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 (
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.
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