Analysis of ICT Impact on Accommodation Rates: Megaro Hotel Case Study

Desklib provides past papers and solved assignments for students. This project analyzes the impact of ICT on a UK hotel's accommodation rates.

RESEARCH PROJECT
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Table of Contents
Chapter 1: Introduction....................................................................................................................4
1.0 Introduction............................................................................................................................4
1.1 Organizational background....................................................................................................4
1.2 Aim and objectives................................................................................................................5
1.3 Research question..................................................................................................................5
1.4 Importance of the study.........................................................................................................6
Chapter 2 Literature Review............................................................................................................7
2.1 Introduction............................................................................................................................7
2.2 Present trend of digitalisation in the hospitality Industry......................................................7
2.3 Impact of Information and communication system in hospitality organisations...................9
2.4 Challenges related to installation of technology in hotel industry......................................10
2.5 Recommendation.................................................................................................................11
2.6 Swiss cheese Model.............................................................................................................11
Chapter 3 Methodology.................................................................................................................13
3.1 Research onion.....................................................................................................................13
3.2 Research philosophy............................................................................................................14
3.3 Research approaches............................................................................................................14
3.4 Research design...................................................................................................................14
3.5 Data collection methods......................................................................................................14
3.6 Data collection techniques and tools...................................................................................14
3.7 Population and Sample size.................................................................................................15
3.8 Ethical consideration...........................................................................................................15
Chapter 4: Results and Discussion................................................................................................16
Analysis.....................................................................................................................................16
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Thematic analysis......................................................................................................................17
Chapter 5: Conclusion and Recommendation...............................................................................18
5.1 Conclusion...........................................................................................................................18
5.2 Linking with objectives.......................................................................................................18
5.3 Recommendation.................................................................................................................19
5.4 Limitation of study..............................................................................................................20
5.5 Future scope study...............................................................................................................20
Reference List............................................................................................................................21
Appendix....................................................................................................................................23
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Chapter 1: Introduction
1.0 Introduction
Information and communication technology plays an essential role in the hotel industry as it
allows organisations operating in the hospitality sector to acquire, utilise, create and synchronise
information collected regarding the consumers of the hospitality sector to improve their standard
of services. Information and communications technology (ICT) used in hotels across the world
are beneficial for the functioning of the organisations as it allows them to access information
regarding the preference of the customers and cater to their needs efficiently (Kharouf et al.,
2018). Various aspects of ICT allow the hotel industry to influence the functioning of the hotels’
internal operations in an improved way. ICT aspects allow hotels to perform better in providing
service to their customers through appropriate creation of products and services (Schegg and
Stangl, 2017). The efficiency of hotels in the competitive market economy is based on the
quality of services that the hotels provide. Using ICT services, the hotel industry can improve the
quality of products and services provided to the customers efficiently. The scope of hotel
industry can be improved by utilising ICTs in their operational activities. ICTs allow
organisation to improve their business performance in a competitive market economy by
providing appropriate information regarding their business operations to the target demographic.
1.1 Organizational background
Megaro Hotel is one of the smartest and stylish hotels located in the UK, King’s Cross Station
area. The luxury boutique accommodation that is capable of providing their customers with
unique and quality services attracts customers from a wide range of economic backgrounds.
Based on the location of the hotel it is observed that the major clientele of the hotel is corporate
individuals who utilize the hotel as a stop while travelling through the Eurotunnel for business
purpose. The Megaro also provides accommodation facilities to the tourists who frequent The
King’s Cross Station and St Pancras station as these provide the tourism industry of the UK with
a favourable transport network. The hotel performs their internal operations using several ICT
factors within their business operations to cater to the needs and requirements of their customers
efficiently (Themegaro.co.uk, 2019). The hotel operates in the competitive market economy
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efficiently. Megaro hotel was able to make a full house booking in the 2016-2017 business year.
The success of the hotel was short lived as the business started failing in 2018 onwards.
1.2 Aim and objectives
The primary aim of this research study can be identified as “to investigate and identify the effect
of information technology on accommodation rate of Megaro Hotel as well as the impact of
technology on accommodation of the hotels that are being developed all over the world”.
Based on the research aim several research objectives have been developed that will ensure the
researcher is able to fulfil the aim of the study in an effective manner.
 To investigate the ways, Megaro Hotel had incorporated ICT in their business areas
 To study the concept of Information and Communication Technology by performing a
literature review
 To investigate the risks associated with the use of information and communication
technology in the Megaro Hotel
 To maximise revenue opportunities associated with the good location of hotels
 To implement measures that reduce staff turnover, improve team-building strategies for
the improvement of employee satisfaction within the hotel
 To study the impact of technology on business operations related to the Megaro Hotel
 To suggest the implementation of different technologies for the future business of the
hotel
 To suggest strategies that would mitigate the challenges the hotel faced in implementing
ICT in their business operations
1.3 Research question
In order to fulfil the research objectives, the study would be conducted by answering certain
questions. Based on the research objectives a primary research question and several secondary
research questions are devised. Proceeding with the research study by answering the research
questions will allow the researcher to fulfil the aims of the study effectively.
Primary research question:
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What is the reason behind the fall of accommodation rate at The Megaro Hotel in reference to
the competitors of the hotel in the UK market economy?
Secondary research questions:
 How does Information and Communication Technology (ICT) influence the operations at
Megaro Hotel?
 What kind of risks Megaro Hotel face in implementing ICTs for their business
operations?
 What strategies can the hotel incorporate to reduce the risks that hinder the effective
functioning of the business organisation?
 In what ways does technology influence the accommodation rate of the Megaro Hotel?
1.4 Importance of the study
The hospitality industry and the hotel industry’s primary business function are to cater to the
needs and requirements of the customers. Communication plays an important role in the
hospitality industry top fulfil their business objectives effectively. The utilisation of ICT in the
hotel industry can be recognised through the success of communication between different
stakeholders of the hotel industry. ICT allows hotels to identify the needs of the target customers
and create appropriate products and services that will improve their business operations in the
competitive market economy (Lovelock and Patterson, 2015). The successful interaction
between customers and hotel management can be beneficial for both parties, as it will allow the
customers to identify accurately the type of products and services the hotel has to offer to them.
The impact of ICTs in the hotel industry is also evident through the increase in accommodation
rate of different hotels in the travel and tourism sector. The study will provide extensive
knowledge about the scope of ICTs in the hotel industry by studying the impact ICT on Megaro
Hotel’s business operations.
The accommodation rate of hotels increase or decrease due to the brand image of the hotel,
pricing strategy and lucrative offers the hotel communicates to their target customer base (Liu et
al., 2017). ICTs allow the hotel industry to provide information to their target customers through
different means. This enhances the business of the organisations and improves the
accommodation rate of the hotels.
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Chapter 2: Literature Review
2.1 Introduction
Literature review plays an important role while conducting the study because, it contains past
works of the scholars based on the same topic so that the study can be conducted in an authentic
manner. In the present study, the present trend of hospitality industry of UK has been analysed.
In addition to that, the challenges of Megaro Hotel have also been analysed. Further, the impact
of communication on the operation of the hotel has also been critically analysed. On the
contrary, the challenges of communication technology on hospitality management have also been
discussed. Lastly, the ways of mitigating technological challenges have also been discussed.
2.2 Present trend of digitalisation in the hospitality Industry
As per the literary underpinnings of Choi et al. (2017), presently, due to advancement of
technology the management of the hospitality organisations improves the quality of the services
so that the rate of profit earned by the organisations can be increased. For instance, the
management of Thomas Cook has launched mobile application so that the customers can book
their rooms as per their convenience. Thus, it can be mentioned that digital communication helps
to reduce the rush of customers during the peak hours. As per the comment of Choi (2017),
digital communication process helps to maintain an effective relation between the customers and
the management. For example, the management of Thomas Cook has launched online Chat Box
so that the customers can resolve their quarries at right time. On the contrary, in global economy,
hospitality industry is improving at a rapid rate. For instance, the overall rate of GDP in UK has
been increased by 10.2% due to the performance of the hospitality industry. As per world
Tourism Organisation (WTO), within 2030, the overall profit margin of tourism sector will get
increased by 4%.
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Figure 1: Present trend of global tourism sector
(Source: Degryse, 2016)
Another report presented by world Tourism Organisation stated that presently, digital penetration
rate in tourism sector has been increased by 44%. On the contrary, in the year 2015, the rate of
digital penetration was 35%. On the contrary (), has mentioned that profitability of the tourism
sector can get affected because all the employees cannot use technology in an effective manner.
Figure 2: Digital penetration rate in the hospitality sector
(Source: Degryse, 2016)
In the year 2016-2025, due to digitalisation, the profit rate of the hospitality industry is expected
to increase by $305 Billion. Thus, it has been proved that implementation of digital
communication within the hospitality industry has increased their competitive advantage in the
market.
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Presently due to the availability of technology, the communication level among the management
and the customers is increasing largely which in turn is also increasing customer’s retention rate.
In the year 2018, one in five hotel bookings are down through Smartphone so that rush of the
customers can be avoided. Thus, digital technology helps the hospitality industry to provide
better facilities to the customers. In addition to that, 88% of the travellers are using Smartphone
while fulfilling their needs. In UK, the rate of Smartphone users has been increased by 70%. On
the contrary, in US, the rate of Smartphone users has been increased by 80%. Lastly, it has been
noted that in hospitality industry, the rate of internet websites have been increased 10%
(Fobes.com, 2019).
Figure 3: Rate of Smartphone users in UK and US
(Source: Fobes.com, 2019)
2.3 Impact of Information and communication system in hospitality organisations
As per the comment of Heo (2015), in hospitality industry, the communication system needs to
be improved so that the relation between the management and the customers can be managed
effectively. For instance, the management of Thomas Cook has launched 24* 7 hrs feedback
system so that the issues of the customers can be resolved effectively. In addition to that in
Thomas Cook, the management has launched Mobile Integration so that the customers can use
their phone while check-ins, for unlocking the rooms and ordering room services. The impact of
information and communication system on hospitality organisations have been mentioned below:
Better service quality
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Effective information and communication system helps the management to provide better service
quality to the customers so that competitive advantage of the organisations can be increased. For
instance, Marriott Group of Hotels are using AI enabled Chat box in nearly 5,000 hotels globally
so that they can conduct activities like reservations, checking of account balance and
Redemption of vouchers. On the contrary, cosmopolitan groups of Hotel have launched a robot
known as Rose so that they can assist the customers 24*7 hours (Forbes.com, 2019). In addition
to that, the management of Thomas Cook has launched IOT system on the doors and window in
order to enhance the security system of the customers. Thus, it can be mentioned that technology
and information system not only improves the quality of service but also help to enhance the
security of the customers. As argued by Kharouf (2018), application of technology within the
organisations affects the privacy of the organisations because the professional hackers alter the
information or hack it.
Improving the gap between the customers and the management
As per the report of Forbes, the management of the hospitality organisations uses Internet of
Things so that they can harness the data related to the satisfaction level of the customers. For
instance, if the data of IOT implies that a particular customer visit the hotel after every year then
at the end of the year the centralised system can send a booking option to the customers.
Moreover, they have also launched a centralised system in which they can store relevant data of
the customers, which in turn helps them to improve the quality of service. Lastly, the IOT system
is also being used by the hospitality organisation for harnessing information regarding the
customers such as food selection, excursion and in room amenities. On the contrary Kundu and
Chatterjee (2018), has mentioned that due to technology digital divide is being created among
the customers because they do not have the same capacity to use the technologies.
Improves the competitive advantages
As asserted by Kundu and Chatterjee (2018), implementation of technology and communication
helps to improve the market position of the organisations. In addition to that, it also helps to
create a positive image in front of the customers. For instance companies like Thomas Cook and
Titan travels has launched their company page on social media sites like Facebook, Twitter and
Instagram so that the customers can contract them instantly. In addition to that, the company can
also launch online booking portal so that the customers can book rooms as per their convenience.
On the other hand, the customers can present their viewpoints on the website of the hotels so that
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their market position can be enhanced. For instance, in order to attract maximum number of
customers The Savoy conducts presentations regarding the features of the hotel along with their
price rate. Thus, it can be mentioned that technology improves the customer’s retention rate
related to the hotel industry.
2.4 Challenges related to installation of technology in hotel industry
The challenges that the hospitality organisations faces while implementing technology within the
organisation have been mentioned below:
Privacy of the customers
After implementing high technology within the hotel organisations, the privacy of the customers
can get affected because the stored data are either manipulated or altered. On the contrary, Liu
(2018) has mentioned that technology has both positive and negative effect on the business
activities of the organisations.
Application Issues
As per the comment of Liu (2018), in hospitality industry digital divide is prominent because the
management treat the employees differently based on their technological skills. In addition to
that, the employees face issues at the time of integrating the software. On the other hand, they
fail to manage the real time activities of the software. Thus, the overall business activities of the
organisation also get affected. On the other hand Liu et al. (2016), has mentioned that
digitalisation also affects the customers retention rate of the hospitality industry because none the
customers have has the same capacity to use the technology.
Expenditure of the organisation
As per the comment of Manning (2018), the management of the organizations may face financial
crisis while implementing modern technology within the organisations. In addition to that, the
management of the organisations need to prepare the budget of implementing technologies
beforehand so the overall expenditure of the organisation can be reduced.
2.5 Recommendation
The steps that the management of the organisations need to follow in order to mitigate
technological issues have been discussed below:
Training of the employees
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