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The emergence of global electronic markets on the Internet has been seen as an opportunity for small and medium‐sized tourism enterprises to improve their competitive position. However, several barriers hinder small hospitality organizations from capitalizing on IT and the Internet. This paper reports on an action research program of introducing Internet technology in a small hotel located in a peripheral region of Finland. As part of a project funded by the European Union, a complete integrated Web booking and hotel management system was developed, denoting a re‐engineering of many business processes. The system, which features customer online (real‐time) reservation services was an inexpensive, user‐friendly solution specially designed for the purposes of small and medium‐sized hospitality organizations with little prior IT knowledge. In the field of online reservation systems, the hotel is a pioneer, as it is the first independent hotel in Finland to offer online reservation services through a non‐customized reservation system.

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