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SPICe Briefing

Produced for the Enterprise andLifelong Learning Committee

02/9321 August 2002

TOURISM E-BUSINESS

This note is to brief members of the Enterprise and Lifelong Learning Committeeon e-tourism in advance of the case study on e-tourism on 2 September.

KEY POINTS – E-COMMERCE

• E-tourism describes a new way of doing business. It means fastcommunications, global accessibility and minimal costs for new businessesgoing online.

• On the positive side e tourism provides cost effective communications, it canmake purchasing easier for customers and can provide the impetus forimproved customer service. New opportunities open up for collaboration withprevious competitors.

• However customers are taking time to come to fully trust the technology andmany still prefer face to face contact. E-tourism can have job implications forcertain sectors and may begin to exclude the “digital have-nots”

• The general trend is for a growth in online business despite recent high levelsof closure amongst dot.coms.

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• In 2001 some 5% (900,000) of all UK tourism trips in Scotland were bookedthrough the Internet totalling £270 million.

• It is claimed that in the near future one third of the travel buying population willpurchase at least some of their travel products online

• The two key web based services developed at a Scotland level by the publicsector are the Scotexchange site (generally provided for communication withinthe industry itself) and the visitscotland.com site (formerly known as theOssian project) which provides information to potential visitors.

• Following controversy over the appropriate use of public funds and the pace ofdevelopment the visitscotland.com site was re-launched later in 2002.

WHAT IS E-TOURISM?The Internet has provided a new economic environment in which to conductbusiness. E-commerce is a growing sector and many tourism businesses areinvolved in developing their internet services including traditional travel agents,tour operators, national tourist offices, airlines, hotels and other accommodationproviders and car hire firms. This means of doing business is known as ‘e-tourism’, or ‘tourism e-business’. The key differences from traditional markets arethe speed at which information can be communicated, global accessibility and theminimal costs of establishing a business online.1

Some of the suggested benefits of tourism e-business are2

• That it is the most cost effective way of communicating with target marketsand disseminating information

• It is a quick and easy way for the customer to buy travel products• It offers opportunities for improvements in customer service and retention

through meeting and promoting individual preferences• It reduces costs through increased efficiency in internal operations and

purchasing processes• It encourages greater co-operation amongst traditional competitors through

the provision of hypertext links. Links are a cheap, quick way of raising theprofile of a new site and getting round the difficulty of up-dating information in-house. The inclusion of links on tourism websites offers benefits to both theuser and the service provider. The service provider can offer a greater rangeof information on related tourism products without having to enter intocontracts with the service providers and the user has access to immediateinformation and online shopping opportunities.

1 Rayman-Bacchus, L. and Molina, A. (2001) “Internet-based tourism services: business issues and trends” inFutures, 33, pp.587-605)

2 Source: E-Business for Tourism: Practical Guidelines for Tourism Destinations and Business

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Possible disadvantages have also been identified. These include:

• Tensions between a growing demand for personalised services tailored to theindividual’s needs and interests and reluctance amongst consumers to releasesuch information over the Internet in case it is misused.

• The preference of many customers to conduct complicated transactions in aface-to-face environment (e.g. high street travel agents).3

• Existing travel agent business being superceded, with resultant job losses• Growing inequality and increased social exclusion for those customers and

businesses without access to necessary technology

THE DEVELOPMENT OF E-TOURISME-tourism has only become possible through the spread of information andcommunication technologies (ICT) and the Internet, which has changed thedistribution of tourism sales and information. An Internet-based tourism servicessector is developing based on networks that link producers and users. This hasresulted in a shift away from traditional supply chains and communicationchannels (e.g. high street travel agents).

Such technologies have been developing over a number of years. In the 1970s, atravel marketing and distribution system known as Computer ReservationSystems (CRS) was introduced. This was an airline database that managed anddistributed reservations electronically to remote sales offices and externalpartners. This allowed customers (travel agents) to make and confirmreservations and allowed all travel businesses to operate flexibly. It offered travelagents increased productivity and competitive advantage as thereafter they wereable to offer the consumer quick access to the most up-to-date information andindeed access to CRS is of continuing importance to online travel agents. In the1980s, geographical coverage was expanded via Global Distribution Services.This has been developed since the Internet, offering consumers access to easilycomparable information. All three systems operate both independently and jointly.

The growing number of people utilising new ICT is shown by the following tableson technology trends.4

3 Rayman-Bacchus, L. and Molina, A. (2001) Internet-based tourism services: business issues and trends,Futures, 33, pp.587-605FCRS

4 A. Samji and S. Gray (2002) e-Marketing: our customers are ready, are you? MORIhttp://www.mori.com/pubinfo/pdf/ags_emarketing.pdf

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Changing socio-economic conditions and technological developments haveimplications for the development of Internet-based tourism services. At the sametime individuals are increasingly concerned about gaining the most from their

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leisure time (Claval, 1995).5 Altering work and leisure patterns and the integrationof business and leisure trips represent an aspect of this concern to make the mostof the leisure time available and affect the role of ICT in the travel industry.6

According to a 1999 survey conducted by TechMaPP7, approximately half of thosewith access to the Internet regularly search for tourism information from theirworkplace. A growing number of people also extend their business trips, stayingfor additional night(s) away to take part in leisure activities.

Changing customer behaviour

In 2001 the focus of much of the publicity surrounding e-commerce was on thefailure of dot.com companies and the dramatic fall experienced in technologystocks. However, according to figures collected by MORI8 the underlying patternin e-commerce in 2001 was one of growth. A 40% increase in visitors to websiteswas noted during the 2001 Christmas period in comparison with the same periodin 2000.9

It has been claimed that customer expectations of e-tourism include:

• Quick response to enquiries• More detailed and tailored information on tourism destinations• Possibility of booking travel, accommodation and restaurants online• Able to check out competition easily at the click of a button• Importance of destination management and marketing• Branding – collection of tourism products and services• Tourism marketing as a means of facilitating regional development• “marketing should be used as a strategic mechanism in co-ordination with

planning and management rather than as a sales tool”10

• must acknowledge travel motivations (moves towards personal servicethrough customer profiling).

There has also been a stark increase in consumer online spending over a fiveyear period.11

5 Claval, P. (1995) “The impact of tourism on the restructuring of European space.” In Montanari, A., andWilliams, A.M. (eds) European Tourism, regions, spaces and restructuring. Chichester, UK: Wiley.

6 Plog Research Inc, American traveller Survey (1997)7 Street survey of tourists, conducted by TechMaPP, The University of Edinburgh in 1999. (Sample of 100

were interviewed).8 Rayman-Bacchus, L. and Molina, A. (2001) “Internet-based tourism services: business issues and trends” in

Futures, 33, pp.587-605FCRS9 JupiterMMXI10 Buhalis, D. “Marketing the competitive destination of the future” In Tourism Management 21 (2000) 97-116.11 Source: Datamonitoravailable: http://www.nua.ie/surveys/analysis/graphs_charts/comparisons/consumer_spending_uk.html

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The diagram below12 shows the near equal gender distribution of online shoppers,the high proportion (79%) of online shoppers over the age of 25 and the lowproportion of online shoppers belonging to the social grade DE.

A MORI survey conducted March 2001 showed that the Internet was used asmuch as traditional brochures as sources of information for booking holidays andtravel. The research company Jupiter MMXI found that the UK is the biggestonline travel market in Europe with nearly six million people visiting travel sites inJanuary 2002. Large UK travel sites such as lastminute.com and easyjet.com are

12 A. Samji and S. Gray (March 2002) , e-Marketing: our customers are ready, are you? MORIhttp://www.mori.com/pubinfo/pdf/ags_emarketing.pdf

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getting over a million visitors a month. In 2001 4.8% (900,000) of all UK tourismtrips in Scotland were booked through the internet, totalling £270 million.13

A problem that may inhibit the potential of e-tourism is the lack of customerconfidence in the security of the systems used and that the system over whichthey communicate their confidential details could be accessed illegitimately. InAugust 2000 the National Consumer Council 14 warned:

The overwhelming impression we received is that consumers sense there is a lack ofrespect for their rights and their safety online

34% of those interviewed for this study said they were reluctant to release theircredit card details online and 35% described internet shopping as the ‘riskiest’ wayto shop.

However, more recently a poll conducted by MORI for the DTI15 found that around26% of the population could be classified as online shoppers. This growth hasbrought with it an apparent change of attitudes16 and though concerns were stillexpressed over the security of shopping online, those interviewed were morelikely to be reassured by websites offering proof of independent certificationshowing that they were safe for online users.

The following table demonstrates the percentage of customer purchases madeonline.17 The information is taken from a Scottish Enterprise survey.

Online purchases (Approximately what percentage of your customer's purchases are made online?)

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

None 1 to 10 11 to 20 21 to 30 31 to 40 41 to 50 51 to 60 61 to 70 71 to 80 81 to 90 91 to 100 Don't Know% of customers' purchases made online

% o

f com

pani

es

13 Figures published by VisitScotland (2002) in Tourism in Scotland 200114

15 MORI (2001) Informing consumers about e-commerce, Department of Trade and Industry, September2001

16 MORI, (2000) Can’t Surf, won’t surf: the digital divide, Which? Online17 This and other tables provided by Scottish Enterprise Network. Survey of 1,095 companies

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IMPACT ON THE TOURISM INDUSTRYIt has been argued that the challenges and issues faced by the industry include:

• Low / varied level of ICT literacy amongst some micro businesses and SMEs• Degree of access amongst SMEs to technology• Extent to which SMEs feel Government should be responsible for providing a

national website with links to information about their business• Level of responsibility each SME should have for their own marketing and the

development of their own website• Opportunities / disadvantages of Broadband – possibility of paying for use of

broadband to reduce Internet congestion.• Collapse of dot coms in 1999-2000 led to significant losses for venture

capitalists. As a consequence investors are more cautious of business plansbased on costly marketing campaigns aimed at quickly raising the company’sglobal profile. Instead it has been suggested that the future of many dot. comslies in the development of ‘clicks and mortar’/’bricks and clicks’ businesses,which benefit from the advantage of both internet and traditional business.18

The following tables show internet access and related issues, e.g. access to ICTand training problems.

Internet access (Does your business have and/or use access to the Internet?)

0%

10%

20%

30%

40%

50%

60%

Yes - Have and Use Yes - Have but don't use No Don't Know

All sectorsTourism

18 Rayman-Bacchus, L. and Molina, A. (2001) “Internet-based tourism services: business issues and trends”in Futures, 33, pp.587-605FCRS

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Overhauling Existing WebsitesHow likely are you to rebuild or overhaul your business web site in the next year

to 18 months? (asked of all companies that have a web site)

20%

24%

19%

8%

5%

4%

4%

14%

21%

28%

15%

10%

5%

5%

2%

13%

0% 5% 10% 15% 20% 25% 30%

Definitely

Very likely

Likely

Unlikely

Very unlikely

Definitely not

Recently completed or overhauled

Don't know

TourismAll Sectors

First Web SitesHow likely is your business to develop a website in the next year to 18 months?

(asked of all companies without a website)

10%

11%

14%

13%

21%

24%

7%

11%

10%

12%

12%

20%

27%

8%

0% 5% 10% 15% 20% 25% 30%

Definitely

Very likely

Likely

Unlikely

Very unlikely

Definitely not

Don't know

TourismAll Sectors

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Influences to adoption

0% 5% 10% 15% 20% 25% 30%

Reducing operating costs

Improving the quality of serviceor products

Increasing efficiency of internalprocesses

Accesssing new customers viathe Internet

Avoid losing customers tocompetitors who are using

ecommerce

Don't knowNot at all importantNot importantImportantVery importantEssential

Factors discouraging businesses from developing ecommerce

0% 5% 10% 15% 20% 25% 30% 35% 40%

The business is concerned aboutthe risk of fraud

Lack of management willingnessto adopt ecommerce

Advantages are outweighed bythe cost implications

Internet businesses are seen tobe failing

My customers do not useecommerce

None of my competitors are usingecommerce

Our staff do not have the skillsrequired to operate ecommerce

Don't knowStrongly disagreeDisagreeNeitherAgreeStrongly agree

In 1999 a study by the Moffatt Centre for Tourism at Glasgow CaledonianUniversity provided some information on the importance of the Internet to thetourism industry, in terms of how significant on-line purchasing of travel productswould become. The study claimed that some of the headline projections onInternet use were correct - namely that over a third of the travel buying populationwill purchase travel products on-line in the future. However this does not meanthat a third of travel industry sales will come from the Internet, rather that this thirdof the population will buy some of their travel on-line and some of it off-line. Theoptimistic estimates for on-line travel sales are probably based on this third of the

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travel population buying all or at least a significant part of its travel from theInternet.

The results showed that personal service is still a high consideration for manypeople and the complexity of travel arrangements meant there will always be aplace for knowledgeable intermediaries. This is because there will always becomplex products - the Internet does not change the nature of the product only itsdistribution. The authors concluded that the UK is significantly behind the USA interms of both the volume and value of Internet sales to travel firms. UK markets –both buyers and suppliers – have traditionally been behind the likes of the USA inthe uptake of new technologies and there is little evidence to suggest that Internetusage is any different.

Other recent survey work has highlighted the main disadvantages of internetdistribution for travel companies19 These include: lack of human contact duringthe transaction; volatile customer base; issues of security; danger of standard,rather than tailor-made products; alienation of potential customers; difficulty ofkeeping up to date records.

In addition to the disadvantages outlined above SMEs may face other challenges.They may lack the capital and the research and development resources andtime to justify the investment in ICT and the hidden costs of training andupgrading packages. According to Evans (1999) smaller establishments tend toemploy older, less qualified staff. They may also feel an antithesis to IT itselfwhere personal service and contact is a key comparative advantage of theowner-operator niche supply.20

There have been changes in the distribution chain in terms of suppliers, touroperators and travel agents, and marketing organisations, which have affected thebehaviours and purchasing patterns of consumers. It has been argued that Smalland Medium Enterprises (SMEs) now have greater opportunities to accesspotential customers directly through the Internet.

Furthermore, the ability to design their own website may empower smallbusinesses in presenting their product or services in their preferred way:

Web-sites linking small operators and destinations to consumers and retail travelagents offer access to marketing and distribution systems controlled by NTOs, touristboards and importantly can mean that the local organisations can present their ownimage and information, not the imposed images chosen for tour brochures and nationaltourism marketing.21

19 Buhalis, D. and Licata, M.C. “The future of eTourism intermediaries” In Tourism Management, 23 (2002)207-220, p.211

20 Evans, G.L. (1999) “Networking for growth and digital business” in Schertler, W. et al (eds) Information andCommunication Technologies in Tourism 1999, pp. 376-387, Springer-Verlag, Vienna

21 Evans, G.L. and Celverdon, R. (2000) Fair trade in tourism – community development or marketing tool? InRichards, G. and Hall, D. (eds)Tourism and Sustainable Community Development, Routledge, London,pp.137-153

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EVOLVING TECHNOLOGY: CHANGING NEEDS ANDEXPECTATIONSBased on the findings of their study of 50 leading tourism websites, Rayman-Bacchus and Molina (2001)22 argued that:

Perhaps the most powerful competitors emerging in Internet-based tourism servicesare those with the resources to invest... they seem to be the portal sites,reservation technology providers, and Microsoft. Portal sites are approaching thesector through structuring their vast data warehouses into thematic sites (e.g.tourism). CRS providers see the Internet as another distribution channel thatcompliments their existing arrangements, while Microsoft recognise the potential ofthe sector for exploiting their own considerable technological and financialstrengths.

Other possible technological innovations that may impact on tourism include:

• Interactive digital television (IDTV)• Mobile and mCommerce distribution

RECENT POLICY DEVELOPMENTS IN SCOTLANDTourist Authorities have an important role in the development of a country’s touristindustry. Though such organisations are non-profit making they influence thesector’s capacity for generating revenue:

Indeed, as the initial point of enquiry for many travellers and tourists, they are uniquelypositioned to amplify commercial opportunities for travel agents and specialist serviceproviders. Close examination of public agency sites show them exploiting the newmedium to exercise greater influence than hitherto possible: providing hypertext links tocommercial service providers; varying degrees of interactivity offered; often accessiblein multiple languages.23

The Scottish Executive Strategy

The Scottish Executive’s strategy on developing tourism as an industry withinScotland was described in ‘A new Strategy for Scottish Tourism’, published inFebruary 2000. The strategy stated that Scotland has the assets to become a‘world class tourism destination’, as long as the industry is modern, embraces theculture of lifelong learning, and provides the highest quality of service. It identifiedfive key areas where the tourism industry should improve if the full potential of thesector is to be realised. One of these was to ensure the provision of the latesttechnology as a means of understanding the demands of customers and

22 Rayman-Bacchus, L. and Molina, A. (2001) “Internet-based tourism services: business issues and trends”in Futures, 33, pp.587-605FCRS

23 ibid

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communicating with them effectively. To measure the success of thesemeasures, and all the other initiatives contained in the tourism strategy, theExecutive set action points to establish improvements in the industry. In the caseof e-tourism, these were:

• On-line booking system to be fully operative by June 2000• 30 per cent of accommodation businesses to be trading by e-commerce by

2002 (50 per cent by 2003 and 90 per cent by 2005)• Scottish Tourist Board to establish a partnership with the private sector to

maintain Ossian’s competitive advantage• New partnership to develop booking and payment by e-commerce• Use of new interactive technologies to enable visitors to access information on

local attractions, accommodation and travel.• To establish a call centre• Tourism information and booking to be available through a single national and

international telephone number for 2001.

Following a shift in departmental portfolios in November 2001, the responsibilityfor tourism (and sponsorship of VisitScotland) was moved from the ScottishExecutive Enterprise and Lifelong Learning Department to the EducationDepartment. In March 2002, Mike Watson MSP, Minister for Tourism, Culture andSport, announced the results of a review of the Tourism Strategy in the TourismFramework for Action 2002:2005. The Framework highlighted several areaswhere action was to be prioritised in relation to e-business:

Actions Responsibility

Develop a scheme to assess sustainableuse of natural heritage sites used by visitorsand develop corresponding web-basedvisitor information

Scottish Natural Heritage

Look at the best use of the web forinformation provision. Link to local areatourist board and visitscotland.comwebsites for the most cost-effective links forpromoting business.

Business

Develop and promote the industry website–scotexchange.net–for two-way informationexchange.

VisitScotland, Scottish Enterprise,Highlands and Islands Enterprise and AreaTourist Boards

It also reported on the establishment of Scotexchange.com.

Launched in June 2000, Scotexchange was developed in partnership byVisitScotland (then the Scottish Tourist Board), Highlands and Islands Enterpriseand Scottish Enterprise and to assist communication between the tourism industryand tourism organisations.

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Its stated aim is to:

provide 'relevant market research information in an accessible form, allowingtourism businesses to improve the nature and quality of the services they provide,and tailor their individual marketing plans to suit particular niche markets.'

It provides information on the structure of the tourism business, different tourismmarkets (e.g. niche tourism), business development, training, promotion, and anews site. According to the Tourism Framework for Action, the site had anaverage of 15,000 user sessions per month, by February 2001.

VISITSCOTLAND.COM (FORMERLY KNOWN AS OSSIAN)VisitScotland.com is the national database of information about Scotland’stourism products, services and contacts, and e-commerce accommodationbooking system. It is intended to allow potential visitors to log on, view details ofavailable hotels and packages and make direct bookings for transport andaccommodation.

This was originally known as the Ossian project. Launching the project in July2000, then Enterprise Minister Henry McLeish described the Internet as the “mostpowerful marketing tool in the world” and claimed that the value of world-wide on-line bookings would rise by $30 billion in the next three years – which couldamount to a £360 million increase in revenue for Scotland. To ensure Scotland’sshare of this lucrative market, Mr McLeish set a target of 90% of allaccommodation in Scotland trading on-line by 2005.

However, the initial launch was not regarded as a total success. The Federation ofSmall Businesses in Scotland as said that Ossian “is incapable of delivering on-line bookings” with “major inconsistencies in how the site is laid out”. Anaccommodation provider in the Borders is quoted as saying: “Ossian is a long waybehind private sector sites” and “The technology is already out of date...I wouldn’tbe surprised if they eventually …write the whole thing off”. The project was alsocriticised by an e-commerce entrepreneur giving evidence to the Enterprise andLifelong Learning Committee’s inquiry into the New Economy. Richard Irwin, whoprovides online booking for hotels across the world, said the project hadextravagantly used up public money:

We (all-hotels.com) built up a business from a relatively small base, but now around60,000 properties are bookable online through our site. The investment that wasrequired to get to that position was around £200,000. Investment in the Ossianproject has been many times more than that, and still nothing has been delivered.We could have provided the project with that technology for a small proportion ofwhat has been spent so far. I am rather angry about the Ossian project.

Other criticisms were voiced at a meeting of the Committee on 1 November 2000

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Fergus Ewing: I know that the Ossian project and the visitscotland.com onlinebooking system are a major part of the Executive's tourism strategy. I understandthat Ossian will be the subject of a public-private partnership. I have heard thatthere are concerns that an extraordinarily high proportion of the costs of the PPPwill go into the coffers of consultants of various kinds—lawyers, financial advisersand computer specialists. I am sure that that will be of great concern to the industryin general, coming as it does on top of a large number of questions about theoperability of the visitscotland.com site and its online booking system.24

The development was originally carried out by an in-house team of informationtechnology developers and other professionals. In developing the online aspectsof future business three delivery options were considered:

• The development of the full e-business option internally by VisitScotland• Contracting out the development and/or the management to qualified external

companies• Establishing a joint venture between VisitScotland, Area Tourist Boards and

external companies

The delivery option eventually selected was the joint venture with the privatesector, on the basis of combining the respective skills and relationships of thepublic and private sectors. Following discussions with the Private FinanceInitiative (PFI) Taskforce (now Partnerships UK – PUK) it was concluded thatVisitScotland and the Area Tourist Board network did not have the resources orthe level of business expertise necessary to make the Ossian Project a success.VisitScotland, the majority of area tourist boards, Schlumberger Sema and PUKset up a new venture, eTourism Ltd.25 The company replaces the existing websiteand operates a national contact centre. It trades under the name ofvisitscotland.com.

The contact centre is now operational and is expected is initially expected tohandle the majority of visitor bookings. In developing the service offered by thiscentre a number of crucial issues will have to be addressed:

• The language capabilities of call centre staff• The access of these staff to information database held information• The script and customer service software the staff will be using in the provision

of the service

VisitScotland is due to re-launch its on-line customer information and bookingservice later in 2002. The site is intended to:

• Act as a selling agency on behalf of subscribing tourism businesses

24 SPOR (2000) Enterprise and Lifelong Learning Committee, 1 November 200025 The preferred joint venture structure was for a company which was 25% owned by VisitScotland and theArea Tourist Boards, 15% owned by Partnerships UK and 60% owned by the preferred bidder SchlumbergerSema.

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• Provide all tourism enquirers with an information service about Scotland as awhole

• Respond to requests for brochures• Act as an information source for the tourism business sector, providing market

intelligence and other services• Provide IT services to the tourism industry and VisitScotland.

VisitScotland will base its software on Touch Vision, which is a purpose builttourism based booking engine already used in Iceland and Dublin and by MediaSurface a supplier of content management solutions. The following diagramshows the structure of the company.26

Speaking (in July 2002) of the planned re-launch of the VisitScotland website andportal, Tourism Minister Mike Watson said:27

With VisitScotland and area tourist boards, we have invested heavily in the web portal.It will exist solely to maximise the return from marketing of Scottish tourism to potentialcustomers all over the world. To do that effectively, visitscotland.com needs highquality information to reach potential visitors to Scotland.

This week, several thousand tourism establishments already registered with theVisitScotland quality scheme are receiving information from visitscotland.com. Once upand running, the new visitscotland.com system will be a powerful demonstration thattourism is everyone’s business."

According to an article in the Scotsman28 tour operators including the ScottishIncoming Golf Tour operators Association, have refused to join eTourism Ltdclaiming that the venture could not meet its bookings target of 500,000 bed nightsby 2005 without diverting inquiries from other website sponsors.

Eddie Friel, Chief Executive Officer of the Greater Glasgow and Clyde ValleyTourist Board, expressed equally serious reservations about the new

26 Provided by Schlumberger Sema27 http://195.92.250.59/pages/news/2002/07/SETC033.aspx28 Scotsman, Wednesday 3 July 2002, Taylor-made approach to the future of country’s tourist body

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VisitScotland website and its predecessor, Ossian.29 In speaking about theventure he highlighted his concerns over the mechanism created for the PPPwhich he regarded as being “seriously flawed”. He also voiced the opinion thatVisitScotland’s theory of business was incompatible with the Greater Glasgow andClyde Valley Tourist Board’s approach. In addition, Friel mentioned hisfundamental disagreement with the Price Waterhouse Report, which suggestedthat VisitScotland’s primary customer was the tourist industry itself. Such stronglyfelt objections reveal the challenges facing VisitScotland if they are to regain thetrust of the industry.

EXAMPLES OF E-TOURISM INITIATIVES

EAST LANCASHIRE VISITDATA30

The East Lancashire Partnership (ELP) tourism website provides an example ofthe development of customer profiles. Behind the website a package monitorsand records the pages visited by each potential customer/visitor and the timespent on the visit to the site. It also monitors through online questionnaires andopportunities to request brochures. This information (called ‘visit data’) is used tocreate a profile of the potential customer/ visitor and provides the basis for directmarketing initiatives, as members of the partnership and the local authority, canaccess the database and search it. Potential customers can then be contacted byemail or brochure which reflect their interests as evidenced by their browser profileand trail. The scheme was initially developed as a bid to the European RegionalDevelopment Fund.

In the near future, the Partnership hopes to make ‘VisitData’ available to theprivate sector in East Lancashire. However, there are data protection issuesinvolved with the sale of this information and this issue is still to be resolved.

EDINBURGH AND LOTHIANS ATBE-tourism also offers opportunities for managing the presentation of destinations.For example, Edinburgh and Lothians Tourist Board (ELTB) have put in place anumber of initiatives to help its members to use ICT effectively, includingdeveloping the future skills programme and LothianExchange.net. ELTB has alsodeveloped other customer focused services, such as the fist Internet cafe to belocated within a tourist information centre, Connect@Edinburgh.

UK ONLINE FOR BUSINESS: GO FOR IT‘Go for IT’ was launched by UK Tourism Minister Kim Howells on 16 July 2002.This UK wide initiative was developed with the support of the Department forCulture, Media and Sport, the English Tourism Council and a diverse group ofcompanies ranging from a hotel in Devon to a Farmers’ Market in Ayrshire.

29 What follows originates from personal correspondence with Eddie Friel, Chief Executive Officer, GreaterGlasgow and Clyde Valley Tourist Board.

30 Information provided by Colin Taylor of the East Lancashire Partnership

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UK online for business is responsible for delivering the initiative. It is a partnershipbetween industry and UK government and is part of a wider government-backedinitiative which aims, “to make the UK one of the world’s leading knowledgeeconomies. UK online for business offers impartial advice to businesses to helpimprove their competitiveness through the effective use of information andcommunications technologies”. UK Business online also has a network of localadvisers who can be contacted through Business Link, Business Connect or LEC.An E-business helpline is also available.

At the launch of Go for IT, the UK Tourism Minister, Kim Howells stated:

The Go for IT programme will help give small and micro-tourism businesses therelevant tools to use the Internet to meet existing customers’ new demands andtarget new customers.

UK ICT IMPACT STUDYOn the 17 July 2002 Kim Howells launched an impact study to look at how wellBritish Tourism businesses are using ICT. The research will look at:

• Current and future trends in take up levels of ICT and levels of IT skills intourism

• Opportunities and disadvantage created by e-commerce• Barriers and opportunities for take-up• Future developments such as digital interactive televisions and the use of

mobile phones

No further information or evaluation is available at present

SPICe Briefings are compiled for the benefit of Members of the Scottish Parliament and theirpersonal staff. Authors are available to discuss the contents of these papers with Members andtheir staff but cannot advise members of the general public.

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ANNEX 1: E-COMMERCE STATISTICS31

As at May 2002 there approximately 580 million people “online” in the world –nearly 1 in every 10 people in the world.32 The value of tourism booked via e-commerce has increased dramatically33 and revenues from eCommerce haveshown a similarly marked increase.34

31 Thanks to Simon Wakefield, SPICe Research Service32 Source: NUA Internet Surveys (available at: http://www.nua.ie/surveys/how_many_online/index.html)33Source: Jupiter Communications.Available at: http://www.nua.ie/surveys/analysis/graphs_charts/travel/total_online_travel_spend_96_2002.html34 Source: PhocusWrightavailable at http://www.nua.ie/surveys/analysis/graphs_charts/travel/travel_revenue_98_2001.html

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ANNEX 2. E-BUSINESS READINESS RANKINGS

The Economist e-business readiness rankings (for all sectors of the economy)show the UK is 3rd placed in the world for e-business readiness

Two indicators were combined to produce the rankings. The first concerned“connectivity” which is based on both a qualitative and quantitative assessment ofa country’s communications infrastructure. The second element relates to a“business environment” rating and according to the EIU “measures the quality orattractiveness of the business environment in the 60 countries covered by CountryForecasts using a standard analytical framework”.

E-readiness rankings, 2002

E-readinessranking (of 60) 2001 ranking Country E-readiness

score (of 10)1 1 US 8.412 10 Netherlands 8.403 3 UK 8.384 (tie) 11 Switzerland 8.324 (tie) 6 Sweden 8.326 2 Australia 8.307 9 Denmark 8.298 12 Germany 8.259 4 Canada 8.2310 8 Finland 8.1811 (tie) 7 Singapore 8.1711 (tie) 5 Norway 8.1713 13 Hong Kong 8.1314 16 Austria 8.1015 14 Ireland 8.0216 19 Belgium 7.7717 15 France 7.7018 20 New Zealand 7.6719 22 Italy 7.3220 16 Taiwan 7.2621 21 Korea 7.1122 24 Spain 7.0723 26 Greece 7.0324 25 Portugal 7.0225 18 Japan 6.8626 23 Israel 6.7927 27 Czech Republic 6.4528 29 Chile 6.3629 28 Hungary 6.05

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30 34 Mexico 5.6731 30 Poland 5.5232 33 Malaysia 5.5033 35 South Africa 5.4534 36 Brazil 5.3135 31 Argentina 5.1436 32 Slovakia 5.0037 47 Venezuela 4.9138 38 Colombia 4.7739 40 Peru 4.4340 37 Turkey 4.3741 48 Bulgaria 4.2542 43 Sri Lanka 4.0543 45 India 4.0244 52 Romania 4.0045 42 Russia 3.9346 46 Thailand 3.8647 44 Saudi Arabia 3.7748 40 Egypt 3.7649 39 Philippines 3.7250 50 Ecuador 3.6851 49 China 3.6452 54 Indonesia 3.2953 50 Iran 3.2054 52 Ukraine 3.0555 56 Nigeria 2.9756 58 Vietnam 2.9657 60 Pakistan 2.7858 54 Algeria 2.7059 57 Kazakhstan 2.5560 59 Azerbaijan 2.38

Source: Economist Intelligence Unithttp://www.ebusinessforum.com/index.asp?layout=rich_story&doc_id=5768