When, ten years ago, somebody wanted to take a business trip or, simply, a leisure trip, he would have to go to a travel agency in order to buy a air ticket, rent a car or book a room in the hotel best suited to his needs.
Nowadays, the customer would go to Internet for this purpose, not just for information about the trip destination but also for getting the various tourist products.
As one of the world’s largest and most pervasive industries, the travel and tourism sector is as exposed as any other to the forces of change that are being brought about by ongoing developments in the Information and Communication Technologies (ICT) arena.
Information Communication Technologies (ICT)
Information Communication Technologies (ICT) is the merging of telephone networks with computer networks through a single cabling or line system. It has been transforming tourism globally. ICT has been applied in tourism since the early adoption of Computer Reservation System (CRS) in airlines in 1950s and in the transformation to Global Distribution Systems (GDSs) in the 1980’s. The ICT driven re-engineering has gradually generated a new paradigm-shift, altering the industry structure and developing a whole range of opportunities and threats. ICT empowers consumers to customize and purchase tourism products and supports the globalization of the industry by providing tools for developing, managing and distributing offerings worldwide. Increasingly, ICT plays a critical role for the competitiveness of tourism organizations and destinations.
ICT Change Hotel Reservation Services
The development of Central Reservations System (CRS) s a computerized system that stores and distributes information on a hotel, resort, or other lodging facilities. They can also be used to check up to date information about hotel room rates and availability. CRS interfaces with Global Distribution System (GDS) which supports transaction brokers such as online travel agencies in making airline and hotel room reservation. Global Distribution System (GDS) is a distribution system which holds no inventory. It connects to several different CRSs. Asiarooms.com is one of the online travel agents uses this system which allows consumers to make hotel reservation.
Advantages of ICT
ICT enables tourism organizations to have a global presence and partnerships around the world in an efficient and cost effective manner enabling small firms to build their virtual size. Distribution is the obvious function that benefits from virtual organizations. The globalization of the industry intensifies the information required for all tourism transactions and requires instant confirmation and purchasing abilities. As distribution has changed from facilitation of information exchange and reservations to a sophisticated mechanism for dynamic personalization of added value services, virtual corporations enable tourism firms to expand their value chain and include endless products and services. Organizations need therefore to appreciate the benefits of co-opetition and co-destiny, when organizations need to collaborate with players that they would normally regard as competitors.
Despite expensive initial investments, ICT can reduce administration and production costs by integrating internal data and processes. Operational and communication costs can be reduced by integrating operational systems, maximizing internal efficiencies, decreasing back office labour costs, reducing number and length of personal communications, and enabling consumers to have direct access to information. Disintermediation and reduction of commission and fees for intermediaries also reduces costs. Hence, ICT should contribute to profitability through increase of revenue and reduction of costs.
Hotel managers also claimed that the major benefits of using CRS are:
- increasing the efficiency and accuracy of internal information transmission;
- saving the costs of paper work and information-processing labour;
- increasing the effectiveness of management, especially in terms of cash, account, stock and yield management.
Disadvantages of ICT
As mentioned above, the use of ICT requires high initial investment by developing the system in the hotels. Hotels also incur constant costs on the system maintenance.
Even with the most developed the technologies, there is still risk of system failure. The system failure may cause inaccuracy in room reservation.
There are also other limitations when making room reservation through ICT, such as limited validity and limited options.
There are also other limitations when making room reservation through ICT, such as limited validity and limited options.
Transaction Broker
A transaction broker (also referred to as a facilitator, coordinator or contract broker) is not a representative or agent for either the buyer or the seller. The job of a transaction broker is to help both the buyer and the seller with the necessary paperwork and formalities involved in transferring ownership of real property.
In hotel reservation, transaction broker acts as a intermediary between buyers and sellers and provides a third-party payment mechanism for buyers and sellers to settle a transaction. Transaction broker earns a commission for each successful transaction. They do not negotiate on behalf of or act as an advocate of the buyer. They simply assist the buyer and seller in the transaction without any loyalty extended to either party. Transaction broker (agent) such as Asiarooms.com, negotiates with hotels to get the best room rates to attract consumers. With the help of ICT, hotel room reservation is becoming easier than before, as information is easily obtained and transactions are done through “spaces of flow”.
Conclusion
ICT has made great changes to hotel reservation for travellers. Despite the limitations mentioned above, ICT has enabled society activities to move from 'space of places' to 'space of flow'. In conclusion, ICT is becoming a key determinant of organizational competitiveness.
