In my opinion every hospitality manager in any part of the world understands the importance of IT for the present and future business success. But why then are there are still many examples of IT implementation failures and profit losses? I think the main challenge for the successful IT selection and implementation is IT governance. Or in other words—what decisions should be made and who is making these decisions? Is it the CEO, CIO, functional managers, end-users, or all of them? The reality is that a majority of employees, including middle level managers, in many companies cannot identify who is responsible for IT governance. Therefore the decisions are usually made by either the CEO or CIO. The CEOs in most companies have a great strategic vision and business knowledge but lack technology expertise. Thus often they cannot define very clearly exactly what IT functionality is required to reach the company’s goal. On the other hand CIOs are experts in technology but do not necessarily know which IT solution is the best match for the company’s strategy. Therefore these inconsistencies lead to the poor IT decisions in the hospitality industry. Hence companies just buy expensive IS based on so-called ‘best practices’ which are not necessarily the best for their particular needs or more often ‘survive’ with some simple functional applications developed in-house.

But moving into the future hospitality companies need to change their IT governance practices-- because many companies may gain a competitive advantage by using IT to support their business goals. Thus what is the most effective and efficient way of managing IT governance for hospitality players in the future? First, ongoing IT education for the senior management will be required. And, very important, this education should be provided by independent consultants, not by ERP sales representatives trying to ‘sell’ their systems. At these educational seminars, managers should receive up-to-date information about IT innovations and all the existing IS product choices on the market. Thus the acquired knowledge will enable CEOs to think more ‘out of the box’, significantly increasing their ability to evaluate different IT options, and align them with the overall company strategy. Second, the role of the middle level managers and their participation in the decision-making process should be increased. The middle level managers in hospitality are usually from a younger generation and often more familiar with IT innovations. Also they work in different departments and know very well what each department needs in terms of IT functionality are how to make it work best for the business. Last, but not the least, the end-users should receive the required amount of training before the new IS implementation. Today every employee in the hotel should be familiar with IT and in-house IS all the way to housekeepers and maintenace. Therefore high-quality end-user training is crucial for the success of IS implementation. This should also be a responsibility of the departmental managers.

In conclusion I think that the role of the hospitality middle level managers in successful IT selection and implementation will gain in importance in the future. These managers, having knowledge in both: business practices and IT could become the CEOs best advisers for the IS selection. Also they would be the key people responsible for the successful IS implementation and customization. That’s why IT is a required course at all the best business schools today. I took it at the Cornell Hotel School and it changed my paradigm about why it was important for hospitality managers.

In my opinion the hotel and travel business has changed forever as a result of the consumer’s access to information about the destination they plan to visit and the ability to hunt for the best deals. Travel industry research authority PhoCusWright refers to this technology-driven trend in 2009 as the “Informationized Trip Experience”. Today customers can research any destination, see videos, and read reviews from other travelers online. Moreover they can download all this information on the smart phones when they get to the destination. I think the most important factor driving the customer’s hotel choice is the abundance of information available about the place they plan to visit. That is why the smart hotels and tour operators have started to use advanced video technology to differentiate their offerings and attract the customers.

A great hospitality industry example is InterContinental Hotels & Resorts who created mini video travelogues for all 135 of their properties. In each destination, the hotel’s virtual concierge takes visitor on a personal site-seeing, shopping, and dining tour of the city they are about to visit. They can download videos to iPhone for quick access during the stay. Also guests can email videos to friends or post to Facebook page to share the experience.











I believe in the future social applications will become critical in a hotel’s effort to “informationize” their properties for customers. One innovative twist on a social user-generated application recently launched by Marriott is called “Spirit to Serve’s Marriott Film Festival.”









In this application hotel employees are encouraged to capture their knowledge of the hotel and local area by filming short videos which they upload to a site that potential customers can view. But, even more important, the video assets can be syndicated by Marriott to blogs and social networks creating a marketing web to catch travelers while they search for information about the hotels. I think today’s travel consumer is looking for first-hand, authentic advice from knowledgeable and reputable sources. In a technology-driven world, they expect realistic visual information they can use to plan and take along on their trip.

My vision is that with the rapid IT development, hospitality players will go even much further in this direction. I think soon hotels will be able to use 3-D technology for virtual tours of the property and local area; it will let the traveler experience the unique feel of the hotel and destination as if they are really there. Customers could find themselves in the virtual hotel room, in the spa, in the dining room, at the roulette table or on the beach just by one click on TV.
A start-up German company called Tridelity is developing 3-D technology capable of transporting the customer into a virtual world.












At first Tridelity plans to make 3-D display devices available onsite at hotels and casinos, trade shows, shopping malls, and airports. But ultimately 3-D (glassless) display technology will make its way into the home TVs. This will be a revolutionary change in the customer’s experience and decision making process.

In my opinion, hotels and tour operators who can “informationize” the future trip for their customers will be able to gain a sustainable competitive advantage in the hospitality industry. The visual technology revolution in hospitality has just begun…

To continue the theme of the previous entry I would like to discuss how hospitality companies can either implement new IS applications or improve existing ones in the most effective and efficient way. To address these issues I would like to provide my vision on this topic by answering the following questions: What kinds of IS implementations hospitality companies are using now and how will they be used in the near and long-term future? What are the future trends of IT in the hospitality industry?

Despite its effectiveness, ERP (Enterprise Resource Planning), has not gained widespread adoption in the hospitality industry. The main reason why it is has not gained acceptance is due to the tremendous implementation and maintenance costs. Hence for most hospitality companies it violates the cost-benefit rule: the cost of ERP is much higher than its benefits. Moreover companies fully depend on one vendor in adopting ERP solutions to confront changing business conditions. This raises the long term cost of ownership. Do ERP systems have a future in hospitality? My opinion is: No they probably do not unless they reduce their costs. But the cost reduction could only be possible if the ERP industry becomes more competitive with more vendors competing in the marketplace. Also ERP should become more flexible in changing applications and accessing data and information over the Internet to compete with two emerging approaches: EIA and SOA.

Most hospitality companies “survive” today using applications for different tasks internetworked with each other: so called “information islands”. I guess such an approach has worked perfectly for them until now: it still is much cheaper than ERP. But as business processes becoming more complex and competition increases, companies need to implement new applications (e.g. Revenue Management). Also they need to modify existing applications more frequently. Thus if the step-wise approach was not a “big deal” before, today it has become more complex. The most efficient way to deal with this issue in the future is to adopt the EIA (Enterprise Application Integration) approach. However today it is still very “raw” and risky due to a number of reasons. First it is not clear what IT complexity level is required to manage the middleware. Second companies need to hire in-house IT experts. This could be problematic (expert shortage) and costly (security issues: cannot outsource it or use open systems code). Third all in-house applications will depend on middleware; if middleware crashes all systems will fail. I think this approach will become the most popular and widely used in hospitality in the future if the aforementioned issues are to be solved. A good example of EIA in hospitality is Stone Bond's Enterprise Enabler®, which had been successfully implemented by The Houstonian Club & Spa, an exclusive Houston urban resort.

Another emerging IS trend—SOA (Service Oriented Architecture)—is a revolution in IS. Instead of spending money on in-house IT applications, companies can easily do the most of their business processes utilizing APIs to interconnect different systems package functionality. Starwood Inc. is a good example of successful SOA implementation in hospitality. "It was the best way to let us map our technology with our various brands," says Del Rio, Starwood's senior vice president of technology solutions. “Instead of having each of Starwood's hotel chains build their own applications, SOA allows the brands to share the same programs and features—but they can be customized specifically for each hotel's look and feel”. Despite this approach being relatively new and untested, it is a huge cost savings for the companies. For example, Del Rio predicted total $20mln savings in annual maintenance costs for Starwood Inc. from implementing SOA. However I think big hotel operators and casinos still would be wary of implementing it today due to the high complexity, lack of expertise, time consuming development, and data security issues. It took about five years for Starwood Inc. to work on it. However I think SOA will become the best way to go for hospitality companies in the future with further IT enhancements and more security provided. According to an IDC report, by 2010 companies will spend upwards of $33 billion on SOA services.

In conclusion I think the two approaches: SOA and EIA will find their place among different hospitality companies. ERP will probably become obsolete. But these two approaches they will need to be modified in order to compete with each other. This competition is in the best interest of customers: quality of all the products and solutions will continuously increase while costs will come down. Just a few years ago choice was limited to either ERP or “information islands”, but today it has become much broader due to IT development. And I predict that in the near future some new even more sophisticated products will appear on the IS market.