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Hospitality Technology; PMS and MIS Overview of Hotel Companies

Executive Summary: Highlighting the Scope and Findings of this Research


Research and Development continues to be the most neglected area in the hospitality industry. However, there appears to be a greater appreciation of the need to conduct market and customer research, and test new services and products before launching them into the market. The role of tourism organizations appears to be basic in this area of management.

The major efforts in this area have been directed to the determination of customer preferences and attitudes through surveys, the evaluation of economic impact of tourism activities on specific destinations and the test of new products and services by hospitality companies. From these efforts, companies have discovered changes in attitudes from their repeat customers, many cities have discovered the great economic effects of tourism for their communities, and companies such as Fitzpatrick Hotels have tested the implementation of new technologies to improve their service. The importance of Research &Development in this industry resides in the fact that it can be the means for a company to obtain a competitive advantage and differentiate its product in the Marketplace.

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Research Methodology

The research methodology used is the survey of hospitality technology as available online.  This research involved studies in detail the news, articles from journals, and online material available on the web.  One such study was conducted by Cline (1999) on the hospitality technology.  His research methodology was as he states that:

Using the methodology tested in previous studies, this study began with a broad review of the literature. A detailed questionnaire was prepared and tested, then mailed to hospitality industry executives in the Americas, Europe, the Middle East, India, Africa, and Asia/Pacific. The findings and conclusions are based on 333 returns.

The outcome of this project is the results of a content analysis of online resources. The research involved analyzing the news postings on the web over a period of years. The analysis consisted of reading the title, and body or abstract of each article posted. Then, each article was qualified and placed in the body of the report, including the research collected

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Analysis of Research

The Purpose (Driving Force) Of Using The System

The first step of using the system is to develop a hospitality technology, the needs assessment process, involves the in-depth evaluation of the company's actual requirements and objectives in developing a negotiated technology organization. The company's culture regarding its focus on the "bottom line" or "employee/traveler productivity" will determine what steps a company can take to analyze these needs. These steps may include: a survey of all frequent traveler (employees): a survey of all management staff (middle and upper level): and/or a review of the current hotel travel patterns. These steps can also be useful for later targeting and negotiating with hotel properties.

Cline (1999) in research reports that

Except few almost all hospitality organizations have technology advances at the forefront of opportunity, yet they represent one of management’s biggest challenges. Change is often essential, but integrating new systems to support strategic goals without disturbing customer service or operations often requires a fine-tuned balancing act. The best-intentioned investments can go awry.  The technology will drive value for the industry in the future, with a particular emphasis on how it will support customer-focused hospitality organizations.

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Is there a good "fit" between the system and the property?

The key to a successful outcome of property and system is a true understanding of it's strengths and weaknesses. By knowing the areas of weakness early into a system existence, each may be addressed and improved. When strengths or success stories are identified each may provide insight into creating additional areas of success.

The research report of Cline (1999) suggests that

The success of a company’s technology strategy will require a firm commitment from all levels of the organization. The study addresses a range of issues relating to organizational impact, including the structure of the IT function within the organization, current and future methods of technology training, and how companies will be integrating their systems in the future.

Systems other then PMS considered

PMS is not the only system used for property.  There are many other systems used.  For example, RMS (revenue management strategies), IDeaS (Integrated Decisions and Systems), OPUS 2, Talus maxim and maximLS systems and TIMS corp., etc.


In the earliest days of hotel revenue management systems (RMSs), forecasting and optimization focused on overall demand. If seasonal demand was predicted to be high, lower rate categories were closed. If demand forecasts were grim, lower rate categories opened.

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However, demand is highly segmented. Early systems acknowledged historically high-volume patterns, but closed rate categories regardless of price sensitivity. The newest, refined breeds of RMSs account for far more than historical demand patterns; they anticipate consumer behavior.  (Marsan, 1999)


Integrated Decisions and Systems, Inc. Eagan, Minnesota The company's IDeaL/YIELD system allows the management of individual properties and/or groups of hotels. It offers data collection services, calculations adjusted to reflect the business strategies of individual properties, staff training on yield management techniques, and analysis of group revenue by displacement. IdeaS guarantees a revenue increase for all room inventory impacted by the system of at least 4% above market forces.  (Marsan, 1999)


Portsmouth, New Hampshire The company's TopLine PROPHET system interfaces at both property and centralized levels with all major PMS and sales and catering systems. TopLine PROPHET’s optimization routines determine the best rates for given demand at a given length of stay. The system offers stay pattern yield management, automatic transient forecasting, and the ability to analyze potential group revenue versus transient displacement. The system runs in NT/Windows 95 environments, and provides a full set of reporting features and management related tools.  (Marsan, 1999)

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Talus (formerly DFIcAeronomics) Mountain View, California

The Talus maxim and maximLS (limited service) systems, both of which are compatible in distributed or multi-hotel environments, forecast at a highly specific level, distinguishing between market segments, room types, seasonal differences and price sensitivity. They maximize revenues through length of stay and focus on guests' net contribution. The systems also analyze group revenues.  (Marsan, 1999)

 TIMS Corp.

Issy-les-Moulineaux, France Optims and CityOptims, which manages groups of properties, use sophisticated probability models to learn and adapt to changing conditions. TIMS warehouses several years of company historical data to form a full platform for forecasting. The systems forecast more than a year in advance but update forecasts continually. The TIMS system offers group revenue analysis and considers the impact of length of stay on revenues.  User-friendly interfaces include color-coded calendars and override options.  (Marsan, 1999)

Efficiency With Which The Property Is Currently Using The System

Industry-wide standards are one of the key strategic issues, given the industry’s historic tendency to lag in how technology is built and integrated into the system. Indeed, 82 percent of executives surveyed believe the closed architecture of the industry’s technology has had a negative financial impact on the industry, and three quarters believe this will continue in the five years to come. Furthermore, about two-thirds of respondents believe that the industry’s technology advances have been slowed as a result.  Addressing the problem of standards in the industry is the American Hotel and Motel Association’s Hospitality Industry Technology Integration Standards (HITIS) project. This project is progressing toward the goal of mitigating the problem in future years—although as our survey results suggest, plenty of concern remains.

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During the last five years, the proprietary nature of most hospitality industry systems has also slowed the advancement of technology. Approximately two-thirds of respondents believe the impact has been negative, while only 27 percent take the positive view. The majority of respondents (57 percent) are still concerned about the impact of closed architectures and proprietary systems on the advancement of technology.  (Cline, 1999)

Investment And The Payback Of The System

For the system to be successful it requires large investment and strategies to make it successful.

Technology does not come without a high price tag, and leveraging these investments requires strategic and organizational insight.
Investment Resources Networked communications in various media have become significant business drivers for companies across all industries. To measure their importance in hospitality, studies show that resources are allocated in these media, which are of immense significance. Most hospitality industry executives (80 percent) report their companies are investing in Internet, intranet, and extranet technology, and that they are currently part of their organizations’ overall strategic plan. And close to all respondents (93 percent) indicate that such investments will be part of their future plans.

During the last three years, hospitality organizations have spent the equivalent of 3.1 percent of their revenue on IT investments.  During the next three years they plan to increase this spending to approximately 4 percent of revenue—suggesting an approximate one-third increase in spending.

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These executives report that property management systems (PMS) represent their top priority for IT spending during the next three years. Investment priorities follow with yield management, reservation systems, sales and catering systems, e-mail/Internet, database marketing, point-of-sale, food and beverage, guestroom technologies, and finally, kiosks for guest check-in and checkout.  (Cline, 1999)

Fitzpatrick is the small and more personal boutique hotel one of the cheap accommodations at the Grand Central (Location reports).
Yield management—which began life in the airline industry and has long since migrated to the hospitality business—is an important tool in maximizing revenues. Its development has been largely facilitated with the deployment of technology against complex algorithms that track historical data and project business volumes against key variables. Of Hospitality 2000 respondents, 60 percent indicate that their organizations have a yield management system in place. And of these, nearly two-thirds are integrated into the organization’s property management system while 41 percent are connected to the CRS. For those without a system, just over one-half report plans to develop one. In sum, it is clear that these systems are fast taking hold in the industry.  (Cline, 1999)

PMS and the vendors

The company and/or its travel agency may have negotiated special discounts at individual hotel properties. The lodging policy should direct traveling employees to stay at these properties whenever feasible. This step will capture immediate savings, and will also help the company or agency concentrate spending volume with preferred vendors to assist in future negotiations. In some instances, chain discounts may be available if you can provide consistent business for at least five to 10 properties within a chain. Obviously, high-volume cities will be the starting point for selecting preferred vendors in order to secure the largest financial gain for your company.
Along with concern about the negative impacts of the industry’s technology on its finances and its degree of advancement are concerns regarding some of technology’s providers—the vendors. Here the concern relates to the staying power of those that are designing, selling, and supporting systems. Ninety-one percent of respondents are concerned about this problem, and close to half of these are "very concerned." Executives in corporate management and those at the hotel level are of a common mind on this. And the study tracks this mutual concern across company types, although it appears that it is more pronounced among independent, non-branded companies than with their larger chain brethren. Because of their scale and buying power, these larger companies tend to have better-established relationships with their vendors and are thus more confident of their vendors’ ability to sustain the consistent delivery of quality technology products and services.

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Approximately three out of four of the executives surveyed believe that hospitality technology vendors will tend to consolidate over the next several years to become single-source providers offering totally integrated systems.  (Cline, 1999) 

Hospitality Technology and the Customer Relationship

How hospitality organizations manage the customer relationship will clearly form a dividing line separating the top-performing companies from others that are less competitive. This study, as a result, put the focus on how hospitality companies use technology to manage this relationship, now and in the future. Key success factors include how companies integrate disparate customer touch-points and collect, evaluate, model, and leverage customer information for sales and marketing purposes and in the pursuit of enhanced customer loyalty.

Executives report continuing efforts to integrate critical systems such as PMS and CRS. But as hospitality companies devote more attention to knowing their customers, they are considering the integration of not only PMS and CRS but also data warehouses into fully integrated "customer information systems" (CIS). But like the adoption of technology elsewhere in the industry, the pace is slow.  Approximately 13 percent of respondents report they have installed a CIS system; most have been introduced during the last several years. Another 11 percent have a plan for a CIS and the capital allocated (mostly for completion within the next three years). An additional one-half of respondents report having considered the development of a CIS and the possibility of putting a plan together.
Company’s continues success is based on a commitment to providing clients with strategies, technology and training to achieve and surpass revenue goals.

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MIS overview of Hotel Companies

Information technology and systems are a vehicle of globalization, which in turn shapes the MIS of a company that plies the global (or, at any rate, international) waters. Information technology pervades all aspects of our life-and information systems may even endanger it. While far from completely formed, legal mechanisms exist to partly protect the customers of IS developers and the public from faulty systems. It is well that the developers be aware of these mechanisms and use this knowledge in their decision-making.  (Zwass, 1996)

Editor Kachmar (1998) in an online magazine reports that

Sulcus legacy solutions seek to join the hospitality expertise of its three partners with best practices in data warehousing, analytical database processing and targeted marketing.  The goal is extremely ambitious and consists of several critical stages, any one of which challenges current PMS: gathering operational data; rendering it into a standard, universal format for data warehousing; cleaning and enhancing the data; implementing reporting, analysis and marketing tools; and allowing distributed user access for strategic decision-making at all levels of the organization.

In comparison, states Ellenbogen, ‘we tell people they don’t have to invest in new systems. You can stay right where you are and stretch your investment while waiting for the next-generation of PMS. We’re saying that if you’re going to buy PMS, Sulcus makes PMS, but if not, stay put, because we’re going to be changing the paradigm.’  (Kachmar, 1998)

Conclusions and recommendations

In conclusion, it can be determined that only some of the trends currently experienced were identified in this project. This research can certainly provide the hospitality operator with a good overall picture of the industry's environment. Moreover, a good argument in support of online means of information can be derived at after analyzing this particular project. Online resources appear to be an excellent provider of information for this type of research involved in travel and hospitality operations.

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Hotel sales and marketing executives have historically segmented their customer base by travel motivation (business, leisure, convention, etc.). We were surprised to find that just over two-thirds of respondents report segmenting customers according to their relative value, with three-quarters planning to do so by 2000. The deployment of technology in this effort is in all likelihood limited. But since 88 percent of those not valuing customers currently indicate that they would if technology facilitated the process, we should see much more of this activity in the future.

Determining who your customers are is always a challenge in a business as geographically dispersed as the hospitality industry and one with so many intermediaries and customer touch points (e.g., CRS, PMS, web site, GDS, and POS). How our industry tracks its customers is therefore of some interest, most particularly in terms of how technology will facilitate the process.

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 (Cline, 1999)

One of the most popular topics today is the wonder of the Internet. It appears that every industry has at least experimented with this new technology, and the travel and hospitality industry is not an exception. The major uses of this technological marvel include the development of internet-based reservations systems, the creation of web pages as marketing tools, and the use of the Internet as an outlet for increasing research and education in the field of hospitality. A curious development is the incursion of some companies into the business of gaming through the Internet. Virtual casinos seem to be popping up everywhere. Hospitality operators must maintain themselves updated with the new ways this technology can be used to improve their operations and increase sales.


The first major finding of the research process was the fact that the majority of the news posted and collected from online resources relates to the U.S. hospitality technology.  Another major finding of the study was the predominance of topics related to the specific environment over the general environment. These two characteristics of online slightly limit its usefulness as a complete environmental scanning tool.

Hospitality 2000: The Technology makes it clear that the majority of hospitality organizations have intensive initiatives underway for technologies at every level of the organization. Investments are growing and the awareness of strategic requirements is on the rise. Indeed, how technology is used will be one of the key drivers of the bottom line as we cross into the new millennium. Strategic, operational, and financial issues will continue to challenge management in making wise investments and using these tools effectively in the organization.  (Cline, 1999)

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A recurrent topic throughout this environment is the continuous development of new systems, machinery and software to aid the hospitality operator. Major developments include new PMS systems, new reservations systems, new safety and security systems and some new facility designs that enhance customer appeal and ease of operation.  An example is the emphasis on the development of new entertainment options for travel and lodging customers. The trend towards offering video-on-demand features in hotel TV systems, in-room video games and electric outlets in airplanes is widespread, and it will probably continue in the near future. The hospitality operator must keep informed of these technological improvements in order to remain competitive in a market where the customer is increasingly demanding cutting-edge services.

Summary handout

The hospitality industry is quickly becoming automated, leading to greater efficiency, better customer service, and ultimately, increased profits. As a result, it is imperative that a person wishing to enter the hospitality business be familiar with the technology propelling it forward.

To develop the plan to communicate with the hotel vendors. The scope of the communication may vary; however, the importance of this should not be minimized since it establishes the communication link with the partners – hotel vendors.

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Communication channels should always be defined. The corporate travel manager's role is to establish the formal and informal communication process for developing a hotel program. Over the years, many organizations have taken different paths in this process.
Coupled with the good state of the economy in the U.S. and many other countries, there is an identifiable increase in the appeal of travel and tourism for the general population. Travel continues to increase, and records seem to be broken every day. A very specific trend is the increase in the number of young people (ages 18 to 24) traveling in small groups on vacation. Hospitality operators must take notice of the importance of this cost-conscious, practical group of travelers. Another identifiable trend is the craving for educational experiences in travel.

Travelers want to increase their appreciation of nature and culture by traveling to specific destinations where the potential for knowledge acquisition is greater.  Destinations such as Virginia and some European cities are taking advantage of this situation.
The major trends identified in the economic environment of the hospitality industry include an overall increase in tourism-related economic activity, an increase in the cost of traveling and an acknowledgment of the potential of tourism as a generator of economic growth and employment.

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The analysis-undertaken reveals that most tourism destinations are experiencing increased economic activity and increased revenues as a result of tourist visits. It is obvious that the main reason for this trend is the excellent condition of the American economy in general. Many studies have discussed the close relationship between hotel room occupancy and trends in business cycles.  Currently, his trend is also coupled with the increasing popularity of travel among the general population. Although a few destinations have experienced some problems due to a variety of external circumstances, the general economic picture in the industry is favorable. A clear sign of this situation is the constant development of tourism facilities (hotels, parks, shopping centers, etc.) nationally and internationally. The rush towards construction of new facilities has also resulted on an increasing need for financing and capital investments.

Finally, it has been found that there is an increasing appreciation of the value of the hospitality industry.  It is no secret that the hospitality industry is the second in importance globally, and it appears that it will not lose that position in the foreseeable future. The technological trends identified through this research are very specific to the hospitality industry, but are closely related to technological improvements experienced globally. The major tendencies in technology call for an increased use of the internet, a constant development of new technologies to improve hospitality operations and the creation of new technologies to improve food handling, processing and sanitation.

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Works Cited

Cline, R. (1999).  Hospitality 2000:  The technology.  Hospitality Knowledge for the New Economy.  Hotelbenchmark.com.  Nov. 12, 2000 <http://www.hotelbenchmark.com/frames.htm?http%3A//www.hotelbenchmark.com/HALER/research_haler_technology.htm>

Kachmar, M.  (1998). An alliance of industry leaders pushes the boundaries of property management. The Great Beyond.  March/April 1998.  Nov. 12, 200.  <http://www.htmagazine.com/archive/PropertyManag/MarchApril98_4.html>

Location Report.  New York.  Travel.  Web centres.  Aol.co.uk.  Nov. 12, 2001 <http://www.aol.co.uk/webcentres/travel/location/lr_newyork.html>

Marsan, J.  (1999). Sophisticated RMSs grow more sensitive to customers and users by forecasting behavior. Smarter Revenue Management Systems.  Editorial Archive. Technology Editor.  March 1999/Technology.  Nov. 12, 2001 <http://www.hotelsmag.com/0399/0399tech.html>

Zwass, V.  (1996).  Editorial Introduction. Journal of Management Information Systems.  Vol. 12 No. 4, Spring 1996 pp. 3 – 4.  Nov. 14, 2001


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