Chapter 10 The Future Of Hospitality And Tourism E- commerce And Information Technology E-commerce...

Chapter 10Chapter 10

The Future Of Hospitality And Tourism E-The Future Of Hospitality And Tourism E-

commerce And Information Technologycommerce And Information Technology

E-commerce and Information E-commerce and Information Technology in Hospitality and TourismTechnology in Hospitality and Tourism

Copyright 2004 by Zongqing Zhou, PhDNiagara University

Learning ObjectivesLearning Objectives

• After you complete your study of this After you complete your study of this chapter, you should be able to:chapter, you should be able to:– Describe new technology trends.Describe new technology trends.– Understand new e-commerce Understand new e-commerce

paradigms.paradigms.– Grasp new e-commerce strategies.Grasp new e-commerce strategies.– Understand the issues, problems, and Understand the issues, problems, and

barriers in hospitality and tourism e-barriers in hospitality and tourism e-commerce and information technology.commerce and information technology.

– Understand the implications of all those Understand the implications of all those changes.changes.

10.1 New Technologies, New 10.1 New Technologies, New Paradigms, And New StrategiesParadigms, And New Strategies

• With new technologies, new paradigms are With new technologies, new paradigms are being created, and therefore new strategies are being created, and therefore new strategies are being formed to compete in this ever changing being formed to compete in this ever changing but profitable world of e-commerce in the but profitable world of e-commerce in the hospitality and tourism industry hospitality and tourism industry

10.2 New Technology Trends10.2 New Technology Trends

• The needs of humankind for The needs of humankind for technologytechnology– communicationcommunication– information distributioninformation distribution– business transactionsbusiness transactions

10.2 New Technology Trends (cont.)10.2 New Technology Trends (cont.)

• The Internet is the beginning of the The Internet is the beginning of the continuous process of seeking continuous process of seeking communications that iscommunications that is– instantinstant– real-timereal-time– 24/724/7– mobile and accessible anywheremobile and accessible anywhere


• Future developments in technology can be Future developments in technology can be predicted to continue the process. And so the predicted to continue the process. And so the new trends will be:new trends will be:– BroadbandBroadband– Mobility and accessibilityMobility and accessibility– Instant messaging (IM)Instant messaging (IM)– Convergence of technologiesConvergence of technologies– Integration of business and e-commerce Integration of business and e-commerce – voice recognitionvoice recognition– tracking technologiestracking technologies– wireless communicationswireless communications


• BROADBAND AND SPEEDBROADBAND AND SPEED– Broadband will be key in solving the speed problem.Broadband will be key in solving the speed problem.– The diffusion of broadband technology among The diffusion of broadband technology among

Internet users will greatly increase the appeal of Internet users will greatly increase the appeal of hospitality and tourism e-commerce since the hospitality and tourism e-commerce since the intangible nature of hospitality and tourism services intangible nature of hospitality and tourism services requires much more visual information and requires much more visual information and interaction over the Internet than any other industry.interaction over the Internet than any other industry.

– Broadband technologies such as DSL, ISDN, cable, Broadband technologies such as DSL, ISDN, cable, fiber optics, satellite, and radio wireless will become fiber optics, satellite, and radio wireless will become the norm in the future.the norm in the future.

– In the future, the question will change from ‘What In the future, the question will change from ‘What can you put onto the Web that consumers can view can you put onto the Web that consumers can view without difficulty?’ to “What can you do to make without difficulty?’ to “What can you do to make your presentation and communication more your presentation and communication more effective?” effective?”


• MOBILITY AND ACCESSIBILITYMOBILITY AND ACCESSIBILITY• Mobility and accessibility are key in meeting the Mobility and accessibility are key in meeting the

needs of the consumers. needs of the consumers. • Wireless and satellite communication provides Wireless and satellite communication provides

such a solution to solve the problem.such a solution to solve the problem.• Handheld devices, such as PDAs (personal digital Handheld devices, such as PDAs (personal digital

assistants) and cell phones will take the market assistants) and cell phones will take the market lead in the years to come.lead in the years to come.

• location-based technology will enable travelers location-based technology will enable travelers who either know their location or where they are who either know their location or where they are headed input their address or the destination headed input their address or the destination address.address.


• location-based technology will enable travelers who location-based technology will enable travelers who either know their location or where they are headed either know their location or where they are headed input their address or the destination address.input their address or the destination address.– find restaurants, stores, theaters, and so on for the traveler.find restaurants, stores, theaters, and so on for the traveler.

– provide interactive functions that permit people in different provide interactive functions that permit people in different locations to communicate via IM (instant messaging), or locations to communicate via IM (instant messaging), or play tic-tac-toe togetherplay tic-tac-toe together

– view restaurant listings together to decide where to meet.view restaurant listings together to decide where to meet.


• INSTANT MESSAGING (IM)INSTANT MESSAGING (IM)– IM is a live chat and e-mail service that enables you to find IM is a live chat and e-mail service that enables you to find

your friends when they are online and send messages or your friends when they are online and send messages or talk via a private chat room.talk via a private chat room.

– With IM, each user has a private list of instant messaging With IM, each user has a private list of instant messaging addresses, and the instant messaging system can be set to addresses, and the instant messaging system can be set to alert you when someone on your list is online.alert you when someone on your list is online.

– Hospitality and tourism e-commerce can use this Hospitality and tourism e-commerce can use this technology to send customized information ranging from technology to send customized information ranging from travel conditions to flight cancellation.travel conditions to flight cancellation.


• Convergence Of TechnologiesConvergence Of Technologies– The convergence of all communications media through the The convergence of all communications media through the

Web.Web.

– Convergence refers to the integration of voice, data, and Convergence refers to the integration of voice, data, and video into a single, IP-based network.video into a single, IP-based network.

– The Web will serve as a central communication platformThe Web will serve as a central communication platform where means of communications merge with each other to where means of communications merge with each other to create the most powerful and convenient information create the most powerful and convenient information distribution, communication, and e-commerce channels.distribution, communication, and e-commerce channels.


• Evidence of this convergenceEvidence of this convergence– Destination marketing organizations Destination marketing organizations (DMOs) (DMOs)

begin to use the Internet as a central platform for begin to use the Internet as a central platform for streamlining functions of marketing, travel streamlining functions of marketing, travel information distribution and customer service. information distribution and customer service.

– Hotels’ Hotels’ property management systems property management systems (PMS) (PMS) are not only transformed by the use of Intranet, but are not only transformed by the use of Intranet, but also become accessible to customers by way of also become accessible to customers by way of extranet, providing 24/7 customer service.extranet, providing 24/7 customer service.


• Benefits of convergenceBenefits of convergence– Save revenue by reducing the total cost of ownershipSave revenue by reducing the total cost of ownership

– business empowerment, which includes increasing business empowerment, which includes increasing organizational speed and efficiency, flexibility, and better organizational speed and efficiency, flexibility, and better support for a mobile workforce.support for a mobile workforce.

– with the same IP network, companies can run video over with the same IP network, companies can run video over the network for teleconferencing, a feature that can the network for teleconferencing, a feature that can potentially accrue tremendous savings in travelpotentially accrue tremendous savings in travel..


• Integration Of Business And E-commerce Integration Of Business And E-commerce TechnologiesTechnologies– Reasons for the integrationReasons for the integration

•The development of new technologies has The development of new technologies has made it possible for businesses to use made it possible for businesses to use Internet technologies to transform their old Internet technologies to transform their old business technology solutions into an business technology solutions into an integrated system.integrated system.

•The drive to cut costs in the adoption of new The drive to cut costs in the adoption of new technologies.technologies.


• Voice RecognitionVoice Recognition– With voice recognition, travelers can free up their With voice recognition, travelers can free up their

hands while driving or doing fun things by hands while driving or doing fun things by speaking to voice recognition devices, such as speaking to voice recognition devices, such as handheld computers, instead of typing on a keypadhandheld computers, instead of typing on a keypad

– Through a voice command service, a traveler can Through a voice command service, a traveler can use a wireless device (either a handheld computer use a wireless device (either a handheld computer or a PDA), get e-mail and have it read or receive a or a PDA), get e-mail and have it read or receive a response, and get headlines and make reservations.response, and get headlines and make reservations.


• Tracking TechnologiesTracking Technologies– These technologies are needed by e-commerce These technologies are needed by e-commerce

companies to get users to visit their sites, allow companies to get users to visit their sites, allow shoppers to easily find and buy the products they shoppers to easily find and buy the products they need and enable need and enable electronic customer relationship electronic customer relationship management management (e-CRM) by customization and (e-CRM) by customization and personalization.personalization.


• Wireless CommunicationsWireless Communications1.1. Key wireless technology applicationsKey wireless technology applications2.2. location based services (the ability to locate cell phones to location based services (the ability to locate cell phones to

send information)send information)3.3. voice command service (basic voice recognition voice command service (basic voice recognition

technology)technology)4.4. multimedia (viewing short videos, like trailers for movies multimedia (viewing short videos, like trailers for movies

and videos taken on vacation), speed (faster wireless and videos taken on vacation), speed (faster wireless networking—an Ethernet connection at 11 megabytes per networking—an Ethernet connection at 11 megabytes per second that can match the speed of broadband), and second that can match the speed of broadband), and interoperability (improving the ability to talk to one interoperability (improving the ability to talk to one another).another).


5.5. point of access ( for all sorts of information, such as point of access ( for all sorts of information, such as news, sports, maps, entertainment (e.g., music), news, sports, maps, entertainment (e.g., music), graphics and games, communications (e.g., e-mail)graphics and games, communications (e.g., e-mail)

6.6. instant messaginginstant messaging7.7. SMSSMS (short messaging service)(short messaging service)8.8. transactions such as banking, shopping, and transactions such as banking, shopping, and

reservations.reservations.

10.3 10.3 New ParadigmsNew Paradigms

• Empowerment of the consumers through freedom of Empowerment of the consumers through freedom of choicechoice

• Empowerment of businesses to gather information Empowerment of businesses to gather information from travelers so as to understand their needs and from travelers so as to understand their needs and wantswants

• Empowerment of marketers to market directly to Empowerment of marketers to market directly to consumers consumers

10.3 10.3 New Paradigms (cont.)New Paradigms (cont.)

• The reasons for a new information The reasons for a new information paradigmparadigm– Customer information has become part of a Customer information has become part of a

business’ assets.business’ assets.– E-CRM (electronic customer relationship E-CRM (electronic customer relationship

management): Once we use the terms management): Once we use the terms assets assets and and investment investment to refer to customer to refer to customer information, we are accepting the idea that a information, we are accepting the idea that a long-term relationship with customers is more long-term relationship with customers is more important than any temporary gain. important than any temporary gain.


• Personalization And Customization Is KingPersonalization And Customization Is King– In the Internet age, mass marketing and In the Internet age, mass marketing and

commercialization are out, and personalization, commercialization are out, and personalization, customization, and target marketing are in. customization, and target marketing are in.

– The challenge is to customize the information The challenge is to customize the information for the end user, delivering high touch in a for the end user, delivering high touch in a high-tech world.high-tech world.

– Personalization and customization make up the Personalization and customization make up the future of e-commerce.future of e-commerce.


• The Web Site As A 24/7 OfficeThe Web Site As A 24/7 Office– A business Web site must serve as a A business Web site must serve as a 24/7 office 24/7 office or or

an an extension branch extension branch of the business.of the business.

– Only when visitors can find what they need Only when visitors can find what they need quickly and easily and when their visiting quickly and easily and when their visiting experience is satisfactory will they become repeat experience is satisfactory will they become repeat visitors and therefore possiblevisitors and therefore possible customers. customers.

10.3 10.3 New ParadigmsNew Paradigms• Be ready to respond to customer needs Be ready to respond to customer needs

and questions.and questions.– One way is to try to understand these visitors One way is to try to understand these visitors

as soon as they come to your site and give as soon as they come to your site and give them what they want, which requires a high them what they want, which requires a high degree of personalization and customization, degree of personalization and customization, discussed in the previous section. discussed in the previous section.

– A second way is through the design of the Web A second way is through the design of the Web site, that is, anticipating the needs and wants site, that is, anticipating the needs and wants and providing the needed information in an and providing the needed information in an easy-to-find and easy-to-understand manner.easy-to-find and easy-to-understand manner.

– Another way is to create as many interactive Another way is to create as many interactive communication channels as possible so that communication channels as possible so that visitor questions can be responded to and visitor questions can be responded to and answered instantly and satisfactorily.answered instantly and satisfactorily.


• Permission Marketing Is EverythingPermission Marketing Is Everything– The sensitivity of customers to privacy and consumer The sensitivity of customers to privacy and consumer

rights also increases.rights also increases.

– Hospitality and tourism e-commerce businesses must make Hospitality and tourism e-commerce businesses must make sure that they get consumers’ explicit permission to send sure that they get consumers’ explicit permission to send marketing or any type of information.marketing or any type of information.

– Furthermore, they will need to provide an option for Furthermore, they will need to provide an option for consumers to opt out in case they decide not to continue the consumers to opt out in case they decide not to continue the relationship.relationship.


• Disintermediation And Re-intermediationDisintermediation And Re-intermediation– This process of cutting off the middlemen is what This process of cutting off the middlemen is what

has been referred to as disintermediation.has been referred to as disintermediation.

– The Internet also creates a new platform for The Internet also creates a new platform for introducing new e-commerce businesses to fill the introducing new e-commerce businesses to fill the void left by traditional middlemen. This process is void left by traditional middlemen. This process is referred to as re-intermediation.referred to as re-intermediation.

10.4 New Strategies10.4 New Strategies

• New technologies and new New technologies and new paradigms require that hospitality paradigms require that hospitality and tourism e-commerce businesses and tourism e-commerce businesses adopt new strategies adopt new strategies

10.4 New Strategies (cont.)10.4 New Strategies (cont.)

• Service OrientationService Orientation– A customer-and-service-oriented company tries to A customer-and-service-oriented company tries to

understand the customer needs and find solutions understand the customer needs and find solutions to meet their needs. to meet their needs.

– A product-oriented company tries to sell features A product-oriented company tries to sell features of its products and lets customers decide what they of its products and lets customers decide what they want. want.


• Building Virtual CommunitiesBuilding Virtual Communities– Viral marketingViral marketing refers to a process in which refers to a process in which

consumers voluntarily spread a message about a consumers voluntarily spread a message about a company, a product, or a service based on their company, a product, or a service based on their own experience. It is the Internet version of word-own experience. It is the Internet version of word-of-mouth marketing.of-mouth marketing.

– This is made possible because passing information This is made possible because passing information on the Internet is much easier and more convenient on the Internet is much easier and more convenient than through any traditional means.than through any traditional means.


• PartnershipPartnership– In e-commerce, partnership is assuming its old role In e-commerce, partnership is assuming its old role

and in the meantime taking a new name.and in the meantime taking a new name.– Thanks to the pressure of cutting cost, Thanks to the pressure of cutting cost,

consolidation is happening in every sector of the consolidation is happening in every sector of the hospitality and tourism industry, especially in the hospitality and tourism industry, especially in the travel information distribution sector.travel information distribution sector.

– Another new dimension of partnership is being Another new dimension of partnership is being made possible by Internet technologies: The made possible by Internet technologies: The affiliate loyalty program, or affiliate marketing, affiliate loyalty program, or affiliate marketing, discussed in Chapter 6. discussed in Chapter 6.


• Multichannel CommunicationsMultichannel Communications– Multichannel communications means the utilization of a Multichannel communications means the utilization of a

combination of traditional media and Internet technologies combination of traditional media and Internet technologies in marketing and customer service.in marketing and customer service.

– You need to realize that not all your customers have the You need to realize that not all your customers have the same technological skills and may not prefer to use the same technological skills and may not prefer to use the same communication vehicle.same communication vehicle.

– In addition, technology does break down, but today’s In addition, technology does break down, but today’s consumers are notoriously impatient.consumers are notoriously impatient.


• Building Brand With TrustBuilding Brand With Trust– The Internet has made trust an overriding factor in the The Internet has made trust an overriding factor in the

consumer’s choice of services and products.consumer’s choice of services and products.

– The old rule that if you build it, they will come, does not The old rule that if you build it, they will come, does not apply to e-commerce.apply to e-commerce.

– Another old rule of e-commerce in the age of dot-com Another old rule of e-commerce in the age of dot-com boom, “He who comes first will win”, is no longer true boom, “He who comes first will win”, is no longer true with today’s sophisticated online travelers.with today’s sophisticated online travelers.

– Earning the trust of consumers will become a vital strategy Earning the trust of consumers will become a vital strategy for successful e-commerce businesses.for successful e-commerce businesses.

10.5 Issues, Problems, And Barriers10.5 Issues, Problems, And Barriers

• IssuesIssues– Cost: The cost of adopting new technologies Cost: The cost of adopting new technologies

becomes a big issue.becomes a big issue.

– Outsourcing: Related to the cost issue is that of Outsourcing: Related to the cost issue is that of deciding on managing technologies in house or out deciding on managing technologies in house or out of house, that is, outsourcingof house, that is, outsourcing to technology to technology companies.companies.

– Standardization: Standardization of technologies Standardization: Standardization of technologies

10.5 Issues, Problems, And Barriers 10.5 Issues, Problems, And Barriers (cont.)(cont.)

• BarriersBarriers– Online payment methods. Online payment methods.

– ReliabilityReliability

– SecuritySecurity

Chapter 10 The Future Of Hospitality And Tourism E- commerce And Information Technology E-commerce...

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