The role of e-commerce in graded five-star hotels in the Cape Town Metropole

Abstract

Electronic commerce, popularly referred to as e-commerce, is the latest catchphrase surrounding the Internet and its many functions. In the past, the Internet was solely used for information seeking, but the 21st century has brought a new global economy to the fore – one that is conducted online. Tourism is seen as a driver of economic growth, contributing both to the Gross Domestic Product (GDP) of South Africa (SA) and creating jobs in the hospitality sector. E-commerce does not only provide a platform for business to be conducted online but also an opportunity for consumers to interact directly with industry. Many studies have been done previously about the perceived benefits of e-commerce in the retail sector, yet none in Cape Town and at five-star hotels in particular. It is well known that holidaymakers conduct an online search prior to booking accommodation; some of those potential guests in turn choose to finalise their bookings online. The purpose of the study was to investigate the role of e-commerce in five-star hotels in the Cape Town Metropole. The main objective of this study was to define what e-commerce is for five-star hotels in the Cape Town Metropole and determine if the hotels are using e-commerce as a booking method. Online questionnaires were used to gather primary data and a literature review was presented as secondary data. The findings of this study showed that all the hotels surveyed use online bookings and half of the respondents believe Online Travel Agents (OTAs) generate more revenue than traditional methods of room reservation. When asked to rank methods of room’s reservations, there was a slight difference between telephone bookings and e-commerce as number one. This could mean that while electronic methods are popular, they have not completely replaced traditional methods. The researcher recommends that five-star hotel managers train the rooms’ division staff to respond to negative reviews on social media, as this was one of the findings. The hotels should also learn how to effectively use their social media presence to increase room sales.