Summer 1988 - In recent years, the rapid changes in corporate and ownership structures within the hospitality industry have had the side effect of forcing companies to employ technology in new and more productive ways. Increased transaction volumes through consolidations, complex reporting requirements, and international communications needs are just a few of the factors driving technological implementations in today's larger and more diverse hospitality organizations.
Unlike times past when the technology focus was on property-based systems and applications, today's hospitality organizations have shifted their attention to strategic solutions providing global connectivity, shared data capabilities, and secure electronic commerce, not to mention the ability to operate beyond midnight on December 31, 1999.
One current technology trend seen across all segments of the industry is the deployment of wide-area network (WAN) technologies for internal and external communication and information management. Typically, this involves the use of e-mail systems providing instant communication capabilities across international and technical boundaries. In addition to using e-mail for standard message delivery, many hotel companies now also utilize these systems for the transfer of time-sensitive files and reports such as statistical updates, payroll information, and operating results.
WAN-based communication systems are also being used by hotel companies
to communicate via the Internet with customers, vendors, hospitality information
services, and others. Some companies now deliver corporate or group confirmations,
contract revisions, billing summaries, and other information electronically.
The relative low cost and speed of delivery of this communication method,
combined with the security options offered and the convenience of a "paperless"
environment, have contributed to its widespread acceptance in the industry.
Several hotel companies have also begun utilizing WAN technology to
implement intranet programs for controlled access via the Internet to company-specific,
private information. The applications for this technology appear to be
limited only by the creativity and vision of the company.
Another technology just beginning to be implemented in the larger chains, but whose benefits will likely be adopted within smaller organizations in the future, is the data warehouse. To put it simply, a data warehouse is a database which consolidates information from multiple disparate systems into a universally accessible and useable format (within a defined user community). Although similar in some respects to a corporate intranet system, a data warehouse utilizes complex software programs to "read" and interpret the data in other systems, while intranet information is largely built and maintained manually. Data warehouse information is therefore "on-line, real-time," providing management with the most precise analytical and decision-support tools.
The type of information provided in a data warehouse is frequently marketing - related in nature, focusing on guest historical and prospective information. Other data applications might include accounting data, employee records, vendor information, or any other data category originating on an individual system but of interest or use to multiple departments or locations, particularly when combined with data from other sources. The downside of data warehouses is that currently they are very costly to implement (thus their limited adoption in smaller companies), although (as with all technologies) they should become more scaleable and therefore more affordable to a wider range of companies in the future.
Electronic commerce, a term given to performing business transactions
electronically, and most commonly over the Internet, has also begun to
take hold within the hospitality industry. Although a large number of hospitality
properties have had Internet presence via a home page on the World Wide
Web for some time (currently estimated at nearly 70% of all U.S. properties),
until recently few of them actually utilized the business
advantages afforded by this technology. With today's industry consolidations,
more and more companies are able to offer on-line room reservations through
individual Web sites or larger booking organizations. This provides a cost
- effective and efficient method of obtaining business. and appears to
be gaining widespread acceptance in the marketplace.
Other applications of electronic commerce employed by hospitality organizations include on-line purchasing of products and services (often transacted over vendor-supplied equipment and programs), and sales of brand logo or other souvenir-type products. Like the on-line reservations applications, electronic purchasing and selling programs are highly cost-effective and have the additional benefit of providing extensive on-line reporting and analysis capabilities.
These are just a few of the technological applications being embraced within an industry becoming more focused on competitive advantage, profitability, and shareholder value. Strategic corporate technology planning and deployment are no longer matters of choice for a hospitality organization wishing to remain competitive and viable into the next century. Those companies who are making the right investments in technology today are sure to emerge as tomorrow's leaders.
The Real Estate Report is published by KPMG's National Real Estate, Hospitality, and Construction Practice. © 1998 by KPMG Peat Marwick LLP All rights reserved. For additional information email KPMG.
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