Although IT applications in the hotel industry have largely been devoted to the handling of routine operational problems, it has become increasingly evident for hoteliers that proactively incorporating IT into their services, operations, and strategy is a key element in their quest for service excellence and high profits. Based on a recent survey of IT applications and challenges in four- and five-star hotels in the UAE, this study presents the findings of an exploratory empirical investigation in this understudied, yet one of the fastest growing tourist destination in the world. Insights and recommendations for hotel managers in the region are, thereafter, drawn from the findings.
Hotel managers around the world are under pressure to increase the profitability with limited resources and under intensifying competition. Customer service has been widely recognized as one of the main areas in which a hotel's product can be differentiated from its competitors. When addressing managerial issues related to service quality and IT, empirical studies in tourism and hospitality have often focused on a specific region such as Australia (Presbury et al., 2005), Cuba (Cervino and Bonache, 2005), Tanzania (Sharma and Upneja, 2005), Hong Kong (Law and Jogaratnam, 2005), Thailand (Sahadev and Islam, 2005), The United States (Piccoli et al., 2003), Canary Islands (Espino-Rodrigues and Gil-Padilla, 2005), and North Cyprus (Nadiri and Hussain, 2005).
There is a significant body of literature that examined IT and information systems (IS) adoption and implementation from various perspectives (e.g., Zmud, 1982 and Zmud, 1984; Fichman and Kemerer, 1997). Most of these studies, however, have focused on issues related to adoption and implementation of such technologies, which are often referred to as either IT, implementation of cutting-edge information and communications technology (ICT), or IS to denote a combination of hardware, software, and networking systems. With respect to the hospitality industry, IT adoption has been gaining an increasing attention. Law and Jogaratnam (2005), for instance, provided empirical evidence for continuous use of IT for operational purposes, as opposed to strategic ones, in Hong Kong hotels. Meanwhile, Sahadev and Islam (2005) explored the propensity of Thai hotels to adopt ICT; and empirically identified a set of location and firm-related factors that influence hotels decision to adopt ICT. They found that, though hotel size was not related to ICT adoption, higher-grade hotels are more likely to adopt advanced ICT. More focused studies addressed issues such as the strategic use of IT outsourcing from a resource-based view (e.g., Espino-Rodrigues and Gil-Padilla, 2005). In contrast, Singh and Kasavana (2005) performed a DELPHI study to anticipate the upcoming changes in the IT-enabled management of hotel operations.
Fierce competition among hotels and even entire destinations is precipitating the need for innovation in technology, organization, and strategy. In an effort to stimulate innovation among hoteliers, this study considered issues that deserve more attention in hospitality research, namely IT-enabled TQM, CRM, and SCM, especially in an understudied and fast growing location such as the UAE. While we uncovered some challenges and opportunities for hoteliers, this study actually raises more questions than it answers. As the supply of hotel rooms increases dramatically in the UAE and the neighboring countries, competition will make current occupancy levels quite difficult to achieve. The intensifying competition will compel hoteliers to look for new and sustainable sources of competitive advantage. One such source is knowledge.
Academically, the research literature provides plenty of evidence of the strategic value of knowledge as a sustainable source of competitive advantage (e.g., Davenport and Prusak, 2002). In SCM, for instance, knowledge management activities enhance SCM outcomes by augmenting the internal stock of knowledge, making better use of existing knowledge, and increasing the speed of learning and innovation through higher absorptive capacity (e.g., Hult et al., 2005; and Spekman et al., 2002). Quality improvement and TQM have also benefited from organizational learning (e.g., Fine, 1986) and knowledge management initiatives (e.g., Mukherjee et al., 1998). Even CRM has been practically and theoretically linked with knowledge management, as it is the case for KCRM (knowledge-enabled CRM) and KCRM auditing (e.g., Tiwana, 2001).
In practice, however, consider for instance the knowledge requirements for implementing a service-quality information system (Berry and Parasuraman, 1997). Such a system calls for combining multiple research approaches among different customer groups. Some of these approaches require a relatively high level of expertise in advanced qualitative and multivariate statistical techniques, thus making them usable only by hotels that have the necessary knowledge and talent. This requirement equally applies to other areas related to the management and implementation of cutting-edge information and communications technology. Aligning these technologies with the organization processes and best practices as well as the business strategy requires even higher levels of knowledge at the senior management levels.
This study raises an important question about the readiness of UAE hotels and similar ones for knowledge-based competition, though we recognize that several hotels around the world have shown pioneering attitudes of acting as lead users of IT, organizational innovations, and best practices. Is there a particular path or a sequence of steps that hotels in our sample must follow before competing on knowledge? Is their current ICT infrastructure sufficient to support the implementation of best practices? Are these hotels advanced enough along that path to use knowledge-based CRM, SCM, and TQM? Is it even profitable for them to pursue such a path? Should four-star and five-star hotels follow the same path and adopt similar strategies? Perhaps more basic steps should precede these initiatives. Such steps might include more systematic planning and learning from other industries such as manufacturing and retail industries.
