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Ict in Tourism Industry

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Information and Communication Technologies in Tourism

Agenda
1.
1.1

ICT and tourism – introduction
Tourism as information business

1.2 2.
2.1 2.2 2.3 2.4 2.5

eTourism – ICT usage in tourism ICT usage in tourism – overview and case studies
Tourism stakeholders and interfaces Tourism suppliers and eTourism Intermediaries and eTourism Destination organisations and eTourism Tourism management and eTourism

3.
3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7

Trends and future applications
Social Media & Web 2.0 Website optimisation Interoperability and semantic web Software agents Recommender systems Dynamic packaging Mobile services & ambient intelligence Online auctions in tourism

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1.2 eTourism – ICT usage in tourism Definition and history of eTourism
Facts & trends

Reasons, advantages and implications of ICT usage ECCA – eTourism Competence Center Austria

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ICT in Tourism

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1.2 eTourism – ICT usage in tourism Definition and history of eTourism
Facts & trends

Reasons, advantages and implications of ICT usage ECCA – eTourism Competence Center Austria

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Introduction - ICT
ICT - Information and Communication Technologies
Umbrella term for technological developments for the
Production, analysis, storage, search, distribution and use of information

ICT includes a combination of hardware software telecommunications netware groupware humanware

ICT enables effective data processing & communication for organisational benefit opportunities & challenges for suppliers in all industries Provide enormous capabilities for consumers

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Introduction - ICT Development phases of ICT

Time period 1945-1960 1960-1975 1975-1990

Technology
Early electronic computers Mainframes, databases Host systems, PC, networks, communication protocols Distributed systems, multimedia, wan, worldwide networks

Scope
Calculation Information processing inside a company Communication between companies Communication between companies

User
Single user Time sharing (multi user) Multi user

since 1990

Distributed computing

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Introduction - ICT Network infrastructure evolution
Information networks Client-server networks ClientHost-based networks HostCHARACTERISTICS: - Circuit-based and protocoldependent - Hierarchical - Centralized computing APPLICATIONS: - Critical mission - Constant use - Low bandwidth - Quality constraints CHARACTERISTICS: - Router-based and protocolindependent - Peer-to-peer - Distributed computing APPLICATIONS: - Department applications - Sporadic use - Medium bandwidth - Less quality constraints CHARACTERISTICS: - Switch-based and protocolindependent - Full connectivity - Collaborative Computing APPLICATIONS: - Collaborative applications - Constant use - High bandwidth - Low quality constraints

(Meleis 1996)

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Definition of eTourism

Business
- Management - Marketing - Finance

eTourism ICT
-Information Communication Technologies -Information systems -Telecommunications

Tourism
-Transport -Travel -Hospitality -Leisure

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Potential of ICT in Tourism Characteristics of tourism
Intangibility, syncronism, non-storability, complexity of tourism services High information need

High ICT potential
Improvement of available information about
Offered services Consumer and his needs

Elimination of information asymmetries and their consequences (adverse selection, moral hazard, etc.)
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Potential of ICT in Tourism

(Schertler 1997)

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Potential of ICT in Tourism

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History of eTourism

1949 60ies

Foundation of SITA: Implementation of a network of 11 airlines Implementation of CRS (Computer Reservation Systems) and GDS (Global Distribution Systems) e.g. Amadeus, Sabre DMS (Destination Management Systems) e.g. Tiscover, Feratel Internet & WWW • Websites • Online platforms

90ies
Mid 90ies

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15 Years of Web-Story

The Internet - Global accessible and transparent infrastructure
System structure: Most nodes few links, but small and significant number show very many (i.e. hubs, authorities) 130 million distinct web sites 40 billion web pages 1 trillion links

In 2007 160 Exa-bytes (1018) of information
25% originally created 75% replicated 95% unstructured, distributed, little control query 2011 > 2.2 Bn (i.e. 1/3 of global citizens)

Internet Users
2000 400m 2006 > 1Bn 2008 > 1.5 Bn

Changes in society
Complex interactions in parallel to ongoing globalization Service industry and information work Virtual network externality (value due to information and user integration in service network)
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Stylized Facts on eTourism
Information Technology and Tourism - 2 world´s fastest growing industries Travel & Holidays = most expensive regularly purchased item Internet Tourism 22.5% of EU eCommerce Sector 61 Bil. € 2008 (Marcussen 2009) 96% search online (i.e. 10 sites before booking), 62% book online (Phocuswright 2009)
TUI 2008
10% 16% 56% 16% Airline 2%

EU online trave market by type of service

Hotels Packages Train Car

Marcussen 2008

Concentration: Top 1% of tourism websites join 53% of users 3 players dominate 93% of online travel US market (65% EU) InterActiveCo Travel Portals: Expedia, Hotels.com, Tripadvisor Cendant GDS: Galileo, Gullivers, Avis, Orbitz.com, Octopustravel.com Sabre CRS: Travelocity.com, Lastminute.com
14 ICT in Tourism © copyright IFITT

eTourism: Facts & trends The travel online market

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eTourism: Facts & trends eBusiness activities per sector e-Business Scoreboard 2006 (for sectors, EU-10)

100 90 eProcurement and eMarketing / Sales Telecom

80 70 60 50 40 30 20 10 0 0 10 20 30 40 50 60 70 80 90 100
ICT infrastructure & internal processes
The Scoreboard consists of 16 component indicators, grouped in four categories. The underlying survey data have been weighted by employment, thus emphasizing the activity of larger firms. The size of the bubbles is indicative for the relative size of a sector (by employment). Data for hospitals are not 100% comparable, as for some business indicators proxies had to be used. (eBusiness Watch 2006)

Tourism CE

ICT M.

Hospitals Paper Shipbuilding Food

Construction Footwear

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eTourism: Facts & trends eBusiness activities per company size e-Business Scoreboard 2006 (for size-bands, EU-10)
100
Large (250+) eProcurement and eMarketing / Sales

80
Medium (50-249)

60

Small (10-49) Micro (1-9)

40

20

0 0 20 40 60 ICT infrastructure & internal processes 80 100

The component indicators for size-bands are based on aggregated data from the 10 sectors studied in 2006 (in 10 EU countries). (eBusiness Watch 2006)

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eTourism: Facts & trends ICT impact on business activities
Where ICT will have an impact in the future?
0 Managem ent Accounting R&D Production Marketing Logistics Custom er support 10 20 30 40 50 60 70

33 40 24 20 37 25 34
Expect high im pact

30 29

18 22 27 25 24
Expect m edium im pact

Read: "Firms representing …% of employment in the sectors surveyed expect that ICT will have a high / medium impact on management / accounting / … in the future." Base: EU-10, 10 sectors. N = 7237. (eBusiness Watch 2006)

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eTourism: Facts & trends eBusiness activities in tourism based on employment-weighted data
(emphasises situation in larger firms)

based on data in % of firms
(emphasises situation in small firms)

A
1,5
1,7

A

0

0

D

-1,5

B

D

-1,7

B

C

Max

Average

Tourism

C

e-Business dimensions (sub-indices): A = Use and access to ICT networks B = e-Integrated business processes C = Supply-side e-business activity D = e-Marketing and Sales

Scale: Max = maximum e-business intensity in one of the 10 sectors benchmarked Average = average e-business intensity in the 10 sectors benchmarked Orange diamond = relative e-business intensity in the tourism industry

(eBusiness Watch 2006)

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eTourism: Facts & trends Acceptance of online orders
0 Total 15 27 30 8 45 60 75

Food Footwear Pulp & paper ICT manuf. C. electronics Shipbuilding Construction Tourism Telecoms

11 13 15 18 16 11 8 5 8 12

19

11 7 9

42 24 12

6

Hospitals 3 4 Accept orders from customers online at least 5% Accept orders from customers online <5%

(eBusiness Watch 2006)

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eTourism: Facts & trends Marketing or sales processes
0 Total 10 18 20 30 40 50

Food Footwear Pulp & paper ICT manuf. C. electronics Shipbuilding Construction Tourism Telecoms Hospitals 8 8 8

14

19 24 20 12

28 37

Specific ICT solutions to support marketing or sales processes

(eBusiness Watch 2006)

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eTourism: Facts & trends Buying or selling online in tourism

(eBusiness Watch 2006)

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eTourism: Facts & trends Direct sales vs. intermediaries

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eTourism: Facts & trends Media of customer requests in tourism

(Kohl & Partner)

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eTourism: Facts & trends Online turnover by type of tourism service

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eTourism: Facts & trends eBusiness in Austrian tourism

(eBusiness Watch 2006)

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eTourism: Facts & trends eBusiness vs. eHospitality in Austria
Turnover:
0,9 % of total turnover transacted online in Austria (ca. 2,8 Bill. €) 7,5 % of total turnover in hotel industry induced by internet bookings

Website:
71 % of all companies online 94 % of hotel industry online

Internet sales:
9 % of all companies make business online 41 % of the hotel industry is doing business online
(Statistik Austria)

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1.2 eTourism – ICT usage in tourism Definition and history of eTourism
Facts & trends

Reasons, advantages and implications of ICT usage

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Specific role of ICT in tourism
ICT played an outstanding role for development of modern tourism Computer Reservation Systems (CRS)
Developed and operated by airlines to cope with increasing volume logistic and operational problems

systems with several ten-thousand participating companies

Similar applications could only be found in the financial sector eTourism is one of the most important sectors in eBusiness Acceptance of online orders Marketing and sales processes
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Advantages of ICT usage in tourism
Optimal product information for customer Multimedia, global search engines, recommendation Reduction of effort for information gathering and travel planning (transaction costs) Reduction of product complexity Information about customer for supplier Customer profiles and preferences (eCRM) Customer behaviour and needs (web mining) Flexibility of tourism offers Customisation of products (prosuming) Yield Management & dynamic pricing Dynamic packaging
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Reduction of effort for travel planning by ICT Conventional process

(Werthner/Klein 1999)
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Reduction of effort for travel planning by ICT ICT-supported process

(Werthner/Klein 1999)

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Reduction of transaction costs Transaction costs
Types of transaction costs
Information costs Negotiation costs Costs of supervision Organization costs friction costs

ex-ante ex-post

Transaction costs decrease through ICT
Ex-ante costs towards zero
Many customers can be served without need to increase information and negotiation capacity Intelligent search & recommender systems Dynamic packaging

Support of supervision by online service recovery (feedback)
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Online-suitability of tourism products

(Werthner/Klein 1999)

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Implications of ICT usage

(Werthner/Klein 1999)
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The electronic tourism market

Single value chains integrated in greater value system coordination need of “long value chain”
(Werthner/Klein 1999)
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E-Tourism Research - An Interdisciplinary View

© copyright – Challenges for Research and Practice. In: Sidali, K., ICT in Tourism 37 Fuchs, M. & Höpken, W. (2011): E-Business Horizons in the Tourism IndustryIFITT Spiller, A. & Schulze, B. (eds.), Food, Agriculture and Tourisms: Interdisciplinary Perspectives, Springer, Berlin, 140-160.

An Interdisciplinary View
Truly equivalent…

Frictionless market scenario through Internet (Akerlof 1970)
Ubiquitous access to equilibria mechanisms (brand, web2.0, screening)

Consumer Culture Theory and SD-Logic
ICTS put empowered user in middle of co-creation process to achieve performance
Interest driven web-behaviour (i.e. need-recognition Business engineering going online) well-being engineering (i.e. utilitarian/ratio AND hedonic/entertainment)

Website neutralizes trade-off between no. of achievable persons and info richness
e.g. accuracy, timeliness, customization level, etc.

Tourism benefits from ICT due to confidence characteristics of tourism product
Complex service experience co-created by SMES & tourist best presented by new media
Supply: Coord., differentiation & promotion (visualization), distr., reduce risks in co-production Supply: Coord., risks coDemand: Planning & individualization, config., interaction, risk avoidance in co-production Demand: config., co-

Information intensiveness in tourism
Huge data amounts and info-processing efforts

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An Interdisciplinary View
Strategic goals associated with ICTS
1995 - 1998 Establish online presence 1999 - 2003 Acquire new customers (e.g. personalized information) 2003 - 2006 Retention of customers (e.g. eCRM) 2007 - ? Customer integration (i.e. customer focussed customer driven, web 2.0)
Customer behaviour
Empowerment Lowered loyalty Adopt tasks as prerequisite for customization Customer care across numerous service providers

Advantages from quickly adopted ICT

Performance
Efficiency Costs Sales Innovation rate Managerial performance Service Quality (CS)

Optimal service info/selling
Complexity & effort reduction

Flexibile co-creation
Adaptation & customization Dynamic sourcing & pricing (YM)
Market structure

ICT provoced change in tourism

Business intelligence
Behaviour and needs (Data/Web mining) Profiles and preferences (eCRM)

Skill demand education system training system Learning methods

Concentration Specialisation Dis-/re-intermediation Dis- /reNew distribution channels Value adding services New eBusiness models

eTourism research: Acceptance, use, adoption and impact of ICTS in Tourism
39 ICT in Tourism © copyright IFITT

Future challenges for eTourism Research
ICT biggest force affecting Travel and Tourism
Web 2.0 empowers tourist (Tourist = Operator) AND tourism supplier/destination Ultimate travel portal: Unlimited online medium offering broad spectrum of information generated within business network and user community Interdisciplinary eTourism Research: Understanding interrelation between… Technology The Web (web-structure mining = topology, linkphobia, Baggio 2009), intelligent business and end user applications Business Model Content
Self-reinforcing propagation Automated Sentiment Detection, Webcontent/text mining
Management Science Business Process Information Science Technical Process Computer Science Information System Web Service E-Service Service

Users
Attitudes and Behavior as coproducer Web-usage mining, trust, privacy, TAM, eBranding, cooperation & adoption behavior
40 ICT in Tourism

Servce Oriented Arcitecture (Werthner 2008)

© copyright IFITT

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