Chapter 6

Demand-driven eTourism

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Chapter Objective

The trends toward eTourism The reasons that motivate people

purchasing tourism online The reasons that discourage people

from purchasing tourism online ICT revolution and tourist

satisfaction

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Introduction

Increasingly customers are become much more sophisticated and discerning, as a result of experiencing high levels of service and also because of standard of living has improved considerably, and thus they enjoy advanced facilities in their everyday environment.

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Tourists become demanding requesting high-quality products and value for their money and perhaps more importantly, value for time for the entire range of their dealings with organizations.

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Leisure vs Business Travel demand and the internet implications

Inevitably, frequent business travelers are more familiar with travel arrangements and often have considerable expertise as regards destinations or particular products.

Business trips are often classified into Meetings, Incentives, Conferences and Exhibitions (MICE) categories.

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It is increasingly evident that business travellers use the Internet independently to book their tickets and often to make more complicated travel arrangements.

They often compare prices and offers available on-line versus arrangements proposed by Company.

In contrast leisure traveling has been much slower to take off on the Internet than many industry analysts had anticipated.

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The Internet has not yet been explored fully by the leisure market to a particular level, these reasons include:

People that take package holidays often belong to lower economic classes and are less familiar with computers and have a lower Internet penetration

The complexity of family holidays create conditions difficult to program and model

Commercial interests of tour operators Fairly high degree of substitution

between destinations and products

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Higher price elasticity of package holidays

Integrated nature of distribution channel facilitating direct sales

Low profit margins do not allow great investment in ICTs

Legacy systems used by tour operators.

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Quantitative growth of tourism demand and online population

The WTO Tourism 2020 Vision forecasts that international tourism arrival are expected to reach over 1.6 billion by the year 2020.

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Online population and online tourism demand The Computer Industry Almanac

estimates that nearly 625 million people or 6.7 per cent of the global population had Internet access worldwide in June 2001.

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Motivators for using the Internet for travel:

The richness and depth information Ease in identifying information Self-service and economical Available at all times Products are offered at discounted

prices as suppliers pass distribution saving on to consumers.

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Motivation factors for Europeans to purchase more products online

Better price Better security for credit card and personal information Easier comparison with shops Ability to get answers from merchant Better information about products Greater trust in particular online merchants Internet stores use local language Ability of loyalty rewards Easier to order Greater familiarity with the Internet and online purchasing

64%56%

49%48%48%38%38%37%36%17%

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Demand for tourism online and eCommerce Increasingly consumers become familiar

with ICTs and expect that tourism suppliers will have interactive interfaces online to support purchasing and discussion about specific requirements.

The Travel Industry Association of America has predicted that travel and tourism will be one of the most popular products for online purchasing in the emerging electronic marketplace.

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Reasons that discourage people from purchasing tourism online User/client factors

Plans were not definite Safety and security of credit cards on

network Cannot see or touch the product No trust, unfamiliar name Prefer regular travel agency Afraid of making mistakes

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Did not realize that they could make reservations

Would rather talk to a real person Concerned about privacy of

information Someone else made the reservations Don’t own a credit card

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Reasons that discourage people from purchasing tourism online

Internet/business factors Takes too long to enter information Navigation difficulty Use corporate travel agency Can’t get confirmation Internet chaotic and difficulty in

finding suitable information Not enough selection available

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Internet doesn’t give lowest prices/deals

Didn’t need to book anything Internet too slow and takes a long

time to find suitable products Too confusing/complicated Internet doesn’t give up-to-date

information

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Qualitative growth of tourism demand Tourism demand is undergoing a

great transformation and qualitative trends are applying more pressure on the industry to use ICTs.

Tourists become sophisticated and more demanding, requesting high-quality products.

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The Internet has enable the new type of tourist to become more knowledgeable and to seek exceptional value for money and time. New consumers are more culturally and environmentally aware and they often like a greater involvement with the local society.

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The Internet not only provides information about the tourism products they can consume but also a whole range of additional data about the resources, history and social and economic structure of destinations.

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ICT revolution and tourist satisfaction Customer satisfaction for travellers

as a result of ICT tools Reduction of the gap between

expectations and perceived experience due to more information and virtual experience before consumption

Consumers have more information and enjoy greater choice

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Better understanding of consumer needs based on research, interaction and data mining

Consumers feel empowered to get information on products and services of Internet

Pricing becomes more flexible as organizations are willing to provide great discounts for last-minute, target offers and special promotions

New business models enable consumers to name the price they are willing to pay

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New value-added services A reduction of the bureaucracy and

paper-work frees employee time for better customer service

Automation of boring operational tasks through ICTs

Personalize services Better integration of departments and

functions of organizations towards better service

User-friendly and customize interface

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Language barriers increasingly reduced through development of interfaces to serve all target markets and also through automatic translation

Differentiated and customized services, according to personal lifestyle, preferences and attitudes, rather than socio-demographic segmentation

Customization of the product and the establishing of one-to-one marketing by using intelligence by loyalty schemes

Accurate and much richer marketing research by collecting data from all transactions and enquiries