KENYATTA UNIVERSITY

SCHOOL : HOSPITALITY AND TOURISM

DEPARTMENT

HOSPITALITY MANAGEMENT

UNIT NAME UNIT CODE STUDENTS NAME ADM NO. TASK

: : : : :

MANAGEMENT INFORMATION SYSTEMS HTM 505 JOHN KAMAU T129/OL/20638/2011

ASSIGNMENT

SUBMITTED TO

: MR. MOSES N. MIRICHO MHCIMA, M.Sc.

Assignment submitted to the School of Hospitality & Tourism Management in partial fulfillment of the requirements for the award of M.Sc. (Hospitality & Tourism Management) of Kenyatta University.

2011

TABLE OF CONTENTS 1.0 INTRODUCTION................................................................................................................................. 1 2.0 SERVICE QUALITY ........................................................................................................................... 2 3.0 RFID TECHNOLOGY ITS APPLICATION IN TOURISM AND HOSPITALITY CHALLENGES AND CONCERNS .......................................................................................................... 3 RFID History and Architecture ................................................................................................................. 3 RFID Applications in Tourism ................................................................................................................. 4 Challenges and Concerns of Implementing RFID Technology ................................................................ 5 Cost Justification and Feasibility of RFID Technology ........................................................................ 5 Privacy and Ethical Issues..................................................................................................................... 5 4.0 BENEFITS AND CONTRIBUTION OF RFID IN THE HOTEL AND TOURISM INDUSTRY 6 5.0 CONCLUSIONS AND RECOMMENDATIONS .............................................................................. 7 Appendix A ................................................................................................................................................ 10

1.0 INTRODUCTION
High market share, Customer satisfaction, and profitability of service organizations are enhanced by service quality (Hoffman and Bateson, 1977). As service quality has become more increasingly important to a service organization. Service Innovation has been found to be one of the ways to improve service. Innovative use of technology have been found to affect the ability of tourism organizations such as hotels to support employees, to enhance the quality of service, improve efficiencies gain competitive advantage, maintain relationships with customers and improve profitability (Lee and Baker 2003). Therefore, Tourism has always been one of the principal application areas for technological advancements. Radio frequency identification (RFID) is an automatic identification method, relying on storing and remotely retrieving data using devices called RFID tags or transponders. RFID systems use radio waves to transmit information from an integrated circuit tag through a wireless interchange to a host computer (Clarke et al., 2006). While RFID provides promising benefits such as inventory visibility and business process automation, some significant challenges on information systems and technologies (IS/IT) need to be overcome before these benefits can be realized. One important issue is how to process and manage RFID data, which is typically in large volume, noisy and unreliable, time-dependent, dynamically changing, and of varying ownership. Another issue is how to seamlessly integrate low-level RFID data into (existing) enterprise information infrastructures (e.g., upper-level business processes). Finally, given the ability of inexpensively tagging and thus monitoring a large number of items and/or people, RFID raises some serious security and privacy concerns.

The paper investigates the possibility of utilizing RFID as a tool for improving service quality in hospitality industry. A brief review is given on RFID technology; current RFID applications in tourism industry are illustrated. Opportunities, threats, and costs of the technology are discussed. Service quality dimensions that can be used in hospitality are identified, and the effects of RFID implementations are evaluated by a hypothetical case study. 2.0 SERVICE QUALITY Hoffman and Bateson, (1997) state that high-quality services improve customer satisfaction, increase market share, and enhance profitability of service organizations. The paper identifies service innovation as projected by Burrill and Ledolter, (1998) as one of the key strategies that enhances service quality. Service innovation involves introduction of radical changes to the existing system with a new system. Hospitality firms, such as hotels, are shown as an ideal example of a market that could benefit from service innovation (Victorino et al., 2005). Service innovation would enable the firms to achieve differentiation by introducing innovative features in their product, attain competitiveness by using technology to understand and focus more on customer preferences and lastly enhance brand loyalty which lacks in the travel who are constrained by budgetary concerns. The service quality model (SERVQUAL) by Parasulaman et al (1988) is measured by perception minus expectation and that service quality is the determined by the gap between customer perception and perceived performance. SERVQUAL states five dimensions for service quality: tangibles, reliability, assurance, responsiveness, and empathy. The LODGSERV model has been designed specifically for assessing service quality in Hotels (Knutson et al., 1990). It asserts that among the five dimensions of SERVQUAL Reliability
2

ranked as the most important factor while being followed by assurance, responsiveness, tangibles, and empathy respectively. Gronroos (1984) summarizes quality based on the features that consumers receive as a result of service that is the technical quality and how the consumers receive services or the evaluation of the service process called the functional quality. Gronroos (1988) later identifies (a) professionalism and skills, (b) attitudes and behavior, (c) accessibility and flexibility, (d) reliability and trustworthiness, (e) recovery, and (f) reputation and credibility as the six dimensions of service quality that would be useful for managerial purposes. 3.0 RFID TECHNOLOGY ITS APPLICATION IN TOURISM AND HOSPITALITY CHALLENGES AND CONCERNS RFID are devises and technology that use radio signals to exchange identifying data. It could be a tag or label that identifies a particular object. Auto-Id is a method of recognizing objects, getting information about them, and entering that data or feeding it directly into the computer systems without any human involvement. Current uses of RFID technology include (POS), automated vehicle identification (AVI) system, access control within buildings, animal identification, asset tracking, warehouse management and logistics, product tracking in supply chain, and raw material tracking/ parts movement within factories. RFID History and Architecture Radio which is the wireless transmission of signals, by modulation of electromagnetic waves with frequencies below those of visible light has evolved from military use in the World War II late 1940s to commercial use in the early 1960s. In this period of the 1960s and 70s the electronic article surveillance system (EAS), which uses a simple form of RFID was used to prevent shop lifting other commercial uses later followed including livestock tagging, toll road
3

payment systems, and production assembly lines. Advances in information technology and cost reduction in system components reinforced the increase in the new application areas (Finkenzeller, 2002). The RFID system architecture consists of two main components and another auxiliary but important component. The system consists of: i. Tags/label These are also known as transponders. A transponder is a gadgets that is a combination of transmitters and receiver that is designed to receive specific radio signal and automatically transmit a reply. Tags come in many types: (i) Read and write (ii) Read- only or (iii) write-once, read many e.t.c. They can also be categorized according to their working principle. Passive tags which do not have their own power and can oly be used in short distances and active tags which are powered and can be used over long distances. ii. Reader also known as transceivers a combination of transmitter and receiver. The main role of the reader is to receive data from a tag. iii. Middleware- is a general type of software that manages the readers and

RFID Applications in Tourism Based on different aims of usage RFID applications can be illustrated in four major groups, these are: i. Human tracking and Control systems example: E-passports, Customer loyalty management, tracking children, Airport Security e.t.c. ii. Assets and valuables tracking systems example: Luggage tracking, RFID- tagged casino chips, Food and Beverage management e.t.c.
4

iii.

Contactless payment systems- example: toll collection system, RFID-tagged public transport cards, payment in hotel, keyless room entry e.t.c.

iv.

RFID-based information- example: Museums, shopping street e.t.c.

Challenges and Concerns of Implementing RFID Technology In the quest to achieving service quality through implementation of RFID technology two major challenges and concerns have to be considered. Firstly, Cost justification and feasibility of RFID technology and Secondly, privacy and ethics concerns. Cost Justification and Feasibility of RFID Technology There has been extensive research on the cost justification and feasibility of RFID technology for the conventional applications such as warehousing or retail sector uses .However for economic analysis of RFID in the tourism sector, one has to differentiate the premises of RFID in tourism than the acknowledged benefits of RFID in any other area. While much of the existing analyses are based simply of summing up the cost of eliminated technology as a result of RFID in the service sector new business opportunities or benefits that spring up as a result of implementation of RFID technology should also be factored in the measurement. New approaches and intensified analysis should be applied to help quantify the premise of gained customer loyalty as a result of RFID technology implementation. Privacy and Ethical Issues Westin (1967) defines privacy as the ability of the individual to control the terms under which personal information is acquired and used. Westin also defines information privacy as the claim of individuals, groups, or institutions to determine for themselves when, how, and to what extent information about them is communicated to others.

According to Angeles (2007) The use of RFD poses several privacy and ethical challenges (i) the RFID tag can be made invisible to consumers who may not bring up the matter of their presence at all. (ii) Information can be collected without the consumers knowledge or active participation in surrendering their personal information, and no record of the information gathered is provided to the consumers.(iii) as tag readers are installed more ubiquitously, firms will be encouraged to more extensively collect data about tags they attach to products they sell, and share this information. 4.0 BENEFITS AND CONTRIBUTION OF RFID IN THE HOTEL AND TOURISM INDUSTRY Using Parasulamans SERVQUAL model and Gronroos theory of service quality the benefits of rfid technology can thus be summarized as i. RFID applications support reliability, responsiveness, and empathy declared by SERVQUAL and also supports flexibility and professionalism determinant of service quality mentioned by Gronroos (1988). With RFID systems integration, smart hotel can provide all the information about the customer, including the average temperature and light of the room, the preferred inner hotel activities, and the meal and drinking preferences. If the same visitors enter the hotel next time, they should find their room with the lighting and temperature that they prefer; the mini-bar in the room may be filled according to their past choices. ii. Access control, cashless payment, and tracking system, present an attachment for the reliability of the organization. RFID also supports professionalism sub-dimension

mentioned by Gronroos (1988) with the new skills and features it provides to the organization. iii. Finally, RFID-integrated systems generate customer data about service usage, priorities, and preferences; these data provide the knowledge hotels need to under- stand the customer and response in the right way thereby generating brand loyalty. 5.0 CONCLUSIONS AND RECOMMENDATIONS In light of the potential benefits accrued by use of RFID technology in the hotel and tourism industry, implementation of such technology could make some of normal standard of operations in the future. New opportunities and products as a result of RFID technology implementation will also increase the product offering. Improvement of service quality is another obvious benefit of this technology. Implementation of this technology brings with it challenges of cost benefit quantification analysis and also privacy and ethical concerns. While this paper identifies and acknowledges this concerns and challenges it has not concentrated on how to tackle them effectively. It is therefore, recommended that more research on the impacts of RFID technogly implementation is carried out. For instance how can we measure the potential benefits of RFID based on the expected results after implementation.

REFERENCES Angeles, R., 2007. An emprical study of the anticipated consumer response to RFID product item taggig. Industrial Management and Data Systems 107/4, 461483. Besar,O, Sedar, B and Fatma A 2009. Radio Frequency Identification(RFID) in Hospitality.Technovation (29) 618-624 Burrill, C.W., Ledolter, J., 1998. Achieving Quality Through Continual Improvement. Wiley, New York. Clarke, R.H., Tewde, D., Tazelaar, J.R., Boyer, K.K., 2006. Radio frequency identification (RFID) performance: the effect of tag orientation and package contents. Packaging Technology and Science 19, 4554 Finkenzeller, K., 2002. The RFID Handbook. Wiley, England. Gronroos, C., 1984. A service quality model and its marketing implications. European Journal of Marketing 18, 3644. Gronroos, C., 1988. Service quality: the six criteria of good perceived service quality. Review of Business 9, 1013 Hoffman, D., Bateson, J., 1997. Essentials of Service Marketing. Dryden Press, London. Knutson, B., Stevens, P., Wullaert, C., Yokoyoma, F., 1990. LODGSERV: a service quality index for the lodging industry. Hospitality Research Journal 14, 227284. Lee, L.S., Fiedlera, K.D., Smith, J.S., 2008. Radio frequency identification (RFID) implementation in the service sector: a customer-facing diffusion model. International Journal of Production Economics 112, 587600. Victorino, L., Verma, R., Plaschka, G., Dev, C., 2005. Service innovation and customer choices in the hospitality industry. Managing Service Quality 15 (6), 555576. Westin, A., 1967. Privacy and Freedom. Antheneum, New York. .

Appendix A

10