Information and Communication Technologies Investments in Hotel Industry

Introduction

The continuous adaptation to the international context, and the fell competition that today's hotels face are leading some of them to consider improving their competitiveness by identifying new strategies to help them improve performance. One way of doing so is to give strategic value to the management of IS resources (Gil-Padilla & Espino-Rodríguez, 2008). A comprehensive model is developed that establishes the relationship between asset specificity, operation performance and hotel or business performance, moderated by the form of governance (Espino-Rodríguez; Pei-Chun, & Baum, (2008). It is therefore, in this sense, that the investment in IS is usually associated with technological assets, namely at the level of ICT. The management of ICT investments, from a strategic point of view has become more complex and more difficult. Although there are quite a few models and methods for evaluating of this type of investments, it is still difficult to achieve impact in the business. One of the most common reasons is that the larger the project the more complicated becomes the management of ICT and especially the evaluation of business value (Pessi, Magoulas & Hugoson, 2011).

Business executives struggle to identify the payoffs from ICT investments (Khallaf, Omran & Zakaria, 2017). There is an extensive belief that investment in ICT improves firm performance. However, empirical evidence has not been conclusive (Tambe & Hitt, 2012) (Stoel & Muhanna, 2009). These investments usually have two main objectives: to increase the capacity associated with the treatment and storage of data/information, and/or the generation of competitive advantages (Anunciação, Esteves & Lagartinho, 2015). In the latter case, the achievement of competitive advantages is sought in three areas: in generating efficiencies (e.g., through cost reduction), and/or in generating efficiency gains (e.g., in improving of knowledge about customers), or in the differentiation of products or services (e.g., through technological innovations). Those investments in IS/ICT are often viewed by management as a need for competitiveness or sustainability (Anunciação, 2014) and therefore as an unavoidable cost in the face of economic progress and development.

This permanent need for technological updating results mainly from market pressures, either directly through customer demands or indirectly through competitive positioning. One of the demands of the market, in general, and of users, in particular, is a real-time operation, offering convenience in meeting everyday needs (Annunciation, 2014). Hotel rating systems allow customers to infer about facilities and service quality (Viada-Stenger et al., 2010).

However, this economic pressure causes significant organizational turbulence and increases the dependence of IS and ICT, both at the level of business and the organization's functioning. The balance of these three dimensions (organizational efficiency, strategy effectiveness and business innovation) that pressure organizations is a challenge for the management of economic organizations in general, in particular as regards value generation.

It is precisely for this creation of economic value, according to Zorrinho (2006), that investment should be oriented and evaluated, taking into account the diversity of the factors involved. And like other investments, the development and implementation of IS should be framed as an investment project that, like any other, requires analysis and valuation. This valuation is often done through cost-benefit analysis and not through more conventional techniques such as the Net Present Value or the Internal Rate of Return. Herdero et al. (2013) indicate the existence of three dimensions of analysis (utility, costs and benefits) and point out some examples of elements commonly considered through cost-benefit analysis:

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  Usefulness or appreciation of the investment;

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  When it presupposes a new IS;

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  When it facilitates the calculation of costs;

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  When it allows for a better posterior evaluation of the final results;

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  Associated costs;

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  Analysis and design;

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  The acquisition of hardware;

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  The acquisition or programming of software;

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  Training;

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  Migration;

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  The opportunity;

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  The maintenance;

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  The new staff;

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  Potential benefits;

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  Cost savings in human resources;

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  Savings in processing times;

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  Savings by reducing errors and increasing quality in general;

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  Improvement in service;

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  Improved decision-making.