Chapter 19 Information Technology in Tourism

This Lecture will give you An understanding of the key ICT and eTourism concepts; An appreciation of the generic ICTs applications in the tourism industry; A knowledge of the basic concepts of computer reservation system and global distribution channels; A comprehension of the impact of the Internet and ICTs tools on the structure and components of the tourism system; and An appreciation of the strategic importance of ICTs and the Internet for the future of each stakeholder in the tourism industry.

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 and 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 and suppliers globally ICTs provide the tools and enable the evolution of tourism demand and supply

The eTourism concept eTourism reflects the digitisation of all processes and value chains in the tourism, travel, hospitality and catering industries At the tactical level it includes eCommerce, eProcurement and all ICT empowered functions eTourism applies ICTs for maximising the efficiency and 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 and the strategic relationships of tourism organisations with all their stakeholders

The eTourism concept (continued) eTourism determines the competitiveness of all tourism organisations and destinations Takes advantage of intranets, extranets and the Internet It includes all business functions eTourism bundles together three distinctive disciplines Business and management Information systems and information management Tourism, travel, hospitality

The eTourism concept and eTourism domains The eTourism mix The eTourism concept and eTourism domains Source: Buhalis, (2003) eTourism, FT Prentice Hall

practices in tourism by ICTs Best operational practices in tourism by ICTs Major drivers make ICTs an integral part of the tourism industry Economic necessity The proliferation of the Internet Development of 3G mobile devices and interactive television Improvements in ICTs' price/performance ratios Rising consumer expectations ICTs can also assist the reduction of operation and communication costs

operational practices in tourism 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.

reduction of operation and communication costs by: ICTs assist the reduction of operation and 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

hospitality functions supported 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

and Networking tools in the Tourism Industry Telecommunications and Networking tools in the Tourism Industry Telephone, telex and fax Mobile devices Telex Videotext and new data Teletext Electronic Data Interchange (EDI) Inter-organisational and Intra-organisational networking Virtual reality Information superhighway (converges media, telecommunications and information technology)

Software classification scheme Source: Buhalis (2003) eTourism, FT Prentice Hall, based on Werthner and Klein (1999) Information Technology and Tourism: A Challenging Relationship,Springer-Verlag, Vienna

Software classification scheme Source: Buhalis (2003) eTourism, FT Prentice Hall, based on Werthner and Klein (1999) Information Technology and Tourism: A Challenging Relationship,Springer-Verlag, Vienna

Applications in the tourism industry used currently 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

Applications in the tourism industry used currently (continued) 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

Lastminute Case Study Mission Statement

Figure 19.1 lastminute.com UK homepage Source: lastminute.com

Figure 19.2 Tiscover Source: tiscover.com

applications in the tourism industry Major ICT applications in the tourism industry Computer Reservation Systems (CRSs) assist tourism enterprises: Handle their inventories profitably Facilitate the tourism products distribution Normally operated by airlines, hotels and tour operators Distribute products nationally or globally Use computerised or videotext systems Use mainframes and extensive networks to support remote terminals in travel agencies 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

tourism industry (continued) Major ICT applications in the tourism industry (continued) Global Distribution Channels (GDS) incorporate a comprehensive range of services and products provide a global distribution info-structure satisfy consumers' need for easy access provide transparent and easy to compare information Tourism suppliers use CRSs & GDSs to manage & distribute their capacity as they enable flexible pricing & capacity alterations reduce communication costs provide managerial information on demand patterns or competitors' position serve the travel trade (intermediaries) support quick and firm responses to customers' enquiries

Functions of intranets in tourism (continued) Communication between departments business functions networking and information exchange human resources management staff coordination 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 information operational planning accounting/billing payroll supplies management Source: Adapted from Buhalis (1998) Strategic use of information technologies in the tourism industry, Tourism Mangagement, 19 (5), 409–421

Functions of intranets in tourism Information exchange within a tourism organisation Management Support strategic planning competition analysis financial planning and control accounting and finance marketing research marketing strategy and implementation pricing decision and tactics middle term planning and feedback management statistics/reports operational control management functions

Functions of extranets in tourism Links between partners availability/prices inquiries negotiations and bargaining reservations and confirmations lists of groups/visitors receipts/documents vouchers and tickets production travelling facilitation follow up progress keep partners informed about plans amend plans should unexpected developments arise follow up developments feedback and clearing commissions payment and commissions clearance feedback and suggestions complaint handling building loyalty through data mining

Functions of Internet in tourism Information distribution Electronic commerce Request availability/prices/information Reservation and confirmation Expanding value chain with complementary products Deposits and full settlements Specific requests/enquiries Feedback/complaints Ancillary services

Conclusions Information Telecommunication Technologies increasingly determine the competitiveness of tourism organisations Tourism industry should take advantage of the Internet, Extranet and Intranet to manage its representation to the world, its internal efficiencies and its relationships with other partners. ICT-enabled tourism organisations will benefit and grow in the future