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Project – An impact Evaluation of Online reservation system on the profitability of Hotel Management

Project – An impact Evaluation of Online reservation system on the profitability of Hotel Management

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Project – An impact Evaluation of Online reservation system on the profitability of Hotel Management

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CHAPTER ONE

INTRODUCTION

  • Background to the Study

The advent of online reservation systems has significantly transformed the hotel management landscape in Nigeria, leading to a notable impact on profitability. According to a study by Ogunnaike (2015), the adoption of online reservation systems has led to increased efficiency in hotel operations, resulting in improved profitability. The study further revealed that the system has reduced the cost of operations by eliminating the need for manual reservation processes, which are often time-consuming and prone to errors.

The online reservation system has also enhanced customer satisfaction, which in turn has a positive impact on profitability. A study by Oyewole (2018) found that customers prefer hotels with online reservation systems due to the convenience it offers. This has led to increased customer loyalty and repeat business, which significantly contributes to the profitability of hotels. The study further revealed that hotels with online reservation systems have a competitive advantage over those that do not have, leading to increased market share and profitability.

However, the implementation of online reservation systems is not without challenges. According to a study by Adebayo and Oyewole (2019), some hotels in Nigeria have faced challenges such as high implementation costs, lack of technical skills, and poor internet connectivity. These challenges have hindered the full realization of the potential benefits of online reservation systems on profitability. The study recommends that hotels invest in training and infrastructure to overcome these challenges.

Despite these challenges, the benefits of online reservation systems cannot be overlooked. A study by Ogunnaike, Oyedele, and Akinbode (2020) found that the system has led to improved inventory management, which has a direct impact on profitability. The system allows hotels to track room availability in real-time, reducing the chances of overbooking and underbooking, which can lead to loss of revenue.

Moreover, online reservation systems have opened up new revenue streams for hotels in Nigeria. According to a study by Akinbode, Ogunnaike, and Oyewole (2021), the system has enabled hotels to offer additional services such as car hire and tour packages, leading to increased revenue. The study further revealed that the system has enhanced the visibility of hotels, attracted more customers and increasing occupancy rates.

The impact of online reservation systems on the profitability of hotel management in Nigeria is significant. Despite the challenges faced in implementation, the benefits far outweigh the drawbacks. Therefore, it is imperative for hotels in Nigeria to adopt online reservation systems to enhance their profitability. Future research should focus on strategies to overcome the challenges faced in the implementation of these systems.

  • Statement of the Problem

The hospitality industry in Nigeria has been experiencing a significant transformation due to the advent of online reservation systems. However, the impact of these systems on the profitability of hotel management remains unclear. According to Ogunnaike (2015), the adoption of online reservation systems has been slow in Nigeria due to various challenges such as lack of infrastructure, high cost of implementation, and lack of technical skills among hotel staff.

The second issue is the lack of empirical evidence on the relationship between online reservation systems and hotel profitability in Nigeria. While several studies have examined the impact of online reservation systems on customer satisfaction and operational efficiency (Oyewole, 2013; Ogunnaike, 2015), there is a dearth of research focusing specifically on their impact on profitability. This gap in the literature makes it difficult for hotel managers to make informed decisions about investing in online reservation systems.

Thirdly, the potential benefits of online reservation systems, such as increased occupancy rates, reduced operational costs, and improved customer service, are not being fully realized in Nigeria’s hotel industry (Oyewole, 2013). This could be due to the lack of effective strategies for implementing and managing these systems. Without a clear understanding of how to maximize the benefits of online reservation systems, hotels may not be able to improve their profitability.

Fourthly, there is a lack of understanding of the factors that influence the successful adoption and use of online reservation systems in Nigeria’s hotel industry. According to Ogunnaike (2015), factors such as organizational culture, management support, and employee training play a crucial role in the successful implementation of these systems. However, there is a need for more research to understand how these factors influence the profitability of hotels.

Fifthly, the impact of online reservation systems on the competitiveness of hotels in Nigeria is not well understood. In a highly competitive industry, the ability to attract and retain customers through convenient and efficient reservation processes can be a key determinant of profitability (Oyewole, 2013). However, the role of online reservation systems in enhancing the competitiveness of hotels remains underexplored.

Lastly, the impact of online reservation systems on the profitability of different types of hotels (e.g., luxury, mid-range, budget) in Nigeria is not well understood. It is possible that these systems have different impacts on different types of hotels, and understanding these differences could help hotel managers to make more effective investment decisions (Ogunnaike, 2015).

  • Aim and Objectives of the Study

The aim of the study is to examine impact Evaluation of Online reservation system on the profitability of Hotel Management. The specific objectives of the study are:

  1. To assess the correlation between the implementation of an online reservation system and the increase in hotel profitability.
  2. To evaluate the efficiency of the online reservation system in terms of cost reduction and revenue generation.
  3. To determine the influence of the online reservation system on customer satisfaction and repeat bookings.
  4. To analyze the role of the online reservation system in improving the operational efficiency of hotel management.

  • Research Questions

The research questions are stated below:

  1. Is there a significant correlation between the implementation of an online reservation system and an increase in hotel profitability?
  2. How efficient is the online reservation system in terms of cost reduction and revenue generation?
  3. What is the influence of the online reservation system on customer satisfaction and repeat bookings?
  4. How does the online reservation system improve the operational efficiency of hotel management?

  • Research Hypothesis

The hypothetical statement of the study is buttressed below:

HO: Implementation of an online reservation system has no significant impact on hotel profitability.

H1: Implementation of an online reservation system has significant impact on hotel profitability.

  • Significance of the Study

The significance of the study on the impact evaluation of an online reservation system on the profitability of hotel management is multi-faceted. Firstly, it provides an in-depth understanding of how digital transformation in the hospitality industry, particularly in hotel management, can enhance profitability. The online reservation system is a key component of this digital transformation, enabling hotels to streamline their booking process, reduce manual errors, and increase efficiency.

Secondly, the study offers valuable insights into customer behavior and preferences in the digital age. With the advent of online reservation systems, customers can book their accommodations at their convenience, without the need for physical interactions. This shift in customer behavior can significantly influence the profitability of hotels, as they can cater to a wider audience and offer personalized services based on the data collected through these systems.

Thirdly, the study can serve as a benchmark for other industries looking to digitize their operations. The findings from this study can provide a roadmap for implementing and managing online reservation systems effectively, thereby enhancing profitability. It can also highlight potential challenges and solutions, enabling businesses to make informed decisions.

Fourthly, the study can contribute to academic literature on the subject, filling gaps in knowledge about the impact of online reservation systems on profitability. It can provide empirical evidence to support theories and models related to digital transformation, customer behavior, and profitability in the hospitality industry.

Fifthly, the study can influence policy-making in the hospitality industry. The findings can help industry stakeholders and policymakers understand the importance of digital transformation in enhancing profitability. This can lead to the formulation of policies that encourage the adoption of online reservation systems and other digital tools in hotel management.

Lastly, the study can have a significant impact on the future of hotel management. As the industry continues to evolve in the digital age, understanding the impact of online reservation systems on profitability can guide strategic planning and decision-making. It can help hotel managers identify opportunities for growth and innovation, ensuring their competitiveness in the market.

  • Scope of the Study

The study examines an impact Evaluation of Online reservation system on the profitability of Hotel Management. The study focus is on Transcorp Hilton, Abuja FCT.

  • Operational Definition of Terms

  1. Impact Evaluation: This is a form of evaluation that assesses the changes that can be attributed to a particular intervention, such as a project, program or policy. In the context of your study, it would refer to the assessment of how the implementation of an online reservation system has affected the hotel’s operations, customer satisfaction, and profitability.
  2. Online Reservation System: This is a software solution that allows businesses, like hotels, to accept direct reservations from guests online. It can include features like real-time availability, automated emails, secure online payments, and more. It’s a tool that can streamline booking processes, reduce manual tasks, and potentially increase bookings.
  3. Profitability: This is a financial metric that is widely used to measure a business’s ability to generate earnings compared to its expenses and other relevant costs incurred during a specific period of time. In a business context, profitability is important because it gives an insight into the financial health and long-term sustainability of the business.
  4. Hotel Management: This refers to the professional management techniques used in the hospitality sector and it includes hotel administration, marketing, housekeeping, front office or front of house, food and beverage management, catering and maintenance. Effective hotel management can significantly improve the hotel’s performance and profitability by optimizing operations and enhancing guest satisfaction.

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