Hotel technology spends have taken a backseat due to recession

Due to increasing pressure on bottom lines, major hospitality players have scaled down their IT investments. Anil Chiplunkar, the head of Infocounselors and ex-CIO at Kamat Hotels (India) Ltd., talks about IT challenges faced by hospitality industry CIOs and suggests remedial measures.

SearchCIO.in: You have been closely associated with the Indian hospitality industry during your career. What do you feel are the challenges faced by the industry on the IT front?
Like any other industry, IT is a very good tool to increase revenues for hospitality players. The right IT setup can help provide better service and customer satisfaction. However, the major problem with India's hospitality industry is that IT is considered as just a support service — not as a backbone for the core business function.

IT is treated as a priority only in major hospitality groups like the Indian Hotels Company Limited (of the Taj hotel brand fame) or the Oberoi group, which have professional management. Other than the major groups, most hotels in India are family-owned, and IT is not a serious proposition for these players. A family-owned business focuses only on services and customers. Therefore, IT takes a backseat in such businesses. If these players don't leverage IT, they will not be able to realize technology's associated benefits. It's a major challenge is to give IT a higher focus so that it can be viewed as a backbone for the hospitality business. Thus, IT can be used as a profit center rather than calling it as a cost center.

At the moment, the annual technology spend does not go beyond 10% in Indian hospitality companies. This is again a major challenge. Hospitality is driven by people who are more focused on services, but technology services do not get importance. For them, services mean ambience of the room, guest pickup services, air conditioning, etc. So if technology is not customer-focused, it will always remain a back office operation in a hotel. SearchCIO.in: What tips would you give to hospitality CIOs for convincing the management about the importance of IT?
CIOs should focus on proving the return on investment (ROI) to stakeholders. For example, a CIO can leverage the Property Management System, which is predominantly used by hospitality for bookings and transactions, for this purpose. The CIO can highlight ROI by explaining the reduction of manpower and increase in speed of operations. This can help the hotel service more customers in shorter periods of time.

The number of travelers has reduced, due to which hotel bookings have come down drastically. At times, hotels are running with just 15-20% bookings.
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SearchCIO.in: Currently, have you witnessed any change or shift in the hospitality industry on the technology front?
At present, such a shift is not very evident due to the ongoing recession. The number of travelers has reduced, due to which hotel bookings have come down drastically. At times, hotels are running with just 15-20% bookings. Spends on technology training and technology deployment have taken a back seat. I think the situation should improve within six months or so.

In a recessionary period, CIOs can leverage existing technology, and offer innovative schemes that help the business forward. Alongside focusing on their own functions, CIOs should try to see how the existing IT setup can best benefit the business. Even technology vendors are now working on supporting hospitality players to totally customize their networks.

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