Chapter 3

eTourism: the dynamic interaction

of ICTs and tourism

SESSION OBJECTIVES

●Introduce the eTourism concept

●Demonstrate technological solutions & equipment. Explore

how each element of ICTs is used in tourism. Introduce ICTs

which are used extensively in tourism

●Understand the structure and components of the tourism

system. Explore some generic ICTs applications and

identify them as technological enablers for the tourism

industry

●Engage with the concept of Computer Reservation System

& Global Distribution Channels

●Appreciate the issue of technological convergence in the

tourism field

●Conceptualise a framework for dynamic use of ICTs

●Identify the tourism organisation stakeholders

●Explore how ICTs can integrate the entire industry &

economy

INTRODUCTION

●The tourism system is inevitably influenced by the new

business environment created by the diffusion of ICTs

●Information Technology is one of the external environment

elements for tourism, travel & hospitality

●In recent years technological developments have supported

tourism innovation and vice versa

●ICTs have become an imperative partner for tourism

●They offer the interface between consumers & suppliers

globally

●ICTs provide the tools and enable the evolution of tourism

demand & supply

●eTourism reflects the digitisation of all processes and value

chains in the tourism, travel, hospitality & catering

industries

●At the tactical level it includes eCommerce, eProcurement

and all ICT empowered functions

●eTourism applies ICTs for maximising the efficiency &

effectiveness of the tourism organisation

●At the strategic level it revolutionises all business

processes and changes the industry structure

●Hence it revolutionises the entire value chain & the

strategic relationships of tourism organisations with all

their stakeholders

The eTourism concept

●eTourism determines the competitiveness of all tourism

organisations and destinations

●Takes advantage of intranets, extranets & the Internet

●It includes all business functions

●eTourism bundles together three distinctive disciplines

- Business & management

- Information systems and information management

- Tourism, travel, hospitality

The eTourism concept (continued)

The eTourism mixThe eTourism mixThe eTourism

concept and

eTourism

domains

Best operational practices

in tourism by ICTs

●Major drivers make ICTs an integral part of

the tourism industryoEconomic necessity

oThe proliferation of the Internet

oDevelopment of 3G mobile devices & interactive

television

oImprovements in ICTs' price/performance ratios

oRising consumer expectations

oICTs can also assist the reduction of operation

and communication costs

ICTs changes best operational practices

in tourism ●Integrating operational systems

●Maximising internal efficiencies

●Decreasing the number of people required for

back office jobs

●Reducing the amount of face to face or

telephone communications

●Enabling consumers to have access to all

information that was previously only

obtainable by direct contact with tourism

organisations.

ICTs assist the reduction of operation

& communication costs by:●Integrating operational systems

●Maximising the internal efficiencies

●Decreasing the number of people required for

back office jobs

●Reducing the amount of face to face or

telephone communications

●Enabling consumers to have access to all

information

THE TOURISM SYSTEM & IT

The tourism industry and tourism system

Source: Adapted from Leiper (1995); Cooper and Buhalis (1998)

Critical tourism and hospitality functions

supported by ICTs

●Front office: reservations, check-in, payments

●Back office: accounting, payroll, human resources management, marketing, procurement

●Communication with consumers and partners

●Control of business processes and personnel

●Customer entertainment and service

●Marketing research and industrial espionage

●Reaction and management of unexpected events

●Flexible and dynamic pricing

●Differentiation and personalisation of products

●Monitoring performance indicators

●Building feedback mechanisms

Telecommunications & Networking tools

in the Tourism Industry

●Telephone, telex and fax

●Mobile devices

●Telex

●Videotext and viewdata

●Teletext

●Electronic Data Interchange (EDI)

●Inter-organisational & Intra-organisational

networking

●Virtual reality

●Information superhighway (converges media,

telecommunications and information technology)

Software classification scheme

Examples of ICT Applications in the

tourism industry used currently

●Entire range of hardware, software and netware●Stand-alone computers and network devices●Office automation, reservation, accounting, payroll and

procurement management applications●Portable/wireless communication devices●Internal management tools such as management support

systems, decision support systems and management

information systems●Tailor-made internal management applications●Databases and knowledge management systems●Internet/Intranets/Extranets●Networks with partners for regular transactions (EDI or

Extranets)●Networking and open distribution of products through the

Internet

Examples of ICT Applications in the

tourism industry used currently (continued)●Computer Reservation Systems (CRSs)●Global Distribution Systems (GDSs) (e.g. Galileo, SABRE,

Amadeus, Worldspan)●Switch applications for hospitality organisations (e.g.

THISCO and WIZCOM)●Destination Management Systems (DMSs)●Internet-based travel intermediaries (e.g. Expedia.com,

Travelocity.com, Preview Travel, Priceline.com etc)●Mobile/WAP based reservation systems●Traditional distribution technologies supporting

automated systems (e.g. Videotext)●Calling centers●Interactive Digital Television (IDTV)●CD-ROMs●Kiosks and touch screen terminals

Major ICT applications in the tourism industry

●Computer Reservation Systems (CRSs) assist tourism

enterprises:oHandle their inventories profitably

oFacilitate the tourism products distribution

oNormally operated by airlines, hotels & tour operators

oDistribute products nationally or globally

oUse computerised or videotext systems

oUse mainframes & extensive networks to support remote

terminals in travel agencies

o Instant update of information

●Advantages: support reservation/confirmation/purchase of

a wide range of tourism products

●Disadvantages: installation and usage costs, lack of user

friendliness and bias in favour of their vendors

Major ICT applications in the tourism industry (continued)

●Global Distribution Channels (GDS)o incorporate a comprehensive range of services and products

oprovide a global distribution info-structure

osatisfy consumers' need for easy access

oprovide transparent and easy to compare information

●Tourism suppliers use CRSs & GDSs to manage &

distribute their capacity as theyoenable flexible pricing & capacity alterations

oreduce communication costs

oprovide managerial information on demand patterns or

competitors' position

oserve the travel trade (intermediaries)

osupport quick and firm responses to customers' enquiries

Computer Reservation Systems and Global Distribution Systems as

drivers for tourism and hospitality globalisation

Functions of intranets in tourism

●Information exchange within a tourismorganisation●Management support

strategic planning competition analysis financial planning and control accounting and finance marketing research marketing strategy & implementation pricing decision and tactics middle term planning & feedback management statistics/reports operational control management functions

Source: Adapted from Buhalis (1998)

Functions of intranets in tourism (continued)

●Communication between departments business functions networking & information exchange human resources management staff coordination operational planning accounting/billing payroll supplies management

●Communication and function with branches coordination of operations reports and budgeting availability/prices/information orders from

headquarters/administration share of common resource databases for customer

and operational informationSource: Adapted from Buhalis (1998)

Functions of extranets in tourism

●Links between partners●availability/prices inquiries

onegotiations and bargaining

●reservations & confirmationso lists of groups/visitorso receipts/documentsovouchers & tickets production

●travelling facilitationo follow up progressokeep partners informed about plansoamend plans should unexpected developments ariseo follow up developments

●feedback and clearing commissionsopayment & commissions clearanceo feedback & suggestionsocomplaint handlingobuilding loyalty through data mining

Functions of Internet in tourism

●Information distribution ●Electronic commerce

●Request availability/prices/information

●Reservation & confirmation

●Expanding value chain with complementary

products

●Deposits and full settlements

●Specific requests/enquiries

●Feedback/complaints

●Ancillary services

Networking eTourism organisations.