Chapter 19 Information Technology in Tourism

1. Chapter 19Information Technologyin Tourism

2. 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.

3. 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

4. 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

5. 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

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

7. 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

8. 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.

9. 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

10. 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

11. 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)

12. 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

13. 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

14. 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 theInternet

15. 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

16. Lastminute Case Study Mission Statement

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

18. Figure 19.2 Tiscover Source: tiscover.com

19. 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

20. 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

21. 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

22. 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

23. 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

24. 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

25. 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