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Tourism Management 53 (2016) 30e37

Contents lists available at ScienceDirect

Tourism Management
journal homepage: www.elsevier.com/locate/tourman

Research note

A model that connects information technology and hotel performance


lez*, Jacques Bulchand-Gidumal
n-Gonza
Santiago Melia
TIDES Institute of Tourism and Sustainable Development, University of Las Palmas de Gran Canaria, Facultad de Economía, Empresa y Turismo, Campus
Universitario de Tafira, 35017 Las Palmas, Spain

h i g h l i g h t s

 We review global proposals about IT influence on hotel organizational performance.


 We review particular IT paths toward different hotel organizational performance facets.
 We present a comprehensive model that details the routes that IT applications follow in order to improve hotel performance.

a r t i c l e i n f o a b s t r a c t

Article history: Despite vast investments in IT, there is scant research and empirical data that connects, in depth, IT with
Received 23 February 2015 firm performance in the hospitality industry. However, the literature does show partial evidence and
Received in revised form examples of particular technologies. After an extensive literature review, we posit four global paths
9 September 2015
through which IT can impact hotel performance and, for each one, the precise mechanisms that cause
Accepted 11 September 2015
Available online xxx
these influences. These four proposals are further developed and refined using in-depth interviews with
a group of 30 managers of different areas from several hotels. A final comprehensive model that shows
the specific routes that IT can follow in order to improve hotel organizational performance is presented.
Keywords:
Information technology
This model can be taken as a frame of reference by academics and can also be used by both practitioners
Hotels and IT producers to assess particular IT options.
Organizational performance © 2015 Elsevier Ltd. All rights reserved.
Productivity
Customer service
Commercialization

1. Introduction drivers of the relationship. After a literature review, we pose a


general model that includes four global paths through which IT can
Information technologies (IT) have been recognized as one of influence hotel performance. This model is subsequently analyzed
the greatest forces causing change in the hotel industry (Law, with 30 managers of different areas in five hotels through a qual-
Leung, Au, & Lee, 2013). Many hospitality firms have turned to IT itative approach using in-depth interviews in order to find support
as a way to cope with an environment characterized by globaliza- for the different roles that IT should adopt to impact hotel organi-
tion, competition, high client turnover, and rising guest expecta- zational performance.
tions. IT investments are considerable in the hospitality industry,
but those investments do not always guarantee suitable returns;
therefore, research that clarifies in detail how IT can improve 2. IT and hotel firm performance
organizational performance is required (Cohen & Olsen, 2013).
Although there is a lack of a comprehensive model of the rela- IT has transformed tourism globally. Its potential to shape
tionship between organizational performance and IT investments customer service and hospitality firm performance has been widely
in the hospitality industry, there is evidence from the academic and recognized (Buhalis & Law, 2008; Ip, Leung, & Law, 2011). Never-
professional literature about how specific IT may impact some theless, hospitality firms do not always obtain a return from their IT
investments (Brown & Stange, 2002). In particular, the extant
research has provided little empirical evidence about how IT can be
* Corresponding author.
used in order to produce customer service outcomes and how it
E-mail addresses: santiago.melian@ulpgc.es (S. Meli lez), jacques.
an-Gonza contributes to the performance of hospitality firms (Cohen & Olsen,
bulchand@ulpgc.es (J. Bulchand-Gidumal). 2013).

http://dx.doi.org/10.1016/j.tourman.2015.09.005
0261-5177/© 2015 Elsevier Ltd. All rights reserved.
n-Gonza
S. Melia lez, J. Bulchand-Gidumal / Tourism Management 53 (2016) 30e37 31

However, the literature provides both theoretical arguments how IT can be used in each of these global options.
and empirical evidence in order to propose a model that describes
IT influence on hotel performance. We will describe the more
global and comprehensive approaches to the issue, and we will 2.3. Operational productivity
examine in detail each of the options presented in these general
views about the influence of IT. Nevertheless, we are attempting to Productivity can be defined as the relationship of output to input
describe how IT can impact hotels' organizational performance; (Tangen, 2005). In hotels, there are both relevant outputs (such as
therefore, this last construct must be explained first. the number of clients and revenue), and relevant inputs (such as
employees, raw materials, and energy). We will consider employee
2.1. Organizational performance in hotels productivity separately because employees are a very important
resource for hotels. Among the other resources that are relevant in
Organizational performance is a complex and multidimensional terms of costs, energy and food stand out (Pavlatos & Paggios, 2007;
construct (Avci, Madanoglu, & Okumus, 2011). Economic results rez-Lombard, Ortiz, & Pout, 2008). Furthermore, apart from the
Pe
represent the final objective of most companies (Chandler, cost interest, the environmental impact and energy consumption
DeTienne, McKelvie, & Mumford, 2011), and so the economic also contribute to hotel social responsibility (Holcomb, Upchurch, &
dimension stands out. In hospitality, Cohen and Olsen (2013) used Okumus, 2007), and they involve international recognition (e.g.,
profitability, sales growth, and revenue per available room. On the EMAS awards). Therefore, both types of non-personnel activities
other hand, the non-financial performance facet focuses on a firm's should be optimized through IT in order to, on the one hand, reduce
long-term success, with measures such as customer satisfaction costs and, on the other hand, improve the hotel organizational
and productivity (Van Veen-Dirks & Wijn, 2002). The sequence image associated with hotel social responsibility: green image
from non-economic performance to economic performance is (Fig. 2). Examples of interesting IT options in relation to these aims
assumed by different authors. In particular, it has been considered are kitchen control systems and energy management systems,
that client-related performance and productivity lead to economic respectively (Doukas, Patlitzianas, Iatropoulos, & Psarras, 2007).
performance (Cohen & Olsen, 2013; Combs, Crook, & Shook, 2005;
Heskett & Schlesinger, 1994). Therefore, any attempt to describe
how IT can improve hotel performance should consider at least the 2.4. Employee productivity
client, productivity, and economic dimensions of organizational
performance. This is consistent with the more recent research Hotel firms are labor intensive and task-oriented in their service
about hotel performance measurement (Sainaghi, 2010). operation and delivery. Evidence suggests that hospitality firms can
succeed in using technological resources to improve staff produc-
2.2. Global proposals about IT impact on organizational tivity. One way of increasing personnel productivity involves
performance reducing staff costs without affecting performance outputs. In this
sense, staff productivity consequences are the same as those of
Bannister and Remenyi (2000) state that the process through operational productivity: higher profitability. Thus, guest registra-
which IT improves firm results is more sophisticated than deliv- tion IT options like kiosks and online check-in allow firms to check
ering services at lower costs. IT should be connected with other in guests faster with fewer staff (Kim, Kim, Park, Lee, & Jee, 2012).
non-IT company factors like strategy, clients, and services. Based on Besides reducing staff costs, employee productivity can be
the analysis of different global proposals about how IT can improve achieved through higher output while containing personnel costs.
hotel organizational performance (Chathoth, 2007; Law & In this sense, since IT releases employees from manual labor, they
Jogaratnam, 2005; Law et al., 2013; Leung & Law, 2005; Piccoli, have the opportunity to focus on service and meeting clients'
2008; Siguaw, Enz, & Namasivayam, 2000; Tavitiyaman, Qiu particular needs and wants (Chathoth, 2007). This staff productivity
Zhang, & Qu, 2012), we posit that the general process involves facet can influence client satisfaction through better customer
acting upon the following organizational performance drivers: service which, as has been explained, is considered as an ante-
operational productivity, employee productivity, customer service, cedent of firm incomes. Fig. 3 illustrates employee productivity and
and commercialization (Fig. 1). In the next sections, we describe IT possibilities.

Fig. 1. Global proposals about IT impact on organizational performance.


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S. Melia lez, J. Bulchand-Gidumal / Tourism Management 53 (2016) 30e37

relates to the physical evidence of the service; which, in the case of


IT, can be impacted by updated technologies (Schmidt, Cantallops, &
dos Santos, 2008). Valence refers to whether, at the end of their stay,
customers believe that the service outcome is good or bad; an
example of this might be the case of free Wi-Fi (Bulchand-Gidumal,
Melia n-Gonzalez, & Gonzalez Lo
pez-Valca
rcel, 2011).
Regarding the second type of services, IT penetration has
allowed hotels to provide SSTs (e.g., kiosks for self-check-in). There
are two main outcomes that hotels should expect from SSTs: first,
Fig. 2. Operational productivity through IT.
reducing queues (Kokkinou & Cranage, 2013), and second, avoiding
situations characterized by a potentially negative rapport experi-
2.5. Customer service ence (Giebelhausen, Robinson, Sirianni, & Brady, 2014). Fig. 4
illustrates how IT can improve customer service.
In hotels, there are two main kinds of services: employee-based
services and IT-based services or self-service technologies (SSTs). 2.6. Commercialization
We will first address employee-based services, followed by SSTs.
Service quality is the main criterion considered in assessing A number of IT options can be used to increase hotel revenues.
services that rely on employee actions (Lee, Barker, & Kandampully, We have identified IT involved in the following: customer satis-
2003). Brady and Cronin (2001) model is one of the most faction measures, client behavior knowledge, distribution channel
comprehensive contributions in the quality service measurement management, and revenue management. We will now discuss each
field (Martinez Garcia & Martinez Caro, 2010). This model explains of them in detail.
service quality with three primary dimensions and nine corre- “Companies and organizations in virtually every industry employ
sponding sub-dimensions: interaction quality (attitude, behavior, customer-satisfaction measures for the straightforward reason that
and expertise), physical environment quality (ambient conditions, satisfied customers are essential for a successful business” (Gupta,
design, and social factors), and outcome quality (waiting time, McLaughlin, & Gomez, 2007: 284). IT makes it possible to get client
tangibles, and valence). opinions through email, corporate and other distribution websites
In relation to interaction quality, attitude alludes to a willingness (e.g., Booking.com), mobile apps, interactive voice-response systems,
to help customers; behavior refers to employees taking actions to and/or traveler review websites (e.g., TripAdvisor).
address clients' needs; and expertise relates to the knowledge of Relationship marketing involves activities directed to obtaining
employees about the service. These facets of service quality can be successful relational exchanges (Morgan & Hunt, 1994). Its success
influenced by IT, since they can be used by contact employees to depends upon acquiring customer information to be used for
improve service encounters by enabling customization, improving developing highly personalized offerings (Sigala, 2005). Customer
service recovery, and spontaneously delighting guests (Bitner, relationship management (CRM) seeks to gather and store client-
Brown, & Meuter, 2000). related information, share it throughout the entire organization,
Regarding physical environment quality, ambient conditions and then use it at all organizational levels for creating unique guest
pertain to non-visual aspects, such as temperature, scent, and experiences (Sigala, 2005). The latest technologies, such as smart-
music; facility design refers to the layout or architecture of the phone tracking, can follow the guest's pathway inside the hotel and
environment; and social factors refer to the number and type of create routes of client movements.
people in the service setting. Here, the contribution of IT is possible Nowadays, most clients choose their stays through the Internet;
as well. For example, IT-based self check-in/out affects the number so, in accordance with O'Connor and Frew (2004), IT must provide
of people in the service setting by making processes more efficient, hotels with a presence in suitable electronic distribution channels
thus helping to avoid large queues and agglomerations. IT can also (e.g., hotel websites, OTAs, global distribution systems). Last, IT
influence the ambient sub-dimension, because IT can change a plays a critical role in revenue management, which seeks to design
room's physical attributions like color, sound and smell (Hosteltur, special service packages using appropriate combinations of attri-
2014). IT also affects facility design, because mobile technologies butes, such as price, amenities, purchase restrictions, and distri-
allow employees to attend to guests in more comfortable setups bution channels. Fig. 5 illustrates IT options to improve hotel
than the classical reception desk. Modern hardware also tends to commercialization.
integrate better, with the facility design avoiding being an obstacle
between the guest and the employee. 3. Research objective
The last dimension of service quality is outcome quality. Waiting
time is the amount of time it takes to provide a service; IT applica- Taking into consideration the elements that could take part in
tions help hotels to deliver services faster (Chathoth, 2007). Tangible each of the global paths through which IT can influence

Fig. 3. Employee productivity through IT.


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Fig. 4. Customer service through IT.

of 30 interviews were carried out and all were tape-recorded with


the permission of the respondents. In all cases, there were two
interviewers present and each took individual notes. The in-
terviews lasted for an average of 1 h and featured open-ended
questions about the role of IT in the categories represented in
Figs. 1e5. The hotel performance influence was addressed
regarding the following organizational performance facets: client
results, operations, incomes, and costs. Content analysis was done
following a deductive approach. In cases of subsequent doubt,
email or phone contact was used to clarify.
Sampling was concluded once saturation was reached. Data
saturation was identified because in the last two hotels that were
Fig. 5. Commercialization through IT.
interviewed no new issues, technologies, or improvements were
mentioned.

organizational performance in hotels (Fig. 1), we have elaborated


5. Results
Figs. 2e5. Considering that these have been elaborated only based
on the literature review, the objective of this work is to find sup-
The results will be presented according to each of the categories
porting empirical evidence. In particular, what is sought is confir-
shown in Figs. 1e5. Previously, there are two general results of the
mation of each one of the specific routes described for the general
research that must be commented upon. All the global paths (Fig. 1)
strategic options of operational productivity, employee productiv-
were confirmed by the interviewees and no new ones were found,
ity, customer service, and commercialization.
since all the mentioned options regarding the use of IT fitted
adequately into the constructs. What was found were other options
4. Methodology inside one of the global paths (commercialization) and some new
relationships between the constructs, as will be explained at the
The authors employed a purposive sampling (Jennings, end of this section.
Rajaratnam, & Lawrence, 2003) that encompassed five four-star
hotels. Four of them were sun and beach hotels located in tourist 5.1. Operational productivity
zones of the Canary Islands and belonging to different hotel chains.
The fifth was an independent urban hotel located in a major city of Energy consumption was a matter of concern for all hotel di-
the same destination. All the hotels had more than 200 rooms and rectors. They perceived their businesses as intensive consumers of
more than 100 employees. The hotel category and size was selected energy and stated that IT could help them with two tasks: providing
because of its tested IT penetration (Ruiz-Molina, Gil-Saura, & relevant information for management and automatically adapting
Moliner-Velazquez, 2011). Considering this was a first approach to energy consumption to surrounding changes. Although cost
explore the theoretical paths, we adopted a qualitative perspective reduction was the main criteria, some managers also highlighted
based on in-depth interviews in order to gain an understanding of the sustainable hotel image facet. Another matter of concern
the phenomena. mentioned by hotel directors and by food and beverage managers
In each of the hotels, the following personnel were interviewed was reducing food wastage. Several of the interviewees were
face-to-face: hotel director, front office manager, housekeeper, food considering implementing IT to help with this process, but none
and beverage manager, IT manager, and marketing manager. A total had yet implemented this type of application. Two of the cases
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mentioned applications that would reduce food waste by adapting appearance.


the buffet to the profiles of the guests. Regarding the valence quality sub-dimension, the interviewees
considered that this global client evaluation may be influenced by
5.2. Employee productivity IT, as an IT failure can negatively influence a client's stay. Currently,
a day without Internet access can really harm a short client stay. IT
Several interviewees found that IT was a way to reduce was considered as affecting the output quality service facet when it
personnel costs without affecting earnings or service quality. This presents problems because some services strongly depend upon it.
was the case of the front office and marketing managers, respec- Nevertheless, when technology runs well, this does not mean that
tively, who stated that their IT applications (e.g., PMS, online check- the output service quality is enhanced.
in, and channel manager) allowed their departments to perform Regarding SSTs, the interviewees agreed that check-in/out
the same amount of tasks (e.g., check-in, check-out, modifying in- operations represent clear examples of services that many cli-
formation in the distribution channels) with fewer employees. ents appreciate that exist as SSTs. Nevertheless, they affirmed that
Despite this admitted advantage, front office managers asserted their hotels were businesses that involved clienteemployee in-
that, when unexpected events happened, the staff numbers were teractions and that offering such services only through an IT-
insufficient, affecting client satisfaction. based service option would not be a good idea. Many clients
The front office managers and hotel directors agreed that the prefer to interact with employees or value having both options.
routine task automation that IT generated was an opportunity to SSTs were considered as a complement to personnel-based ser-
focus on client interaction. Contact employees could dedicate more vices that avoid waiting times, queues, and walking to the
time to understanding clients' needs, to explaining hotel facilities reception desk.
and services, and to recognizing loyal clients.
5.4. Commercialization
5.3. Customer service
In this area, two big themes were raised by the interviewees: the
With respect to employee-based service quality, the influence opportunity to know clients' opinions and behaviors, and
on the interaction quality dimension was the most mentioned IT commercialization through the Internet. Regarding clients' opin-
impact. The main examples were the behaviors of contact em- ions, the social media phenomenon stood out. Acquiring these
ployees that fit in the behavior quality sub-dimension. For instance, evaluations during the clients' stay was mentioned, too. With
in the case of the front office staff, the employees can clarify client respect to clients' behavior, CRM was the most mentioned IT
doubts on consumptions showing exactly which services and function. According to the interviewees' comments, this technology
products were consumed, as well as where and when the client allows hotels to both personalize employeeeclient interactions and
approved those services. Similarly, the sales staff can quickly increase sales opportunities.
answer client questions by email. Regarding the attitude quality Regarding commercialization, an appropriate presence in the
sub-dimension, the interviewees stated that employees' actions to different distribution channels on the Internet and the revenue
satisfy client requirements are interpreted as a willingness to help. management technique were highlighted by marketing and hotel
As such, if employees use IT in order to meet clients' demands, it managers. As hotels commercialize their offers in a larger number
can reflect their intention to assist them. Regarding the last sub- of channels, greater flexibility is demanded from IT to allow for new
dimension, expertise, the interviewees commented that IT re- options to be created.
sources could be a problem for contact employees if they do not Another theme upon which both a marketing manager and an IT
master them well. manager commented was the adaptability of IT in order to intro-
With respect to the physical environment service quality duce new services. This does not have to do with combinations of
dimension, all the interviewees agreed that clients really appreciate existing service attributes, but rather the design of a new service
the physical conditions of their hotels. The ambient condition and the flexibility of IT to connect it with the necessary related
quality sub-dimension was seen as being far from IT influence. The activities (e.g., accounting, payment). This concept had not been
same was the case with the layout design. IT was only mentioned found specifically in the literature, but we thought that it was an
with reference to the physical appearance of the hardware used. In interesting idea to add to our model. Thus, this additional specific
contrast, the social factor sub-dimension was clearly associated path appears as “new products,” understanding as such the ability
with IT, as using IT can avoid crowds in the hotel areas where these of IT to support the creation and commercialization of new
can appear. Self-check-in, self-check-out, and online check-in IT products.
options were all considered by front office managers as a way of Another issue mentioned by some of the interviewees is the use
avoiding annoying agglomerations. of IT as a source of revenue per se. This is the fact that hotels have
The last service quality dimension, service outcome, was also various technologies that are rented or sold to guests and are a
considered as improvable by IT. The same IT judged as useful for source of income (e.g., access to Wi-Fi networks and rental of IT
eluding agglomerations was valuable for clients to avoid excessive devices). We do not believe that this source of income will be
waiting times. Additionally, the Internet's possibilities and infor- sustainable over time, because, as other interviewees commented,
mation systems such as the PMS can also eliminate the latter. guests arrive at hotels more frequently with their own technologies
Nevertheless, IT has brought a new kind of waiting time that is and free Wi-Fi is becoming very common. However, we decided to
often criticized by clients: Internet browsing speed. IT can also add this specific path to the model, representing it with dotted
affect the tangible quality sub-dimension. Several managers lines.
emphasized the corporate web page characteristics, such as
updated information, good quality pictures, ease of use, and a 5.5. Final model
modern appearance. Other technology in full sight of clients was
also considered relevant for the hotel's image: large touch screens, We started with the model shown in Fig. 1 and with the details
computer monitors, and POS. Cutting-edge IT was cited as inter- depicted in Figs. 2e5. We refined each of the paths and the re-
esting for improving the tangible client experience, for instance, lationships between them, thus creating the resulting model pre-
with technology that allows clients to change the room's sented in Fig. 6.
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Fig. 6. Detailed proposal about IT impact on organizational performance in hotels.

To understand the model, the connections among the different them additional services. Nevertheless, another hotel's CRM por-
global paths must be explained. For example, SSTs, like other IT trayed client consumption data in such a way that employees
options, can release employees from operative tasks, thus knew easily what clients specifically demanded from the hotel.
increasing the opportunities for client interaction. SSTs may also These employees were able to particularize their client in-
contribute to increasing employee productivity, through worker teractions and to generate cross-selling opportunities. Further, in
displacement. These influences are represented in Fig. 6 with an many cases, IT contribution depends upon employee behavior,
asterisk. The client satisfaction measure is useful for modifying which means that IT should not be analyzed in an isolated way.
customer service according to detected weaknesses, which is rep- Hospitality is a people-oriented business, and forgetting this can
resented with two asterisks. This same box also shows how be a great mistake (Ryan, 2015).
knowledge of client behavior can be used to get service quality Practitioners can use the model to assess how a specific IT
through improving client interactions. Last, a better image of the option may be used to improve hotel performance. It can also be
hotel as being environmentally friendly can be used as a commer- used by IT producers and entrepreneurs to design and evaluate
cialization argument. This is represented in our model with three their products, as the variables included are those that drive hotel
asterisks. performance.
Hotel managers should not directly rely upon the type of IT (e.g.,
6. Conclusions online check-in, smart TV, presence sensors); instead, they should
analyze the extent to which a specific IT product or service (with all
In this article, we propose and analyze with a qualitative its configurations, and possibilities) is capable of improving the
method a model that relates IT to the performance of hotels. Ev- operational productivity, personnel productivity, customer service,
idence supporting each of the paths' specific content was found. and income generation paths. According to the proposed model, if
Academics can use this model to understand in a comprehensive an IT product or service does not influence any of the factors por-
way the role of IT in the hospitality business. Additionally, it trayed in Fig. 6, organizational performance will not be enhanced.
should be considered that IT attributes matter, as not all of the Furthermore, sales pitches like “This product will increase
technologies associated with the prescribed processes exhibited personnel productivity” should not be accepted. Instead, more
the same potential to increase organizational performance. For precise information should be requested; for example, a measure-
example, although one of the hotels had a CRM, it was not sys- ment of how much more availability for service interaction an
tematically used by its employees to surprise clients or to offer employee or group of employees will have. Additionally, hoteliers
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should try to imagine the future with the technology and clearly Giebelhausen, M., Robinson, S. G., Sirianni, N. J., & Brady, M. K. (2014). Touch versus
tech: when technology functions as a barrier or a benefit to service encounters.
define how this spare time will to be used (e.g., upselling, cross
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Heskett, J. L., & Schlesinger, L. A. (1994). Putting the service-profit chain to work.
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firm profitability: mechanisms and empirical evidence. MIS Quarterly, 36(1),
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n-Gonza
S. Melia lez, J. Bulchand-Gidumal / Tourism Management 53 (2016) 30e37 37

Santiago Melia n-Gonza lez is an associate professor at the Jacques Bulchand-Gidumal is an associate professor at
University of Las Palmas de Gran Canaria, in the Canary the University of Las Palmas de Gran Canaria, in the Canary
Islands, in Spain. His research interest include human re- Islands, in Spain. His research interests include informa-
sources, information technology and their interaction in tion technologies, social media, innovation and entrepre-
order to improve organizational performance. He is neurship. He is focused in the tourism sector.
focused in the tourism sector.

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