Strategic CIO: Serving Tech Savvy
- 17 October, 2008 11:30
Mohammad Khalid Shah, corporate director of IT at Avari Hotels, is certainly thinking about it... but are the others in the hospitality industry?
When you think of Pakistan you certainly don't think much of the hospitality industry and give even lesser thought to how a hotel is run in the circumstances that it is. Having only a handful of names that include the likes of the Sheraton, Pearl Continental, Marriott and Holiday Inn, the lack of a strong tourism industry hasn't provided hotels much reason to provide services geared towards the tourist. On the other hand with Pakistan poised as a hub for outsourcing, manufacturing and infrastructure development, the number of expos, conferences and growth in trade and business find hotels packed with foreigners and out-of-towners that frequent the large cities in search of rest, relaxation and connectivity with the rest of the world.
The hospitality industry in Pakistan might be small but it does possess an importance in linking Pakistan with several other countries. The franchises put us on the map, so to speak, and no service-intensive industry will progress unless its target audience better understands the technology infrastructure that runs through it -- especially not an industry that wants to compete in the open market today.
The hotel industry isn't a new vertical for Pakistan by any measure. The Hashoo Group is perhaps better known because of the Holiday Inn franchise they established in 1972, however a local family-run business with the name 'Avari' had already set their foundations in the industry back in 1944.
Like so many other businesses, hotels don't operate in isolation. Their growth depends on the development of local tourism, investor incentive and economic stability. The post partition era is often referred to as a renaissance in Pakistan's history where investment flowed in as freely as an open culture greatly influenced by the British Raj. When General Ayub Khan was still in power, he had the foresight to encourage the development of hotels which would hopefully support a growing tourism industry. By the time the hotels were operational, General Zia ul Haq came into power, and prohibition replaced the nightclubs and curtailed the nightlife that provided a strong revenue stream to the hotels.
Hotels looked to other ways of generating income and ventured into the catering business. No nightlife lessened the number of reasons for the Western tourist who had the capacity to spend money to visit Pakistan which meant a dwindling tourist stream.
Hotels had to change strategy -- the shift from catering to the tourist to attracting the business traveler.
Technology thankfully entered the picture and phones, entertainment and connectivity were being provided to keep guests on the hotel premises for a longer duration of time. The hotel transformed from being all encompassing experience into a meager point of transit. With laws in place, there was little for the foreigner to do in Pakistan except work, eat and sleep. The Pakistani Tourism Department projected Pakistan as an economically viable destination for its mountain trails and hiking, reducing what few hopes there were for tourists to spend money in the big hotels situated in the main cities.
As if the challenge wasn't enough, the early part of 2000 proved to be a turbulent time for the travel industry worldwide. September 11 and the world's increased exposure to terrorism, luxuries were put on hold big time. With the great exposure that the internet brings to a business, it also levels the playing field for competition to make a better impact through their website and win otherwise regular customers.
Going back to the late 1990's, like most other sectors, the hotel management was also dependent on manual systems -- essentially having to manage everything from accounts to customer lists, on paper.
Mohammad Khalid Shah, Corporate Director IT, Avari Hotels says, "With the benefit of hindsight, business was tough to manage without digitization and lack of automated processes. Every detail was marked and maintained manually. The details included different kind of transactions, data entries, timings and a variety of bills, including the room services, additional facilities, phone calls, meals and transportation. I can't believe how much information there was to manage! After working with the software solutions we do now, it was amazing how we ever managed without it!"
In the early days, explains Khalid, when computers were just coming into Pakistan, Hotel Management gradually shifted its data entry to a so-called digitized system which was essentially a collection of Excel sheets and basic computer activities. "This helped to a certain extent but this was obviously just glorified data entry and suffered from the same constraints that we were already facing with our manual systems." We all know how it was. You used to get one key and leave it at the behest of the hotel in case they needed to get into your room. This would have been the time before any real security and much before living in constant terror of threat.
Things were booming in the hotel industry around the world but then September 11 happened and businesses everywhere suffered. "I joined the Avari Group in July 2001. Two months later 9/11 took place and there was a record slump in hotel business worldwide." How did the hotel propose to climb out of that slump? "Strong commitment and dedication from the Management and Board invited innovative ideas. We have never looked back."
In the early 90s, several Property Management Systems (PMS) were introduced. One of the most prominent solutions was an Oracle-based PMS called Fidelio developed by a company Micros.
Fidelio was deployed across several hundred hotels around the world and also made its mark in Pakistan.
Hotels get PMS (the good kind)
PMS is an innovative application which monitors transactions being carried out by a specific guest. Its various features include the automated logs of guest check-in and check-out, room service, restaurant bills and all other services that a customer may use while staying at the hotel. PMS also contains special features that are helpful in building a better relationship with the customer. Khalid says, "The system automatically saves customer priorities and preferences, which help us in providing the demanded services without delay. For example, we would be aware of customer's favorite cuisines, room location, brand of coffee -- essentially all the trends generated based on his ordering behavior during his previous stay. Being able to provide personalized services to every customer obviously leaves a lasting impression on our guests."
In addition to Fidelio, some hotels have upgraded to a newer version known as Opera, which is little more advanced in its functionality. In Pakistan, Opera is being installed in several hotels.
The Avari Hotel management decided to introduce the concept of E-Rooms in their Karachi hotel later in 2002. This meant that 20 guest rooms got access to the latest computers and printers with DSL internet service. "After gauging the positive response from the Karachi market, we took the offering to our hotel premises in Lahore."
While progress with the help of software is great, but what about investing in customized solutions that meet the exact requirements of the hotel? The answer, we'd imagine, includes the big three: Time, budget and returns. As with everything else in the hospitality industry, the software deployment requires a great deal of planning, foresight and empathy.
Industry has always been quick to critique the local software development industry saying they don't understand the niche market or don't have the expertise or simply can't deliver on time. But in a time when Pakistan's software sector seems to on the up and exceeds exports worth millions of dollar, could it be that the local industries are just uninterested in making the local investment?
Local development of the software for any vertical doesn't necessarily mean a large cut in cost, but there are bound to be more savings than expenses. Take into account the alignment, implementation and the support. There will be more savings in the long run than not. Khalid explains, "The software that is primarily used has been developed by American and European companies. Pakistan's software industry hasn't developed a solution that meets cater to a Hospitality Management System thus far."
Khalid goes onto explain the reason. "The Hotel industry in Pakistan is fairly small in size, ranging from 5 grand hotels, though this is changing. Pakistan's IT sector can surely bring an innovative HMS, but it won't be economies of scale -- this is something the sector needs to figure out whether developing something so complex for such few customers makes business sense for them."
But where a niche exists and the market size is small, perhaps there is hope that once Pakistan's economy picks up, so will the size of the business. Where budgets are limited, it might take more effort on the part of the specific sector, but perhaps the establishment of a link with a university or institution to help with the capacity building aspect along with the knowledge transfer might help solve more problems than meet the eye.
Are you being served?
So what impact has technology made on the hospitality industry? "Technology has changed the total experience for the guest. The experience begins much before he actually reaches the hotel or even flies into the intended destination. From the time he goes online to search for a suitable hotel, the repute and usefulness of the hotel has started. He can shortlist the hotels by filling in various parameters such a geographical proximity to a landmark or site price range, specific features or facilities."
Besides, comments Khalid, there are many hospitality portals and GDS channels that can make booking for you. "The Hotel website has to be Search Engine Optimized and well designed so it is easy for the world to find you in a simple search query. The guest can select the hotel, confirm the booking and make payment electronically, so this process isn't much different than purchasing any other service." When a guest reaches the hotel, continues Khalid, he can check right in because a click of a button converts his reservation into a booking. "He gets a plastic card instead of metallic key and can go directly to his room. If the guest has a history in the hotel's Property Management System, we'll customize the room and his stay based on the trends he stored during his last visit." This includes the room temperature, choice of his favorite television channels, favorite amenities, cookies, flowers and other selections in the room. "It's the little things that make the difference."
These 'little things' were not an issue for majority of locals, but they made a resultant impact on foreign delegates, many who visit Pakistan regularly to initiate business ties.
Khalid comments, "I think technology has changed the relationship between a guest and the hotel. Now it is more of a direct nature and has minimum role of a travel agent. We have to know the customer if we want to be able to provide him with the best possible service. Because it is a relationship, this becomes a long term association. With so much competition out there, customers will go elsewhere if they aren't content with the quality of service -- same as any industry. Organizations have to strive to embrace change and be proactive to receive their customers."
The guest is smart and almost all knowing. "With so much exposure of services and trends online, the customer is a lot more aware of what a hotel should be capable of and demand everything. They have a right to. They know what facilities are available in other hotels so you are always faced with the challenge of providing them with the same or more at challenging costs. Many surveys indicate that one of the most demanded facility in a hotel today is Wi-Fi connectivity. More than 80 per cent guests ask about this first. Second on the list is in-room entertainment system including Interactive TV, Video-On-Demand and Games."
Technology has affected the way hotels plan, execute and manage the operation. "They have deployed state of the art technologies, interfaced with each other, thus fully automating the various departments such as Accounting, Stores, Inventory Control and Sales. Large event registers have been replaced with user friendly Sales and Catering Systems. Restaurants are equipped with Touch Screen Point of Sale systems. An order taker can key in the order on a handheld wireless device. When he presses Enter, it is printed on designate kitchen printer for preparation. Internal correspondence of the hotel departments is almost all electronic." It might seem like these are really small advancements but when you get down to it, the hotel industry hasn't exactly been on the Pakistan's top priority list. With the global turmoil that the travel industry has suffered, the domestic instability has also effected adequate justifications for technology integration and advancement into the industry.
More Technologically-Inspired Trends
The local industry is currently planning the deployment of the Smart Guest Room which will be interfaced with Property Management System. These Smart Guest Rooms will be designed on power saving system and the entire electrical equipments will automatically turn off when there is no one in the room.
Khalid admits that life could be made easier with more technology integration. It would certainly help if there was one, single comprehensive software that would relieve the organization from the headache of depending on dozens of applications with multiple interfaces running on individual terminals. "We are actively looking for one hospitality software will be able to manage all departments such as the Front Office, Sales & Catering, Accounts, Housekeeping, Banquets, HR, Purchase, Inventory and well, everything else that comes in contact with the hotel. Presently we have signed dozens of maintenance contracts with different software and hardware vendors. These have to be renewed every year by paying large amounts. If we have one vendor providing the complete system, we will have one maintenance contract." Get the CRM that gives the hotel that trends analysis and systems integration needed. Is there not an ERP out there that can be developed by the local software industry?
"Additionally, for an organization that has multiple hotels across different regions, there should be an automated system to collect guest preferences information from all the properties, merge them in one place and share them with all the properties to maintain a universal service standard.
If all of these advancements are happening, why does it feel like the hospitality industry in Pakistan is just not at par with the hotels you find abroad? Could it be the fault of the technology which is lacking as much as the people who implement the technology? "I don't think we are weaker in terms of technology and talent. The hospitality industry gets its life support from people who travel into the country. They might be coming here for tourism, business, sight seeing or visiting family and friends. Due to so many reasons, we have very few foreigners coming into the country. That obviously hurts every industry but ours will not grow until this factor changes. Build all the hotels you want and wire them with all the world class luxuries -- if you don't have people moving around in the hotel, nobody is going to benefit."
Khalid continues, "I cannot say much about the law and order situation in the country but I do hope that one day there will be peace and prosperity in our country and that we will see countless travelers from abroad and within the country. If the hotels grow, because of the networks that we are all associated with, the indication to the world that Pakistan is a good destination to come to, will spread very quickly.
This growth will then encourage investors to focus more on the hospitality industry making the ROI quicker. I would imagine it is just a matter of time before our hotels will be at par with other hotels in the world."
"I feel that our hotels should put equal emphasis on technology as well as service with the human touch. We have slightly different values than others. We should provide all technical facilities to the guest but should provide him with the people support he needs. We're establishing a relationship with the guest which has to remain until the guest chooses to disconnect it. Personalized correspondence with the guest even after he has left, offering assistance that goes beyond the 'call of duty' -- these are more than just gimmicks. Our survival depends on every guest that passes through our doors and visits our website. Every little bit counts and every staff member on our team adds to the experience that a guest should have."
The hotel industry continues to experience innovation and growth. The competition is certainly increasing with the number of 5-star and 7-star hotels in the making, so the niche is growing albeit slowly.
Considering there are so few tourist resorts, one would imagine the reason a guest would visit Pakistan would be an extremely focused reason -- business, family or in transit. Until the time there are sites which are promoted for tourism, the burden of creating the Pakistani experience will remain on the hotels. Think about it. Despite the best service, you rarely exercise the reason 'to visit a hotel' as an excuse to revisit a country or city. "Almost all hotels in Pakistan are owned by the private sector and we not only portray a good image of Pakistan through our services, plus we also try to introduce foreigners to the local culture. Our region is rich in history, culture and tradition. But you have to understand that a hotel is a small place in the society, so we can only change the image to that small scale."