Hospitality and Tourism management represents a unique environment marked by rapid technological changes and innovations, new service requirements, and increasing customers expectations. It is expected that in 20 years, the hospitality and tourism industry will change greatly because of new service requirements and new economic paradigms. Eternal innovation seems the price of survival in contemporary economic competition, and this is especially true for high technology firms. For tourism and hospitality firms survival depends on a stream of innovative microelectronic products manufactured in high volume by frequently changing state-of-the-art technologies.
Service revolution was marked by technological innovations and the invention of computer technologies and WWW. One of the key areas of competition in the 1980s and early 1990s was over access to distribution channels to ensure that services could be brought to end consumers (Bardi 2002). During the 1990s, tourism and hospitality service companies invested millions in building up their branch networks; companies vied for the rights to new channels or wavelengths.
Power lay in the hands of those who could take a product and deliver it to a customer — hence the increasing strength of service providers over the last decade. Intermediaries — whether they take the form of people who sell on to consumers the products or services of others, or are simply a processing function— are becoming rapidly redundant (Bardi 2002). Customer trends, like strategic choice issues, require constant attention from companies.
It means genuine closeness to customers. The 1990s have seen a revolution in service delivery when the networking of devices has enabled organizations to start to collect information at a much more detailed level, starting at the point where the transaction occurs. Electronic data input devices are used to collect information, which is then transmitted back to a central computer so that one’s actions can be monitored. “Cell phones and BlackBerrys gave staffs the ability to work on the move and spend more time out of the office” (Tapscott & Williams 2007, p. 247).
It is possible to assume that in 10-15 years, technology will be the main driven force of the service industry. Following Hamel & Prahalad (1996): service companies will “need to bring together and harmonize widely disparate technologies, to manage a drawn-out standards-setting process, to conclude alliances with the suppliers of complementary products, to co-opt potential rivals” (p. 37). Technology will be a driving strategic force.
Technology impacts speed, customization, service, quality, design, and availability and use of information (Tapscott & Williams 2007). Quality is defined by customers according to how well a service performs relative to their requirements. Because customer requirements change over time, so do perceptions of quality. Tourism and hospitality companies will have to determine that the capability of their organizations has been defined by staff responsiveness (Tapscott & Williams 2007).
Customers infer that the company is or is not responsive, and thus worthy of loyalty, based on performance during transactions. Responsiveness will be also based on the level of cooperation, communication, and support employees exhibit for each other. “The record shows that corporations have become networked in the sense that they build business webs with partners on a platform of information” (Tapscott & Williams 2007, p. 245).
Strategic priorities for technology firms are now shifting and will be different in the 1990s. Recovery pressures on costs and quality will continue, as well as pressures to think globally about the businesses. But development has already begun to assume a higher priority in resource allocation decisions. At some companies, the new expression is: “What are you doing for the top line?” That is, tourism and hospitality companies realize they cannot remain competitive by simply closing plants and offering early retirement (Rutherford 2001). They need new sources of revenue to grow and develop. Also, the revived core businesses are generating more cash than can economically be reinvested in them (Tapscott & Williams 2007).
Technology will change the view of service management and customer relations. In 10 years, the hospitality and tourism industry will depend upon information and computer technologies more than ever (Rutherford 2001). The new development strategies being adopted by modern companies will be targeting services, software, technology, and financial services as new growth sources. Current industry participants have invested in the old technology and are slower to adopt the new rules of competition. In 2020, “a person can seamlessly shift from consumer to contributor and creator” (Tapscott & Williams 2007, p. 143). The customer service paradigm will be technology-driven based on impersonal interaction between customers and technology (Rutherford 2001).
The role and tasks of managers will also change. They will perform the roles of controllers and coordinators rather than managers and supporters. Tourism and hospitality companies with trained and expensive workforces can best compete in the high-performance ends of the markets. This end of the market will be driven by technology, performance, and design. The home markets of companies are early testing grounds for the services (Hayes and Ninmeier 2003).
Technology itself restructures industries and provides openings for a newcomer. Managers will have to use the right tools, or levers, to influence inside and outside customers. The tools will be used to create competencies within organizations by hiring and training. They will reinforce competencies through evaluation, reward, and recognition. Finally, they will have to sustain competencies through organizational design and methods of communication (Hayes and Ninmeier 2003).
Technology and computer systems will a masters of tourism companies and their customers. Tourism and hospitality operators will seek new sources of growth by entering new businesses based on services, software, and technology (Hamel and Prahalad 1996). Thus, they will lack control over technology and its practical application. Many companies will fight for a customer implementing faster and more efficient information systems and solutions. “There is little chance that companies that have fallen behind in the advantage-building race will ever regain the lead” (Hamel & Prahalad 1996, p. 303).
The change will be coming at companies from many directions–environmental and regulatory influences, workforce availability and mindset, new approaches to organizational architecture–to identify just a few. The most significant changes, however, will be those created by ever-changing customer needs and requirements. Skill level will be also judged by how well leaders and their companies anticipate and facilitate change. To be customer-driven, reward and recognition systems should be fully aligned with performance and customer loyalty. This circles back to the company’s strategic motivation. When companies use behavioral and output standards for performance measurement, they must be consistent with customers’ expectations (Hamel and Prahalad 1996).
It is possible to assume that tourism and hospitality companies will remain the learning organizations based on a strong interrelationship between individual, group, and company skills. Not only are skills created with enthusiasm and learning gathered from multiple sources, but skills and insight are transferred quickly and effectively throughout the company. Involved employees throughout the company develop knowledge and breadth of understanding about processes and relationships (Hamel and Prahalad 1996).
Learning will become an everyday fact of life, part of the overall process of work. Employees will be cross-trained, function in cells or flow lines, natural teams, and can easily train one another or trade job functions. Companies interested in basic and advanced skills enhancement must provide formal training for everyone. The training needs to be continuous since changes in technology, management theory, and work processes are ever-changing. Training will be available from professional organizations offering a broad spectrum of instruction, from Total Quality and customer service to computer software and machine maintenance (DeFranco and Noriega 1999).
The long-term value strategy will be built on creating strong relationships with customers and anticipating their requirements. A significant new challenge will emerge about value (Dittmer 2001). Companies will have to strategize concerning both the physical product and the “virtual” product, such as information. Overlaps in-service products occur in many industries, particularly those where a tangible product and an intangible product, such as service advice coexist. Another will be the use of “marketspace,” involving sites on the World Wide Web for advertising and service, and using the Internet for marketing (DeFranco and Noriega 1999).
Speed will be what drives services as varied as photo processing, and mail delivery. Increasingly, speed will become a valuable differentiator in business-to-business and other consumer services. Seemingly solid service benefits have lost some of their lusters because of the amount of time involved in providing customer service–from pick-up to completion. Speed is very much a strategic equity and value issue. Companies should be aware of the advantages faster options may present to customers (Tapscott and Williams 2007). Companies will use customer service to add value, overcome negative price differential, and negate a competitor’s size advantage.
It also impacts relationships and lasting impressions, greatly influencing whether companies keep, or lose, customers. The computer will quickly work out your premiums, but it will also store that information so that it can be analyzed and sold to other organizations that might wish to make use of it. Networking will make collecting and distributing information both easy and cheap (Dittmer 2001).
In 2020, hospitality and tourism companies will implement electronic hiring and systems. Assessment and analysis of data and personal portfolios will be computerized. Staff will be identified and categorized according to skills and knowledge level, geographical location, and qualifications. Probably, another way to look at staff is strictly in terms of the job description. How does the job fit into the overall scheme of company operations? How does it meld with the company’s goals and objectives in terms of output, timeliness, quality, consistency, and the like? Staff is often a reflection of hiring practices, placement, cross-functional exposure, team activity, mentoring, formal and internal training, and reward and recognition (Tapscott and Williams 2007).
Skills do not refer to the abilities of individual staff members, except when those members of staff embody the strength (or weakness) of the organization. A company known for engineering design excellence, superior customer service, or zero-defect manufacturing would be emblematic of how skills are defined (Tapscott and Williams 2007).
Implementation of new strategic steps in the new competitive environment will revive some old organization forms and giving rise to some new ones. Those that are of particular significance for technology companies are today’s Matrix Organization and Network Organizations (Dittmer 2001). To be responsive and integrated, tourism and hospitality companies will need small, fast-acting business units. But to get critical mass in technology, companies will need large functions. The solution for some companies will be to use a functional organization with product, project, or program overlays. Previously, these overlays or functions were referred to as matrix-like organizations (Dittmer 2001).
Following Bardi (2002), the ability to use technology as a hub from which to control a network depends on laws that protect intellectual property and pricing schemes that allow inventors to reap downstream profits. The mechanism will be information networks. Hospitality and tourism firms all along the value-added chain will “plug into” the hub firm’s network. They all will need to adopt compatible systems and standardized accounting and information systems.
All the firms in the network will benefit by having upstream and downstream visibility. Such visibility will reduce uncertainty, lowers inventories, and increases responsiveness to end-users. On the other hand, it will increase the hub firm’s control (Bardi 2002). In service industries, technology will come into play in several ways. In automation, technology will be used to reduce labor costs. It will be used in robotics and automation for quality and flexibility.
Management and professional functions will be being automated by computer-aided design and software engineering. Currently, the establishment of computer-to-computer linkages is reducing intermediate information processing steps in sequential processes, with a reduction of clerical costs and an increase in quality. The computer’s greatest impact on management processes is its facilitation of a more responsive and integrated organization (Tapscott and Williams 2007).
The hospitality and tourism industry will be marked by consolidation and integration. An important trend that warrants the attention of high technology managers is the pace at which multi-domestic firms evolve into global industries. Converging market and technological forces lead to large, concentrated, and global industries. This is evident in the semiconductor memory segment, where the growing preference of buyers for standardized products sold worldwide at lower prices established its global status. The fragmentation of new markets that arise from product differentiation favors the loosely coupled network of several entrepreneurial firms such as those in Silicon Valley.
For as long as markets remain fragmented, smaller firms, which typically sell to specific niches, should be able to avoid confrontation with larger and better-financed firms, which prefer to sell their products across a wider spectrum of buyers. Consolidation of the market, however, as is evidenced in the trend toward greater globalization of high technology products, changes the parameters of competition. As markets converge, it becomes economical to configure activities within the firm to capitalize on the scale economies and other synergies afforded by inter-product linkages (Rutherford 2001).
In sum, the technological revolution has changed the nature of the tourism and hospitality business demanding innovative solutions and new service tools. In 2020, this industry will be technology-driven depended upon the effective implementation of technological innovations and systems. The role and tasks of hospitality managers will shift from supporter and leader to coordinator and controller. A new customer service paradigm will demand that the organization continuously innovate over time to manage the dominant competitive issue of innovation. The focus is not merely on the creation of single high technology innovation; rather they will be concerned with being on how companies create a stream of commercially successful innovations.
References
Bardi J.A. (2002). Hotel Front Office Management Wiley; 3 edition.
DeFranco A., Noriega P. (1999). Cost Control in the Hospitality Industry. Prentice Hall; 1 edition.
Dittmer P. R. (2001). Dimensions of the Hospitality Industry, 3rd Edition,
Hayes D.K. Ninmeier J.D. (2003). Hotel Operations Management Prentice Hall; 1st edition.
Hamel, G. & Prahalad, C.K. (1996). Competing for the future. New York: McGrawHill-Ryerson.
Rutherford D.G. (2001). Hotel Management and Operations, 3rd Edition. Wiley, 3 edition.
Tapscott, D. & Williams, S. (2007). Wikinomics: How Mass Collaboration Changes Everything Portfolio Press.