Developments in Digital

Business
(G53DDB )
Guest Lecture on E-Tourism
By
Professor Leo Jago
Lecture utline

!ole of "#T

E-Tourism

Definitions

utcomes

#$aracteristics of Tourism

%istory of "#T in tourism

Benefits of E-Tourism

"ssues &it$ E-Tourism

!ole of "#T

"#Ts are no& critical for strategic

management of organisations as t$ey allo&'

E(pansion into ne& mar)ets

Empo&ering of employees

Lo&ering of costs

En$ancing *istri+ution

Gates (,---) sai* t$at +usiness no&

con*ucte* at spee* of t$oug$t

"#Ts great for time poor +ut cas$ ric$

consumers
"ncreasing .pee* of /pta)e of
Tec$nology

35 years for ra*io to reac$ 50 million

,3 years for television to reac$ 50 million

5 years for internet to reac$ 50 million

, year for ipo*s to reac$ 50 million

1 mont$s for face+oo) to reac$ ,00 million

Definition
E-tourism "nclu*es 2ll Business
3unctions

E-commerce an* E-mar)eting

E-finance an* E-accounting

E-%!4

E-Procurement

E-.trategy

E-Planning

E-4anagement
utcomes of E-tourism
(Bu$alis 5003)

"t revolutionises all +usiness processes6 t$e

entire value c$ain as &ell as t$e strategic
relations$ips of tourism organisations &it$ all
t$eir sta)e$ol*ers

"t ta)es a*vantage of intranets for

reorganising internal processes6 e(tranets for
*eveloping transactions &it$ truste* partners
an* t$e internet for t$e interacting &it$ all its
sta)e$ol*ers
utcomes (#ont)

E-tourism increasingly *etermines t$e

competitiveness of t$e organisation an*
t$erefore it is critical for t$e
competitiveness of t$e in*ustry in t$e
longer term7
#$aracteristics of Tourism

"ntangi+le

#an8t +e p$ysically *isplaye* or inspecte*

+efore purc$asing

.eparation +et&een purc$ase 9

consumption

Peris$a+le inventory

%ig$ ris)

Psyc$ological an* financial

ften involve t$e &$ole family

"nformation intensive activity

#$aracteristics (#ont)

Dominate* +y small enterprise

%istory of lengt$y supply c$ains +ase* on

commissions

Pro*uct suppliers

#onsoli*ators

:$olesalers

!etailers

#onsumers
Pro+lems &it$ Tra*itional 2pproac$

.mall operators totally *epen*ent on

con*itions set +y large companies in t$e
supply c$ain

ften too small to participate in opportunities

Pricing an* ot$er con*itions loc)e* *o&n for

up to 5 years

;ery limite* a+ility to access t$e mar)et

*irectly
#$ristel De%ann Tourism an* Travel
!esearc$ "nstitute
E-Tourism
<e-Business re=uires a customer-centric vie&
an* a s$ift a&ay from mass pro*uction to
mass customisation an* from selling to
relations$ip-+uil*ing7>
;ictor Garlan*
(%ea* of "T at 2er Lingus6 500,)
Drivers for e-Business in Tourism

Economic necessity

!api* a*vancements in tec$nology

!e*uce* cost

Ease of access

!ising consumer e(pectations

Time poor

vercame fears regar*ing security

%istory of "#Ts in Tourism

#entral !eservation .ystems (#!.s)

"ntro*uce* +y airlines in ,-10s

%otels t$en came on+oar*

Dominate* t$e in*ustry

2irline computer reservations systems emerge* to

+ecome glo+al *istri+ution systems (GD.s)

"ncorporate* a &i*e range of services an* pro*ucts

for t$e entire in*ustry

E(amples inclu*e* 2ma*eus6 .a+re 9 Galileo

&ners c$arge* commissions an* participation fees

Transaction costs too $ig$ for small operators
%istory (#ont)

/ntil mi* ,--0s6 over $alf t$e &orl*8s

electronic transactions &ere in tourism

Largely airlines

Destination management systems (D4.)

t$en emerge*

"nformation on locally availa+le attractions an*

pro*ucts

/seful for $elping to overcome seasonality

pro+lems +y sprea*ing an* +alancing tourism
*eman*
%istory (#ont)
3or many years6 in*ustry +ase* on'
Tra*itional supply c$ain
Broc$ures
3ree-sale allocation
Tele( confirmations
Tele( to fa( to email
2ccess to fun*s internationally ? replace travellers c$e=ues
#$ange* travel +e$aviour
2s .4E *ominate*6 "#T $a* slo&er upta)e7
/pta)e pus$e* +y consumers
E-Business an* "n*ustry ;alue
#$ains
Suppliers
Manufacturers
Distributors
Retailers
Customers
(Supply Chain Management Systems)
(Inventory Management Systems)
(Efficient Customer Response Systems)
Transporters
Alternative Direct
Channel (eg
The !eb)
.ource' Lau*on an*
Traver (5005)
Online Purchases 2000-2004
(Australia)

Benefits of "#Ts for Tourism

2llo& small +usinesses to compete

internationally

Dispose of un&ante* inventory

Eg' &otif7com an* lastminute7com

T$ese systems pose pro+lems as &ell

#onsumer can no& pac)age t$eir o&n

pro*uct +ut *oes re=uire effort $ence agents
still use*7 2lso someone to +lame if t$ere are
pro+lems7
Benefits of "#Ts for Tourism
(#ont)

#$ange* t$e structure of t$e in*ustry

4any interme*iaries $ave gone or $ave +een

s&allo&e* up as part of vertical integration

"nternet great for +ran* enforcement6

enlargement an* e(pansion

#lutter no& +ecoming a pro+lem7

#an set price in real time to $elp manage

*eman*
Benefits of "#Ts for Tourism
(#ont)

.op$isticate* yiel* management to

ma(imise profits

"nitially only airlines

T$en $otels

@o& open to smaller operator

/n*erpin strategic alliances for airlines

Benefits of "#Ts for Tourism
(#ont)

.op$isticate* "#Ts allo& organisations to

pre*ict an* target consumer nee*s

Differentiate pro*uct for *ifferent consumer

groups

3oster relations$ip management 9 mar)eting

Loyalty programs
3re=uent 3lyer Programs

#lu+ concept &it$ re&ar*s for loyalty

Development lin)e* to a+ility to capture

sop$isticate* customer *ata

%ig$er returns6 from repeat sales over time

%ig$er costs associate* &it$ attracting ne&

customers t$an )eeping e(isting customers

.cope for cross-selling

Loyal customers recommen* +y :o4

Promotional costs to ac=uire ne& +usiness

re*uce*
"ssues

nline pricing compare* to ot$er pricing

L##s pus$ online

3ull service carriers use consoli*ators an*

interme*iaries to sell t$eir *iscounte* seats to
protect t$e +ran*

Bun*ling pro*uct

nce t$e role of interme*iaries +ut no&

consumers
"ssues (#ont)

.urvival of travel agents

#ommission versus service fee

Tourist information 9 tour gui*ing

4o+ile p$one tec$nology

.mart &e+sites an* searc$ engines

#onsumer preferences
"ssues (#ont)

%o& *o &e get t$e various *ata+ases to

communicateA

%armonise ProBect (E/ proBect in tourism)

2llo&s t$e reconciliation of *ifferent stan*ar*s an*

provi*es t$e minimum ontology to formally *escri+e
t$e *omain of reference7

"t &ill allo& provi*ers an* users to communicate6

&$ile )eeping t$eir proprietary *ata formats7

Gro&t$ of +logs (#onsumer generate* content)

:ill virtual travel replace real travelA