E-tourism

Electronic Commerce Strategies for Development: Promoting an International Dialogue Tunis, 19-21 June
WORLD TOURISM ORGANIZATION

A c c e s s

WORLD TOURISM ORGANIZATION

The On-line Market is there

Forecast for European markets
300 250 200 150 100 50 0 12.8 10.9 8.45 6.77 4.73 0.227 0.811 2.64 1998 1999 2000 2001 2002 2003 2004 2005 2006 14.7 192 200 208 212 216 237 244 223 230

- 64% of Internet sales are direct sales. - UK sales represent 34% of Western Eurepean sales. - Airlines are 60% of total sales and half of this is from low-cost airlines

Market M(000)

Internet salesM(000)

Market share
7% 6% 5% 4% 3% 2% 1% 0% 1998 1999 2000 2001 2002 2003 2004 2005 2006

WORLD TOURISM ORGANIZATION

Distribution costs are a growing area of potential savings $ 20 billion per annum: 4% of overall costs and growing.

WORLD TOURISM ORGANIZATION

The Electronic Marketplace in tourism

eBusiness Business Business
B2B Extranets between Hoteliers and tour operators C2B Consumers registering their preferences on airline or hotel loyalty/executive clubs G2B Government informing hotels about food safety legislation or taxation

Consumer

Government

B2C B2G eCommerce Business interacting with applications where government departments, e.g. consumers purchase air hotel developer requires tickets planning permission C2C Consumers informing other consumers over good or bad practice (e.g. www.untied.com) G2C Government informing consumers on regulations, visa or vaccination requirements C2G Consumers applying for visas, requesting maps and local destination information

Consumer

Government

G2G Governments interacting in tourism policy matters or asking technical assistance through organizations such as the World Tourism Organization

Source: Buhalis D., eTourism

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New Business Models

Tiscover GTREX

WORLD TOURISM ORGANIZATION

Three online firms now control over 55 percent of all online travel bookings
100 90 80 70 60 50 40 30 20 10 0 Online Travel Online Agents Suppliers

Source: Peter OConnor, IMHI, 2003

WORLD TOURISM ORGANIZATION

WTO activities in E-tourism: Publications: Marketing Tourism Destinations Online, 1999 E-Business for Tourism, 2001 Seminars Capacity building: Courses for National Tourism officials of WTO member States Partnership with IFITT Bench-marking scheme for Destination Web Sites Harmonise
WORLD TOURISM ORGANIZATION

WORLD TOURISM ORGANIZATION

As it was in the beginning.

Electronic Intermediaries Traditional Intermediaries

Hotel Hotel Hotel

CRS Switch

GDS

Travel Agents

Customer

3rd Party CRS

DMS Hotel

TICs

Source: Peter OConnor, IMHI, 2003

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Is now..
Hotel Hotel Web site Customer Customer CRS Web site Customer

Hotel

CRS

GDS

Travel Agent

Customer

Switch GDS-based Web site Customer

Switch Co Web Site

Customer

Hotel

Web Intermediary

Customer

Hotel

Rep Company

Customer

Rep Company Web site

Customer

Customer

Hotel

DMS

DMS Web site

Customer

TIC

Customer

Source: Peter OConnor, IMHI, 2003

WORLD TOURISM ORGANIZATION

Critical tourism and hospitality functions supported by ICTs

Front office: reservations, check-in, payments Back office: accounting, payroll, human resources management, marketing Customer entertainment and service Communication with consumers and partners Marketing research Reaction and management of unexpected events Flexible and dynamic pricing through yield management Differentiation and personalization of products Monitoring performance indicators and building feedback mechanisms Control of business processes and personnel
WORLD TOURISM ORGANIZATION

Examples of information technology applications used in tourism

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
WORLD TOURISM ORGANIZATION

Examples of information technology applications used in tourism

Internet/intranets/extranets Networks with partners for regular transactions (EDI or extranets) Networking and open distribution of products through the Internet Computer reservation systems (CRSs) Global distribution systems (GDSs) (e.g. Galileo, SABRE, Amadeus, Worldspan) Switch applications for hospitality organizations (e.g. THISCO and WIZCOM)
WORLD TOURISM ORGANIZATION

Examples of information technology applications used in tourism

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 centres Interactive digital television (IDTV) CD-ROMs Kiosks and touch-screen terminals
WORLD TOURISM ORGANIZATION

Internal systems and intranets Improving capacity management and operations efficiency Facilitating central room inventory control Providing last room availability information Offering yield management capability Providing better database access for management purposes Supporting extensive marketing, sales and operational reports Facilitating marketing research and planning Providing travel agency tracking and commission payment
WORLD TOURISM ORGANIZATION

The small e-business

The ICT illiteracy of the entrepreneurs Lack of marketing and technology understanding The cost of ICTs being perceived as prohibitive for entrepreneurs Inability to control the equipment Perceived dependence on trained staff Lack of standardization and, often, professionalism Seasonality and limited period of operations in resorts Insufficient training and established organizational practices Small size multiplies the administration required by CRSs to deal with each property The unwillingness of SMTEs to lose control over their property

WORLD TOURISM ORGANIZATION

Tourism is a very information intensive act In few other areas of activity are the genera gathering, processing, application and communication of information as important for day-to-day operations as they are for the travel and tourism industry
Poon 1993

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