MIS in Hotels Report

MIS In Hotel Industry

Table of Contents MIS in Hotel Industry.............................................................................................................................. 2 HOW TIMES HAVE CHANGED??........................................................................................................... 3 Why Invest in IT/IS??........................................................................................................................... 4 Interesting Facts................................................................................................................................. 5 Key Terms in Hotel Industry................................................................................................................ 5 Sample Hotel Management Software Modules.................................................................................... 6 Important functions in MIS.................................................................................................................. 6 Room Management......................................................................................................................... 6 Guest Management......................................................................................................................... 7 Room Control System...................................................................................................................... 7 Sample Front Office Management................................................................................................... 8 A Typical Reservation System.......................................................................................................... 8 Food and Beverages Operations..................................................................................................... 9 IT/IS in Purchase Operations............................................................................................................. 10 Maintenance Management............................................................................................................ 10 Security Management................................................................................................................... 11 Yield Management........................................................................................................................ 12 Case Study – Hotel ZaZa................................................................................................................... 12 Hotel Background......................................................................................................................... 12 Challenge...................................................................................................................................... 12 Functional Requirements............................................................................................................... 12

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Solution......................................................................................................................................... 13 Results – Extracts from Hotel Executives....................................................................................... 13 Differentiation............................................................................................................................... 13 Challenges in implementation....................................................................................................... 13 Empowering customers – TripAdvisor................................................................................................ 14 TripAdvisor for Business.................................................................................................................... 15 Analytics for TripAdvisor.................................................................................................................... 16 Revenue Model............................................................................................................................. 17 Mobile App.................................................................................................................................... 18 Making ‘Room’ In Hotel Industry - AIRBnB......................................................................................... 19 AIRDNA – More money on AIRBnB..................................................................................................... 21 Way Forward – OYO rooms................................................................................................................ 21 References........................................................................................................................................ 22

MIS in Hotel Industry Hotel industry is all forms of business relating to the provision of accommodation in lodging, food and drinks and various types of other services that are interconnected and form intended for the public service, both of which use the lodging facilities or who simply use the services or the production of certain of the hotel.

HOW TIMES HAVE CHANGED? It wasn't long ago that the hotel reservation desk -often operating just from 9 am to 5 pm -was the only way you could research and book rooms. But now, with online reservations becoming the norm, the big boys of the hospitality sector are spending millions of dollars on technology, looking to make digital platforms the best option for customers. The image below shows how the evolution in Hotel search takes place. From the early days where consumer convenience was not even considered and getting accommodation was a challenge to today’s times when Consumer is central to every business opportunity. More and More money is being spent to understand consumer and give them an experience which is worth the

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value to the customer and thus as a business we hope to have customer retention and repeat business opportunities.

So, where Does Technology Come in?? We could look at the model developed by Deloitte.

Any Business operates on what value it is offering to its customers based on its products and services and core competencies. The Business level strategy is formed based on customer segment targeted, if any, and depending upon

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macroeconomic environment. As can be seen Technology is one of the tools for value enablement apart from functional departments in an Organization.

Why Invest in IT/IS?? The business will have various functional departments which are to be integrated and it is here that technology comes in the forefront. Also, Technology today is also used as Knowledge Management systems to understand customers better, for room management and maintaining inventory of various foods and beverages, increased guest satisfaction, security or improve operational efficiencies. Having said that, information storage and maintenance by itself isn’t the key but getting that information across to the department that needs it, will and thus take more informed decision and thus create more value in terms of Products and services offered.

Interesting Facts   

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3.5 million Indian Internet users booked a hotel online in 2014, which will increase to 8.4 million by the time 2016 ends The current market of online hotel bookings is $800 million which will swell to $1.8 billion by 2016 83% of those surveyed admitted that they always research online for hotel booking; but have booked a hotel online at least once in the last 3 years 56% of those users who have booked a hotel have installed a mobile app for the same and 27% used app for booking. 67% of all users wanted to pay at the Hotel, rather than paying online Searches related with hotel booking has increased 30 times during the last 3 years Compared to men, women are more comfortable in hotel bookings online. 79% of all online hotel bookings were done by women, compared with 21% by men Lack of trust and recommendation from trusted sources were the major hindrance in online bookings of hotels.

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Key Terms in Hotel Industry  

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Online Rating: It is very much in your interest to get as many online reviews as possible – good and bad. Occupancy %: The most critical and simplest measure of performance for hotels in the occupancy rate. Measured as the percentage of available rooms occupied over a specific period of time. ADR: Average Daily Rate: Measured simply as the average price paid per room on a given day. REVPAR : Revenue Per Available Room :Measured by the average daily room revenue generated by available room, Customer Satisfaction :It may be more of a challenge to measure but without satisfied customers you will find it difficult to challenge for business against competitors, especially when online ratings are the currency of choice for potential guests Advertising ROI: Calculating your Return on Investment (ROI) from your advertising and promotions will save you from wasting money on ineffective advertising and promotion.

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Sample Hotel Management Software Modules

Important functions in MIS In Hotel industry, MIS implementation is primarily noticed in below systems:      

Room Management Food and Beverage Operations Purchase and Store Operations Security System Maintenance System Yield Management System

Room Management Room Reservation and Room Allocation System 

Room booking and allocation: At the front desk, company owned websites, 3rdparty websites.

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Display the room status (reserved, booked, occupied with identification of guest presence) 6

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Room bookings at differential pricing. Guest Management

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Display length of stay, day of departure and other information about guests

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Build relationship with customers for future.

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Manage Services and Privileges

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Room offering based on Customer preference as maintained in database. Room Control System

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The power in the room is turned on when the guest slots the key card into the wall mounted key card switch.

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Lighting, temperature and curtains can be controlled to suit the activity of the occupant.

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Sample Front Office Management

A Typical Reservation System

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Food and Beverages Operations

(F&B) is responsible for maintaining high quality of food and service, food costing, managing restaurants, bars, etc.

Challenges    

Maintenance of Quality Inventory Management Identification of Customer Preferences Storage and issuing of Alcoholic Beverage

MIS Solution MIS aims to incorporate the below advantages:    

Trend analysis of Customer Preference Tracking table assignment Automated Purchasing and Material Purchasing System Food order management

Sample Food and Beverage System

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IT/IS in Purchase Operations 

Improves & Streamlines Internal Processes  Use of handheld technologies  Decentralization, creating accountability  Improves purchasing communication, streamlining internal process

 Facilitates Best Practices & Controls  Operational analysis  accountability  cost control.  Monitoring of expenses & comparison with budget.  Reduces Costs  Improved inventory management eliminating shortage & pilferage  Integrated vendor quotations  Complete control over vendor prices  Automated reorder linked with Inventory  Increases Revenue  Periodic reporting and budget analysis combined with drill down accountability improves control & increases revenue

Maintenance Management

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Guest Requests: o Guest has the freedom to give requests as per his/her convenience o Various mediums of request: phone, computers, PDAs, phones o Multilingual support: Guest can request in his own language o Automatic tracking & follow-up is possible o SMS alerts for the convenience Work Orders o Again, flexible work orders o Multi-medium support o Easy tracking of pending work orders o Freedom of scheduling Asset Management o Real-time monitoring of health of each system 10

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o Dash-board support o Flexible break down reports & data analytics for improvements Capital Expenditure o Easy purchase approvals o Easy budget approvals o Budget monitoring o Insta-alerts to management or head-office Technology o By technology, it is meant the use of technical devices & technology integrated software for improvement in the maintenance process in hospitality industry.

Security Management

Issues: Following are the security related issues or threats to hotel industry:      

Terrorism and extremism, Environmental catastrophes, Fire, Robbery, Burglary and spying, Theft and vandalism.

Solutions:  

A different software (Onity) is mostly used, which can be linked with Oracle and other major software applications. Intrusion Detection: Intrusion detection is mostly done in two ways:

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o Passive, through mechanical protection equipment o Active, with an electronic alarm system Access Control: o Electronic keys:  Can even record if the room have been opened by guest or any staff member?  Maintains the access data for longer periods, depending upon the requirement Video Surveillance:

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CCTV cameras & DVRs linked with the hotel management software

Yield Management

Yield management or revenue management is the technique which is used to increase the room revenue. Challenge  Hotel’s manager biggest problem is that neither they can increases the supply of rooms in case of more demand nor they can store it and sell on the following days in case of rooms left unsold on a particular day.  Difficulty in taking decisions which require strategic integration of revenue management, marketing, and guest analytics. MIS Solution MIS Solutions are based on holistic decision science and business intelligence platforms that answers the why, where, what and how in sales, marketing, distribution and revenue management. MIS helps a hotel in following: 

Fully automates revenue management solutions

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Recommends appropriate selling strategies

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Delivers detailed data analysis and reporting

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Creates accurate revenue and demand forecasts

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Maximizes yield and profit

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Case Study – Hotel ZaZa Hotel Background

Hotel ZaZa, part of the Preferred Hotel Group collection, boasts two popular locations in both Dallas and Houston, Texas. Hotel ZaZa takes a modern twist on luxury with a variety of themed and unique room types that are both funky and fun. Challenge

Hotel ZaZa set out to find an automated revenue management system (RMS) that would complement its current revenue goals and management strategy Functional Requirements

Functional requirements for an automated revenue management system included but were not limited to:      

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Demand forecasting Aggregated data from multiple properties and revenue centers Integrated hotel systems for a comprehensive and accurate view of operational statistics Competitor's pricing and real‐time data based on occupancy and market rates Optimal yield and pricing analytics for each room type and booking window Accurately extracting data regarding past demand, actual performance and future demand from the hotel’s property management systems (PMS) or central reservation system (CRS) Reliability and stability of the data extract process.

Solution

The OPERA Revenue Management System (ORMS) turned out be the ideal solution for Hotel ZaZa, providing its management team with the tools and information needed to enhance business. The tools and features that ORMS provides include:    

Customized alerts facility that allow the revenue management team to keep constant track of forecast risks, eliminating manual tracking. Customized evaluation of groups with different optimizing patterns is used based on the behavior of the group. Automated optimization based on event and seasonal impact is derived through real historical data. Distinct forecast models are used, for each optimization the most suitable model is automatically selected. 13

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Results – Extracts from Hotel Executives

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We wanted to still keep human objective thinking in our revenue strategy. With ORMS we review current levels of booking and forecasts, look at specific business opportunities, restrictions and rates by market segment, and any exceptional circumstances influencing previous forecasts. ORMS gives us an update every 12 hours, and it’s exciting because it forces us to reevaluate our objective every day. ORMS takes data and processes it in a scientific manner and gives you a tool to develop your own revenue strategy. Houston location is nearing a record breaking month for March 2012, a month after we launched ORMS.

Differentiation

Hotel ZaZa differentiated itself from the competition not by dramatically lowering room’s prices, but instead by increasing reservations with value added packages and specials. Challenges in implementation

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User friendliness of the software Software trainings Types of software Guest data includes personal information, passport details, credit card details etc. Loss of data/data theft is a major challenge (server crashes also occur)

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Empowering customers – TripAdvisor TripAdvisor is a travel company that provides travel related bookings and reviews. It is a B2C online travel website, where users can gather information from reviews and forums about travel destinations worldwide. TripAdvisor was one of the early adopters of user-generated content. Services of TripAdvisor are free to users and it took the concept of conversational media, changing the role of consumers from a passive audience to an interactive audience. TripAdvisor was founded in 2000 and since then it has collected a huge database of 225 Million reviews and 340 million unique monthly visitors. Travellers add photos and it has collected more than 26 million traveller photos. It has opinions covering more than 4.9 million accommodations, restaurants and attractions in 45 countries.

Travel forums: People can interact and ask their queries from locals or people who have travelled to various destinations. This enables consumers to prepare for trips well in advance.

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TripAdvisor for Business TripAdvisor also includes TripAdvisor for Business, a dedicated division that provides the tourism industry access to millions of monthly TripAdvisor visitors. TripAdvisor has also helped Hotel owners intangibly, as In case of negative reviews about a hotel/restaurant, owners can check that in early stages and take an immediate action or offer apology.

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Analytics for TripAdvisor TripAdvisor Dashboard for hotel owners’ captures a full spectrum of analytics generated for property listed on TripAdvisor. Hotel owners can analyze traffic to their property page in monthly, annual or two year increments. TripAdvisor’s dashboard is a feature that enables hotel owners to view a list of competitors’ properties most viewed by the consumers. 17 Wednesday, August 19, 2015

Revenue Model

TripAdvisor does not gain any revenue from users, the huge traffic of travel consumers who visit its website. Instead, it generates revenues from business owners such as hotels, restaurants, attractions, flight companies, rental agents from the following: Click-based advertising (77%) - TripAdvisor follows a Cost per Click Model. Each time a user clicks on an advertisement or hotel to book, advertisers and hotel owner pay fee for each click. Display advertising (13%) – Advertisers pay a fixed amount of money to TripAdvisor to display banner Ads. Subscription revenue (10%) – Revenue is generated from advertisers such as hotels, restaurants, travel attractions, rental agents pay a regular fee to increase their business’ exposure to the 340 million unique monthly 18 Wednesday, August 19, 2015

visitors on TripAdvisor to find out more about their services and to even reach them directly by displaying their contact details on their profile page. Affiliate model: Hoping to emulate Amazon's success in the affiliate marketing sector, TripAdvisor looks to new revenue areas to maximise profits. Working within the leisure and business travel fields, TripAdvisor forms affiliations with third party websites such as airlines, hotels, attractions and other travel sites like Expedia.com, Booking.com, Zuji.com, HotelClub and Hotels.com to generate additional revenue by directing traffic over to those websites and earning affiliate commissions.

Mobile App

TripAdvisor has launched Apps for both Mobile and Tablets. Trip Advisor’s iOS and Android apps have been updated with a useful offline feature, which lets travellers download review, photos and city maps before they set out on their trip, so they can then access the information on-the-go even without internet connection.

To access the feature, click on ‘Downloaded Cities’ on the main page, which redirects you to a list of cities that you can download content for. There are 300 cities available for this offline feature at launch, with TripAdvisor promising that there will be more to come.

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TripAdvisor Mobile app is downloaded 28 times per minute.

Making ‘Room’ In Hotel Industry - AIRBnB When you travel halfway across the globe, there is nothing better than arriving to couches with cosy throws, quirky neighbours who give you tips on the best local restaurants. This is the core of value proposition of AIRBnB.

Founded in August of 2008 and based in San Francisco, California, Airbnb is a trusted community marketplace for people to list, discover, and book unique accommodations around the world — online or from a mobile phone or tablet. Airbnb connects people to unique travel experiences, at any price 20 Wednesday, August 19, 2015

point, in more than 34,000 cities and 190 countries. And with world-class customer service and a growing community of users, Airbnb is the easiest way for people to monetize their extra space and showcase it to an audience of millions.

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AIRDNA – More money on AIRBnB AIRDNA is proprietary technology provides analytics on how to outperform the competition in over 4,000 cities worldwide. Airdna.co has put together the most comprehensive analysis on the best places to invest in vacation rentals in the USA.

Way Forward – OYO rooms OYO Rooms is India's first technology driven branded network of hotels with presence in cities like Delhi, Gurgaon, Noida, Bangalore, Mumbai, Pune, Goa, Jaipur, and Hyderabad. As of July 2015, the company has 1000+ hotels in 63 cities. The owners own and manage the hotels while OYO essentially provides training, standardisation of the product and marketing of these hotels, which is their main value addition to these properties. Ritesh Agarwal led network of branded budget hotels Oyo Rooms has raised $25 million from Lightspeed Ventures, Sequoia Capital, Greenoaks Capital and DSG Consumer Partners. The company will use funding to realize its ambition of becoming the largest technology-enabled network of hotels globally. 22 Wednesday, August 19, 2015

OYO Rooms leverages technology and enables consumers to have hassle-free budget hotel booking experience while it helps hotels/guesthouses to increase their occupancy. Oyo is a sort of an aggregator, it 'adopts' hotels in its fold; gets them to follow certain standards of services, features, staff, pricing, security etc.; and then sells their rooms under its own brand, for a certain cut. Currently, the company at is under the” invest-and expand” mode, and has attracted two rounds of PE funding already.

References        

https://twitter.com/oyorooms?lang=en https://en.wikipedia.org/wiki/OYO_Rooms https://en.wikipedia.org/wiki/Airbnb http://yourstory.com/2014/05/airbnb-india/ http://www.airdna.co/ https://en.wikipedia.org/wiki/TripAdvisor http://e-businessmodeltripadvisor.blogspot.in/ http://www.micros.com/NR/rdonlyres/E3581A0C-22D1-43F5-B99A735AFC5E21B1/0/HotelZaZaCaseStudyFinal.pdf

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