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Going High Tech: Telecom solutions adopted by the travel and hospitality sector

August 22, 2014
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Growing aspirations, rising incomes, globalisation and infrastructure improvements have driven significant growth in the Indian travel and hospitality industry.

According to the World Travel and Tourism Council, the total size of the tourism and hospitality industry in India is likely to increase from $117.7 billion in 2013 to $418.9 billion by 2022. In 2014, the industry is expected to register a growth of about 7.3 per cent.

In order to keep pace with this growth, industry players are increasingly adopting telecom and IT solutions for improving customer accessibility, making information readily available and offering customers easy access to various products and services.

Several travel agencies and hotel chains have invested significantly in telecom, and information and communications technology (ICT) infrastructure and software applications for business development, maximisation of revenue generation, cost minimisation, and reaching out to customers.

With the widespread use of the internet, travel companies and leading hospitality brands are using ICT to allow customers and other stakeholders, including vendors, to access information regarding tourism products and services on a realtime basis. For example, booking tickets on the internet is already a convenient means of transaction for frequent flyers. Currently, the practice of using hotel reservation systems, also known as a central reservation system (CRS), is common across large and small hotel chains. The CRS is a computerised system that stores and provides information related to hotels, resorts and other lodging facilities. Using CRS, hotel managers oversee their online marketing and sales functions. The system allows the management to provide information related to booking status, which is then made easily accessible to customers and other sales channels, including travel agents.

Besides CRS, industry players are opting for the property management system (PMS), which is used to automate the operations of a hotel and process reservations, check-ins and check-outs. Further, PMS helps the management to integrate front office accounting, marketing and other interfacing systems such as reservations, restaurant and pay-per-view movies.

Like other industries, the travel and hospitality industries are making significant investments in enterprise platforms such as customer relationship management (CRM) and enterprise resource planning (ERP). Companies deploy CRM to access essential information necessary for segmenting high-value customers and tracking customer behaviour and preferences. The data collected through the CRM system helps companies design better products and services for high-end customers and attract repeat business from their regular clients. In addition, CRM solutions provide stakeholders a detailed case history of a particular client, allowing for a personalised customer experience and therefore, paving the way for immediate resolution of complaints.

With the growing adoption of smartphones and increasing popularity of social media platforms, the majority of players in the travel and hospitality sector are using both the mediums to reach out to potential customers and strengthen their brand image. Hotels and resorts are using mobile applications to help customers research, transact and share feedback. The most commonly used enterprise applications include ticketing and destination research applications. For example, the Mobile Vacation Planner (MVP) enables travellers to access and explore rich travel content sorted by various parameters like geography. Another widely used mobile application by the hospitality sector is SmartRetreat, a hotel-specific application which enables guests to explore various hotel amenities such as booking a spa treatment and ordering room service. Further, to leverage the growing popularity of social media platforms such as Facebook and Twitter, travel and hospitality players post their releases, latest offers and favourable reviews on these portals. This allows companies in this vertical to directly get in touch with their target audience.

Given the current industry scenario, the security of domestic and international travellers is also gaining importance among small as well as large hotels. These companies, particularly luxury hotels, are opting for campus-wide surveillance systems with video analytics such as face recognition and unattended object detection. Large hotel chains are also investing heavily in building management systems which integrate IP surveillance, fire and gas alarms, public announcement systems, and scanners.

Recognising the advantages offered by a robust telecom and IT system, travel and hospitality players are expected to earmark a significant part of their yearly budgets to upgrade their legacy networks and introduce cutting-edge technologies.

The following questions were asked in the survey:

•             What are the organisation’s key technology requirements?

•             What mix of service providers and vendors is used?

•             What are the biggest concerns with respect to telecom infrastructure?

•             What are some of the mobility and enterprise applications implemented by the organisation?

•             Which network security tools has the organisation implemented?

•             What redundancy tools are being used?

•             Which new product or service holds the most relevance for the organisation?


Key technology requirements

The survey results highlight that the organisations’ key technology requirements include processing and managing large data volumes, ensuring payment gateway security and deployment of mobility solutions to enhance service efficiency.

In order to meet their communication requirements, several companies have established a robust telecom network using a mix of wireless and wireline technologies. They have set up a wide area network-based system, comprising MPLS, leased lines, ISDN, Ethernet and virtual private networks (VPNs) to support day-to-day connectivity needs. For example, Super Cabz has established an internet-based leased line network coupled with PRI lines sourced from Bharti Airtel. The network connects the company’s servers with the hardware used by its fleet of cabs. Similarly, Agra-based Hotel Marina uses leased lines to provide information related to sales, special promotions, and room occupancy across its branches, while Jaypee Hotels has established a cable-based telecom infrastructure. The hotel chain uses unshielded twisted pair cables which are a cost-effective medium of connectivity.

Meanwhile, Ethernet is used by travel firms and hotel chains to upgrade their telecom networks in a cost-effective manner. Most hotels provide their guests with a Wi-Fi facility by establishing Wi-Fi hotspots through the deployment of technologies such as IP-VPNs, MPLS and internet private leased circuits (IPLCs).

Of late, a large number of hotel chains have established a converged network which supports high bandwidth. These networks use gigabit passive optical network technology to enhance customer experience by providing clients access to high speed data transfer for watching high definition videos and movies on demand. Several players have also adopted unified communication systems comprising a PBX system, PRI lines and VoIP for connectivity among offices. In addition to using standard telecom systems and tools, companies use a host of IT applications to meet their communication requirements. For example, leading hospitality and travel brands have adopted various tools such as CRS, information management system along with CRM. Further, to enhance employee productivity and provide clients an improved customer experience, they have adopted solutions such as workforce management systems, guest recognition systems and customer-management interaction, among others.

Service providers and vendors

Players in this segment use the services of telecom service providers and IT vendors such as Bharat Sanchar Nigam Limited, Mahanagar Telephone Nigam Limited, Tata Communications, Reliance Communications, Bharti Airtel, Vodafone India and Tikona Digital. In addition, travel and hospitality companies deploy various IT- and enterprise-led solutions offered by companies such as Microsoft, IBM, Wipro, Tata Consultancy Services, Hewlett-Packard, Dell, Wipro, Avaya and Juniper Networks.

Popular applications

With the growing familiarity and usage of technology by end-consumers, players in the hospitality segment have to proactively deploy new technologies and mobile applications to reach out to customers. The majority of the travel companies and leading hotel chains offer Android-, Windows- or iPhone-based applications for bookings and reservations. Various applications including payment gateways, which are available on the companies’ websites, are also replicated on the mobile platform. Players also use SMS alerts and campaigns to provide information regarding new schemes and discounts. For example, the Indian Tourism Development Corporation uses SMSs and push alerts to confirm reservations and inform customers about promotional offers.

Further, companies internally use various automation tools for different services such as reservation, ticket sale, and customer service and support. They use applications including video-, audio- and web-conferencing, IP video solutions and VoIP. In addition, ERP is used for managing employee count and payroll. With an aim to empower their ground staff, companies have provided them with mobility devices for on-the-go connectivity.

Data centres

The travel and hospitality industry deals with huge volume of transactions on a daily basis. Industry players are required to process and store information and data on a per second basis and have to handle a high number of inbound and outgoing calls. To support all these functions, these companies have established data centres, which house servers and security devices, and host various applications. These data centres also support customer-facing services such as inbound calls.

Network redundancy

The topmost priority for the travel and hospitality industry is to maintain uptime and ensure 24x7 network connectivity. Industry players deploy several tools to address issues regarding uptime and response time. For backup and data recovery, a large number of companies deploy leased lines, ISDN lines, data archiving, firewalls, storage area network systems along with security audits and security operation control systems. A lot of companies also deploy switches and routers with built-in redundancy in their telecom systems. For example, Meru Cabs uses leased lines for addressing issues regarding redundancy. The leased lines, which are a combination of 2 MB and 45 MB links, are used to connect cab service providers’ operations in each city to the central data centre in Mumbai. For last mile connectivity, the company uses three technologies – optic fibre, copper and wireless.

Network security

Since players in the travel and hospitality industry support various payment gateways and are privy to customer information, the risks associated with data and transaction security assume paramount importance. In order to secure their networks, travel and hospitality companies use tools such as firewalls, intrusion detection systems, antivirus packages and authentication systems. In addition, companies also use content filtering and create isolation circuits to safeguard their networks from internal as well as external threats.

Issues and concerns

Managing network downtime, selection of appropriate service providers and vendors, technology upgrades and integration and high bandwidth costs are some of the key issues faced by the travel and hospitality industry. In addition, training employees to leverage new technologies and software is a major challenge.

The way forward

Keeping pace with fast evolving technology, the majority of players in the travel and hospitality industry are keen on making significant investments in cloud computing and virtualisation. These players are replacing hardware-based application solutions with software-based solutions hosted on a private cloud, which will help them secure data and reduce network management costs.

Carzonrent India Limited is working towards introducing web-, voice- and SMS-based applications which are scalable and work across platforms. Since travel and hospitality players have to handle huge data volumes and are completely dependent on customer feedback for reviews and repeat business, players are increasingly looking to adopt big data analytics. This will help organisations analyse information regarding customer behaviour and offer better products and services. The travel portal Cleartrip has earmarked significant investments to upgrade its telecom network to meet its growing business requirements and adopt a host of mobility applications.

Going forward, the key focus areas for the travel and hospitality industry will be to integrate new technologies to reach out to their targeted customers and provide them with relevant information through tools such as big data analytics.

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