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Technology In The Hospitality Industry

4260 words (17 pages) Essay in Marketing

15/05/17 Marketing Reference this

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Introduction

This document explains the technological change which has happened in hospitality industry and in particular hotel industry. The impact of information technology in hotels is quite significant. It has not only given people knowledge as what to seek when looking for a hotel but also a whole preview as what is available in the market.

This whole revolution of information technology has changed both the industry and the consumer. Industry has to become more transparent and competitive in order to satisfy customer needs. One needs to keep in mind the enormous variability of the technology rather than assume its determining powers. (Poster, 1995)

Information technology is an inevitable part of any organisation’s functionality. If an organisation seeks to progress in industry then it has to be competitive and up to date in its technological needs. In a world wide technology survey (Hensdill, 1998), hoteliers and other consultants explained how the hotel industry lagged far more behind in terms of automation than other industries.

This document will explain what has changed hotel industry from technological perspective and what the demands of consumers are in post modern era.

1.1 Claridge’s Hotel

Claridge’s hotel is situated in Mayfair, in the heart of London’s west end just a few minutes’ walk from the shops and boutiques of Bond Street, South Molton Street and Oxford Street. It has 203 rooms including 67 suites. The Reading Room restaurant and The Foyer – Designed by Thierry Despont. The Fumoir – The intimate, candlelit bar is a push, sophisticated place to enjoy cocktail. Claridge’s Bar – designed by David Collins plays host to London’s movers and shakers. (www.claridges.co.uk)

The most important change in recent times is ‘Gordon Ramsay at Claridge’s’ restaurant – head by Head chef Steve Allen. It offers finest dining in London, celebrating flavourful combinations of the freshest ingredients which is designed by Thierry Despont it is sumptuous and elegant, but intimate. (www.claridges.co.uk)

Claridge’s hotel has always been considered as living in modern era but very famous in royalty and celebrities for its iconic image. But in recent years there have been many changes which has mixed modernism and post modernism in Claridge’s and this is why author thinks it is the best example to show how information technology has had its impact on Claridge’s.

1.2 Claridge’s Hotel Website

Claridge’s website provides facility to both its customers and partners in order to book hotel rooms, table at restaurant or for afternoon tea. Online presence of Claridge’s hotel is one of the main examples of post modern era. Now any type of customers can just go online and book room for them. Two or three years ago trying to find hospitality IT vendor with an e-mail address, never mind a website, were an almost futile search (Frew, 2000). There were many hotels which were still on the old phone/agent booking system. Now agents have live database in which they can see when to book and Claridge’s gets these bookings automatically.

Dr. Martin Peacock argues that the systems currently being implemented in the hospitality industry emphasise the controlling side of technology: they provide performance measures; they work to restrict the options of both line managers and staff. As he suggests as well that this to be the cause for the irrelevance of management.

1.3 ‘Gordon Ramsay at Claridge’s’ Restaurant

Celebrity Chef Gordon Ramsay has his own restaurant in Claridge’s which is headed by Chef Steve Allen. In today’s technology revolutionised era, it is very important to have someone famous to boost the brand. Most of the people know Gordon Ramsay through TV, newspaper and media and having his name with Claridge’s is key to enhance its brand name. People not only take it as a typical hotel but also a place to spend afternoon and dine out. According to Cline (2002) “Hospitality ebusiness” is destined to play an increasingly significant role and will have profound impact on the way hospitality business is conducted in the future.

Literature

2.1 Research Methods

There are various ways to perform research in order to understand technological requirements and changes in Claridge’s hotel. Dr. Martin Peacock has laid down three fundamental rules in order to choose and research on choice establishment. First, he suggested that it should be of interest of the author, secondly the fulfilment of the criteria of sufficient secondary data which is deemed possible. Finally, a possibility of primary data being available so that core reasons and suggestions can be presented in shape of an argument. This primary data can either be collected by talking to choice establishment or its customers.

2.1.1 Observations

In order to understand and feel technological changes in Claridge’s, author visited the hotel himself and had afternoon tea in the hotel. Author also visited Gordon Ramsay restaurant and saw their seating plan and menu for customers and also understood how customers are being booked at the restaurant. Author also visited halls and visited bedrooms to understand and feel the same which a customer feels. Author understood that online customer booking facility is quite famous among customers due to ever changing consumer demands and post modern era. Claridges also provides online facility to its partner companies/agents to book for rooms/restaurants.

2.1.2 Interviews

One of the primary research techniques is to interview the owner or people working in the choice establishment. It is also very important to take interview from customers so that proper analyses can be done. Author tried to book interview with IT staff of Claridge’s hotel but the concerned person in IT department was not available. So author has relied mainly on observations and secondary data.

2.1.3 Online Sources

Main online sources used are hospitality journals available online, website of Dr. Martin Peacock, Claridge’s website and google search.

2.2 Limitations

It was not possible to conduct survey with customers as Claridge’s does not allow external person to conduct any questionnaire survey with its customers without prior permission from higher management. It was not also possible to take interview with staff of claridge’s who can give insight about Claridge’s IT performance except few observational meetings with receptionist just to understand the functionality of basic information systems.

Impact of Technological Innovation

Technology has often been used as an instrument of control and the term itself has a link with the use of tools to control inanimate objects. Possibly the best illustration of the use of technology to control people is Zuboff’s (1988) example of Bentham’s Panopticon. Here a prison is designed with glass walls and corridors radiating out like spokes from a wheel. The concept is that these corridors can be controlled by one guard situated at the centre of the wheel. The technology (in this case glass walls, a rotating chair and innovative design) is used to control the inmates. This is not an image totally distant from modern information systems within tourism and hospitality. (Chapter in Information and Communication Technologies in Tourism (edited by D.Fesenmaier), Springer, Wien, 2000)

(Cultural tourism product emphasising on information and infrastructure, by Daniela Freund De Klumbis & Wil Munster in Developments in the hotel industry: Design meets Historic Properties)

Sector (significance of under ANOVA 0.000). Hotels had 68.6% in the enthusiastic user category, whilst restaurants could only count 41.9% in this group. (Martin Peacock, 1994)

Modern information systems privilege a vision of technology which has close links with Bentham’s glass prison. In the NEDC working party report on competitiveness in tourism (1992), TGI Friday’s use of technology to provide “control and monitoring systems”, is listed under Case Studies Best Practices. The same report also praises McDonald’s use of systems. Baker et al (1998) suggested that the EPOS system developed for Bass Taverns removed the “uncertainties” of operative fraud and the “black economy” for public house managers. (Chapter in Information and Communication Technologies in Tourism (edited by D.Fesenmaier), Springer, Wien, 2000)

This systematic standardisation of the hospitality product provoked a counter-movement inspired by consumers searching for hotels with unique or sophisticated and innovative characteristics, called boutique, design or lifestyle hotels. In the beginning of the 80s of the last century the term boutique hotel swept through the market and was used to describe unique 50-100 rooms properties, non chain-operated, with attention to fine detail and individual decoration in European or Asian influenced furnishings (literally a boutique as opposed to a department store). Sophistication and innovation explain the growth of the design and lifestyle hotel niches. In order to employ a generic term for these new niches, we will refer hereafter to the boutique, design and lifestyle concepts with the term lifestyle hotels.

Being independent enterprises, lifestyle hotels join voluntary groups (membership affiliations, consortia) in order to benefit from the advantages of chains – especially global marketing and promotion services, common packages and international reservation systems – without having the disadvantages of chain box hotels like absence of management autonomy, architectural uniformity and standardized operational procedures (Yu, 1996; Andrew, 2001). Examples of these voluntary groups are marketing and sales reservation networks (e.g. SRS World Hotels) and free alliances.

The confrontation of box and lifestyle hotels by means of Kotler´s product levels shows clear differences between both concepts. On the core and facilitating product levels, box hotel companies present savings in building and staff costs – due to the standards of performance – as a major advantage to the hotel operator. In the marketing policy, the uniformity of the concept and the strong recognition of the brand are used to influence the consumer’s choice. Commoditization generates, within traditional segments, a feeling of security and familiarity. For the widely-travelled tourist, however, the stay in a box hotel turns into alienation and anonymity. Many of them share the experience of awaking in a hotel room while asking oneself: “Where am I now?” This negative guest experience, caused by impersonality, predictability and boredom, has led to an important loss of clients and turnover with box hotel companies. Table below shows us, by means of a confrontation matrix, the hotel guest’s main differences in choice criteria (Naber, 2002).

BOX HOTELS LIFE STYLE HOTELS

Demands quality guarantee

Expects quality given the high quality level of lifestyle hotels

Minimum standards

Exceeding standards

No annoying surprises

Surprise-adventure-history

Experiences are sought outside the hotel

The hotel stay is an experience in itself

Recognition of the product

Recognition as a guest

To feel at home by means of the “hardware”

To feel at home by means of the “software”

Reliable unique selling propositions

Really unique selling propositions

Familiar with the brand image

Search for a specific identity

(By Daniela Freund De Klumbis & Wil Munster in Developments in the hotel industry: Design meets Historic Properties)

What is key component to drive today’s hospitality industry?

Information technology is the key component which is driving hospitality industry. It has already revolutionised hospitality industry in post modern era and now it is driving it as major decisions are being taken and are based on Information systems provided by IT.

Claims of overall increases in productivity caused by increasing use of information technology are difficult to justify empirically both at the local and the global level. US improvements in productivity can be linked directly to computer manufacturing (Anonymous, 1999) with productivity growth in other sectors stalled or falling. Landauer (1995) reported Roach’s findings that information workers in the US (1960-87) had seen no increase in productivity.

Martin Peacock and Humphery Shaw, (1996); Bytes and Bias suggests in this paper that the specific issue of the attitudes to new technology in the hospitality industry. Yet, outside the specific question of the industry, society too illustrates very ambivalent attitudes to new technology. One of the best illustrations of this is the Unabomber debate. The Unabomber is an American mail bomber who has attacked pro-technology targets (principally academics) over the last 18 years. Last year his manifesto was published in the Washington Post and other American publications (Anonymous, 1995).

Technological change defines the horizon of our material world as it shapes the limiting conditions of what is possible and what is barely imaginable. It erodes taken-for-granted assumptions about the nature of our reality, the ‘pattern’ in which we dwell, and lays open new choices. (Zuboff, 1988)

New technologies do not spell the end of traditional technologies. The synthesiser has not replaced the piano. Each has their traditional and contemporary roles to fulfil. However, the advent of the synthesiser has effected the way in which we see and use the piano. It is something different to what it was. (Biggs, 1991)

Tiles & Oberdiek suggests in 1995 that modern technologies in short, behave like ecosystems. When we intervene here, unexpected consequences pop up there.

As Tiles & Oberdiek suggests in 1995 that on the other hand there are people who have become deeply pessimistic as a result of observing the path of so called technical progress. As they see it, we are strangely impotent in the face of, indeed are enslaved by, a pervasive technology that, ironically, we ourselves have made.

Belonging to the primary tourism enterprises, the hospitality industry is an essential component of the cultural tourism product. Hospitality products need to fulfil customer’s needs on several levels (Kotler, 2003):

(a) The core product answers the basic question: what is the buyer really buying? It refers basically to the benefits provided by the hotel to the consumer and not the features, e.g. room comfort and convenient location.

(b) Facilitating products are those services or goods that must be present for the guests to use the core product, e.g. bellboy in a luxury hotel.

(c) Supporting products are extra products offered to add value to the core product and help to position it through differentiation from the competitors, e.g. full-service health spa.

(d) The augmented product includes atmosphere and customers’ interaction with the service organization and each other, e.g. lobby socializing. The augmented product is an important concept because it is in this level were the main differences arise between the various hospitality concepts, e.g. atmosphere created by focus on lightning, marriage of textures and colours to please the senses.

How Technology works in Claridges?

The expansion of the international hotel chains, in their vast majority, was accompanied and made possible by a process of standardisation and commoditization. Technological innovation has had huge impact on this expansion. Research data, which hotel chains keep and also have track record of ever changing customer needs is really important in order to expand the hotel chain as well as keeping an iconic image in the market. Claridge’s hotel has uniqueness which is to keep itself as one and only one hotel. It is part of group of hotels which is called Maybourne Hotel Group who has three big hotels (Claridge’s, Connaught, The Berkeley) in their portfolio and few other hotels internationally.

Customers like to book online using Claridge’s website. Travel professionals in tourism industry also have online access available through website where they can make bookings on behalf of their customers. Booking online provides facility to customers to request anything extra they want to the hotel and that will fulfilled. Due to recent trend in technology and use of internet has changed the old perspective of booking via phone. A customer can book anywhere while sitting in airport or in a cab and as soon as they arrive at the hotel, everything is ready for them.

It is very important to show in this document what are the strengths, weaknesses, opportunities and threats which are being faced by Claridge’s. This analysis shows this data using SWOT technique which can be applied to other life style hotels as well and will give sufficient information in order to take the required decisions.

SWOT – Analysis of the Claridge’s hotel

Strengths Weaknesses

Well-defined concepts with an unique identity and a modern character, taking into account the four levels of the hospitality product.

Need to re-adapt constantly to the fast changing market demands.

Diversity in guest experience. In some cases, hotel becomes the cultural attraction in itself

Larger hotels groups cause lifestyle-fatigue through over-branding

Low costs of soft branded distribution by the sharing of costs of distribution, technology and purchasing

Low profitability as compared to box hotels

Autonomous control over operations by the hotel itself, allowing the personal expression of passion for hospitality

High maintenance and staffing costs

Opportunities Threats

Emergence of new soft brand distribution models: organization of independent hotels (e.g. Design Hotels & Resorts)

Global chains dominate supply through acquisition and development. They practise brand management across multiple brands (economies of scale)

Design is becoming an element adopted by the various hospitality products (e.g. Accor’s backpackers concept “Base”)

Emergence of low service stylised concepts or imitators

Create programs that allow customers to spend all their money

Aggressive down-pricing by box hotel chains to retain market share

Needs and wants of the post-modern consumer: quality tourism, traditional hospitality, personal

approach, sustainable hotels, the brand as a self image, diversity of experiences

Familiar with travelling, nowadays’ consumers expect value and quality for their money.

Effective use of Customer-Relationship-Management databases and customer-choice-modelling experiments can allow hospitality establishments to personalize products and services thus increasing satisfaction, retention and loyalty.

Good informed and critical consumers

Use of co-branding synergies with other lifestyle brands as the allocation to an existing Claridge’s brand name enables a quick transfer of the hospitality product values and contents to the client (e.g. Gordon Ramsay at Claridge’s – Restaurant)

Because of the unpredictable buying behaviour of the post-modern consumer, brand loyalty is difficult to achieve. Many consumers can no longer be easily segmented on the basis of education, income, social class and geographic origin.

Utilisation of opinion leaders in the segment addressed and of the power of famous influencers (e.g. Famous hotel for George Clooney when he is in London)

The consumer is wary to media, makes his choices and can hardly be influenced.

ICT solutions for one-to-one marketing

High cost level of ICT-investments

Development of websites that convey the types of pleasurable experiences promised by the hotel and ensure pleasant browsing experiences

High complexity of the global distribution model

Conclusions

By using the research methods and proper use of literature, it is quite apparent that technological innovation is inevitable and in hospitality, any establishment who does not believe in this will be out of the industry in no time. It is and will always be the case of being more innovative and creative in information technology and more strategic decisions are being taken by using proper IT research methods. It is imperative to keep up to date information systems in place if to succeed in the market is the goal. In future, it will not only the case of looking good and be more hospitalise but also to use core hospitality techniques along with good knowledge of customer needs. This knowledge can only be gained if proper information system is in place.

Author believes that customer should have the power to customise the facility according to his/her needs. Hotel should accommodate customer and help him/her to customise as per requirement. This can only be done if hotel has sufficient information available which covers all expected and legitimate needs of any customer.

Cline (2002) as well as Peacock (1995) point out the industry’s slow and measured approach to IT and to innovation generally. But as the sophistication of technology increases (e.g. Fisk, 1999) it was suggested that a more organic or humanistic approach to IT is needed to make the technology more useable to the organisation, employees and customers.

Effective innovation appears more at the operative level, at the point of sale. Creative problem solving, product remodelling, and effective marketing have been encouraged by technological change in other industries. New modes of service delivery have grown directly from the potential of new software (Barras, 1990). It is the imaginative coupling of new technology with new services and new modes of organisation which represents its real potential. (Martin Peacock & Humphery Shaw, (1996); Bytes and Bias)

Competition is fierce on the international hotel market and imitation of successful concepts is a proven method to attract new target groups. So it is no wonder that many of the ingredients which contribute to the lifestyle hotel experience, have been adopted by box hotels. Glocalisation, the combination of globalisation and localisation, has been introduced as a leading principle in marketing policies of chain hotels. In promotional campaigns of box hotels, the role of local culture as component of the hospitality product is highlighted by means of slogans like “Think locally, act globally” (Hilton Hotels) and “International standards, local flavours” (Claridge’s). While ten years ago design and style were unique selling propositions, nowadays they are minimum requirements to attract the sybaritic post-modern guest. Large hotel groups are even causing lifestyle-fatigue through over-branding and, at the same time, the number of low service stylish concepts is increasing with design becoming an element adopted by various hospitality products, e.g. Base, the backpacker concept of the Accor group.

In this competitive struggle, the cornerstone of success for the lifestyle hotel product will be to pursue to satisfy the fast changing needs and wants of the post-modern consumer by offering an inimitable individuality and a full-balanced hospitality experience. The effective use of customer-relationship-management databases and one-to-one marketing actions has to be strengthened in order to be able to personalize products and services, thus increasing satisfaction, retention and loyalty. The quality of the staff will continue to be a key success issue because the lifestyle traveller seeks more than advice or recommendations. Hotel employees should not only be trained to manage the information exchange, but also be required to match guests to experiences. To perform such a “consultancy” task, they are expected to be informed about the hospitality product itself as well as its cultural environment (Freund, 2002). Furthermore, hospitality employees will be required to possess commercial skills based primarily on making the most out of each customer transaction by creating experiential programs that push the guest to spend the greater part of their money at the hotel.

It should be noticed in this respect that consumers see food, accommodation and culture merely as elements of a greater whole relating to a total experience. Because of this, a relevant opportunity for lifestyle hotels, from a marketing perspective, consists in co-branding the property with a leading brand outside the tourism industry, e.g. fashion designers, retail companies, lifestyle brands. As the allocation to an existing brand name enables a quick transfer of the product values and contents to the client, co-branded hotels (e.g. Cerrutti, Armani and Bulgari Hotels) have a competitive edge in penetrating the market. However, co-branding in the hospitality industry requires a profound evaluation of both brand partners’ strengths and weaknesses, a strategy for the long term co-operation and, above all, a prudent implementation.

References

Freund de Klumbis, D. (2002), ‘Seeking the ultimate hotel experience’, paper originally presented at the XIIe International Leisure and Tourism Symposium ESADE-Fira de Barcelona, Barcelona, April 2002, and published in Gestión en H, No. 11, May-June 2003, pp. 58-76.

Naber, T. (2002), ‘Chain or independent: box hotel or boutique hotel?’ lecture given at the Eurhodip Conference 2002 Hospitality Management in Europe: Moving into a New Dimension, Maastricht, May 2002.

Andrew, G. (2001), ‘Evolution of tourist offers: the importance of an individual hotel experience in an independent hotel chain’, lecture given at the Eurhodip Conference 2001 The Hotel and Catering Trades for Employment and Economic Development in Europe, Venice, November 2001.

Peacock, M., Information Technology in the Hospitality Industry, Cassell, London, 1995

Smith, T., Does Technology Drive History, The MIT Press, London, 1994

O’Connor, Peter – “Using computers in Hospitality,” Cassel, 1996.

`Bytes and Bias: Technophilia in technology writing’, (refereed conference paper for `Hospitality Information Technology Association Worldwide Conference’, 1996).

Ms. Rita Fernandas (2010); observations during meetings held with Ms. Fernandas, a receptionist at Claridge’s hotel.

Online Sources:

www.claridges.co.uk

http://www.maybourne.com/page.aspx?id=4458

http://www.maybourne.com/uploadedFiles/Claridges/About_the_hotel/Claridges_London_English.pdf

http://www.maybourne.com/uploadedFiles/Maybourne/Supplementary_Navigation/Travel_professionals/Downloads/Group_Guarantee_UK.pdf

http://www.avlk87.dsl.pipex.com/martin/hospital.htm , (Hospitality managers who love computers too little?) by Dr. Martin Peacock

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