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 todays 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 isnt 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

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

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.

Display the room status (reserved, booked, occupied with

identification of guest presence)
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Room bookings at differential pricing.

Guest Management

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

guests

Build relationship with customers for future.

Manage Services and Privileges

Room offering based on Customer preference as maintained in

database.
Room Control System

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

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

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
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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:

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
Hotels 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

Recommends appropriate selling strategies

Delivers detailed data analysis and reporting

Creates accurate revenue and demand forecasts

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:

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 realtime 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 hotels 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.
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Results Extracts from Hotel Executives

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 its 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 rooms prices, but instead by increasing reservations with value
added packages and specials.
Challenges in implementation

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. TripAdvisors dashboard is a feature that enables hotel owners to
view a list of competitors properties most viewed by the consumers.
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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
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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 Advisors 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
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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.
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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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