Internet Diffusion in the Hospitality Industry

Internet Diffusion in the Hospitality Industry

Anatália Saraiva Martins Ramos
DOI: 10.4018/978-1-60566-026-4.ch347
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Tourism is the most important industry in the world in terms of the numbers of employees and its effect on the social and economical development of a region or country. Holjevac (2003) believes that, by the year 2050, tourism will by far be the largest industry worldwide, with 2 billion tourists and US$24 billion in domestic and international receipts. Moreover, the major tourist destinations will be India, China, Indonesia, and Brazil. The use of information technologies for basic functions— conferences, business meetings in distant places, training, designed routes and airlines, reservations and tickets purchased through computer systems, tourist shops, restaurants—is becoming usual in tourism. All these services have led tourist companies to adopt more updated methods in order to increase competition. Consumers, who are already becoming familiar with new technologies, demand more flexible, interactive, and specialized products and services, bringing new management techniques from the intelligent use of IT used to accomplish tour company business processes (Buhalis, 2000). The hotels depend progressively on the resources of new information technology to follow and update the tools which allow an efficient development of activities in each section of the company, leading to better results for its management (Mendes-Filho & Ramos, 2003a). To Phillips and Moutinho (1998), information technology (IT) is one of the critical factors of success in the hotel industry. According to studies and data, the use of technological tools will allow a bigger competitiveness for hotels (Cline, 1999). Technology will be the catalyst of change, a source of growing connectivity and one of the most important factors in distinguishing success among hotel companies. Few issues have greater importance to the business of hospitality than the technological decisions that will be made in the coming years (Buhalis, 2000; Mendes-Filho & Ramos, 2004; Olsen & Connoly, 2000). The hotel industry is one of the most important kinds of Web commerce. The data shows that all major companies linked to the tourism industry (hotels, agencies, air companies, and rentals) possess some kind of e-commerce activity through the Web (O’Connor, 1999; Scottish Executive, 2000; Werthner & Klein, 1999).
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Decades ago, before the use of the computer in the accommodation sector, those charged with making reservations performed their service by checking availability tables exposed on the wall or in large, updated, hand-written lists (O’Connor, 1999). The hotels received innumerous telephone calls, letters, and telex from potential clients, sometimes larger than that of the hotel’s reception, and worked to select correspondence, type letters, send telegrams, and deal with other demands. The delays were frequent, the cost of correspondence writing went sky-high, and specialized typists were in demand (World Tourism Organization, 2003).

A way found by the American hotel chains to streamline the reservation services was to centralize this function in a main office, serving the consumer better and offering a valuable service to the hotels belonging to that chain. O’Connor (1999) states that the reservation process in hotels in the USA was made even easier with the introduction of free telephone services in the mid-’60s, which permitted potential clients to perform an only call to obtain information or make reservations in any of the hotels of that chain in the world.

Although the reservation area became faster and more efficient, two large costs remained, those of telecommunications (free telephone service payment) and labor costs of the reservation agents necessary to answer the phones. With the increase in trips during the 1960s, the airline companies developed the computer reservation system (CRS), which pressured the hotel sector to develop its own (O’Connor, 1999).

Key Terms in this Chapter

Data Mining: The process of analyzing data to determine relationships undiscovered by previous analyses.

Bed and Breakfast: An establishment (as an inn) offering lodging and breakfast.

Data Warehouse: A data warehouse is a central repository for all or significant parts of the data that an enterprise’s various business systems collect.

Front Office: The department of the hotel that deals directly with clients. Normally, it involves the reception and the reservation sector of the hotel.

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