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Telecom in Tourism: A key tool to meet customer needs

July 31, 2012

The Indian tourism and hospitality industry has been witnessing a surge in both business and leisure travel by local and foreign tourists. A World Travel and Tourism Council report indicates that the industry witnessed a compound annual growth rate of 13.7 per cent during the period 2010 to 2012. The industry is expected to generate revenues worth Rs 275.5 billion by 2018.

Given the continuing rush in tourist inflow, the hospitality sector is likely to offer lucrative opportunities to investors. With several international hotel brands establishing operations in the country, investments worth $11.41 billion are likely to be made during the next two years.

This surge in growth has translated into a demand for better quality services, including high-end telecom facilities. Thus, establishing a secure and flexible communications infrastructure has been accorded top priority by travel and hospitality majors.

Automation in the sector initially took off on a small scale with the introduction of fully automated property management systems, integrated point-of-sale systems and a central reservation system. Today, telecom and IT are being used for all services and functions ranging from restaurant sales accounting to check-in, check-out and billing-related procedures. Wireless technology such as Wi-Fi, wireless local area network and IP telephony is also being deployed in the hospitality industry. Hotels are converting most available areas on their premises into Wi-Fi “hotspots” and providing internet facilities in the lobby, restaurants, swimming pools, business centres, ballrooms, etc.

Besides this, other connectivity options such as virtual private networks (VPNs), leased lines, Ethernet technologies and optic fibre connectivity are being deployed. For wide area network (WAN) connectivity, the key technologies include primary rate interface-based ISDN technology, DLC (local loop), DLC (NLD), MPLS, IP-VPNs, point-to-point Ethernet and VSATs. International connectivity is another focus area in this segment for which mediums like IP-VPNs, MPLS and IPLCs are being used.

The hospitality industry also makes extensive use of various applications. Tools such as centralised reservation systems, custo-mer relationship management (CRM), disaster recovery strategies and management information systems (MISs) are increasingly being adopted at the corporate level.

A hotel group usually has a centralised reservations centre that is connected to the other hotels of the group. The hotels’ servers are connected through WAN and are monitored by the technical department of each hotel in order to ensure 100 per cent uptime. This acts as a single-point junction where all hotel reservations are accumulated. MIS is also deployed by all major hotels, not only to increase their customer base but also to analyse market trends and company profiles.

The internet serves as an essential tool for e-commerce transactions with hotel bookings often being done through the internet. All major hotels have their own websites that allow customers to view their guest rooms, restaurants, banquet halls and other facilities. The companies have made considerable investments in building these websites and regularly updating them.

Going forward, the technology uptake in this segment is expected to increase. Analysts believe that mobility platforms and cloud computing hold maximum potential for this segment. However, the consolidation of these platforms in order to provide a unified collaborative experience may prove to be a challenge for these players.

Given the benefits of telecom and IT services in the travel and hospitality space, hotels and travel organisers are enthusiastically deploying the best technology to attract customers and generate revenue.

tele.net carried out a survey among players in the travel and hospitality space to assess their telecom requirements and identify solutions.

The following questions were asked in the survey:

•  What are the company’s key technology requirements?

• What mix of service providers and vendors is used?

•  What is the biggest concern with respect to telecom infrastructure?

•  What are some of the mobility and enterprise applications that the organisaton has implemented?

•  Which network security tools has the organisation adopted?

•  What redundancy tools are being utilised by the company?

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

Key technology requirements

As per the survey, companies in the travel and hospitality segment are adopting the latest telecom tools and platforms to ensure business continuity and streamline business processes.

Telecom is used by these players to reduce operational and support costs, provide consistent quality of service to customers and simplify the management of their communications infrastructure.

To achieve these targets, travel and hospitality majors use point-to-point leased line connectivity, MPLS, optic fibre networks and IP-VPNs.

Most of the companies’ networks are based on leased lines or MPLS, which are usually used in conjunction with VPNs.

For example, Lemon Tree Hotels’ (LTH) telecom set-up functions on an MPLS and internet VPN backbone. This solution utilises a full duplex bandwidth and has helped LTH achieve increased network scalability, simplified network service integration and network management, and offered integrated recovery. Mahindra Holidays & Resorts India Limited (MHRIL) also uses an MPLS port to connect to all its offices. The bandwidth used is 40 Mbps at the main office and up to 2 Mbps at remote locations.

On the other hand, Prime Air Global Limited (PAGL) and JourneyMart.com use leased lines as a primary connectivity medium. PAGL is using a dedicated leased line offering 2 Mbps bandwidth and a 1:1 contention. This, according to the respondent, offers advantages such as secure and always-on connectivity and bandwidth-on-demand, which can be easily upgraded depending on the requirement.

The Indian Tourism Development Corporation-owned Ashok Group of Hotels also uses point-to-point leased lines in a hub-and-spoke model to connect with hotels belonging to its parent group and with its headquarters. Likewise, JourneyMart.com uses ADSL 2-based connectivity, which has a dedicated bandwidth of 2 Mbps, along with an additional 2 Mbps for load sharing and a backup internet connection sourced from Bharti Airtel.

All surveyed travel and hospitality companies use an optic fibre network. PAGL, for instance, uses this medium for last mile connectivity. According to the respondent, this medium is a viable option, given that it is less expensive than copper and more flexible, making it ideal for carrying digital information.

LTH also uses this medium for last mile connectivity, along with copper. This network is used to support Wi-Max. The hospitality chain has opted for optic fibre connectivity as it provided a higher rate of data transfer and bandwidth. It was also cost effective and provided connectivity across longer distances as compared to other technology mediums.

Besides telecom infrastructure, several IT tools are also being used by companies in this segment. While a property management system (PMS) is being used extensively by all respondents, a few companies have implemented other applications as well.

For example, MHRIL uses Oracle SAP, CRM and enterprise resource planning. PAGL also utilises an electronic CRM tool. This entails using technology to organise, automate and synchronise business processes such as sales activities, marketing, customer service and technical support. The aim is to find, attract, add and retain clients as well as reduce costs of marketing and client services. Toll-free customer support is included as a value-added service for Indian customers.

LTH uses software platforms like the Protel multi-property edition, Prolific, Touché, Leisure Point and vBoss. Applications such as the BMC suite, Veritas and Symantec are installed at the company’s data centre.

Kingfisher Airlines uses two main tools – an interface to simplify the process of checking ticket availability and a SAP-based system for storing operational data on an online data warehousing platform. While Kingfisher Airlines has been using this system for several years, it is currently in the process of making it more user friendly.

All applications used by Jaypee Hotels are based on Oracle and SQL, functioning on the Windows server platform.

Data centres are used by several of these players for functions such as ensuring server uptime and data recovery and backup, facilitating storage management and hardware and network operations, streamlining operations and simplifying end-user support.

Service providers and vendors

The survey shows that the services of companies like Tata Communications, Bharti Airtel, Cisco, Research In Motion, Websense, Symantec, Siebel, Bharat Sanchar Nigam Limited (BSNL), Juniper, McAfee, Tata Teleservices Limited, Mahanagar Telephone Nigam Limited, Ericsson, Alcatel-Lucent, Wipro Primus, Cisco, Sun Microsystems, IBM and Hewlett-Packard are being used.

Key issues and concerns

Travel and hospitality players face several issues and concerns. These include non-performance of the selected vendor, high costs of telecom equipment and downtime, and the lack of bandwidth.

For PAGL, the lack of network bandwidth is a key issue as it impacts connectivity with the company’s remote locations.

The travel major feels that telecom equipment ought to be made more affordable. “Currently, telecom equipment is within the reach of a select few. This scenario has to change, especially since enterprises are rapidly adopting cutting-edge technologies,” says the respondent.

Finding a reliable internet service provider and hosting agency is a major concern for LTH. “The idea is to ensure our communications infrastructure is tailor-made to suit the business requirements of the time,” says the respondent.

MHRIL faces multiple challenges – working with multiple vendors, non-performance of the selected operators and providing connectivity to non-accessible remote locations.

For the Taj Group of Hotels, the biggest concern is the lack of products and services for the travel and hospitality segment from telecom service providers. Also, the respondent says that the IP PBXs and IP end-points are not commercially competitive and, therefore, cannot be used for mass deployment.

Mobile and enterprise applications

Travel and hospitality majors use mobile applications such as BlackBerry devices, mobile email and data connectivity, corporate intranet, high speed data cards as well as mobile-based push and pull solutions extensively.

In terms of enterprise applications, the respondents use audio- and videoconferencing, web hosting, VoIP; and email, instant messaging, hosted messaging and collaboration, mailing solutions and organisation domain-specific core tools.

Network redundancy

The redundancy mediums used in this enterprise segment include failover systems and secondary links and operators.

Kingfisher Airlines uses secondary links and other mediums for redundancy. According to the respondent, the company uses several such tools in case the primary link fails. In this situation, the network switches to a secondary link via an automated process.

The Ashok Group of Hotels has divided its network for guests and operations. The respondent explains that the network is designed in such a manner that even if half of the network fails, the other half would remain operational without any downtime.

MHRIL uses the services of two operators for redundancy. The company’s main vendors are BSNL and Tata Communications, and it uses links provided by Reliance Communications as backup.

Network security

Network security is a key priority for players in this segment. Mediums used to ensure this include enterprise antivirus software systems, Symantec End Point, Encryption, a hardware-based IP firewall, internet content filtering, a caching solution, a dedicated staging server with IP and MAC security, a McAfee-based network security enterprise solution and the MDaemon local mail exchanger.

The way forward

Strengthening the communication network and deploying new technologies is at the top of most respondents’ to-do lists.

For example, Kingfisher Airlines plans to deploy additional mobility-based tools in its communications set-up. According to the respondent, “Going forward, we will focus on bringing in more mobility, which will help us integrate our systems onto one platform. This will be used internally for our airport operations.”

MHRIL plans to leverage the VoIP and BCP platforms for keeping the network operational in case of a disaster.

The Taj Group of Hotels plans to enable multiple IP-based services on its networks. The hospitality major will also implement IP-based systems to offer high speed internet access, IPTV facility, video-on-demand, etc.

Therefore, it is evident that telecom has permeated every level of operations in the hospitality and travel sectors.

 
 

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