CHAPTER 5

CHAPTER 5. HOSPITALITY MANAGEMENT AND THE INTERNET

Objective: This chapter introduces the concept hospitality management through the use of the internet. Electronic Commerce (e-commerce) is one of the most common services on the web that is used by the hospitality industry.. After this chapter, the students must be able to define and expound the definition of e-commerce, the span and scope of e-commerce, its applications to the hospitality industry and be able to tell some of the barriers and technical components. Figure 5 shows the e-commerce concept

Topics:

Ø Electronic Commerce (E-Commerce) .:. Span and scope of E-Commerce

Ø E-Commerce applications for hospitality organizations

Ø Technical Components of E-Commerce

5. 1 Definition

E-commerce (electronic commerce or EC) is the buying and selling of goods and services on the Internet, especially the World Wide Web. In practice, this term and a newer term, e-business, are often used interchangeably. For online retail selling, the term e-tailing is sometimes used.

It is the use of communication technologies to transmit business information and transact business rather than via paper. Taking an order over the telephone is a simple form of EC. Commerce conducted via the internet is also called EC, but commercial exchanges on the internet are only one of several advanced forms of EC that use different technologies, integrated applications and business processes to link enterprises.

5.2 Span and Scope of E-Commerce

E-commerce starts with the development of the internet and subsequent development of e-commerce. Its scope is in proportion of business involved in e-commerce, type of trade being conducted, business to business, business to consumer and consumer to consumer (e.g. eBay) and their different needs and systems

5.3 Barriers of E-Commerce Website

Barriers: identifying and meeting customer needs, channel conflicts (e.g. traditional outlets of a business may suffer), scarcity of skills, design elements, site downtime, financial resources, international and legal barriers, lack of trust (in reliability of system and security of payment), customer attitudes.

Solutions: government initiatives and support, (Electronic Communications Bill 1999 and subsequent legislation) AEB (Alliance for Electronic Business), software houses, case studies of success

5.4 Applications of E-Commerce

Hospitality is said to be "kindness in welcoming guests or strangers."

E-Commerce can be applied to the hospitality industry in many ways. Primarily e- commerce is used to seek and register new business. Hospitality businesses are setting up shop online, allowing potential customers to see what they have to offer, view photos of their amenities and services, and even to make reservations and purchase services.

The primary goal of hospitality businesses in terms of e-commerce is to drive revenue while showing customers first-hand and realistically what they can expect to experience. After all, hospitality is about meeting expectations.

Effective hospitality web sites will offer itemized lists of exactly how much each service is, photos of the facility, wording that is straight-forward and doesn't make something sound better or worse than the services or products that are actually offered, and ways you can purchase the goods or services.

Many of the larger hospitality businesses already offer ways you can make purchases on their e-commerce sites. They have found value in showcasing what they offer and making purchases. They are making money by allowing visitors to their e- commerce sites to make reservations and spend money.

For example, hotels can create e-commerce sites that allow visitors to find out whether rooms are available for rent for particular dates. These sites can then take credit card information and other payment types, so customers can reserve rooms.

Restaurants can create e-commerce sites that allow visitors to view menus, view photos of the foods offered, and even place orders or make reservations online.

Service clubs and organizations like hunting, golf, or boat rental clubs can create e- commerce sites that allow visitors to view which dates and times are available for reservations and make purchases.

Cruise ship companies can create e-commerce sites that allow you to view which cruises are available on which dates, what types of rooms are available, and their prices. These sites then can allow customers to make reservations or purchase cruises.

Taxi companies can create e-commerce sites that allow you to see how long it could take for a taxi to pick you up at a particular destination, to get a cost estimate, and to place a taxi order.

Sports organization companies can create e-commerce sites that allow you to view schedules of the sports teams, find out which seats are available for which games, and even purchase tickets and other merchandise.

In addition, many hospitality companies find it fruitful to go so far as to sell advertising on their sites and allow other, related hospitality companies to link on their sites. This provides customers a chance to visit the companies' affiliates and easily plan entire weekend or vacation getaways in just a few minutes.

5.5 Technical Components of E-Commerce and Organizational Aspects

Ø Sufficient work done in market research and analysis. E-commerce is not exempt from good business planning and the fundamental laws of supply and demand. Business failure is as much a reality in e-commerce as in any other form of business.

Ø A good management team armed with information technology strategy. A company's IT strategy should be a part of the business re-design process.

Ø Providing an easy and secured way for customers to effect transactions. Credit cards are the most popular means of sending payments on the internet, accounting for 90% of online purchases. In the past, card numbers were transferred securely between the customer and merchant through independent payment gateways. Such independent payment gateways are still used by most small and home businesses. Most merchants today process credit card transactions on site through arrangements made with commercial banks or credit card companies.

Ø Providing reliability and security. Parallel servers, hardware redundancy, fail-safe technology, information encryption, and firewalls can enhance this requirement.

Ø Providing a 360-degree view of the customer relationship, defined as ensuring that all employees, suppliers, and partners have a complete view, and the same view, of the customer. However, customers may not appreciate the big brother experience.

Ø Constructing a commercially sound business model.

Ø Engineering an electronic value chain in which one focuses on a "limited" number of core competencies -- the opposite of a one-stop shop. (Electronic stores can appear either specialist or generalist if properly programmed.)

Ø Operating on or near the cutting edge of technology and staying there as technology changes (but remembering that the fundamentals of commerce remain indifferent to technology).

Ø Setting up an organization of sufficient alertness and agility to respond quickly to any changes in the economic, social and physical environment.

Ø Providing an attractive website. The tasteful use of color, graphics, animation photographs, fonts, and white-space percentage may aid success in this respect.

Ø Streamlining business processes, possibly through re-engineering and information technologies.

Ø Providing complete understanding of the products or services offered which not only includes complete product information, but also sound advisors and selectors.

Naturally, the e-commerce vendor must also perform such mundane tasks as being truthful about its product and its availability, shipping reliably, and handling complaints promptly and effectively. A unique property of the Internet environment is that individual customers have access to far more information about the seller than they would find in a brick-and-mortar situation.

CHAPTER 6

E-INFORMATION AND DISTRIBUTION SYSTEMS

Objective: This chapter focuses on applications of information and distribution systems that provide interfaces to each of the hospitality business functions. E-information and distribution systems use technology to provide communication among interdependent operating units, which permits the staff members to focus on the core competencies of creating memorable experiences for the guests of hotels, restaurants, recreation facilities, entertainment venues, and travel companies.

Topics:

 Hospitality functions
 E-Business process
 Enterprise resource planning systems
 Artificial Intelligence

It is said that hospitality e-commerce consists of transactions and interactions between the business and customers (guests), employees and other businesses. It is recognized that the nature of the business-to-customer transactions are personal and intimate, which somewhat limits this aspect of e-commerce in the hospitality industry. These limitations, however, do not apply to the e-information and distribution systems that help enhance productivity for the hospitality businesses.

6.1 Hospitality Functions

Hospitality operations are quite complex due to the need to manage every moment that comprises the guest experience. E-information and distribution brings together all of the business functions that contribute to the operation of successful hospitality organizations.

Business functions of hospitality organizations include:

 Marketing
 Human resource management
 Accounting, and
 Operations
.

6.2 E-Business Process

Electronic Business, or "e-Business", may be defined broadly as any business process that relies on an automated information system. Today, this is mostly done with Web-based technologies. The term "e-Business" was coined by Lou Gerstner, CEO of IBM.

Electronic business methods enable companies to link their internal and external data processing systems more efficiently and flexibly, to work more closely with suppliers and partners, and to better satisfy the needs and expectations of their customers.

In practice, e-business is more than just e-commerce. While e-business refers to more strategic focus with an emphasis on the functions that occur using electronic capabilities, e- commerce is a subset of an overall e-business strategy. E-commerce seeks to add revenue streams using the World Wide Web or the Internet to build and enhance relationships with clients and partners and to improve efficiency using the Empty Vessel strategy. Often, e- commerce involves the application of knowledge management systems.

There is a new model for the information distribution process that supports hospitality/tourism organizations. The key feature of this business process is the design of cross- functional information systems that handle multiple business functions. The two processes are Supply Chain Management (SCM) and enterprise resource planning (ERP), which are used to facilitate front end and back end electronic commerce (E-Commerce) and internal employee application interfaces (EAI). Supply Chain Management is a system of information interfaces with sources of supply for material resources. Enterprise Resource Planning is the overall information system used to maximize resource utilization in the transformation process and to manage output generation. Hospitality E-Commerce is the use of electronic media for transactions and interactions among guests/clients, employees and other business enterprises. Employee Application Interfaces (EAI) are B2E information systems aimed at maximizing employee productivity.

E-business involves business processes spanning the entire value chain:

 electronic purchasing and supply chain management
 processing orders electronically
 handling customer service, and
 cooperating with business partners.

Special technical standards for e-business facilitate the exchange of data between companies. E-business software solutions allow the integration of intra and inter firm business processes. E-business can be conducted using the Web, the Internet, intranets, extranets, or some combination of these.

3 Categories of business applications:

1. Internal business systems:
 customer relationship management
 enterprise resource planning
 document management systems
 human resources management

2. Enterprise communication and collaboration:
 VoIP
 content management system
 e-mail
 voice mail
 Web conferencing

3. electronic commerce - business.-;to-business electronic commerce (B2B) or business- to-consumer electronic- commerce (B2C):
 internet shop
 supply chain management
 online marketing

Business models

When organizations go online, they have to decide which e-business models best suit their goals. A business model is defined as the organization of product, service and information flows, and the source of revenues and benefits for suppliers and customers. The concept of e-business model is the same but used in the online presence.

The following is a list of the currently most adopted e-business models:
 E-shops
 E-procurement
 E-malls
 E-auctions
 Virtual Communities
 Collaboration Platforms
 Third-party Marketplaces
 Value-chain Integrators
 Value-chain Service Providers
 Information Brokerage

Classification by provider consumer

Roughly dividing the world into providers/producers and consumers/clients one can classify e-businesses into the following categories:

 business-to-business (B2B)
 business-to-consumer (B2C)
 business-to-employee (B2E)
 business-to-government (B2G)
 government-to-business (G2B)
 government-to-government (G2G)
 government-to-citizen (G2C)
 consumer-to-consumer (C2C)
 consumer-to-business (C2B)

6.3 Enterprise Resource Planning Systems

Hospitality organizations that use IT capabilities will greatly enhance their competitive edge. Customized solutions, business collaboration, flexible organization structures all provide what the customer is looking for when doing business with a firm.

As a customer, you may not realize that other organizations are participating in the development of your product or service, as you may be dealing with a virtual company comprised of many firms acting in collaboration. An example of this in the industry is the proliferation of online intermediaries that provide cruises, airline flights, and hotel rooms by working as brokers in collaboration with a number of hospitality firms. In the near future, hospitality organizations will establish their own inter-sector collaborative initiatives, which will eliminate the role of the independent hospitality broker. An example of this trend in the present is the near elimination of travel agents as third party contractors of hospitality and tourism services.

Information systems are certainly efficient and effective when it comes to management information used to make decisions. Managers have access to automated information that used to take long hours of tedious manual operations to compile. This is one of the intended outputs that drove the developments in the areas of database development and networking. Table 6.2 lists four types of management reports that are generated from information systems.

Table 6.2 Management reports generated from information systems

Periodic Scheduled Reports
Standard reports generated on periodic bases. Examples include Night Audit reports on a daily basis, Month-to-Date budget reports on a weekly basis, and Variance reports on a monthly basis.

Exception Reports
Produced and distributed when something out of the ordinary occurs. Flash and Pop-Up reports are examples.

Demand Reports
Sorted and specialized reports available to managers through database report generators and SQL.

Push Reports
Exception information "pushed" through the network to the workstations of all managers with a need to know. Similar to exception reports, but distributed to a more specific group of managers.


The periodic reports (daily, weekly, quarterly, annually distributed) are automatically generated and distributed to lists of managers and executives based on need-to-know the information. Additional reports such as, schedules, hours worked, banquet event orders (BEOs), occupancy, and others, are distributed to the general employee populous, again, based on the need to know the specific information. Many individuals in organizations are accustomed to these reports being printed on paper and placed in intra-company mail boxes for distribution. More progressive companies, however use electronic distribution, which is more effective and efficient than printed reports.

Remember that reports are generated by queries that order the sorting and combining of various records in the database used to provide specific information and analysis. Marketing and project managers are particularly fond of power associated with online analytical processing (OLAP) procedures available in progressive hospitality organizations. Online Analytical Processing (OLAP) uses electronic media to provide data collection and analysis from remote locations in real time. Table 6.3 provides a listing of these activities.

Table 6.2 OLAP activities

Automated Environment Analysis (AEA)
Data warehouses linked through a Database Management System (DBMS) with data mining features.

Consolidation
Chain of regional offices to provide information by property, city, geographic region, district or nation.

Drill Down
The opposite of consolidation. The chain home office can identify top producers at specific properties in ranking order and compare them with regional, district or national performance benchmarks.

Slicing and Dicing
Breaking information into customized segments, sectors or niches.

6.4 Artificial Intelligence

Artificial intelligence (AI) comes from the blended disciplines of computer science, biology, psychology, linguistics, mathematics and engineering. The goal of AI is to create machines with human physical and mental abilities (reasoning, learning, and problem solving). AI is not a new technology application, however, it has not been widely used until recently, as cost and machine power limitations prevented the development of its application for practical uses. Some of the aspects of AI are listed below:

 Neural Networks - The closest electrical simulation of an organic system. Comprised of networked processors that interact as transponders and have the capacity for learning based on identification of patterns and relationships.

 Fuzzy Logic- Processors that can perform reasoning based on inferences and incomplete data (the opposite of "crisp data") in response to SQL inquiries.

 Virtual Reality - Computer simulated reality based on multi-sensory input and output devices to create undetected simulated environments through telepresence illusions.

 Intelligent Agents - Applets that perform tasks for end users using a built-in knowledge base about processes. Application Wizards are good examples.

 Expert Systems – knowledge-based system that possesses expertise in a single discipline. Users pose questions and problems and the ES provides solutions. The three components of all expert systems are listed below:

o Knowledge base is the information contained by the system in factual and heuristic form.

o Inference engine provides analysis tools for If/Then reasoning and adds experiences to the KB through repetition.

o A knowledge engineer and a logic programmer program the expert shell.

All of these applications have been available from in technology R&D laboratories since the early 1990s. While smart chips have been built into commonly used machines and appliances that use some of these technologies (automobiles, for instance), the more powerful applications have been precluded from reaching market places due to hardware constraints. Today, however, with more powerful microprocessors and lower hardware costs, researchers are considering broad applications of these technologies. The implications for the hospitality/tourism industry over the next ten years will only be limited by the imaginations of decision-makers. This is a wonderful time for hospitality practitioners, as these technologies permit hospitality managers to use creative talents to envision and develop applications in conjunction with technical experts.

CHAPTER SUMMARY

This chapter has discussed many of the advancements in technology and information telecommunications that provide the establishment of fully functional E-Commerce systems. These systems infiltrate the interior aspects of the organization and link those to outside sources via the Internet, intranets, and extranets. The key driver for these applications is the overall advancement of telecommunications technologies. As discussed in the chapter, technology is facilitating new forms of open systems within, between, and among the variables that exist in the external environment.

Chapter 7

E-BUSINESS STRATEGIES AND SOLUTIONS

Objective: This chapter deals with the existing business strategies in E-Commerce. At the end of this chapter, the students should be able to develop a simple e-business planning process, and a strategic solution.

In today's highly competitive business environment, budget-oriented planning or forecast-based planning methods are insufficient for a large corporation to survive and prosper. The firm must engage in strategic planning that clearly defines objectives and assesses both the internal and external situation to formulate strategy, implement the strategy, evaluate the progress, and make adjustments as necessary to stay on track. Below is a simplified strategic planning diagram.

Strategic Planning Steps
Mission and Objectives

The mission statement describes the company's business vision, including the unchanging values and purpose of the firm and forward-looking visionary goals that guide the pursuit of future opportunities.
Guided by the business vision, the firm's leaders can define measurable financial and strategic objectives. Financial objectives involve measures such as sales targets and earnings growth. Strategic objectives are related to the firm's business position, and may include measures such as market share and reputation.

Environmental scan

The environmental scan includes the following components:
 internal analysis of the firm
 Analysis of the firm's industry
 External macroenvironment

The internal analysis can identify the firm's strengths and weaknesses and the external analysis reveals opportunities and threats. A profile of the strengths, weaknesses, opportunities, and threats is generated by means of a SWOT analysis. (Strength, Weaknesses, Opportunities, and Threats)

An industry analysis can be performed using a framework developed by Michael Porter known as Porter's five forces. This framework evaluates entry barriers, suppliers, customers, substitute products, and industry rivalry.

Strategy Formulation
Given the information from the environmental scan, the firm should match its strengths to the opportunities that it has identified, while addressing its weaknesses and external threats.
To attain superior profitability, the firm seeks to develop a competitive advantage over its rivals. A competitive advantage can be based on cost or differentiation.

Strategy Implementation
The selected strategy is implemented by means of programs, budgets, and procedures. Implementation involves organization of the firm's resources and motivation of the staff to achieve objectives.

The way in which the strategy is implemented can have a significant impact on whether it will be successful. In a large company, those who implement the strategy likely will be different people from those who formulated it. For this reason, care must be taken to communicate the strategy and the reasoning behind it. Otherwise, the implementation might not succeed if the strategy is misunderstood or if lower-level managers resist its implementation because they do not understand why the particular strategy was selected.

Evaluation & Control
The implementation of the strategy must be monitored and adjustments made as needed. Evaluation and control consists of the following steps:
 Define parameters to be measured.
 Define target values for those parameters.
 Perform measurements.
 Compare measured results to the pre-defined standard.
 Make necessary changes.

E-BUSINESS SOLUTIONS
Tips and techniques to a better e-business solution:
I. an e-mail address.
II. promote your business.
III. a good name for your website, URL.
IV. a website.
V. get people to visit your website.
VI. Customer Relations Management (CRM)
VII. register with search engines
VIII. get statistics about visits to your website
IX. get an evaluation of the efficiency of your website.
X. improve your website.
XI. prepare for e-commerce taxes.

I. E-Mail
To conduct electronic business successfully the first thing you need is an e-mail address. Most Internet Service Providers (ISPs) will offer you one for free or for a modest fee. However, the e-mail address that you want my already be taken. You need an address that is unique worldwide. So it may take some searching and compromising to find one for you.
Occasionally, you may want to change your provider of e-mail services. For instance, you may not like the advertisements that go with a free address. If you are a member of the Institute of Electrical and Electronics Engineers (IEEE) you can get an e-mail alias. This means that you can keep that address when you change providers. It also means that your e- mail will be routed through the IEEE server, for example, which offers an extra firewall against viruses.

II. Promotion
As with all business and commerce you will have to promote your e-business and e- commerce. You can use all conventional means, ways and media. However, certain aspects are specific and you have to consider them.
Some users and authorities take a dim view of so-called scamming, i.e. flooding users with unsolicited commercial e-mail (UCE) messages. There are already laws prohibiting such activities and others are in the works.
The use of equipment that automatically calls a series of telephone numbers and leaves recorded messages is also considered annoying.
:::.

III. Universal Resource Locator, URL
The URL is the address of your website. It consists of . . Typical domains are ".com" for commerce, ".edu" for education, ".org" for organization, ".mil" for military, ".gov" for government, and ".net" for network. These are all U.S. domains. The United States also has the country code ".us" that is used occasionally. Every other country has a country name such as ".ca" for Canada and ".uk" for United Kingdom and .ph for Philippines. The country code for Moldova, ".MD" is popular among medical doctors! Note that there are no general rules about the allocation of domains. It is up to the registration agency to accept or decline a name. The world is running out of popular ".com" names and they can be traded at millions of dollars. As with e-mail addresses, your URL must be unique worldwide.

IV. Website
The next step is to create a website and put contents on its pages. When you surf the web you will see all kinds of WebPages, one fancier than the other. Do not fall for the temptation to make fancy WebPages. You are not out to win a webpage award. You want to sell your products and services. Make sure that advertisements for the products and services of others do not overwhelm the promotion of your own products and services.
Avoid using dark backgrounds - in particular black - for text, which will then be hard to read. Do not use a small font that is difficult to read. Backgrounds and pictures will also slow down the downloading of pages. Your potential costumers and clients may give up before they get to the promotion of your goods. Keep your WebPages simple!
Make sure that the contents of your website can be displayed and printed without scrolling left or right. You may have noticed that text to the right of a site does not print. You do not want this to happen to your site.

Websites are written in the HyperText Markup Language (HTML), in one of its versions, or in similar languages like the Extended Markup Language (XML). You want to write your website in a language that most browsers can read, like the basic HTML. A
browser is a computer program that reads the contents of websites. The Microsoft Internet Explorer and the Mozilla Firefox are examples.

There are HTML editors like the Microsoft FrontPage and Netscape's Composer that automatically write in HTML. Thus, you do not have to learn HTML, even though it is recommended. Knowing some HTML lets you edit your webpage content. There are simple books like the 10 Minute Guide to HTML.
You want your customers and clients to be able to register and to communicate with you to order your products and services, and to pay for them by credit cards, etc. - all from the website. For that you need one or several fill-in forms on your website. You can arrange to have the filled in information sent bye-mail to any e-mail address of your choice. You can read about how to create them in manuals and help-files. Also ask your ISP regarding fill-in forms.
If you select a free or low fee website and/or e-mail server, the ISP may restrict the sizes of your e-mail and the number of website hits. Make sure that you agree to the ISP's rules.
You can also have your own e-mail and website servers. To start you only need ~ something like a Microsoft NT or 2000 Server.

V. Increasing Hits and Traffic
It is essential that your potential customers and clients visit your website to be exposed to your promotional efforts. There are several ways to increase the traffic to your website.
1. Use a Title of your site that conveys what you offer. Search engines look for Titles and direct surfers to your site depending on the text in the Title.
2. Use META KEYWORDS in the head of your HTML text. For example: - This is another kind of text that search engines look for. However, do not overdo your META -files. Some search engines are programmed to reject WebPages that are considered being designed to manipulate search results.

3. Add a META Description Tag to describe your site for the search engines. Sample:

4. Register your website with search engines. You can do this individually with each engine, or you can use services that do it for you. With several thousand search engines in use worldwide, registering with all of them is a chore.

Yahoo! has an extensive website that tells you how to suggest a website to them. Go to http://howto.yahoo.com/chapters/lO/a.html and click on Suggesting a Site.

VI. Customer Relations Management (CRM)

You have the option to encourage people to correspond with you by e-mail. To get replies by e-mail, you need to post your e-mail address on your website, and/or have forms for replies, comments, ordering, etc. You should encourage people to give you their e-mail address.
People will also reply by telephone and fax. If you expect any reasonable number of phone calls you will need a Call Center. A more up-to-date name is Contact Center. Because customers and clients will contact you by voice, fax and e-mail, you will need a Contact Center that handles all kinds of contacts. Information about the caller, including history, e- mails, faxes, etc. should be displayed to your customer representative at the same time that he/she takes a call.



VII. Register with Search Engines
Listing with some ten of the top search engines should give you good enough service. Among the top engines are All the Web (Fast), AltaVista, AOL, Excite, Go.com, Google, HotBot, Lycos, Microsoft's MSN, Netscape, NorthernLight, WhatYouSeek and Yahoo!. Note that rankings differ with the ranking criteria used.
To reach them try websites that offer listings, such as Open Directory, WebCrawler, etc. You can also list directly with each search engine.

VIII. Hit Statistics

You need to know how successful your website is, i.e. the number of people that visit it and what they are looking at. Most Internet Service Providers (ISPs) offer hit counters. Ask your ISP how to install a counter. They are all different.
A hit counter typically displays the number of previous visitors. If you do not want your visitors to know that number, there are programs that send the information to you only. Other programs give you the number of hits for each page of your site.

Several programs that track hits are available. They will report the number of hits per page, the referring search engine, the domain name of the visitors, etc. Among such programs are HitBox and WebPosition.

IX. Evaluate the Efficiency of Your Web site

You should evaluate the efficiency of your website. This can be measured in the number of hits, as stated in Section VIII. above. The amount of purchases, the listings by search engines, etc. are also part of the efficiency. Continuously make sure that your site does not have any dead links, that browsers will find it, that download times are reasonable, etc. There are services that evaluate the efficiency of your website, some for free. Try ProBooster, ProBoostGold and WebPosition.

X. Improve your website
Use all the information you have collected to improve on your website.

XI. Prepare for E-Commerce Taxes
Governments are always looking for things that can be taxed. E-commerce is no exemption. However, there are also strong oppositions to taxing e-commerce. Some jurisdictions are levying taxes on e-commerce, others are not. Some are payable by sellers, others by users and third parties.

CHAPTER 8

Computer Reservation Systems and Global Distribution Systems

Objective: This chapter deals with the existing reservation systems used by the hospitality industry. At the end of this chapter, the students should be able to identify and enumerate the different techniques and strategies on an online reservation and information systems.

Definition:

A computer reservation system (CRS) is a computerized system used to store and retrieve information and conduct transactions related to travel. Originally designed and operated by airlines, they were later extended to travel agents as a sales channel; major CRS operations that book and sell tickets for multiple airlines are known as Global Distribution System (GDS). Airlines have divested most of their direct holdings to dedicated Global Distribution System companies, and many systems are now accessible to consumers through Internet gateways for hotel, rental cars, and other services as well as airline tickets

GDS / CRS Evolution

The travel marketplace is a global arena where millions of buyers ( travel agents and public) and sellers (hotels, airlines, car rental companies, etc.) work together to exchange travel services. Among the “shelves” on which buyers search for travel services are world global distribution systems and the Internet distribution systems. These systems have become electronic supermarkets linking buyers to sellers and allowing reservations to be made quickly and easily. Nowadays, more travel is sold over the internet than any other consumer product. The Internet is a perfect medium for selling travel as it brings a vast network of suppliers and a widely dispersed customer pool together into a centralized market place. Nearly 37 million f America’s more than 162-million active internet users have already purchased travel online. Online travel bookings exceeded $23 billion in 2001, and are expected to reach $63 billion by 2005.

However, any discussion of the Internet as a distribution channel for travel needs to start with an understanding of the existing electronic distribution infrastructure, the Global Distribution System (GDS). The airline industry created the first GDS in the 1960s as a way to keep track of flight schedules, availability, and prices. Although accused of being “dinosaurs” due to their use of legacy system technology, GDS were actually among the first e-commerce companies in the world facilitating B2B electronic commerce as early as mid 1970s, when SABRE (owned by American Airline) and Apollo (United) began installing their propriety internal reservations systems travel agencies. Prior to this, travel agents spent inordinate amount of time manually entering reservations. The airlines realized that by automating the reservation process for travel agents, they could make the travel agents more productive and essentially turn into an extension of the airline’s sales force. It is this original legacy that GDS today provide the backbone of the internet travel distribution system.

There are currently four major GDS systems:

1. Amadeus
2. Galileo
3. Sabre
4. Worldspan

In addition, there are several smaller or regional GDSs, including SITA's Sahara, Infini (Japan), Axess (Japan), Tapas (Korea), Fantasia (South Pacific), and Abacus (Asia/Pacific) that serve interests or specific regions or countries.

I. Amadeus

Founded in 1987 by Air France, Iberia, Lufthansa, and SAS, Amadeus is the youngest of the four GDS companies. Amadeus is a leading global distribution system and technology provider serving the marketing, sales, and distribution needs of the world's travel and tourism industries. Its comprehensive data network and database, among the largest of their kind in Europe, serve more than 57,000 travel agency locations and more than 10,500 airline sales offices in some 200 markets worldwide. The system can also provide access to approximately 58,000 hotels and 50 car rental companies serving some 24,000 locations, as well as other provider groups, including ferry, rail, cruise, insurance, and tour operators.

2. Galileo International

Galileo International was founded in 1993 by 11 major North American and European airlines: Aer Lingus, Air Canada, Alitalia, Austrian Airlines, British Airways, KLM Royal Dutch Airlines, Olympic Airlines, Swissair, TAP Air Portugal, United Airlines, and US Airways. It is a major player in the GDS business throughout the world: North America, IEurope, the Middle East, Africa, and the Asia/Pacific region. Galileo International is a diversified, global technology leader. Its core business is providing electronic global distribution services for the travel industry through its computerized reservation systems, leading-edge products and innovative Internet-based solutions. Galileo is a value-added distributor of travel inventory dedicated to supporting its travel agency and corporate customers and, through them, expanding traveler choice.

3. Sabre

For more than 40 years, Sabre has been developing innovations and transforming the business of travel. From the original Sabre computer reservations system in the 1960s, to advanced airline yield management systems in the 1980s, to leading travel web sites today, Sabre technology has traveled through time, around the world, and has touched all points of the travel industry. In July of 1996, Sabre became a separate legal entity of AMR (parent company of American Airlines), followed by a successful initial public offering in October in which AMR released approximately 18% of its shares to be publicly traded. Sabre, represented in 45 countries, is a leading provider of technology for the travel industry and provides innovative products that enable travel commerce and services, and enhance airline/supplier operations.

4. Worldspan

Founded February 7, 1990, Worldspan was originally owned by affiliates of Delta Air Lines, Inc., Northwest Airlines, and Trans World Airlines, Inc. It is currently owned by affiliates of Delta Air Lines, Inc. (40%), Northwest Airlines (34%), and American Airlines, Inc. (26%). Since its 1995 advance into the world of Internet technology for the travel industry, Worldspan has successfully developed the strategies, solutions, and services to ensure the company's long-term success in the new web-based world of travel distribution. Worldspan provides worldwide electronic distribution of travel information, Internet products and connectivity, and e-commerce capabilities for travel agencies, travel service providers, and corporations. Worldspan currently serves 20,021 travel agencies in nearly 90 countries and territories. Headquartered in Atlanta, Georgia, Worldspan connects approximately 421 airlines, 210 hotel companies, 40 car rental companies, 39 tour and vacation operators, and 44 special travel service suppliers.

Advantage of hotel intermediaries:

Meeting planners and travel agents could become an even more important distribution channel than they already are for hotels, provided that lodging operators understand the - factors that create value for those important intermediaries. As part of Cornell's broad-based survey of best practices in the U.S. lodging industry, researchers conducted a survey to discover the hotel attributes and practices that create value for travel agents and meeting - planners. The study found that the most important factor in the lodging transaction with intermediaries is a hotel's ability to make the hotel booking process as smooth as possible, including a problem-free stay for the clients. While location is, of course, the key factor in the intermediaries' choice of a hotel for their clients, travel agents indicated that the quality of communications, the hotel's brand name or reputation, and the quality of deals or incentives were also important in creating value in the booking transaction. While a good price is important, meeting planners additionally consider meeting and convention services and food- service quality as essential to creating value in a hotel transaction.

Speech Technology to Distribution System

IT in tourism helps to reduce information gaps among suppliers by providing information on market products, and among consumers by reducing the complexity of decision making. Mobile tourist information applications for in-trip information services are developed in different ways. Speech technology offers a similar in-trip information system in the form of a telephony speech dialog systems (SDS), which provides diverse information via a telephone voice interface in a dialog of question and answer. The idea of a destination speech dialog system so far solely exists in theory. The system can be reached by tourists via a (mobile) telephone in the destination where they receive information on sights, accommodation, opening hours, entrance fees, the weather, etc.

HRTM135 LABORATORY CLASS WED 1-4

for all students under Ms. Unajan for the HRTM 135 laboratory, Wednesday, 1-4...

we will have our class in the internet cafe of DCST on July 21, 2010, 1-4 in the afternoon.

Everybody is to finish all their exercises (1-4) and have it checked.

Project for finals will also be announced.

Everybody under that class.. no more batch 1 and batch2..

c. u.

ANNOUNCEMENT for HRTM 135

July 7, 2010 (Wednesday) lectures on 8:00 - 9:00 and 4:00 - 5:00 and July 8, 2010 (Thursday) 8:00 - 9:00.. we will not meet on during lecture time..

Here is what you should do:

1. meet with your group mates.

2. decide on what specific hospitality industry will u be promoting
hotels
restaurant
food chains
resort
leisure cruise
airlines
tourist spots (local, national, global) - most preferable if local spots in your own provinces... promote your local tourism
and many others

3. once decided, its time for you to create your blogs.

4. you can use blogspot.com, wordpress.com, yahoo blogs, facebook blogs, friendster blogs and other blogging sites.

5. make sure to describe in your blogs that it is a blog for your HRTM135 subject then give me the complete URL of your blogs in our next meeting during our lecture. it will be viewed in our lecture time from time to time for improvement and progress...

keep posted...and post comments for questions and clarifications

QUIZ ANNOUNCEMENT

Chapter 1 Quiz on July 5, 2010 for MW class and Quiz on July 6, 2010 for TTh class.. Be conscious of your time. 30-minute quiz only.