Comparison of e-Commerce Systems in Different-sized Hotels

Abstract

Use of Internet is getting popular to hotel industry to promoting marketing activities. Hotel operations adopt electronic distribution channels to facilitate the operations by rendering conveniences to customers and suppliers. Literature review on the distribution channels showed the value of using traditional and electronic channels (Middleton & Clarke, 2001). O'Conner and Frew (2004) argued that the selection of appropriate distribution channels may differ according to the goals of organizations. The size of hotels may determine many characteristics of the hotel operations. Thus, the hotel size may be a criterion to make a difference in the selection of relevant distribution channels of certain types of operations in the hotel industry. While previous research confirmed the importance of using electronic distribution channels, little research has examined the selection of distribution channels by the size of hotel operations. This study proposes an investigation of electronic distribution channels of hotel operations according to size. Specifically, this study holds two research objectives: 1) to identify the basic characteristics and the underlying dimensions that portray e-Commerce systems for hotels, and 2) to compare the key dimensions of e-commerce systems and related informational activities with respect to hotel sizes. The necessity for this consideration arises from the significance of adopting e-commerce systems for S&M hotels which may not coincide with same imperatives for large hotels. In-depth interviews of managers collect data from 16 hotels chosen for the study. The participating hotels are seven large hotels (super deluxe and deluxe), and nine S&M hotels (1st, 2nd, and 3rd rated tourist). The study has value for the hotel industry by positing implications for the influence of e-commerce on hotel management. This study offers major findings: First, e-commerce has expanded throughout the hotel industry regardless of hotel size or management style. Large hotels tend to institute more e-commerce than smaller hotels, through both B-to-B and B-to-C channels. The findings also support previous research that e-procurement is an important element of e-business operational excellence for large firms (Barua et al., 2001). In particular, reinforcing e-commence is important for F&B procurement, which helps hotel management by offering cost reductions, since F&B divisions allocate higher variable costs than rooms divisions. In addition, large hotels, primarily chain-affiliated, accrue other benefits from effective customer management connected to the CRM of the central corporation, and cost reductions as a whole. Second, althoug S&M hotels also need to promote both B-to-B and B-to-C systems, they are able to adopt B-to-C easily due to limited resources. One suggestion is that S&M hotels place emphasis on enforcing B-to-B systems through e-Market places or in cooperation with large hotels, rather than developing unique systems, considering resources and management styles. While large hotels tend to facilitate more e-commerce than smaller hotels, this study's results indicate that the expansion of e-commerce continues in the hotel industry regardless of the hotel's size or management style. From a marketing perspective, the findings of the study benefit hotel industry managers' decision-making processes with regard to investments in e-commerce and selection of effective e-commerce systems for specific hotel systems.