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1.May.2023 Travel e22 1

ICTs (Information & Communication Technologies)

• Tourism products are therefore almost exclusively depend on "representations & descriptions" .

Dimitrios BUHALIS - Information Technology for strategic tourism management

• Tourism is a very information intensive activity. Unlike durable goods, intangible and variable tourism services cannot be physically displayed or inspected at the point of sale before purchasing. Tourism services are bought before the time of their use and away from the place of consumption.

• Communication and information transmission tools are therefore indispensable to the global marketing of tourism industry


Tourism & ICTs • Thus, tourism &

ICTs increasingly provide strategic opportunities for powerful tools of economic growth, redistribution of wealth and development of equity around the globe.

• However they also instigate new challenges and threads for players that are unable to cope with the developments and are left behind technologically


• Tourism & ICT are 2 key catalysts for enabling dynamic, innovative and knowledgeable communities and organizations to communicate and interact with outside world in order to import expenditures & benefit.


• Question: Whether technological developments drive business strategies or visa versa?

• Answer: Business Strategy & mission of organization should lead their processes and technological developments.


Tourism

• However, it is also evident that unless management appreciates their technological strengths and weaknesses, they will be unable to implement these strategies.

• It is only a matter of time before technological progress provides trouble-free solutions at justifiable costs. Technologies have been surpassing their initial expectations to become commonplace.


Information Management • Information

Management (IT Dept.) is responsible for providing information and communication services and resources for the products and services, operations, management and control activities and co-operative work of an organization.

• It is therefore charged with planning, developing, implementing, operating, and maintaining the information technology infrastructure and all applications of an organization. This is an ongoing process, requires feedback and adjustment at each stage

• Information Management enables organizations to develop systems and processes in order to transform raw data and input from the external and internal environment through software to meaningful & useful information which can support business processes & decisions.This is an ongoing process, requires feedback and adjustment at each stage .



Tourism Determines the competitiveness of an organization.

• Etourism takes advantage of Intranets for reorganizing internal processes; extranets for developing transactions with strategic partners, and internet for interacting with all the stakeholders.


• Etourism is the digitization of all process and value chains in the tourism, travel, hospitality and catering industries that enable organizations to maximize their efficiency & effectiveness.


• The key is to recognize where in the process these opportunities exist and to apply the appropriate level of technology.


Tourism

• Time & Speed are the key factors of future business. Only organizations that create real value for their customers and partners will survive..

• The greatest problem when introducing new technology is that you can apply improved technology to a bad process.

• On the other hand, the greatest gain and return are made when both process and the applied technology are optimized.


• Sometimes it is much better for organizations to wait until the marketplace and technologies settled, rather than investing heavily on new technologies and get the associated risks. Try not to loose their positioning and marketshare.• They need to develop a close

understanding and assciation with their target markets and use appropriate and affordable technology to serve their needs.


• However, employing the right technology at the right time is DIFFICULT TASK. Technology and its applications move much faster than the decission making of corporations.

Tourism



• Sales and intermediary organisations need Sales and intermediary organisations need to rationalise a selling tool (B2B or B2C) to rationalise a selling tool (B2B or B2C) capable of real time operationscapable of real time operations • need to offer, without interruptions, only need to offer, without interruptions, only

what is really available, as soon as what is really available, as soon as availability shows up availability shows up

Tourism


• It is, therefore,It is, therefore, proposed that technology use for proposed that technology use for tthe tourism industry is influenced by he tourism industry is influenced by

(1)(1) organizational propertiesorganizational properties (2) personal characteristics of the leader(2) personal characteristics of the leader(3) the fit between technology and organizational(3) the fit between technology and organizational

activitiesactivities

Tourism – Stages of IT use



Tourism – Stages of IT use• The process of adoption and diffusion starts with a The process of adoption and diffusion starts with a

problem and/or the perceived need for an problem and/or the perceived need for an innovation (agenda setting) and continues with the innovation (agenda setting) and continues with the search for a technology that is able to solve the search for a technology that is able to solve the problem (matching). problem (matching).

• The initiation phase ends as soon as the right The initiation phase ends as soon as the right technology has been identified. technology has been identified.

• What follows is the decision whether to adopt or What follows is the decision whether to adopt or reject this specific technology and is referred to as reject this specific technology and is referred to as the point of adoption. the point of adoption.

• The implementation phase starts when the The implementation phase starts when the technology has to be modified to fit organizational technology has to be modified to fit organizational goals and, simultaneously, organizational goals and, simultaneously, organizational structures and systemsstructures and systems are altered to accommodate are altered to accommodate the technological innovationthe technological innovation (i.e., redefining, (i.e., redefining, restructuring). restructuring).


Tourism – Stages of IT use• TheThe implementation process is completed when the implementation process is completed when the

relationship between the technology and the relationship between the technology and the organization is clear and the innovationorganization is clear and the innovation becomes an becomes an integral part of the organization.integral part of the organization.

• organizational capabilities influence the way organizational capabilities influence the way technology is used in organizations. technology is used in organizations.

• IT diffusion involves complex interactionsIT diffusion involves complex interactions between between technologies and users in a given system. The technologies and users in a given system. The properties of the system include both incentives properties of the system include both incentives and constraints to the use of technology. Adopter and constraints to the use of technology. Adopter capabilities also influence how an adopter perceives capabilities also influence how an adopter perceives IT . IT .

• Also, personal qualities of the leader (e.g., attitude Also, personal qualities of the leader (e.g., attitude toward change, vision for the future) have toward change, vision for the future) have substantial influence on the use of IT.substantial influence on the use of IT.


From an Internet marketing perspective; websites development From an Internet marketing perspective; websites development stages ;stages ;

• Stage 1 Web sitesStage 1 Web sites are pure “publishing sites” that only are pure “publishing sites” that only distribute data. There is limited dialogue between the distribute data. There is limited dialogue between the Web site and the consumer because the Web is used Web site and the consumer because the Web is used like a traditional broadcast medium. like a traditional broadcast medium. Have low degrees Have low degrees of innovation and require little adjustment of organizational of innovation and require little adjustment of organizational structures. Simple advertising strategies such as advertising structures. Simple advertising strategies such as advertising banners and mass e-mail fall into this category.banners and mass e-mail fall into this category.

• Stage 2 Web sites Stage 2 Web sites concentrate on information. These concentrate on information. These sites are database driven and allow for more specific sites are database driven and allow for more specific retrievals andretrievals and ask-respond interactions. ask-respond interactions. More innovative More innovative and integrate more functions. Online auctions are one and integrate more functions. Online auctions are one example for Stage 2 models.example for Stage 2 models.

• Stage 3 Stage 3 Web Web sitessites are “personalized are “personalized interaction sites” interaction sites” that stress relationship building. The concept of stages that stress relationship building. The concept of stages of technology use can also be applied to eof technology use can also be applied to e--business business models.models. E-business models are highly innovative, E-business models are highly innovative, multifaceted, and integrated into the overall organizational multifaceted, and integrated into the overall organizational framework.framework. Virtual value chain integration and virtual Virtual value chain integration and virtual communities are seen as models that have Stage 3 communities are seen as models that have Stage 3 characteristics.characteristics.

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Business

Consumer

Government

Business

Consumer

Government

B2B B2C B2G

C2B

G2B

C2C C2G

G2C G2G

• Extranets between Travel Portals & Tour Operators: TO entering its tour info into travel portal. eg: www.BookinTurkey.com

• Corporate Booking Systemeg: www.BookinTurkey.com

• Travel Portals for end-user. eg:www.travelocity.com www.expedia.com

• Following and applying for taxes and regulations:www.maliye.gov.tr

• Airline, hotel loyalty, executive clubs

www.delta.com/ www.hilton.com

• Consumers informing other consumers over good or bad experience

www.sikayetvar.com www.HolidayTravelWatch.com

• Applying for visas, passport, etc.

www.egm.gov.tr/onlinepasaport.asp

• Government informing hotels & TO about new regulations. eg:

www.turizm.gov.tr www.tursab.org

• Government informing consumers about new regulations, Travel Adversories. eg:

http://travel.state.gov/

• Such as Turizm Bakanlığı withWTO

www.world-tourism.org


http://www.bookinturkey.com/

http://www.bookinturkey.com/

http://www.travelocity.com/

http://www.expedia.com/

http://www.maliye.gov.tr/


• At tactical level, it includes At tactical level, it includes eCommerce eCommerce and applies and applies ICTs for maximizing ICTs for maximizing efficiency and effectiveness efficiency and effectiveness of the tourism organization.of the tourism organization.

Dimitrios BUHALISDimitrios BUHALIS - - Information Technology for strategic tourism managementInformation Technology for strategic tourism management

• As ICT and tourism As ICT and tourism developments are closely developments are closely interrelated, it is often difficult interrelated, it is often difficult to identify whether ICTs to identify whether ICTs generate changes in tourism generate changes in tourism supply and demand, or visa-supply and demand, or visa-versa. Usually reality is versa. Usually reality is somewhere in the middle. somewhere in the middle.

• ICTs provide tools and enable ICTs provide tools and enable evolution of tourism demand & evolution of tourism demand & supply. Consequently, tourism supply. Consequently, tourism industry increases its industry increases its requirements from ICTs. requirements from ICTs.

• In return, developments in ICTs In return, developments in ICTs offer further tools and greater offer further tools and greater potential which are then potential which are then matched by the requirements matched by the requirements of the industry.of the industry.

Impact of ICTs on TourismImpact of ICTs on Tourism

• At strategic level, eTourism At strategic level, eTourism revolutionizes all business revolutionizes all business processes, entire value processes, entire value chain as well as the chain as well as the strategic relationaships of strategic relationaships of the organization.the organization.

• eTourism concept includes all eTourism concept includes all bussiness functions ; bussiness functions ; eCommerce, eMarketing, eCommerce, eMarketing, eFinance, eAccounting, eFinance, eAccounting, eHRM, eProcurement, eR&D, eHRM, eProcurement, eR&D, eProduction, ePlanning, eProduction, ePlanning, eManagement,eManagement, etc.etc.


• CRMs enable organizations CRMs enable organizations to interact with the to interact with the clientsand continuously clientsand continuously change their product to change their product to meeting the customer meeting the customer expectations.expectations.


• ICTs transform the best ICTs transform the best operational practices and give operational practices and give opportunities to expand in all opportunities to expand in all geographical and operational geographical and operational senses..senses..

• However, However, TOURISMTOURISM is an is an industry that has long been industry that has long been regarded as “regarded as “labourlabour” industry, ” industry, and several practices are still and several practices are still carried out in traditional ways. carried out in traditional ways.

• Many small enterprises (small Many small enterprises (small hotels, travel agencies, etc.) hotels, travel agencies, etc.) make it even worse and keep make it even worse and keep ICTs at a minimum.ICTs at a minimum.

• Increasingly, ICTs play critical Increasingly, ICTs play critical role in role in CRMCRM (customer (customer relationship management)relationship management)

Transformation of best operational Transformation of best operational practicespractices

• Managing customer Managing customer relationships on a relationships on a continious (365/24) and continious (365/24) and global way is the key to global way is the key to success for future tourism success for future tourism organizations.organizations.• ICTs must also protect the ICTs must also protect the organization from organization from competitive disadvantages, competitive disadvantages, as they now have to compete as they now have to compete on a global arena..on a global arena..


• CRMs enable organizations CRMs enable organizations to interact with the to interact with the clientsand continuously clientsand continuously change their product to change their product to meeting the customer meeting the customer expectations.expectations.


• Tourism Industry needs to Tourism Industry needs to become;become;– more flexiblemore flexible– more efficientmore efficient– quickerquickerin responding to customer requests.in responding to customer requests.

• ICTs provide tourism ICTs provide tourism organizations global presence, as organizations global presence, as well as formulate partnerships well as formulate partnerships around the world in an efficient around the world in an efficient and cost-effective manner.and cost-effective manner.

• ICTs also ICTs also reduce operational reduce operational and communucation costsand communucation costs by; by;– integrating operational systemsintegrating operational systems– maximizing internal efficiencymaximizing internal efficiency– decreasing number of people decreasing number of people

requiredrequired– reducing phone calls and faxesreducing phone calls and faxes– enabling customer to have enabling customer to have

access to all informationaccess to all information

• Managing customer Managing customer relationships on a relationships on a continious (365/24) and continious (365/24) and global way is the key to global way is the key to success for future tourism success for future tourism organizations.organizations.• ICTs must also protect the ICTs must also protect the organization from organization from competitive disadvantages, competitive disadvantages, as they now have to compete as they now have to compete on a global arena..on a global arena..


• Developing new Developing new technologies will also technologies will also bring extra costs:bring extra costs:– advertising at search advertising at search

engines, engines, – interconnectivitiy with interconnectivitiy with

other organizations may other organizations may need high investment, need high investment,

– new procedures may new procedures may create new jobscreate new jobs


• However, it must be recognized However, it must be recognized that ICT developments have that ICT developments have certain certain COSTSCOSTS to the company. to the company. Thus, a detailed cost-benefit Thus, a detailed cost-benefit analysys should be drawn before analysys should be drawn before taking action.taking action.

• The cost of hardware and The cost of hardware and software and communucation software and communucation packages, as well as developing packages, as well as developing and maintaining online presence and maintaining online presence is expensive...is expensive...

• Developing interfaces between Developing interfaces between internal legacy systems internal legacy systems and and systems of other organizations systems of other organizations may require high investment.may require high investment.

• Penetration of ICTs in Penetration of ICTs in tourism is generally tourism is generally customer-driven. customer-driven.

• Most of the Most of the technological technological innovations are innovations are demanded by demanded by customers..customers..



• Entire range of hardware, software.

Examples of information technology Examples of information technology applications used in tourism applications used in tourism

• Office automation, reservation, accounting, payroll, procurement management

• Portable wireless devices• Taylor made internal management tools; support

systems, etc.• Databases• Internet / Intranet / Extranet• Computer Reservation Systems (CRS)• Global Distribution Systems (GDS – eg: Amadeus, Sabre,

Galileo)• Property Managements Systems for hospitality; FIDELIO• Internet based travel intermediaries; Travelocity,

Expedia, etc.• Kiosks and touch-screen terminals• Augmented Reality (Çoklandırılmış Gerçeklik)• All Social Media


• Tourists become demanding, asking for better services at lower rates: getting value for their money .


• Internet increasingly revolutionizes flexibility in both consumer choice and service delivery process. Increasingly customers are becoming much more sophisticated and discerning, as a result of experiencing high levels of service.

• Thus, sophisticated travellers rely heavily on internet & electronic media.

Tourism Dynamic interaction of ICTs and tourism.

DEMAND-DRIVEN eTourism


Leisure vs. business travel demand • Tourists demand

dramatically more information than experienced travellers

• Experienced travellers however, require greater indepth information as well as being sure that their previous experiences will be addressed.

• Often bookings are not made by travellers themselves, but rather by their secretaries or travel managers in their organizations.


• Inevitably, frequent business travellers are more familiar with travel arrangements having considerable expertise

• Business trips are often classifed into Meetings, Incentives, Conferences & Exhibitions (MICE) categories.


• Business travellers can often compare the prices and offers available online, with the ones offered by their organization.

• He/she can find better deals than their company travel professionals sometimes..

• Thus, business traveller is able to sort out his own travel arrangements, and they often disobey travel policies of their organizations. (playing “amateur travel agency”)

• Business travel represents the highest proportion of on-line travel bookings, not only because it is often quite straightforward, but also most variables, such as time & places are set. Besides, business travellers are better educated and more independent and familiar with computers.


Leisure vs. business travel demand


Package vs. Independent• B2B transactions betwen businesses and travel

companies grow at much faster rate than other sectors of internet

• In Europe, Leisure travel has been much slower to take off. Package Holidays still dominates leisure market. eg: Thomas Cook, Kuoni, TUI, Thomson, STA, Airtours, etc.• package holiday makers are usually from lower income classes, less familiar with internet

• complexity of family holidays create conditions that are difficult sell online

• commercial interest of tour operator; low profit margins do not let greater IT investments

• existing distribution channels they have• tour operator computer systems, old-fashioned but still

usefull..

REASONS INCLUDE:



• In USA and North America however, leisure market is dominated by independent travellers. That is why internet did much better and much faster..

Package vs. Independent

• Consequently, fast European counterparts, which are the no-frills airlines; e.g.: Ryanair, EasyJet start selling DIRECT and online.

• Small & big hotels also started to use Internet efficiently to reach their clients directly!

• RESULT: The Independent Leisure market grow faster, at the expense of inclusive packages by assisting consumers to substitute some of the functions and value added by tour operators...


• Substituting inclusive package holidays with self-assembled leisure products!Experienced travellers certainly went for it!


• Better PricesBetter Prices %64 %64

Motivations factors to purchase online on OTA Motivations factors to purchase online on OTA websiteswebsites

• Online secure transactions for CCOnline secure transactions for CC 56%56%• Ability for cancellation easilyAbility for cancellation easily 52%52%• Easy to compareEasy to compare 49%49%


• Ability to get answers onlineAbility to get answers online 48%48%• Better information, better contentBetter information, better content 48%48%• Brand loyaltyBrand loyalty 38%38%• Use of local languageUse of local language 38%38%• Loyalty award programsLoyalty award programs 37%37%• Easiness to orderEasiness to order 36%36%• Familarity with internet purchasingFamilarity with internet purchasing 17%17%


• Obtained Maps & driving directions 59%

Online trip planning activities in USA

• Searched places to stay 54%


• Searched things to do 46%• Searched airfares/schedules 45%• Searched for dining&entertaintment 36%• Searched for rental cars (prices&avail.) 26%• Searched for places to go 22%• Searched for package tours & holidays 13%


• “It is not the strongest of the species, nor the most intelligent that survives. It is the one that is the most adaptable to change”

-Darwin

Web 2.0

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