Chapter 1: Introduction in Tourism and Information

Technology

LEARNING OBJECTIVES
At the end of the chapter, the student should be able to:

1.identify key terms and concepts in information technology;

2.describe the evolution of information technology;

3.recognize the types of information technologies relevant to tourism;

4.explain the synergies between the travel industry and information technology; and

5.evaluate the strategic applications of information technology in tourism

organizations and destinations.

What is Tourism and Information Technology?

TOURISM: AN INFORMATION-INTENSIVE INDUSTRY

The tourism industry thrives on information. The size of the industry alone
suggests that it generates large volumes of information to be processed and
communicated. For each person embarking on a trip, scores of messages and
pieces of information must be exchanged: itineraries, schedules, payment
information, destination and product information and passenger information; but
the tourism industry exhibits many other unique characteristics, which create a
need for the IT applications used by travelers, organizations and tourism
agencies. This section will first present a model of tourism information flows and
the discuss the characteristics that make tourism so information-intensive.

DEFINITION
Information technology can be defined as “the application of computers and
telecommunications equipment to store, retrieve, transmit and manipulate data”
(Daintith, 2012).

In a business context, information technologies are often referred to as

Information systems. “Information systems are combinations of hardware, software
and telecommunications networks that people build and use to collect, create, and distribute
useful data, typically in organization settings” (Valicich and Schneider, 2014, p. 19).

The travel and tourism industry is a heavy user of IT, and some of the
largest telecommunication networks spanning the globe carry travel information.
IT, therefore, provides the information backbone that facilitates tourism (Dutta
and Bilbao-Osorio, 2012).

Characteristics of Tourism Services

While the term product is frequently used in the industry to refer to

accommodation, transport attraction and even destinations, tourism can also be
described as a type of service. Sometimes the tourism product is also referred to
as an experience. Pine and Gilmore (1999) argue that products are manufactured,
services are delivered and experiences are staged. Furthermore, experiences are
usually co-created through interactions of travelers, tourism organization and
 Chapter 1: Introduction in Tourism and Information
Technology
settings (Prahalad and Ramaswamy, 2004).

The following are some of the characteristics that differentiate tourism

from other products, services and experiences, and which make it so information-

Heterogeneit
y

Globa Perishabilit
l y
Tourism

Inseparability

intensive,

1. Heterogeneity - a typical trip is complex and consists of many component

parts, therefore by nature is heterogeneous.
To research and plan a trip, travelers must interact with many private
sector organizations and public sector agencies. Coordination and cooperation
between each of these organizations, agencies and the consumer are necessary
to create the heterogeneous experience called a “trip”.
2. Intangibility - potential consumers are often unable to see, touch or feel
a vacation or a business trip and its components before they purchase it.
Instead, they need detailed information about the destination or experience to
substitute for the lack of tangibility. This information can be presented via many
different media. Travel and destination information, which was traditionally
distributed in the form of brochures, is increasingly in electronic form. Rich and
immersive digital content such as websites, pictures, videos, and virtual reality
allow travelers to “Sample” the trip before making a purchase.
The intangible nature of tourism has brought the IT and tourism industries
together to creatively market the product and make it more tangible.

3. Perishability - if an airline seat is not sold on a given flight, that

particular seat can never be sold again. The seat, or rather the revenue from it,
has “perished”. This is true for almost all products in the tourism industry (e.g.
accommodation, attraction, tours, transportation) and is due to the time-
sensitive nature of tourism products.
IT can assist with monitoring inventories and dynamically adjusting prices
to maximize load factors, occupancy and attendance rates. Many computers
reservation system (CRSs) in tourism use revenue management system to assist
with the challenges created by product perishability. Internet booking engines
and smartphone apps can also assist suppliers in the promotion and distribution
of “last-minute” deals before they perish.

4. Inseparable - Tourism consumption is inseparable from the production of

experience. Unlike goods, which can be purchased and taken home, there is
interaction between service providers and travelers because the production of
 Chapter 1: Introduction in Tourism and Information
Technology
the experience happens simultaneously.
For example, a hotel guest “consumes” a hotel stay as it is being
“produced” by service providers. Information plays an increasingly important
role in ensuring that this co- production and co-creation of tourism experiences is
efficient and of a high quality (Schertler,1994).
One of the greatest challenges facing managers is how to increase the
productivity of service and knowledge workers (Drucker, 1990). IT applications
are increasingly being used to personalize experiences and serve tourists more
efficiently, whether it be to check a guest out of a hotel or to change their flight
reservation.

5. Global - By its very nature, the tourism industry is one of the most
global industries in the world. This characteristic is central to it and contributes
further to its information intensity. International travel generates large volumes
of information not found in domestic industries. International travelers need
access to border control information such as visa and passport regulations, custom
regulations, arrival or departure taxes, currency control and heath regulations such as
immunization requirements.
For example, travelers from France visiting Peru have higher information
needs than travelers from New York to San Francisco. Both leisure and business
travelers are expanding their horizons and travelling more globally, requiring
access to this kind of information. This geographic dispersion requires data
communication networks around the globe to link countries, tourism
organizations and travelers together. Without IT, the tourism industry would not
function as efficiently at the international level.
In summary, information is lifeblood of the tourism industry. The application of IT
to its operations, therefore, is critical to its growth and success.

Applications of Information Technologies in Tourism

The entire tourism industry has been changed by the use of IT. Research
shows that it is influencing the way travel organizations in all sectors
communicate with customers, in the way they compete, plan their strategies,
add value to their products, cost-save and stream line their operations (Buhalis
and Law, 2008).
The following are the different sectors of the tourism industry that have adopted IT at
different rates.

The aviation sector has been most innovative and heavy user of IT starting
early in the 1950s with the implementation of computer reservation systems.
These systems evolved and became known as Global Distribution Systems
(GDSs) as they integrated all type of travel reservations in addition to flights.
They became the main tool of travel intermediaries when booking trips.

The airline sector has also been a leader in the use of yield management
systems to strategically price airlines’ seats to maximize revenue. IT has
facilitated the development of frequent-flyer programs that require
sophisticated database technology and very large amounts of data. As
airlines seek to reduce labor costs and speed passengers through airports,
 Chapter 1: Introduction in Tourism and Information
Technology
self-check-in terminals in airports have been introduced. Automated call
centers attempt to further reduce labor costs. Use of the Internet for booking
flights and IT applications that allow travelers to use their smartphones for
boarding passes, updates on flight status and other functions are becoming
popular, reducing paper usage.

Travel intermediaries such as travel agents and tour operators have been
significantly affected by technology to the degree that their existence is at
stake. In fact, many such intermediaries have left the market as Internet and
other technologies have replaced them. They have had to adapt to the
“disintermediation” caused by the Internet giving consumers access to the
same information and more. Many have done this by specializing in certain
destination or travel products (e.g. cruises) or by obtaining cheaper rates
through their bulk buying power.

The hospitality sector has, in general, been more reticent to adopt
technology, but now has many specialized systems to support their
operations.

- Hotel operations are run by property management systems, which

process all activity relative to guests, rooms, accounting, housekeeping
and customer records. Hotel reservation system are crucial links to
customers, and they may be property- specific or designed for multiple
properties in a chain or marketing consortium.
Electronic locking systems, digital room keys, guest room
automation, voice command technology, energy management systems,
virtual concierges and self-check-in terminals are also becoming common,
particularly in business hotels. A number of hotels now offer a seamless,
fully automated experience where guests can complete their entire stay
without ever speaking to a real person.

- Restaurants’ main use of IT is in the forms of point-of-sale systems, menu

management systems and restaurant management systems.

Other sector of travel industry, including attractions, entertainment, casinos
and conventions, all have specialized IT systems. Since the arrival of
Internet, these smaller organizations have gained market power as they
now are able to access distant international markets in the same way as
large multinationals.


Tourism destinations have found much value in incorporating IT into their
marketing and management strategies. IT links together different sectors
of the destination and different stakeholders and can connect with
travelers in new and different ways including Internet, social media and
mobile technologies such as Global Positioning Systems (GPS) and
Geographic Information Systems (GIS).

Travelers themselves are gaining much benefit from IT developments. In
particular, social media and mobile technologies provide ubiquitous access
to information about destinations, travel organizations.
 Chapter 1: Introduction in Tourism and Information
Technology
Typologies of Information

Information, however, differs in numerous ways from the other three

resources (Cleveland, 1985).

1. Information is not used up or depleted as it is consumed. Instead, it expands as

it is used. As one traveler gives information to another about a favorite hotel,
museum or beach, that information is duplicated and not lost by the giver. This
information expansion can create opportunities or threats depending on the
nature of the information and the receiver.
2. Information and information technology can actually be used as substitute for the
other three resources of land, labor and capital.
Telecommunicating is an example of using IT to substitute for land, since
organizations whose employees telecommute need no longer to rent or purchase
so much high-price land in expensive districts.
IT can also be used to substitute for labor in many ways. At higher levels
of operations, IT can augment human resources with decision support systems,
expert systems, and other applications of artificial intelligence.
Peer-to-peer networks such as Airbnb demonstrate how value can be
created for the organization as well as the consumer without capital investment
infrastructure such as hotel rooms.

3. Information has tendency to leak. This can cause security problems and
requires policies and systems to prevent security and privacy breaches. For
example, hotels will not give guest room number to casual reports, nor will airlines
release the personal details of passenger on a specific flight.

Information can be static or dynamic. Information can be used, produced or

shared by travelers prior to, during or after the trip. Information can be produced by
the private sector or the public sector or by travelers. Different types of travel
information may require different type of information technologies to process
and distribute them, which are discussed below.
Static and dynamic information

Static tourism information- some tourism information does not change very
frequently and therefore is relatively static. Static tourism information may
change in the long term but not in the short term.
Examples: product description, transportation routes. Signages and location
information.
Dynamic tourism information- information changes frequently. A large volume of
tourism information, however is dynamic and requires digital format for frequent
updates and rapid transmission. Dynamic information changes daily, weekly,
monthly and seasonally.
Examples: product availability schedules, fares and rates, travel reviews, weather
conditions, snowfalls on skin slopes or surf conditions at beaches.

Trip Stages
Travelers need information at different times and different places.
 Chapter 1: Introduction in Tourism and Information
Technology
Pre-tip information in the planning phase of a trip is required at traveler’s
home or prior destination. The type of information required at different times of
the trip planning process depends on the type of tourist.
In general, travelers are leaving more of their decision until they are on site
at the destination. This need for on-site information spawning new applications in
mobile technologies and smart destinations.
After the tourist returns home, both static and dynamic information is used.
Dynamic post-trip uses of tourism information are growing as social media and
other photo- and video-sharing platforms proliferate.

The table below shows various dynamic and static information media for different trip
stages.

THE EVOLUTION OF INFORMATION TECHNOLOGIES

The evolution of information technology has been extremely rapid

compared to other industries. In fact, Intel famously claimed that if the airline
industry had developed as rapidly as the computer industry in relation to price
and performance, a flight to New York to Paris would today cost about a penny
and take less than one second (Jordan, 2012). The speed and cost of the
internet, smartphones, GPSs, laptops and digital cameras are far removed from
the slow, expensive, room sized computers of half a century ago. Many
innovations over the decades have led to the explosion of application in IT. Many
of this development will be discussed in more detail throughout this book.

Computers

The first commercially available computer (UNIVAC 1) was unveiled in

1951. IBM soon followed with the world's first mass-produced computer, the
IBM650. These large computers used magnetic tape, magnetic drums, vacuum
tubes and punched cards for input, and were mostly used for scientific
purposes. The aviation industry was a pioneer in the commercial used of these
large machines, which played an important role in the development of the first
airline reservation system.
The invention of the transistor by Bell Laboratories eventually led to the
 Chapter 1: Introduction in Tourism and Information
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development of a second generation of computers, which were smaller, faster
and more powerful. In 1958, two engineers working independently invented the
integrated circuit (or the computer chip). This led to the next generation of
computers in 1965, creating even smaller and faster machines that were more
viable for business. Many travel businesses such hotel, travel agencies and other
tourism enterprises used these third-generation computers for their operations.
In 1970, Intel Corporation invented the microprocessor for use of
microcomputers. Major commercial microcomputers included the Apple II and the
IBM PC. Greater affordability coupled with new storage media and operating
system (such as MS-DOS), and input devices such as the mouse, made
computing both accessible and user-friendly for average users with no
knowledge of programing. In the early 1980's both Apple and Microsoft
introduced window-based "point and click" Graphical User Interfaces (GUIs) to
further simplify user interactions with computers. Word processing spreadsheets,
desktop publishing and database management software were developed in the
late 1970s and early 1980s and have become common application in travel
industry organizations.
Innovations have continued to result in computers that are smaller and
more powerful. In 1965, Intel co-founder Gordon Moore observed that the
number of transistor and integrated circuits in computers doubled roughly every
two years. this prediction known as Moore's Law, has proved to be accurate for
over 50 years and can be applied to processor speed, memory, sensors, data
storage capacity, data transmission and the number and size of pixels in digital
cameras. While many major innovations occurred throughout the 1970s and
1980s, advances since 1985 have involved incremental changes have occurred

Loquiano/P.J.S. Buhay/
in the development of new version of software. However, major advances have
been made in networking and mobile technologies, as are discussed in the
following sections.

A.A.
 Chapter 1: Introduction in Tourism and Information
Technology
Moorse’s Law

Networking and The Internet

The next wave of information technologies overlapped with some of

developments in electronic computing. while IBM, Apple and Microsoft laying the
foundation of Digital Revolution, some organizations were already thinking about
the potential of linking computers together using networks. In 1970, the science
fiction writer Arthur C. Clarke made the following prediction in the magazine
Popular science:
Imagine a console in your office, combining a features of Touch
Tone (pushbutton) telephone and television set, a Xerox machine, and a
small electronic computer. Tuned in to a system of synchronous satellites,
this console will bring the accumulated knowledge of the world to your
fingertips. By punching a few digits, you can verify a check, get the data on
some historical event, or hear an illustrated lecture on any subject you
wish. Or you can hold an electronic conference with any group of people
scattered all over the world, seeing each other as you talk.

Arthur C. Clarke's prediction became a reality 12 years later when network

at the Advanced Research Project Agency (ARPA) and several universities in USA
were connected to create Internet - a network of networks. The internet expanded
rapidly in Europe and Australia in the mid-1980s and to Asia in the late 1980s
and early 1990s. The Internet enable a range of networked services, including
email, the WWW and cloud computing.

Ubiquitous Technology

The most recent IT wave relevant to travel and tourism is the rise of
mobile and ubiquitous computing. Many of the technological developments in this
field occurred at the same time as the development of the Internet. As a result,
many IT innovations have taken the advantage of advances in both areas. The
history of mobile devices includes developments in a number of parallel
technologies that have converged to create the devices used today. These
include mobile phones, personal digital assistants (PDAs), portable computer,
digital cameras and portable music players. In the early 1990s the
miniaturization of electronics and batteries made pocket-size portable devices
possible triggering the new product category of PDAs. These were small,
handheld computers, which allowed users to read text, send email, schedule
appointment and store documents and contacts.
The development of mobile phones and PDAs is significant because the
convergence of these two technologies in 1994 resulted in the first smartphone,
the IBM 'Simon'. This was followed by a period of intense competition between
mobile phone manufacturers, computer makers and electronics companies,
eventually leading to the release of the first successful mass-marker
smartphone, the Apple iPhone. In 2007, the proliferation of mobile devices and
apps has created many new benefits for both travel industry and for travelers.
Location aware mobile devices have had an impact on visitor information,
 Chapter 1: Introduction in Tourism and Information
Technology
marketing, orientation and interpretation. New innovation in ubiquitous (or
portable) devices such as smart watches and smart glasses have continued to
find applications in the travel industry.

Implications of Travel and Tourism

The major trends evident in this historical account information

technologies included the convergence of information technologies and the
increasing interoperability of various platforms. the miniaturization and ubiquity
of computer technology together with the connectivity of the internet has
created a new level of functionality and the travel agency has benefit from this.
Advances in fiber optics and wireless telecommunication has led to an
exponential growth in the amount of information being produced and
consumed. We a increasingly living in a world where physical object is blended
with the virtual. Everyday objects and amenities like lights, heating and cooling,
fridges, washing machine and cars are connected together to create an 'Internet
of Things' (loT). Artificial intelligence and expert systems are now used to support
tasks and decision-making that were previously carried out by people. Social
media (Facebook, twitter, etc.) has connected travelers and organization in new
and different ways and has transformed how society operates.
The consequences of this hyper-connectivity coupled with the
globalization of business travel are profound. Technological innovations have
caused the "collapse of space and time" (space-time collapse), in that time and
space no longer restrict us from connecting and working. Work can be done at
any time and in any place. IT and Internet connect us to whoever we want. A
traveler sitting in Heathrow Airport on their smartphone can make a booking for
a Honolulu hotel, for example, and within microseconds receive a confirmation.
Meeting with others for business (sales meeting and conferences) or pleasure
(family reunion) in different parts of the globe with videoconferencing from a
smartphone, tablet or laptop are now commonplace. Person to person meetings
are likely to be less frequent and yet perhaps more valued.
Travel is also likely to be reduced by the implementation of
videoconferencing, meaning that the travel industry must be alert and
innovation to adapt to this trend. For example, Rosenbluth Travel (sold to
American Express in 2003), a business travel agency in the US, has added
teleconferencing to its product offering so that client can compare and choose
between face-to-face conference and teleconference. If a teleconference is
chosen, Rosenbluth organizes it and sells it as part of their product line.

Strategic Thinking and Information Technology

Thinking strategically about IT applications is critical in today's

competitive world. There are many ways that IT can be used to support the
strategic direction of the organization and support innovation. Some IT
applications affect the production of goods and services and others have more
impact on the marketing process.
Cash et al. (1992) provide a model to show how different industries can use
IT to improve both their production and marketing. The model uses a two-by-two
 Chapter 1: Introduction in Tourism and Information
Technology
matrix in which the horizontal axis represents the impact of IT on marketing
activities and the vertical axis represents its impact on the production of goods
and services. The authors of the model place certain industries on the matrix as
shown in Fig. 1.1.

The model suggests that industries further along on the horizontal scale
will tend to be ones where: (a) product choice is complex; (b) quick customer
decision with confirmations are essential; and (c) customer tastes and pricing
are volatile.
Industries tend to be high on the vertical scale if: (a) technology is
embedded in the product; (b) production requires a long design process; and (c)
time and cost saving are opposable through automation.
Defence hardware is place high on production impact and low on
marketing impact since the product tends to be highly technical and need little
marketing.
High fashion, however, placed high on the marketing impact scale, with
moderate impact production.

An analysis of various travel industry sectors and their use of IT in

marketing and production can position them in matrix relative to other
industries. The travel industry sectors place on the matrix are airline, travel agents, tour
operators, hotel and attractions (in bold). Most sectors are place on the right side of
the matrix since IT is heavily used in marketing tourism products. Various travel
sectors are positioned from high to low on the production axis since the impact
of technology varies according to different sectors.

The airline sector is the highest on both dimensions and was placed there
in the original matrix of Cash et al. (1992). Global Distribution Systems, frequent
flyer databases and yield management programs have been heavily used by the
airline to distribute and market their product. IT has also effectively been used in
production activities, for example in the design, operation and maintenance of
aircraft, and in luggage handling. Other transportation sectors such as trains and
 Chapter 1: Introduction in Tourism and Information
Technology
car rentals are not quit so high on the marketing axis but equally high on the
marketing axis since new technological innovation are constantly introduced to
provide better transportation.

Travel agents, tour operators and other travel intermediaries are perhaps
the most information-intensive of all travel sectors. They deal almost exclusively
with information and have no tangible product of their own. Product choice is
complex, quick decisions and confirmations are often necessary and customer
tastes and prices are volatile, placing them high on the marketing axis. There is
also a high impact on production activities since their product or service is the
provision of information.

The accommodation sector is high on both scales, but not as high as the
airlines. Computer reservation systems including guest history system assist in
the marketing of hotels. IT's impact on production, however, is lower. Hotels,
traditionally, have not embraced technology as readily as the airlines, but this is
changing. More and more accommodation providers are installing property
management system, electronic locking systems, energy management systems
and guest room technology to make their operations more efficient. The hotel
industry, therefore, has, overtime, moved higher and further to the right of the
matrix. See the case at the end of this chapter about Intercontinental Hotels
Group's (IHG) use of IT for strategic purposes.

The attraction sector is difficult to position since some attraction use

technology intensely in their production (e.g. theme parks) whereas others use it
hardly at all (e.g. nature-based attraction). Therefore, it is placed in the middle
of production axis. It is also positioned in the middle of the marketing axis.

The strategic management of IT is a necessary part of the competitive

profile of a tourism organization. It will not bring the organization maximum
benefits if simply applied to operation problem without a systematic approach
(Poon, 1993). First and foremost, there must be a commitment from top
management to support the implementation of IT by giving it adequate
resources and creating a corporate structure to maximize its implementation

The following listed below are many ways that enterprises can use IT strategically.

1. Managing value chains: value chains are activity, or series of activities, that
create and build value for destination, intermediaries, suppliers or travelers. This
can be done through the design of product and services or through supply chain
management. IT application can affect value chains by changing information
and distribution channels, and making them more accessible and transparent,
thereby generating more profit.
For example, new IT developments have had substantial impact on the
distribution system over the last 20 years.

2. Managing knowledge: the expert management of information and data

resources is essential for success. Knowledge management system in tourism
involved the sophisticated use of computers to generate information that can be
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Technology
used in decision-making. Computer technology offers huge potential in this area.
Database management system can store and process millions of costumer
records, accounts, product reviews and etc. to generate knowledge that will
guide strategic decision making. The term big data is relevant here. These are
huge datasets that an organizations can mine for information with special
software systems. They can be tapped to answer many questions to assist the
organization in its strategic thrust such as "Who are our high-value customers?"
or “What are our emerging markets?”.

3. Marketing and competitive advantages: the application of IT provides a strong

competitive advantage in the areas of sales and marketing. The use of electronic
distribution channels, social media platform and other innovation connect the
supplier with new and different market. In other operational areas, organization
can be early adopters of technology for competitive advantages. Example are
hotels installing self-check-in terminals, airlines offering mobile boarding passes
or destination using GPS system to guide the tourists to the key sites.

4. Service delivery and customer relationship management: because of the unique

characteristics of the tourism experience, knowledge about tourists’ needs,
wants and expectations is important part of effective service delivery. Customer
relationship management (CRM) is a business philosophy that focuses on the
consumer and attempts to create a meaningful relationship with them. This is
most effectively done through a large organization-wide database (containing
data on customers, their buying habits and needs) that helps tourism suppliers
to build a relationship with customer by understanding their needs and providing
superior customer service.

5. Strategic listening: part of an organization’s success is based on listening to

employees, customers, suppliers and competitors, and this provides deeper
understanding of how the organization can strategically change and move
forward. It can provide more shared meaning and direction. IT as an excellent
toot to assist in the listening process. As face-to- face meetings are not always
possible, listening can be done thru teleconference, smartphone or tablet, or in
many other ways. Social media provides new ways to access market intelligence
by monitoring blogs and other online media to understand more about customer
and competitors.

SUMMARY

This chapter has introduced the reader to the basic background of information
technology, its development and evolution over the centuries and its status
today. Aspects of computer hardware and software have been described, giving
the reader an understanding of the scope of this important phenomenon. The
chapter has described various models of how technology is adopted by
organizations in general. It goes on to explain the uniqueness of the tourism
industry, its characteristics and size that make it such a heavy user of
information technology. The ways in which technology can be used strategically
in tourism is also discussed. The chapter ends with a schematic diagram
explaining the layout of the book
 Chapter 1: Introduction in Tourism and Information
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ACTIVITY 2

Instructions: It is a requirement of this Module that you complete this Activity.

Output must be in MS Word, Arial 11, and A4 size. The case analysis paper is a
one-page comprehensive essay, answering all case study questions.

Case Study: Intercontinental Hotels Group

Hotel are often criticized for not using IT as strategically as other

industries. There are exceptions to this and one of the world's largest hotel
chains, Intercontinental Hotels Group (IHG), has invested heavily in its strategic
use of IT. HIG owns seven large Intercontinental Hotel chains including Crowne
Plaza, Holiday Inn and InterContinental Hotels. It has a total of 4503 hotels ang
656,661 rooms and is strongly committed to the strategic use of IT for its
competitive edge.

IHG has an appointed a Chief Information Officer (CIO) and spends about
US$200 million, annually, on its innovations, or about 1.2% of its revenue. The
organization are always looking for IT for new ways to innovation. It is passionate
about making hotel guests "the center of our universe" and this is the focus of all
the company's strategic innovations. The company has designed one of its
properties as the test bed for technology that can help achieve this aim: The
Atlanta Crowne Plaza Hotel in Atlanta, Georgia, has a huge customer
database holding 200 million guest profiles. When integrated with others system
in the hotel, the system can analyze customer activities, trends and preference.
The technology is more advanced than most hotels and will process request
more rapidly because IHG has developed its own search technology called BOSS,
which will soon be integrated with Google, providing GPS support and voice
search. In the lobby of the hotel, guests can access airline flight boards and
touchscreen PCs to check flight and search for local amenities.

IHG is also strategically innovating in the area of mobile technologies. it is

experiencing a 400% increase in the number of hotel rooms booked with mobile
phone and has therefore created apps for both iPhone and Android. With these
apps guests can check availability, make a reservation, check themselves in, and
even unlock their rooms.
Another strategic initiative involves the concierge staff, which now uses iPads to
access information for their guests. This unleashes them from their desks so that
they can engage more dynamically with hotel guests in different parts of the
hotel. An application currently being developed by IHG is the ability for the
concierge to create a sightseeing itinerary of the area where the hotel is located
and to transmit this to a guest's mobile devices.

IHG is also innovating strategically with its commitment to cloud

computing for many of its operations. It is building a private clouds environment
called Camelot to move its core customer relationship management (CRM)
systems off its mainframes and onto industry- standard equipment. IHG's loyalty
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program. Its analysis of current guest activity information and historical records,
and its system for promotional material to individual guests run on Camelot. IHG
is working on also using Camelot for its revenue management and room yield
system that determines room rates. It is using public cloud infrastructure for
application development and testing, and also to host web content accessible for
customer worldwide. It is also evaluating moving key proprietary systems, such
as room reservation software, into the Cloud.
(Adapted from Babcock, C. (2011) Four companies getting real results from cloud
computing. Information Week, 15 January)

Case Study Questions:

1. Evaluate why the volume of reservation from smartphones has increase

rapidly. What future opportunities do smartphone offer to hotels?

2. Download the IHG app on to your smartphone and evaluate its features with
IHG's. Are there any features you would add?

3. Explain how the cloud help IHG with its operation. What are the benefits of
cloud computing compared with having all system stored on local computer
hardware?

4. Visit the IHG website and read all about their strategies. Evaluate how IT
support their strategic vision. How else can IHG innovate with technology to
support their strategies? Compare the IT strategies of two other major hotel
chains. Which do you think is more innovative and why?

The output will be evaluated using the following criteria:

✓ Organization
✓ Content
✓ Development
✓ Grammar and Mechanics
✓ Format