By Hubert B. Van Hoof, and Marja J. Verbeeten

Last year, the International Hotel and Restaurant Assn. organized a Think Tank in Singapore to discuss technology in the lodging industry. The participants  represented the world's leading technology companies, hotel organizations and  universities.

The Think Tank said the Internet would be the major driver of change in the lodging industry-that it was changing the way in which services were offered and delivered, reshaping organizational structures, and altering the relationship between hotels and their customers and suppliers. Moreover, it said the Internet was perceived as rapidly becoming the most sought-after amenity in hotel rooms.

The Internet will have an enormous effect on the way the lodging industry will conduct business in the future. It will radically change the way in which hotels communicate with their customers, with their corporate headquarters, and with the rest of the world. Without a presence on the Internet, either in the form of e-mail or a World Wide Web site, hospitality operations will lose important business opportunities and harm their competitive edge.

The Hospitality Information Technology Assn. studied  the use of the Internet in the U.S. lodging industry. The study was conducted in conjunction with the hospitality consulting firm of Pannell, Kerr and Foster. During the latter half of 1997, 2,000 surveys were sent to lodging managers throughout the U.S., asking them to describe how they used the Internet and what they felt about it.

Electronic  Mail

The study looked at the two most commonly used features of the Internet: electronic mail and the Web site. E-mail is a feature of the Internet that is mostly used for communication. Its major benefits over other means of communication, such as telephone and fax machine, are its speed, its access to large numbers of people at the same time, and its inexpensiveness.

The survey found that a large majority (70.5 percent) of hotel properties in the United States uses e-mail. The properties using e-mail said they mostly use it as a tool to communicate with their corporate offices (40.7 percent); 30.2 percent responded they use it to contact other properties; and 29.6 percent said they used e-mail to contact guests and customers.

E-mail rarely is used as an internal means of communication. In only 26.5 percent of the cases did the respondent state he/she uses it to contact other managers on property. Only 11  percent said they used e-mail to stay in touch with their staff.

Almost 43 percent of respondents stated their property have used e-mail for less than a year, with an additional 37.2 percent stating they have used it less than two years. With only 19.2 percent of the respondents indicating they has used e- mail for more than three years, it is obvious e-mail is still a relatively new phenomenon in the U.S. lodging industry. On average, the lodging managers in this survey stated they used e-mail about 2.5 hours a week.

Web sites

The second important feature of the Internet is the World Wide Web, a global network of computers that publish information for the general public to view and access. Individual pieces of information on the World Wide Web are referred to as Web sites, and many hotels have created their own Web sites - a collection of Web pages - over the years.

The survey found that two-thirds (66.4 percent) of the respondents in our sample worked at a property with a Web site. A large majority of the respondents (88.3 percent) stated that an outside party had created their Web site. Estimates of the costs involved in creating a Web site ranged from $79 to $10,000. The average cost of creating a Web site was estimated at about $1,200.

Similarly, maintaining and updating the Web site is mostly done by outside specialists. Properties in our sample spent about 5 person hours a month maintaining their Web sites, at an estimated cost of $116.00 a month.

All of the respondents who stated their property had a Web site said it included information about their property. Other popular characteristics are photographs of the property (85.4 percent) and information on the surrounding area .

Relatively little information is paid to providing guests with information on availability (29.2 percent) or on offering guests the possibility of making a virtual tour of the property (20.1 percent). Yet a large majority of the
respondents (80.6 percent) indicated that information on their property was included in other Web sites, too.

In terms of guest access to their Web site, a majority of the respondents (56.8 percent) said their Web sites allowed guests to make reservations. An almost similar number (55.5 percent) stated they tracked the number of reservations that was made through the Internet. Only 23.7 percent of the properties enabled guests to access the Internet from their rooms, and only 24.1 percent of the properties had a business center that enabled guests to gain access to the Internet.

Further Analysis

Upon further analysis of the data, we found property type and size had an effect on the use of e-mail and the Web. Limited-service properties and motels used e- mail significantly less than hotels in the full-service and resort sectors, especially as a communication tool inside the property and inside the company, according to the results.

Limited-service properties also had significantly fewer Web sites than their counterparts in the full-service and resort categories. The Web sites of resort hotels offered the most features, such as virtual tours of the property and photographs of property features. Limited-service hotels included fewer promotions and special packages on their Web sites than resort and full-service hotels.

The size of the property also has an effect on the use of e-mail and Web sites. Larger hotels (more than 300 rooms) used e-mail significantly more than hotels in the small (less than 100 rooms) and mid-size (101-300 rooms) ranges.

Similarly, large hotels had significantly more Web sites, and used them more often to make and track reservations.

As was to be expected, the large properties had more business centers that allowed guests access to the Web than the smaller hotels. Finally, the large properties had much more elaborate Web sites than the smaller hotels: more photographs, more information on availability, more promotions and information on special packages and more virtual tours of the property.

Uncharted territory

Despite the fact that many experts and corporate executives agree the Internet is perhaps the most important technological tool of the future, it is still a relatively new, and underused tool in the hospitality industry.
Yet e-mail and Web sites are probably cheaper, once installed, than phone, fax, memo, or mail. The Internet is a cheap and efficient alternative to paper. If the larger properties with the larger budgets have figured it out, the smaller properties with the smaller budgets will have to start realizing it's very cost- effective and fits their budgets very well.

Hubert B. Van Hoof is assistant dean and Marja J. Verbeeten is associate professor at the School of Hotel and Restaurant Management of Northern Arizona University.