SUSTAINABLE TECHNOLOGY IN HOSPITALITY INDUSTRY: SOME
4.2 CLOUD BASED SOLUTIONS OR CLOUD COMPUTING The hospitality industry generates massive data and specialized information
each day in numerous operational areas on its internal servers. Data and in- formation management therefore becomes a top priority for the industry to in- crease operational efficiencies and profit margins. Therefore despite shrinking budgets, manpower shortage, highly dynamic markets and increasingly tech- savvy customers, globally, more and more hoteliers have begun to express in- terest in cloud-based hotel management solutions, with a hope of streamlining operations. It has become critical for the hotels to stay ahead of the hospitality information technology curve. With cloud computing, organizations can ex- tend the life of their existing systems with new innovations, improve time to market new systems through affordable pricing, and ultimately gain competi- tive advantages in the hospitality industry(Hopkins, 2011).
Cloud Computing has been defined by The U.S. Commerce Department’s National Institute of Standards and Technology (NIST) as“a model for creat- ing a convenient, ubiquitous, on-demand network, which is accessible to a shared pool of configurable computing resources and applications that can
be swiftly provisioned and acted upon with a minimal amount of management effort or cloud provider interactions”(Mell and Grance, 2010).
Depending upon the service requirement, different types of service models are used by the industry.
1. Infrastructure as a service (IaaS)—Examples of IaaS providers in- clude: HP cloud, Google compute engine, Navisite, Rackspace, Ama- zon EC2, Ready Space Cloud Services and Joyent, Linode.
2. Platform as a service (PaaS)—Examples of PaaS include: Google App Engine, Windows Azure, Cloud Foundary, Force.com, Heroku, En- gine Yard, Mendix, AppScale, OrangeScape, Jelastic, OpenShift, and AWS Elastic Beanstalk.
3. Software as a service (SaaS)—Examples of SaaS include: Microsoft Office 365, Petrosoft, Onlive, GT Nexus, Google Apps, Callidus- Cloud, TradeCard, Casengo, Marketo, and Salesforce.
4. Network as a service (NaaS)—This service includes bandwidth on de- mand, and a flexible and an extended VPN. Owners of the network infrastructure can provision a virtual network service to the third party through NaaS concept materialization (VNP–VNO).
On being asked “if they support moving their company’s revenue manage- ment system to a cloud-based Software as a Service (SaaS) model, 46.3% of hoteliers agreed or strongly agreed that it’s the right move” (Hotel Technology Study, 2013).
For the hospitality industry cloud computing ensures strategic advantage to the hotels.
4.2.1 BENEFITS OF CLOUD BASED TECHNOLOGY FOR HOTELS
1. An on-premise based IT system requires, constant maintenance, hard- ware update and purchase, while a cloud based system does away with all these activities. Its IT activities are managed by off-premises re- dundant servers. Hotels do not have to constantly scramble to update their systems because cloud software’s ensure that there is an automat- ic upgrade implementation. The constant threat of compliance with the latest standards is thus taken care off. Therefore the implications on costs are tremendous and a saving of 45–65% are not uncommon (iTesso, 2013) for the hoteliers. They no longer have to earmark large sums of money for systems upgrade; instead they pay small fees for the cloud-based systems.
2. Unpredictable electrical outages upset the hospitality industry’s effi- cient flow of operations, and although the guests may not feel it, the front office personnel are often left in limbo when his/her screen goes blank. Cloud based solutions do away with such an eventuality and ensure that there is continuous systems (service) availability.
3. Antivirus scanning can be an expensive computing resource operation.
Also antivirus scanners typically require a lot of CPU and memory al- location. Computer resources of clients are spared the inconvenience of expensive process because (1) redundant and off-shore site back- ups of the data and critical information ensures that the data is safe from physical damage and that high levels of security are maintained at all times, and(2) The cloud automatically upgrades all the major web browsers for antivirus. It additionally scans the sites and warns the clients about possible harm that a malware may cause.
For example, Google provides a cloud security service for Yahoo searches, and sites, which fail a Google antivirus check, receive a warning notice from the Yahoo search that the site may harm your computer. By using the benefits of scale, Google is able to provide and distribute an excellent and highly efficient form of cloud security.
Google visits a huge number of sites regularly to index them for fast searches, and also analyzes the sites for malware using a variety of antivirus software (Walsh, 2009).
4. Most of the hotel staff needs to be trained only in the uses of the tech- nology at the end level. This means that even non-tech savvy people at all levels can gain access to pertinent and mission critical data. Thus the cost of training them reduces considerably as the trained staff of the service provider does all the technical work.
An example of such a Technology would be Hotel Concepts’The Enter- prise Lodging system,iTesso, the company calls it “world’s first cloud native hospitality technology solution, that will help reduce your total cost of IT.”
The company offers an integrated distribution property management sys- tem (IDPMS) with inbuilt functionality for controlling distribution channels besides other software on cloud for a small fee and requires only a Mac or PC with a browser facility.
Best Western International (Global), uses the cloud based hotel specific software of iTesso for total operations management including front desk, res- ervations, customer relationship management, reporting and invoicing, etc.
Additionally, various other interfaces like the telephones, climate control, door locking system, room management, point of sale and central reservation
systems are all managed through onsite terminals, workstations or simple windows servers at the hotel end.
4.2.2 APPLICATIONS OF CLOUD COMPUTING IN HOTEL INDUSTRY
The entire guest cycle in the hospitality industry can be taken over by a cloud based integrated property management system, distribution platform and cen- tral reservation system that can connect between a hotels CRS and GDSs, alternate distribution systems or act as a Property management system (PMS).
Moving from an on-premise PMS system to an off-premise cloud based PMS system can accrue immense benefit to the hospitality industry in terms of costs, service availability, security, and latest software. Additionally, cloud computing ensures a flexible scale of computing power that can be distrib- uted across different streams in a relatively short amount of time. It can also provide immediate access to hardware resources without needing any capital investments upfront, which greatly reduces the time requirements and cost of entry for hotels (Cruz, 2013).
‘Interdependent feature’ of tourism industry makes the companies in dif- ferent sectors, that is, transportation, tour operators and hotel, heavily reliant on each other (Evans, et al., 2003). Hence, it requires various organizations in the tourism industry to work together as a value chain to add value and deliver product and services to the customer. The cloud opens up possibilities to partner with travel agencies, offbeat recreational companies, entertainment companies and others. This could facilitate guest attraction by coordinating the activities of various organizations in the hospitality industry and deliver exceptional product and service to the customer. This feature of cloud comput- ing plays a great role in improving the overall service quality of the product that the consumers buy (Yilmaz and Bitici, 2006). It can help the hospitality industry to tie up with new eMediaries like the airlines, car rentals and hotels chains, etc., by allowing them to use their reservation systems, vertical indus- try portals (vortals)* and auction sites. Besides the Internet, GDSs can be fur- ther strengthened by the emergence of cloud based Platforms viz. Interactive Digital Television and mobile devices like tablets and phones, for example, recently displayed in a Hospitality Technology Exposition and Conference 2012, was a new mobile phone based check-in application, which allowed the guests to use their mobile phones and tablets as a room key.
Another example of a cloud based computing in the hospitality industry is Microsoft AZURE a cloud based development platform currently being used
by the Intercontinental Hospitality Group (IHG). IHG uses this platform to integrate its IT services around the world for its data management and its
‘GREEN ENGAGE’ environmental initiative.
‘GREEN ENGAGE’ is an online sustainability system linked to IHG properties across the globe. Data about each site/property is fed into the sys- tem. The system then automatically generates reports and energy benchmarks.
The hotel can then compare it with the best practices being followed by other hotels in the same climatic zones. Based on the issues raised in the energy report, ‘GREEN ENGAGE’ provides green solutions that cover every aspect of the hotel lifecycle ranging from picking up suitable sites (for new Hotels) to suggesting pro-environment cleaning materials for the hotels. It also trains the staff on sustainability. The return on investment, carbon reduction and potential impact on the guests is calculated for each action item suggested by GREEN ENGAGE. Finally, the system produces reports, which allow IHG to review an individual hotel’s progress (IHG, 2013).
As of now, the in-house ‘Enterprise Technology team’ at IHG, has begun integrating two or more service models, to manage IHG data and contact cen- ters, and other IT systems, to facilitate and maintain guest traffic across all its 4,600 branded hotels. This process further helps in simplifying access to all of IHG’s global distribution systems, online booking platforms, reporting applications and other management tools. Additionally, by ensuring that its supply chain purchases energy-efficient equipment and implement Internet- based voice and data networks across the enterprise, IHG hopes to reduce the IT servers by 80%.
As cloud computing evolves many possibilities open up in future IT opera- tions in the hospitality industry in dynamic service pricing, system integration for quality inventory management issue control, and controls for guaranteeing guest room availability (Official Blog of Hotel Ninjas, 2013).