially in regard to bookkeeping, which was cumbersome, since it is time-consuming, prone to many errors and tedious. It is also vague, in that, it does not easily show the real situation of the business directly. For the owner to determine the financial situation of his/her business, he or she had to go through heaps of papers and files, which was practically impossible. This has been made incredibly simple through electronic bookkeeping.

Owners can now access information regarding their business with ease. That way, they are able to determine the financial performance of their businesses. Through advancements in information technology, hospitality firms have been able to buy customized accounting software, enabling them to keep up-to-date accounting information. This makes it very simple for firms since they employ fewer workers and get work done at faster rates than before. This also makes decision making simpler than it was, enabling owners to produce more of what is demanded and less or no units at all of what is not demanded.

Previously, hospitality firms used phone calls for booking and reservations. This was very inconvenient and at the same time expensive. This is because, at times, the customer would call to find the line busy. This could go on for several hours, depending on how busy the firm was at that time. This would be inconvenient to the customer and at times cost the firm that customer. That is the firm could end up losing customers since customers could decide to choose another firm to offer him or her services. It was also expensive for firms to employ staff to work as telephone operators. Luckily, this is long gone. With advancements in information technology, hospitality firms are able to allow their customers to make reservations and bookings online.

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This is cheaper for both the firms and their customers. Currently, firms use online book engines to enable their customers to enquire, book and make reservations. Through online booking, it is possible to tell how many rooms are still vacant. This way, customers do not make long-distance trips, only to find that the firm they wanted is already full. Now, customers cannot check-in if there are no vacant rooms. This makes it convenient for all parties. Customers make bookings and reservations from the comfort of their houses or offices and avoid making inconvenient trips.

Advancements in information technology go beyond communication. Of late, most customers prefer hospitality firms that offer Wi-Fi. The Internet is used for more purposes than entertainment (Smith, 2013). Most people going on vacation prefer to be in a place where they can easily access the internet in order to keep in touch with their families, business partners, etc. In some cases, business people choose places where they can access the internet in order to work while still enjoying their vacation. This enables them to spend as much time on vacation as they wish since there is nothing in a standstill waiting for their return. This works to the advantage of a hospitality firm since its customers spend as much time there as they want and, moreover, it enables the company to maintain its customers.

That is when customers enjoy their vacation at a certain place, they prefer coming to the same place next time, rather than going to a new place since they do not know whether the latter will be as comfortable as that one they liked. Hospitality firms also use the internet for security purposes. Devices such as security cameras need the internet in order to transmit data to necessary offices. It is also possible to connect doors fire and security alarms to a system that will alert the right personnel in case of any danger. That way, hospitality firms are able to heighten security throughout their facilities. Security is important both for a firm and its customers.

Even if, so far there have been considerable advancements in information technology in regard to the hospitality industry, information technology continues to advance. Therefore, there is a need for hospitality firms to try and keep in line with the latest IT developments in the industry. This is the only way for firms in the industry to remain relevant and competitive in the 21st century. Managers and firms` owners in the hospitality industry have great duties to ensure they have the most recent developments in information technology. Otherwise, their firms will become obsolete. There are developments such as intelligent reservation systems, which predict customers who are likely to use the firm’s services again.

This enables the firm to keep in touch with such customers keeping them informed about and new developments and offers of the firm. Such advancements allow fast guest feedback, making work easier. Hospitality firms are increasingly offering guest services online to enable customers to place orders even before they arrive. There are also advancements enabling the firm to keep good records of its employees making it easy to remunerate them and avoid ghost workers. All these and many more are continually coming advancements in information technology, in regard to the hospitality industry.

Use of Technology

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Communication

Technology has many benefits for both firms in the industry and customers. To begin with, it allows streamlined communication, which by extension makes the business more convenient for both parties. Through technology, it is possible for the firms to keep track of their customers while they are using their facilities. This increases security and reduces the chances of insecurity. It is also possible to respond to emergencies. This is because, the customers will be in touch with the firms at all times, making it possible to ask for help and get it within the convenient periods. Continuous communication between customers and the firms providing them with services is very important. It makes booking and accommodation easy. For instance, customers book restaurants online even before they leave the house. It is also possible to inquire about what services firms offer in order to make informed decisions on the same. All this is possible due to technological advancements.

The Internet

The internet is an important tool in the hospitality industry. Advertising a hospitality firm through the internet is easier than advertising a firm in any other industry. This is because advertising a firm in the hospitality industry requires uploading of photos of the firm and a slight mention of the services they offer (Smith, 2013). There is no explanation needed, unlike when advertising firms which operate in other industries. This makes the internet an essential tool in the hospitality industry. Most people who eventually visit and buy services from firms in the hospitality industry saw their ads on the internet. It even occurs that one was not even interested in that particular firm but the enticing photos of the firm caught his/her attention. This way, the internet is the best medium to advertise firms operating in the hospitality industry. Another important way in which the internet helps market hospitality firms is through GPS. One gets to know the hospitality facilities around them through their phones. If an individual wants to find a facility yet he/she doesn’t know any, he/she may choose one that is closest to his/her location as directed by GPS.

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Reservations Systems

It is possible to make reservations in hospitality facilities through technology. Technology has made it possible for hospitality facilities to have reservation systems, which enable customers to compare prices and place their reservation orders. This makes it simple for customers and hospitality facilities. Once customers make a reservation online, they are able to budget their disposable income properly, increasing their purchasing power. This is because customers understand the amount they will spend on their accommodation, food, and entertainment at the facility beforehand. This works for the advantage of the firm or facility as well as the customer. Examples of booking engines that allow travelers to access these services are Orbitz and Expedia among many others.

Computer Systems

Many hospitality firms are expansive and often they have more than one branch. Inter-branch communication helps in keeping track of the firm’s income and new developments. This makes it important for all the branches to be connected and to be in constant communication. Computer systems make this possible. It is possible for these firms to keep customer and staff information constantly updated. This way, the firms are able to know how many customers they are expecting, how many are already in thus making reservations easier. Using computer systems has helped hospitality firms keep the information updated. Through computer systems, firms are able to keep in line with the most recent developments and policies in the industry. It is also possible to take care of customer preference and to find out other important details.

Mobile Communication

The use of mobile communication has proved to be the most convenient form of communication. When people are traveling, they carry with them mobile communication devices such as laptops, mobile phones, and Ipads. Hospitality firms have taken advantage of this and use mobile communications to keep in touch with their customers. Through mobile communication, firms are able to communicate information about new developments and the latest news to their customers, for instance, if there is an expected change or in case an unfortunate accident occurs. This helps customers to know what to expect and in case of any problem, they are able to keep off the accident scene. Hospitality firms use such forms of mobile communication like text messages and GPS among others. Currently, they are also using social media in order to ensure that everyone interested in information gets it with ease.

Stakeholders Enabling IT Advancements in Hospitality Industry

There are several stakeholders who have helped in realizing information technology advancement in the hospitality industry. They range from governments, individuals, hospitality firms, IT firms and society in general. It can be said that achievements realized in terms of IT advancements in the hospitality sector are the product of the efforts of all the parties involved. There is no group that has been left behind, although the magnitude of contribution differs. Stakeholders are a comprehensive business resource for the entire team in the sector. I do understand that the most convenient way to do operations in the hospitality industry is to use networks. These networks will connect all the participants in the industry together. The participants include all individuals and companies related to trips, restaurants, lodging, entertainment, etc.

These services within the hospitality industry need proper management. They are actually lucrative businesses. The network connecting these players sees the work being done in an efficient and effective way. Efficiency in any work done brings about good output and returns. This minimizes costs thereby increasing the profits. It is the objective of every business to make profits and so this will consequently lead to high profits. What is required is cooperation and agreement to use the latest technology. When this is implemented, the work in the hospitality industry becomes simple. It is the hospitality that puts a person within the middle of the industry, domestically and also around the globe. The communication network together with collaboration allows an individual to do his/her business with the existing partners and discover the new ones.

The mission we have is to become the single place from where you can source any hospitality need which you have now, and in days to come. We wish to be the unifying factor of the global community. We also want to connect you to all other industrial participants easily and quickly. So whenever you want to be connected globally within the hospitality industry, then the right place to run to is us. InfoTech’s practice of hospitality does the delivery of software solutions that are business aligned and services that are related to the hospitality industry (Smith, 2013). The main things that we include: restaurants, hotels, casinos, car hire, holiday planning, clubs, recreational facilities among others. They also offer our services to independent software vendors who are specialists in the area of hospitality. The ability we have and the strength of our working are as a result of thirty years’ experience in the hospitality industry. The survival of many firms in various industries is dependent upon the managers` experience.

The powerful management provided by our training institute is a pool of senior and middle management levels. They are experts and consultants with years of experience. This experience is of vital importance when it comes to running of different functions of the sectors that we have in the industry. Expertise management is necessary for the sufficient and effective running of any business. That is why we are doing very well in the industry. Many countries are in the process of passing legislation that conforms to International Telecommunication Regulations, brought about by the International Telecommunication Union (ITU)

In an attempt to promote security, thus improving the hospitality sector, the US authorities considered exposing porn websites visits. This was in order to discredit the activities of radical Islamists.

The UK authorities plan to disable extremists online. Most extremists use websites that are similar to popular hospitality firms’ websites in order to rank high in search engines. If the government implements the blockage, this will help market hospitality firms since searchers will not be disrupted by the extremists.

IDC intends to implement strategies that will enable firms to benefit from consumerization and mobility approaches. This will see hospitality firms continue enjoying the benefits provided by advancements in information technology.

In an attempt to improve internet security, NAC has changed the UK laws regarding cybercrimes. This is to try and fight against cybercrimes in a win-win battle. Cybercrimes have for long acted as a hindrance to good online services provided by firms to their customers. In order to eliminate this problem, good laws ought to be put in place, in order to make the internet a good place for business. This will enable firms in the hospitality industry, among other industries relate with their customers without fear of impersonation and impostors. It was not convenient for firms to deal with their customers online since some unscrupulous people used that to their advantage. They could mislead customers and in some instances, make them transfer money to wrong accounts. That way, firms would experience huge losses, making it impossible to operate their businesses online. With the curbing of cybercrimes, it will be very easy for businesses to deal with their customers online without fear of any customer being misled or harassed.

Cybercrime has been a threat to business operations online mostly in the United Kingdom. This has prompted the government of the United Kingdom to fight against cybercrime. In an attempt to fight against this menace, the government has come up with strategies that will be implemented in 2014, in order to kill the dragon of cybercrimes.

With the increasingly artificial intelligence, there is a great risk of business data being hacked. White hat has shown that it is possible to hack sensitive business data from public internet access spots or Wi-Fi hotspots. This makes us realize that there is a need for safety measures to be implemented by firms in order to secure their data. As much as firms should indulge in using information technology to advance and develop their businesses, it is important to take caution, in order to remain safe.

FTSE argues that with the increased use of information technology in operating businesses, it is important for owners and managers of these businesses to improve the way they handle cybercrime and other related risks. This is because crimes related to information technology may cause more damage to the business than benefits. Therefore, as much as firms should work towards improving their services by implementing new information technology advancements, FTSE warns them. They should beware of crimes related to these advancements in information technology.

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Hospitality and leisure firms, such as hotels, restaurants, and pubs, are turning to use information technology in order to deliver services to customers and manage costs. Currently, firms in this industry are improving their services and start using advanced technology. There are some challenges that come with the use of information technology advancements, but these firms seem to be thriving nevertheless.

Businesses can benefit from growing and advancing technology in today’s world. With many customers having knowledge of this, the companies can use these means to advertise and make their companies to be known all over the world. Regardless of what kind of business a company specializes in, technologies can be of great importance in its pursuit to become known all over the world.

Computers can be used for quite a variety of business operations and also in the daily running of a business enterprise. Computers can be used, for example, to compute large volumes of data that could have otherwise been impossible if the same was being done manually. This is because computers have special software for carrying out this kind of operation. Computers also can be used in business to keep records that are very important for the business-like records regarding employees of the business. Another area where computers can be used is performing the budgeting of a business organization, preparing and forecasting future operations of a business organization.

Computers can also help in performing research work, for example, in finding new markets for products of the business or locating a new place to establish a business unit and also getting knowledge about the performance of the product in the market (Smith, 2013). Finally, computers can help a business organization to cooperate with other businesses and also to get information from other companies. All these advantages make the use of computers in a business organization important; therefore, business organizations should ensure they use computers to get this great advantage.

Some years ago computers that were found in the market were very large, very expensive and also had a very low processing speed; thus they could only be afforded by the largest companies and this was a limiting factor to small organizations that could not find enough capital to purchase such computers. This situation has changed today with the development of small computers that are cheap and also with very fast processing speed. Nowadays, nearly all small organizations can afford such computers. This shows how computers have become important resources for all companies in today’s business. There are computer programs that help to ensure accuracy in an accounting department, for example, when using quick books. This program can help in maintaining a systematic record of business operations; it can also be used to send invoices since this way is fast and reliable to customers; it can be also used to maintain workers` payrolls.

Computers can also be used to forecast business operations. The use of accounting programs ensures that even people with limited knowledge can be able to come up with a detailed budget of a business and this will ensure that the business operations will be on track. A program like a spreadsheet can be used to forecast business operations. Such programs can be used in marketing. This kind of program helps marketers to come up with a good system of where to locate a certain business or where to take a certain product. They also help in coming up with eye-catching advertisements to attract potential customers. There are some programs that help to easily prepare documents of dynamic marketing.

Adobe Photoshop offers numerous templates that users can manipulate to give interesting materials of auto marketing. People who do not have a creative background can then use this service to make the professional documents in an easy and quick way.

The internet provides lots of information which when used well, can help a business be competitive. The information concerning business competitors is available on the internet. So the business can access the information and use it for its advantage. Once the information is acquired, a business can use it and manipulate its way through into the world of success. The information obtained includes prices, strengths, and weaknesses. Businesses can also get to know how customers view their products and also monitor sales. They can know precisely everything that they need to know via the internet. Companies can also conduct researches online when they want to launch a new product or service in the market. This makes it easier to acquire information quickly as compared to the traditional ways of research.

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Competition

The rate of usage is a vital variable that is used in the hospitality industry. The owner of an extra productive asset would always want it to continue being in use again and again. This is because this asset brings more and more income. Similarly, in the hotel industry, hotels, restaurants, as well as theme parks frequently seek to make the maximum use of the number of customers they get from every sector. This factor contributed to the service formation with the aim of increasing the usage rate which is provided by the hotel industry consolidators. The information concerning the products offered or needed in the networks of business vendors, as well as all the purchasers are put into application.

When you look at different industries, entry of new firms and the presence of competitors are of great importance. In addition to other things, the hospitality industry players normally have the advantage of using the old classical thing, initial and also ongoing support investment. They do a reflection on the upkeep material and facilities plus the luxuries that are located there. The themes that are particularly adopted by teams of marketing departments of different organizations are also important. Another vital thing is the characteristics of human resources working directly with clients. A clear competitive advantage is professionalism and an authentic concern in the clients` wellbeing.

Costs

To make the hospitality industry use technology was a step that needed large investments. Firms needed to invest large amounts of capital, and it was risky to put a lot of capital in a single investment at the same time. IT firms have played a big role in enabling firms in the hospitality industry to use IT. That is, IT firms partnered with these firms to enable them to pay small amounts for the installations needed and pay the rest in installments. The work of financial institutions in enabling these firms to acquire the necessary installations of IT devices is recognizable. To see the hospitality industry where it is today in terms of information technology, it has taken the efforts and corporation of these three sectors.

That is IT firms, financial institutions, and hospitality firms. Their collaboration has made it possible to venture into investments that otherwise could not have been possible. For firms to move from the old systems to working with new systems, they needed a complete change and installation of new systems. This was only possible through cooperation. Otherwise, most firms could have closed down as a result of a lack of adequate capital.

Previously, most people used to get news through less technologically advanced means, such as newspapers. Eventually, more people started receiving news through more technologically advanced means such as television or the radio. Currently, people mostly get news on the internet (Smith, 2013). This way, the hospitality industry ought to utilize the internet. Firms in the hospitality industry should use such statistics and studies in order to prioritize their advertisement and marketing appropriately.

Another significant use of information technology in business is advertising. According to the TNS media report in 2007 58% of advertising in the United States was through information technology. With the increased popularity of the hospitality industry, this percentage is expected to rise. It is expected that advertisements through the most recent IT media will increase.

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Revenues

Nowadays, multi-billion investments are made in the hospitality industry. Information technology has helped improve the hospitality industry, thus increasing the revenues provided by it globally. In 2011, the hospitality industry provided almost 20 percent of the total revenues collected in the world. This has resulted from embracing technological advancements in the industry. In previous years, the world used to witness around 8-12 percent of total revenues collected from the hospitality industry. Since 2009, this has changed and the world has seen a tremendous increment in the amount of revenue provided by the industry. Individual countries and states have experienced growth in revenue, all due to the hospitality industry.

The increased use of telecommunication media for advertisement by firms in the hospitality business has also seen an increase in revenues. Advertising has also seen growth, as a result of being regularly used by the companies operating in the hospitality industry. Research shows that in the coming years, the hospitality industry will be providing approximately 50 percent of the total world’s revenues. Economic growth is attributable to growth in the hospitality industry in different countries.

In conclusion, using IT in any industry is beneficial but it requires commitment and innovative minds. This is because for a firm to be ahead of its competitors in using IT, it must come up with new ideas for making use of the available technology. That is the only sure way of being successful. A firm can use IT to make incredible development in its field of business while the same IT can lead to the failure of the business. This is because if a firm invests large amounts in order to get IT systems installed but does not use the systems wisely it will suffer from a tremendous fall. Therefore, for a firm in the hospitality industry to be successful in the use of IT, innovation is inevitable. Therefore, firms in the hospitality industry ought to be cautious while making decisions concerning the improvement of their IT systems. They should improve the systems in a manner that will not remove them from business, but, on the contrary, will make them more relevant in the business.

Improving IT systems will not work on its own to ensure a firm`s success. Good management and marketing skills are required. For technological advancement to benefit a firm, all other departments of the firm must be working well and in proper coordination; above all, there is a need for proper management. Everything rises and falls due to management. Therefore, management is the most essential department for a firm to benefit from technological advancements. This is because good decision making is needed before any of such major investments are made. Proper management will also ensure that the installed systems are working as expected through constant checks and evaluations. It is not enough to install the most recent systems, constant check and evaluations are also equally necessary. This is because, through constant checks and evaluations, any malfunction will be identified and corrected before it causes any damage.

It is advisable for any firm in the hospitality industry to embrace technological advancements in its operations. This is the only sure way to remain relevant and competitive. It is also advisable for the firm to carry out a comprehensive analysis of its performance before deciding to embrace costly technological advancements. This will ensure that the firm is able to operate with the systems it has embraced and at the same time making profits. Thirdly, it is advisable for firms to embrace innovation more than buying new technologies every now and then. Being innovative is the only way to remain competitive without repeatedly incurring huge costs. This is because innovative minds will utilize the available technology and make it do more noble things. They are able to bring good results using what is available.

Therefore, a firm should ensure that it is using its innovative minds to the fullest. This will spare it the need to always purchase a whole system while only slight improvement is needed in the current one. Innovations will safe firms from unnecessary expenses since they will be able to work with what they have, in order to make their business successful. Constant purchasing of systems is expensive and will eventually kill the competing power of a firm (Smith, 2013). This will make the firm unprofitable. In addition, it is not advisable for a firm to keep buying systems every time a new one appears; this is because sometimes systems become obsolete within a very short period of time. Therefore, it is better for a firm to utilize the systems it has to the maximum and only purchase new systems when they are completely different from what it already has, and when they have been evaluated and proven to be more effective.

There is a clear demarcation between firms that use innovation to remain competitive and relevant and those that use investing in new systems. This is because firms that use innovation have a low-cost competitive advantage over the rest. They produce their services at low costs while others are struggling against high production costs. Since IT systems become obsolete after very short periods of time, a firm should be very cautious while buying these systems. If it is not cautious, it will buy systems that will not serve it as expected. A thorough evaluation is necessary before any purchase is made. This will reduce the chances of buying a system that will become obsolete before the firm benefits from it.

Summary

Using IT in any industry is beneficial but it requires commitment and innovative minds. For a firm to be ahead of its competitors in using IT, it must come up with new ideas for making use of the available technology. That is the only way of succeeding in this game. A firm can use IT to make incredible development in its field of business, while the same IT can lead to the failure of the business. If a firm invests a lot in order to get IT systems installed but does not use the systems wisely, it will go down with a tremendous fall. Therefore, for a firm in the hospitality industry to be successful in the use of IT and to improve its business, innovation is inevitable. Improving IT systems will not work on its own to ensure firms' success.

For technological advancement to benefit the firm, all other departments must be working well and in proper coordination, above all proper management. Everything rises and falls due to management. Therefore, management is the most essential of all, for a firm to benefit from technological advancements. A good decision-making process is needed before any such major investments are made. Proper management will also ensure that the installed systems are working through constant checks and evaluations. Installing the most recent systems is not enough, constant check and evaluations are also equally necessary. Through constant checks and evaluations, any malfunction will be identified and corrected before it causes more damage.

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It is advisable for any firm in the hospitality industry to embrace technological advancements in its operation. This is the only way to remain relevant and competitive. It is also advisable for the firm to carry out a comprehensive analysis of its performance before deciding to embrace costly technological advancements. This will ensure that the firm is able to operate with the systems it has embraced and at the same time making profits. Third, it is advisable for firms to embrace innovation more than buying new technologies every now and then. Bring innovation is the only way to remain competitive without repeatedly incurring huge costs. Innovative minds will utilize available technology to do more noble things. They are able to build upon what is available.

Therefore, a firm should ensure that it is using its innovative minds to the fullest. This will spare it the need to always purchase a whole system while only slight improvement is needed in the current one. Innovations will safe firms unnecessary expenses since they will be able to work with what they have, to make good their business. Purchasing systems every time is expensive on the firm and will eventually kill the competing power of the firm. This will remove the firm from the business. In addition, it is not advisable for a firm to be buying systems every time one comes by, this is because; sometimes systems become obsolete within a very short period. Therefore, it is better for a firm to utilize the systems it has to the maximum and purchase new systems only when they are completely different from what is already installed, and they have been evaluated and proven to be more effective.

There is a clear demarcation between firms that use innovation to remain competitive and relevant and those that use investing in the new system. Firms that use innovation have a low-cost competitive advantage over the rest. They produce their services at low costs while others are struggling with high production costs. Since IT systems become obsolete after very short periods, the firm should be very cautious while buying them. If they are not cautious, they may buy systems that will not serve them as they expected. A thorough evaluation is necessary before any purchase is made. This will reduce the chances of buying a system that will become obsolete before the firm benefits from it.

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