NexGen Technology

Driven by technology

It has the power to transform the Indian hospitality industry that is driven by aggressive competition, demanding customers and thin profit margins. Sanjeev Bhar examines how it can take the industry to an even more progressive phase

The world is getting smaller - often used with reference to globalisation and its impact on our lives can't be truer given the present scenario where technology has propelled business strategy to a new dimension. Conventionally having stayed away from technological assistance, the hotel industry in India is observing a sea change - in its objective and management's role towards delivering quality customer service. 'Service', related to personalised care and hospitality, is finding a friend in advanced systems, gadgets that accentuate service imparted.

This brings us to ponder what lies ahead: What NextGen technologies are in store for the hospitality sector? The answer to this query lies in introspecting how hospitality can be managed optimally. Over the last couple of years, it has revolutionised the Indian hospitality businesses and cutting-edge networking technology is now being deployed to enhance customer satisfaction.

What customers want

Going by the latest American Express study on the lifestyle of the Indian affluent has revealed that increasing consumerism is steering a dramatic change in the lifestyle aspirations thereby forcing product and service providers to understand what is driving consumers' choices and decisions. Lifestyle expectations are growing rapidly along with wealth and thus personalised service is high on the charts for hotels and restaurants customers.

Customer Relationship Management (CRM) plays a crucial role in identifying customer needs and behaviour towards products/services and helps in identifying strategies to hold customers. Abraham of Sage Accpac India, says, "Now you can have your pick (software) for the specific need to address your query. We have products that cater to travel/hospitality sectors like ACT!, that addresses the sales force automation requirements of small and medium businesses and can be used in both network and web environments. This is ideally suited for smaller hotels and travel companies who have no requirement to integrate with any other business solution that they might be using. Typically, they can have upto 50 users on this system with about 10,000 records."

There is another side to CRM where it fails due to constant pressure. Renu Kapoor, vice president (sales & marketing) at Hotel Claridges, New Delhi, feels that unless there is a major discrepancy in the way services are performed and not supported by CRM properly, it may harm an organisation. It is a tool to enlarge the vision towards identifying your customer and it can only help provided right tactics are employed to shower guests with perfect service. Sudip Mukherjee, operations manager (hotel systems) at Micros Fidelio India, opines that restaurants (standalones and chains) have to keep their customers in mind. He says, "CRM has to survive combining with other aspects like HR, finance, etc. Also, it is to be looked on the basis of how much financial burden it would have on the company because the prime focus has to be surviving the bottom line of costs. If that is taken care of, then it is feasible for standalones to follow CRM." Collaboration of IT companies with hotels and travel agencies is going to yield technologies that enable to identify customer needs and service them better. CRM is increasingly being perceived as a business tool generating customer loyalty.

Streamlining technology

After identifying customer needs, the goal of meeting them should be figured out in such a way that the cost of offering the service(s) doesn't pinch the company balance sheet i.e. variable costs shouldn't show fluctuations northwards. Marketing gurus would always adhere to one statement for advice: cost need to be justifiable through high probability of ROI. Thus, selection of technology in itself is a vital step.

High quality technology solutions call for the right selection of hardware and software applications. This in itself means that there has to be a substantial focus on IT. But the scenario is different for new properties. Pradeep Khetwal, IT manager at Shangri-La Hotel, avers, "We have a corporate policy that suggests that IT product(s) need to be changed every five years while keeping an eye on the changing technology market. The constant feedback goes to our corporate team for taking right decisions."

According to Yugal Sharma, country manager (India & SAARC), Polycom, the hotel industry is witnessing difficulties in managing complex operations today. He says, "It is pertinent for hoteliers to set up the required IT infrastructure to facilitate sound operations and IT applications." Hotels are increasingly becoming receptive to changes that IT is bringing to this sector in order to meet intense demands in the future. Suprabhat Chatterjee, national business development manager (India & SAARC) at Cisco Systems, says, "Since the hospitality industry demands seamless and uninterrupted connectivity, a robust network is a primary requirement. Cisco offers specialised end-to-end solutions that facilitate seamless connectivity and networking."

Advanced technologies such as wireless LAN, Wi-Fi and IP telephony have become critical components of hospitality today with Indian hotels investing in technology to provide world-class services to guests. Automation of front office, networked properties, broadband and Wi-Fi services are now a standard part of services.

A hotel property in the future will not be able to survive if each of its divisions is working on different hardware and software platforms. Like in any enterprise today, having access to critical information about customers is very important. For example, the information collected by front office can act as a very good marketing database for the sales department. The finance department should have access of banquet sales and room sales. This information is required across different departments instantly. There is no way this is possible if different departments are working on different platforms.

Other applications which are increasingly deployed in hotels include Access Control Systems, CCTVs, integrated fire and burglary alarm systems and smart rooms. The new trends within smart rooms include functions such as keyless entry, rooms that can map customer preferences for room temperature, preferred room lighting, food, TV/video preferences, etc. All these functionalities are a gift of advanced technology viable for hospitality use.

Curtailing geographical barriers

With focus on building relationships, hospitality works to deliver personal service and true community commitment to customers alongside the resources they already offer. Thinking in favour of customer service needs to be substantiated with good infrastructure for the management to work with. Today, it has become essential for hotel companies to set up the required IT infrastructure to facilitate this. The rise in number of global collaborations in this sector has obviously initiated constant strategy discussions, exchange of ideas, planning and operation control. This means that the business structure today stands scattered at all times across geographies. This calls for smooth communication flow for updating themselves on a regular basis with the global happenings.

In such a scenario when decisions need to be taken quick, one cannot wait for a global participation for a meeting stretching over a week's time at a single point. Communication tools like conferencing thus removes geographical barriers. Sharma says, "Sometimes written or mere verbal communications over phone cannot substantiate that need. This can be achieved through tools like video conferencing enabling face-to-face meetings across teams over different locations." The hospitality industry is in dire need for world-class experience for providing customers with technologically-advanced facilities. Connectivity is a necessity. The IT industry feels that the future of hospitality lies on Internet Protocol (IP)-based applications. Polycom has taken some initiatives in the APAC region wherein it is trying to ease internal communication. Once a property is networked on video conferencing, training of their chefs and everything related to distant communication becomes easy. Says Sharma, "We recently conducted an activity for the hospitality industry in Thailand wherein we had a cook in a different location teaching French cuisine through video conference. This is what we want to do for the Indian hospitality industry also."

The evitable is all about converting local boardrooms into virtual global conference rooms. Hotels, on similar patterns, would eventually be better equipped to constantly interact with international vendors and partners. Internal requirements such as training of staff or official communication with seniors become easier as travel expenses are reduced and would also be able to address customers better. Vintoo Kaul, information systems manager at Imperial Hotel, feels, "The hospitality industry must overcome its general reluctance to invest in new ideas and technologies and look for applications that will drive bottom lines. Hotels need to use technology to offer customers the best of services; they should invest in technology, e-commerce and commoditisation." Since the hotel and restaurant industry is burgeoning in a big way in India, it can become a beneficiary by managing a single, integrated voice, video and data network in a central location instead of maintaining separate voice and data networks in many locations, thereby increasing costs.

Wireless connectivity: Need of the hour

Wi-Fi is the latest buzzword that is invariably used everywhere. Hospitality industry for that matter isn't far behind; it has progressed and is continuously progressing towards attainting wireless connectivity to boost customer satisfaction.

Considering the situation where major Indian carriers have acquired spectrum licenses to deploy wireless broadband services and have expressed interest in going with World Interoperability for Microwave Access (WiMax), the scope for hospitality will widen. BSNL has announced plans to offer WiMax services in Chennai, Bangalore, Kolkata, New Delhi, and Mumbai this year. Sify, Bharti-Airtel, Reliance, MTNL and BSNL are making their strategies more customer-friendly to tap the hospitality market. Players in the field of Wi-Fi and WiMax are working with these service providers to make available their offerings. These technologies will provide wireless connectivity to access the Internet using laptop computers or personal digital assistants (PDA) or similar hand-held devices. Chatterjee informs, "The Taj Exotica in South Goa not only provides guests with Wi-Fi broadband access for surfing the internet and checking email, its solution also allows guests to send print jobs wirelessly to the hotel's business center. The beach front hotel is the first in Goa to provide the service, powered by Cisco Systems."

Wi-Fi is not restricted to just big players; many three to four-star hotels are also deploying these services. Consider Hyderabad-based Hotel Golkonda, a three-star hotel which has deployed full-fledged wireless LAN. Powered by Cisco Aironet 1100 series access points across five floors, the hotel offers seamless wireless internet connectivity to its guests. Some mobile phones and PDAs now have Wi-Fi chips installed, which means conventional networks can be bypassed and inexpensive long-distance calls made over the web using Voice over Internet Protocol (VoIP). This will help hotels directly. Ashish Arora, vice president (Enterprise Solutions) at Sify, says, "We have a tie-up with the Oberoi group for its Wi-Fi services and with the certainty with which this sector is growing the dependency on Wi-Fi need will only increase."

The importance of getting wireless in enterprises directly reflects on the organisation in terms of productivity and efficiency. There is a rider though, and Park Group of Hotels is pretty much concerned about it. Manik Dhodi, front office manager at the group's Delhi property, says, "We have a policy where Wi-Fi network is not available in guestrooms. We have provided inputs there for PC devices that enable internet access. This is a mere precautionary step. However, public places like the lobby and restaurants are all Wi-Fi-based." On the other hand, Arora is of the opinion that the tussle for internet security will carry on but would not stop industries to adopt internet-based service due to its benefits. Wi-Fi hot spots have evolved and have become more frequent in a variety of locations including hotels, service apartments, restaurants, and other venues where hospitality finds its presence. Mesh networks subsequently have evolved to become the architectures of choice for the rapidly increasing number of municipal wireless networks.

Revenue optimisation

If a hotel concern is well-networked, it is equipped to fight the bears of business where additional software application can prove vital. Every system/technology has its own life cycle wherein prospective users first become aware about the system, evaluate it and then adopt it. The hotel industry deals in rooms, which is the most perishable commodity. Also, the probability of a room sold twice in a day is less. In such a scenario, revenue optimisation system (ROS) is one method that is evolving as a gift to the hoteliers to function at a level which fetches maximum returns on rooms - whether on rack rates (fixed) or selling rooms on discounts yet keeping the most effective rate for the hotel at a given point of time.

Thus ROS enables hotels with daily reports on competitive rates from group distribution systems, branded websites, etc. Hotels can then use these data with rates quotable for walk-ins by identifying optimal rates based on probability of booking to be used by hotel staff keeping profitability at a higher level. Andrew Quinlan, general manager of Hotel Shangri-La, New Delhi, says, "ROS is an essential process of allocating the right type of capacity to the right customer at the right time and at the right price. A key factor is to determine the most profitable mix of demand for the given capacity and for the given period. Accurate forecasting about the business not only helps us yield more but also gives us an indication about the most appropriate manpower requirement at a given time."

Amit Khurana of IDeaS Revenue Optimisation says, "Many international hotel chains operating in India have adopted this system. Several domestic hotel groups are evaluating the same for their hotels. It is our constant endeavour to reach out to the industry and make more and more hoteliers aware about ROS and its benefits their hotels can accrue." An additional complicating factor is that a lot of hotel chains in India use Property Management Systems (PMS) that do not have an ROS interface. A sophisticated ROS interface is critical and in some cases this requires development from the PMS companies, he adds.

Revenue optimisation aims at delivering measurable revenue increase and thus, augurs increased profit margin and enhance asset valuation. Says Rudy Oretti, general manager of the Leela Palace Kempinski Bangalore, "It helps decide what system (for decision making) to take and when. The purpose is to allow users to maximise profits on peak days and to put right strategies into place." According to finance experts, the strong demand existence is not a necessity for increasing revenue. They say that barring a few, most Indian hotels are not following demand-based pricing, which is all set to become the future of the hotel business. Rooms are sold to those who have reservations as well as to those who don't. In the latter category, there are bound to be some corporate clients or a customary loyal guest, and hotels lose profitable clients out of sheer compulsion. Khurana remarks, "With the kind of demand cities in India have been experiencing in the hotel sector, it is only a matter of time before hoteliers in India adopt ROS to make the best of it and we are already seeing this to some degree. IDeaS ROS is constantly moving towards a more attractive pricing solution. The question of 'what is the right price when I am not going to fill' is equally (if not more) important as 'what is the right price when I am going to fill'.

Revenue optimisation addresses the following:

• Transaction systems
• Market segmentation
• Effective rate structure
• Effective and realistic market positioning
• Online strategy
• Revenue management culture
• Strong demand existence
• Implementation of automated revenue management system

High on chip culture

The desire for wireless connectivity in hospitality reflects the immense need to shed loads of belongings. Looking around would suggest that the time has come for simplifying various activities in relation to guest servicing through smart solutions aka smart cards. Microchip-based smart cards are becoming popular as one-touch options reduce data verification and help the management to keep track of guests' activities effortlessly.

The concept of smart cards can be used for various in-house transactions. In place of magnetic strip, a micro chip inside the card would act as data collector. After the guests avail of a certain service, the issued card may be charged 'debit' at POS terminals. The information can then be retrieved by the cashier while the guest checks out and settles for the final bill. Further, this smart card can be used for added information like passport details, details of previous stays, etc. It acts as an identification mark for the guest, which would benefit both the management and the guests alike.

Technology is evolving and owns the power to transform the Indian hospitality that is today driven by aggressive competition, demanding customers and thin profit margins. While travellers, the world over, hold Indian hospitality in high esteem for its trademark 'service-beyond-expectations', the industry in turn is beginning to take key steps to further its service leveraging on technology-driven opportunities.