Property Management Systems for Eateries Hotels - Case Study Example

MANAGEMENT INFORMATION SYSTEMS Student’s name Code & Course Professor’s Name University City Date Executive Summary In a world always changing at a very fast rate due to technological advances, different sectors of the economy are affected by these changes. There has been need therefore to make strategies that would be able to adapt and fit to these changes in businesses. One such way has been the use of technology in administering services. Organizations have adopted the use of Property Management Systems to help in the marketing of their services. In the Hospitality industry Property Management Systems have been very effective in marketing and delivering services to the customers. The systems have basically made life easier for both the customers and the providers of the services. However there has been a challenge for most organizations in selecting the most appropriate PMS to use. This report uses different features of two well known PMSs to select an appropriate one for Eateries Hotels. Table of Contents 1.0 Introduction 1 1.1 Relevant Background Information 1 1.2 Authorisation 1 1.3The Aim of The Report 1 1.4 Scope 1 2.0An Analysis of the Latest trends in hospitality 2 3.0 The use of e-commerce in hospitality 3 3.1.1 The use of Third Party Internet Reservation Providers 4 3. 1.2 The Necessity to Link to a GDS 5 3.1.3 The use of Cloud Technology 5 3.1.4 The Latest Developments in Property Management Systems 6 4.0 An Analysis of Two PMS 6 4.1 Mobile Access 7 4.2 Multi-Property Functionality 7 4.3 Real-Time Functionality 7 4.4 Yield Management Integration 8 4.5 Online Booking Integration 8 4.6 Building Management Integration 8 4.7 Self-Check-in Kiosks Integration 9 5.0 recommendation 9 References 11 1.0 Introduction 1.1 Relevant Background Information The Managing Director of the Eateries Hotels intends to upgrade her technology systems as part of the building refurbishment currently being considered and wishes to ensure she has the necessary technological infrastructure to take the hotel into the next era. The Eateries Hotels has appointed a consultant to undertake an investigation into the appropriate technology to be implemented into the hotel and in particular to recommend a Property Management System which will take advantage of current “cutting edge” technology and will maximise efficiency and optimise profitability. 1.2 Authorisation As authorised by the MD of the Eateries Hotels. 1.3The Aim of The Report The aim of the report is to discuss hotel technology currently being used. This includes: i. The use of e-commerce in hospitality ii. The effect of e-commerce on brand management iii. The use of third party internet reservation providers, e.g. Wotif.com iv. The necessity to link to a GDS v. The use of Cloud technology vi. The latest developments in Property Management Systems The secondary aim is to produce a comparison report on two selected Property Management Systems utilising the comparative evaluation criteria set in section 4.0. 1.4 Scope The report will include, inter alia, the following: i. The effectiveness and ramifications of E-commerce on the hospitality industry ii. A discussion of any negative impacts and risks in the use of e-commerce iii. The effect on brand management of e-commerce iv. A discussion on the new methods of marketing the hotel in an e-commerce environment. v. The impact of new technology on the internal processes currently being utilised in the hotel. 2.0An Analysis of the Latest trends in hospitality Due to advancements in technology with time, the hospitality sector has found need to use technology so as to reach their market and promote their services (Noone, McGuire & Rohlfs 2011, p.304). The selections of PMS used by the sectors have been influenced by the choices of their competitors and the effectiveness of the systems. Those who have effectively used the e-commerce opportunities to their advantage have been able to increase on their profits while reducing the expenses (Buhalis & Crotts 2013, p.47-48). Customers are always looking for new channels of information that would influence their decisions. In the hospitality industry, e-commerce has been vital for facilitating this. According to research in the tourism sector, agents were spending slightly up to 80% of time preparing booking information and data but only 20% for the actual reservations. This was not only unsatisfactory for the customers because of its slowness but it also incurred significant losses on businesses. Arguably, these losses reflected across all hospitality sectors until the introduction of e-commerce. Air Asia; for example, use their Facebook fan page as a major marketing initiative. In 2009, November, the company initiated a ‘free sale’ campaign through their Facebook page, which helped them sell approximately a million seats in only two days. Consequently, they saved on millions which they would have used in print or televised advertisements. On the other hand, travel agencies are using the Global Distribution Systems (GDS) in booking hotel services. Some of the negative effects of using e-commerce include, but not limited to: Privacy Personal information is collected from consumers through e-commerce websites which are easily done. Since the online transactions are recorded, it could potentially create an online profile for the buyers. It is agreeable that such intrusions affect the consumer’s privacy. Hence, it suggests the need to consider their online presence. Security Consumer’s securities are affected tremendously. Online transactions are notably insecure as opposed to the traditional payments. At the same time the customer is subject to third party intrusions given that they operate in websites that are susceptible to attacks. Merchants and users ought to be aware of such electronic risk posed by e-commerce. 3.0 The use of e-commerce in hospitality The Increased usage of E-commerce in the hospitality industry has created significant changes. Arguably, it has enabled the need to maintain a competitive industry and functionality within an industry. Whereas numerous organisational have incorporated E-commerce, its realised benefits has enabled the effectiveness of the various companies. Its usage is imperative and has seen its effectiveness in offering customer value. The need for increased connectivity has made most companies to present strategies that are attuned to the ever changing operational dynamics. It is important nevertheless, that organisation’s attune their functionality to an improved service delivery and effectiveness. 3.1 THE EFFECTS OF E-COMMERCE IN HOSPITABILITY With the number of technologically savvy increasing, e-commerce plays a major role in brand management (Pizam 2012, p.78). It is important for companies to use the platforms provided by these channels to reach the target markets and attract customer preference in highly competitive sectors. E-commerce offers the service providers with consumer insights and also offers avenues for the companies to listen to the consumers, for example, through social media. Therefore, this strategy engages customers and enables the hospitality sector to apply important recommendations or suggestions posted by customers. This builds preferences and loyalty to the brand. E-commerce could also provide companies with data concerning customer’s behaviour and trends. This helps companies to react to the customers’ behaviours appropriately and in good time and promotes preference for the brand. Using search engine optimization strategies, the hospitality industry would be able to recognize relevant content from the online media queues that the industries would respond to. Responding to them, would increase the companies ranking on the search engines which are essential for attracting market consideration and preference. Eventually, this supports the brand’s business goals. E-commerce is therefore an important tool for the hospitality industry through which effective management of brands would be achieved. 3.1.1 The use of Third Party Internet Reservation Providers The use of third party internet reservation providers was at one point significantly advantageous to the hospitality industries. Customers would book reservations for hotels through third party agents who represented the hotels. The hotel guests basically purchase rooms from intermediaries selling them on behalf of the hotels. This procedure is however accompanied with a number of challenges (Rodriguez-Anton, Mar Alonso-Almeida Celemin & Rubio 2012, p.78). To begin with, the hotels will not always know what the customers spent on the reservations but only have a record of only the amount received from the third party agents. This difference could sometimes be significant. As a result, in cases where the hotels may need to change their pricing environment, the rate of room growth and amount could be understated (Kydd & Straus 2013, p.678-679). Then, there is the problem of miscommunication. For example, guests could arrive knowing that they have reservations which they booked through a third party only to find no reservation. Who is to be held responsible and what should be done in such cases? As such, there is need for hotels to have effective Property Management Systems,that would promote the hotels brands. 3. 1.2 The Necessity to Link to a GDS It is essential for hotels to link to a Global Distribution System. The GDS is directly controlled by the companies and link rates, service and bookings across the three hospitality sectors: hotel reservations, airline reservations and car rental activities (Nyheim & Connoly 2011, p.56). The main customers of GDS are travel agents who make reservations on diverse reservation systems controlled by vendors. The inventory is on the vendors’ reservation system and a GDS links to the vendor’s database. For example, in a case where a travel agency makes a request for reservation for a certain airline, the GDS will direct the request to the airline’s computer reservation system. As such, a travel agent connected to one GDS can book hotels or flights and associated hospitality services from any vendors worldwide that are in that GDS (Gossling & Lane 2014, p.8). 3.1.3 The use of Cloud Technology Cloud technology shares resources so as to achieve economies of scale within a network (Rodriguez-Aton, Mar Alonso-Almeida Celemin & Rubio 2012, p.77). The technology enhances the effectiveness of these shared resources which are not only shared by multiple users but also reallocated depending on demand. For example, cloud computer service serving Americans for example through email during their business hours could reallocate same resources to serve Europe maybe through a different application like web server. This enhances use of computing power. Therefore, cloud technology enables multiple users to access single server to access data and information without getting licences for different applications (Goyal & Jain 2012, p.365-366). 3.1.4 The Latest Developments in Property Management Systems Before the development of HPMS, paper work was used to carry out hotel tasks. Later softwares were developed to manage some little tasks such as payment management, managing guest check-ins and reservations among others. The HPMS was created because of need for simpler organizational system (Lockyer 2013, p.23-24). The HPMSs could be programmed to fit or suit a number of hotel chains. Besides, new module integration like energy and yield management systems are being integrated. With advances in technology, there are still more developments bound to happen with the HPMS for example, mobile access, integration with social media platforms and realising more HPMS cloud solutions (Nyheim & Connoly 2011, p.79-80). On the other hand, e-commerce presents numerous negative effects to consumers both to retailers and consumers. Price Wars The online transactions appear to be somewhat expensive given that they offer competitive pricing. This is attributed to the fact that the pricing are placed adjacent to other competitors where users can compare the prices. The retailers can be negatively affected in the event that they offer higher prices than competitors. Evidently, the retailer cannot sell much than what they anticipate. 4.0 An Analysis of Two PMS Having discussed the significance of HPMS and the trends, this section analyses MICROS and Cenium PMSs using the enlisted criteria to establish the best suit PMS for globally oriented hotels. The most appropriate PMS for the hotels will be one with features relevant to the operations of the hotel and dynamic. 4.1 Mobile Access Travelocity and TripAdvisor recent reports reveal that 55% and 66% respectively of their mobile bookings are from tablet devices. An increase in the smart phone technology and tablets has increased access to important technological service through these simple, convenient and easy to use hand devices (Gallier & Leidner 2014, p.12). They are easily portable and hence could be used to access information anywhere at any time. This mobile access has therefore become a preference to customer booking services and hence for most hotels it is necessary to use a system that facilitates the use. In this case both Cenium and MICROS PMSs have this feature. 4.2 Multi-Property Functionality For convenience purposes and effective management, it is important to have a system that is flexible and can operate in both single-property or multi-property mode and all the hotels’ properties having a single database (Bowie & Buttle 2013, p.112). The Eateries Hotels would be best served with a system with this functionality since it would harmonize the operations of chains of hotels. Cenium and MICROS PMSs both have this feature. 4.3 Real-Time Functionality This feature enables customers to receive any information and updates as soon as they are placed on the hotel’s database. As Green & Lomanno (2012, p.14) put it, this would enable the customers to gain quick access to information about our available services and new offers among other things at a quicker rate, hence very important to the HPMS of global hotels. Both Cenium and MICROS have this feature. 4.4 Yield Management Integration Yield management involves pricing strategies depending on consumer or customer behaviour. This is very important in for a hotel management system as it helps to maximize profits arising from fixed perishable resources (Gossling & Lane 2014, p.4). This feature would go a long way in helping the Eateries Hotel sustain a competitive advantage over other hotels in a highly competitive hotel sector. MICROS PMS has this important feature fully developed and functional while for Cenium it is partial, that is, yet to be fully developed hence having some limitations. This is a distinguishing feature between the two PMSs that would make MICROS preferable to Cenium in global hotel operations. 4.5 Online Booking Integration Most customers have overtime developed the habits of making advance bookings (Cohen & Olsen 2013, p.249). For most hotels globally, this online bookings could be necessary for accommodation and also service table reservations. Integrating this service into the PMS would give the hotel competitive advantage over other hoteliers. This feature is prominent in both Cenium and MICROS HPMSs. 4.6 Building Management Integration Customers need to be guaranteed of their safety within the hotels premises. Therefore, it is significant to ensure that the HPMS is fitted with features that enhance security always. For example, features controlling power systems, lighting, fire systems, security systems, electrical equipment, ventilation among others (Chan & Lam 2013, p.210-212). MICROS and Cenium PMSs both have this feature. 4.7 Self-Check-in Kiosks Integration This feature of PMS would not be of much significance to the Eateries hotels. Both Cenium and MICROS have the feature but then, it would not be essential in determining the most appropriate HPMS for hotels. The feature is more useful for airlines PMSs. 5.0 recommendation This report has established the significance of a HPMS in the effective management of the Eateries Hotels. Moreover, it identifies the significance of an effective HPMS in managing of the hotel’s chains and help in maximizing on profits while minimizing on unnecessary and avoidable expenses. Evidently, it is recommended that the HPMS be incorporated in the hospitality industry given its effectiveness in handling information systems. Whereas their comparisons with Cenium showcase its superiority, its incorporation will enhance productivity, functionality of organisation’s systems. Secondly, the incorporation of management information systems has showcased its ideal performance in management of yield time integration, online booking integration, yield time functionality and real time functionality. In order to offer customer value proposition, it is recommended that organisations effectively incorporates such systems. Systems such as Micros PS can potentially augment its management approach. Thirdly, the organisations in this industry should effectively attune their management systems to the changing technological dynamics. Attuning management systems to changing technological preference is imperative given the need to make systems more effectively and proficiently. As such, the organisation’s productivity can be effectively maintained in various aspects. 6.0 CONCLUSION The hospitability industry has effectively utilised modern technologies in effecting its services. Evidently, the incorporation of the systems has realised considerable advantages given its effectiveness. As such, the shifting trend from consumers preference to new channels of obtaining information and dispensing some services has created the need to shift to e-commerce. E-commerce has enabled online shopping, using cloud connectivity and add value to consumers. Cloud connectivity has seen its fair share of improved effectiveness, where users can access information at any locations. This has enabled the consumers to make online reservations at different locations; hence augmenting their user experience. On the other hand, enhanced management systems have been realised where, hoteliers can effectively manage resources and capabilities, to name a few. Various PMS systems have been in place namely; multi property functionality, mobile access and real-time functionality References Bowie, D., & Buttle, F. (2013). Hospitality marketing. Taylor & Francis. Buhalis, D., & Crotts, J. (2013). Global alliances in tourism and hospitality management. Routledge. Cohen, J. F., & Olsen, K. (2013). The impacts of complementary MICROSmation technology resources on the service-profit chain and competitive performance of South African hospitality firms. International Journal of Hospitality Management, 34, 245-254. Chan, E. S., & Lam, D. (2013). 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