An Overview of Information Technology in Tourism Industry

International Journal of Applied Services Marketing Perspectives

Volume 1, Number 1, July -September 2012

AN OVERVIEW OF INFORMATION TECHNOLOGY IN TOURISM INDUSTRY Anju Gupta1 ABSTRACT The Importance of Information Technology in Tourism, Especially of the World Wide Web, has increased tremendously over the past years and this trend will certainly continue. ITs provide both opportunities and challenges for the industry. IT is crucial to the tourism industry and its success. Various high-tech information and communication technologies are in use in the tourism sector around the world. They are used for tourism product development, marketing, distribution and training of tourism sector personnel. These technologies are so indispensible in order to find out and satisfy the ever-changing demands for tourism products. This article looks at the different uses of information and communication technologies in tourism sector. It examines the impact of ICT on tourism industry and the new and innovative technologies which are used in tourism industry. It also indicates the problems and issues concerning information technology applications in tourism. KEYWORDS World Wide Web, Information &d Communication Technology (ICT), Tourism, and Information Technology (IT) etc.

INTRODUCTION Though there are many definitions for tourism, it could be simply defined as a “travel and stay of a non- resident”. In order to travel to a particular area there must be a reason. For example a person may travel for leisure, business, visiting friends and relatives, health education etc. He/ She choose a destination for one or other reason (Mekonnen G / Egziabher, 2001). Tourism has a significant economic impact at an international, domestic and regional level. This impact is underlined by statistical evidence demonstrating the significance of tourism in terms of GDP, employment and economic development. The tourism industry can be seen as one of the first business sector where business functions are almost exclusively using information and communications technologies (ICT) (Garzotto et al, 2004). Information Technology (IT) and ICT has played an important role in the development of tourism. Computerized Reservation System (CRS) were among the first applications of IT worldwide. In fact ICTs have contributed to the massive growth of tourism and the increased volume of supply and demand. ICTs have been changing the way in which tourism companies conduct their business. E-Tourism therefore emerged as a term describing the entire range of applications of ICTs on tourism industry. TECHNOLOGY & TOURISM Tourism in its present form is a post war phenomenon developed essentially as a consequence of technological developments in the field of automobiles, railways, ships, aircrafts, computers and communication system. Although sails were the earliest means of transport, the invention of steam powered automobile by Nicholas Joseph Cugnot in 1769, the assembly of the first commercial steamer by Robert Fulton in 1807 and the production of first successful locomotive by George Stephenson in 1814 Introduced Several means of mass transport. It was, however, the advent of air transportation during twentieth century which revolutionized the phenomenon of international tourism. It reduced the distances between the nations to a matter of few hours (G. Raveendran, 2001, Department of Tourism Transport Bhawan, New Delhi). Though the role of IT as a catalyst for competitive positioning in businesses was recognized as back as the mid-1980s (Porter, 1985), it was not until the early 1990s that its strategic potential was acknowledged by the tourism and hospitality industry (Cline & Bhatt, 1998; Olsen, 1996). The developments in computer and communication technologies have made it possible to have rental cars with computerized driving directions and self – service video- terminals at rentals counters in high traffic airports. Fully automated rental transaction system National’s ‘Smart Key’ machine and Budget’s “Remote Transaction Book” came into existence. Yet another major contribution of technological developments in computers and communication systems to tourism is the Computerized Reservation System (CRSs) in the 1970s and the Global Distribution System (GDS) in 1980s. The dawn of the age of personal computers (PCs) coupled with the advent of multimedia content has thereby spurred the interactivity between suppliers and consumers (Bubly & Bennett, 1994). The IT revolution has induced Business Process Reengineering (BPR) in virtually all sectors of the economy and tourism is no exception.

1

Assistant Professor, Department of Commerce, DAVC College, Haryana, India, [email protected]

© Pezzottaite Journals, Jammu & Kashmir, India.



APPLICATION OF IT IN TOURISM INDUSTRY Till a few years ago, the basic sources of information in the tourism sector were pamphlets, brochures, and directories, guide books etc. produced and published by different countries. These sources prevail even today, though they are the most inefficient means of information. Geographical Information With the help of internet geographical information on location climate, landscape etc. can be given to tourist. The CD-Rom technology took the tourism industry by storm. CD titles which came in the market during the initial period mostly contained geographical information. Several such titles are presently available in the market. Attraction Features In the attraction sector the establishment of tourist information centers is of special significance. Attraction owners with the use of ICT can communicate their customers directly and effectively, both for marketing and distribution of their products. In natural attraction areas like in the national parks, the use of ICT is important in protecting the resource. The attraction owners particularly the national tourist offices discharge their duty of promoting their country’s tourist attractions using the information technology products. Information through promotional videos, internet web sites, television advertisement and travel documentaries are the main information dissemination tools (Manjula Chaudhary, 2008). Accessibility With the help of ICT the information of accessibility though air, water, rail, roads and availability of scheduled means of transport, can be given to customers. Before setting out on a Journey of any kind, every traveler makes sure which transport co. has a good safety record. To this effect, airplanes coaches and even taxis are equipped with good communication equipment. An airplane flies with the help of modern information technology equipment which provides information ranging from weather altitude and other information to the pilot etc. In the case of buses / coaches and taxis, in many countries with developed tourism business, they are equipped with radio communication system for various uses. For example, the driver or the tour guide updates the tour company headquarters about the progress of the tour throughout the touring period. This communication ensures the safety of tourists (Mckonnen G/Egziabher, 2001). Accommodation In the accommodation sector also the contribution of information technology is prominent. Any individual or group wishing to travel to any part of the world now has an easy access to the accommodation service providers. A visitor can access an information about the kind of hotels at the destination, their range of product, the price and other relevant information without leaving his/her office or home. Here the information can be obtained aided by still or moving pictures in order to give an exact feature of an accommodation (Nath and Menon, 2005). Activities and Entertainment facilities In- flight entertainment is also a product of information technology. Video games, video films are some of the examples. Season of Visit With the help of ICT, the information regarding in which season the tourists should visit to a particular place can be given. For example, in the hilly areas, people like to go to enjoy the snowfall season this information can be obtained from internet based web sites. Quality of Facilities and Their Standard Prices So far it has been dealt with an information technology where intermediaries, travel agents, tour operator etc. are an indispensable part in the distribution and marketing of travel and tourism products, and as an important point of sale or product outlets. Here I will discuss about an information technology where the producer and the consumer are directly communicating by putting the indispensability of travel intermediaries in question. The intangibility of the product where risk and uncertainty for the customer is higher, his need for reliable pre-purchase information is stronger. The potential customer’s decision risk and dependence on information is decreased with the help of ICT because he can see, inspect, compare or try out tourist services before deciding to use them. Marketing Tourist product and destinations are better advertised via the internet rather than traditional means, like brochures, advertising catalogs etc. Furthermore, ICTs allow direct and interactive relationships between tourism organizations and customers. But the most interesting perspective of ICTs applications on marketing is that, companies can build a customer’s profile and make personalized offerings (Stiakakis & Georgiadis, 2009).




INFLUENCE OF IT ON THE STRUCTURE OF TOURISM INDUSTRY An interesting issue to deal with is what actually the internet and the other ICTs mean for tourism organizations. Is the use of internet a competitive advantage for the tourism industry? For this first of all, we need to examine the impact of the internet on tourism industry structure. According to Porter (2001), the underlying forces of competition which determine the structure of an industry are the same irrespective of whether this industry belongs to the traditional or new economy. Rivalry in the Market The competition of tourism organizations over the internet is much more intense. It is mainly a price competition instead of offering a product of better quality or differentiating the service package. Another argument that competition will continue to increase is that numerous non- tourism organization are entering the sector and start to provide online tourist services. Hence the effect of the internet on rivalry is strong negative (Antonio, Andres and Roman, 2010). Barriers to Entry The barriers for a new entry to E-tourism have been minimized, since the technological obstacles as well as the necessary resources to start up an online business (Capital, personnel, etc) are very limited, compared to traditional tourism business so the effect of the internet on barriers to entering is moderately negative. Threat of Substitutes It is nowadays easy, costless and not time consuming to find substitutes for any tourism business via the internet (rooms to let instead of hotels, transportation by rail or ship instead of airlines etc). Even if we looked for substitutes for tourist products and services outside the tourism secretor, we would be amazed by the many alternatives the internet provides, (entertainment cultural and sporting activities etc). It is concluded that the effect of the internet on threat of substitute is moderately negative (E. Stiakakis, Georgiadis, 2009). Bargaining Power of Suppliers Tourism organizations are capable of offering their products and services via the internet to more customers without depending upon any traditional intermediaries. This implies a better bargaining position of supplier. However, suppliers will continue to work with online intermediaries, thus leading to another kind of dependencies. Consequently, the internet seems to have a slightly positive in parallel with a slightly negative effect on bargaining power of suppliers (Karanasions and Burgess, 2008). Bargaining Power of Buyers The direct relationships between customers and e-tourism organizations have increased the bargaining power of buyers. Moreover, as customers become more familiar with the internet technology, their loyalty to specific providers will decline; in combination with the low costs of switching a supplier over the internet, the bargaining power of buyers will also strengthen. Hence the effect of the internet on bargaining power of buyers is strongly positive (Powell & Micallef, 1997). NEW & INNOVATIVE TECHNOLOGIES The last few decades witnessed the application of computer and communication technologies in the field of tourism. Two distinct streams of information sources viz, Online and Offline came into existence. Some of new technologies which came into existence are as under: CRS (Computer Reservation System) The airline CRS systems were the pioneers of computer applications in the 1950s and are now virtually indispensable in the airlines because they enable their revenues streams to be maximized by efficient inventory control. The emergence of computerized reservation system (CRS) like Galileo, Amadus, Sabre Pars, Jalcom, Qamtam and Abasus etc opened up a new source of online information on tourism and are being expanded continuously The latest source of online information is internet which contains some pages on most of the tourist destinations in the world. (G. Raveendran, 2001). The technology works by using computers of special kind and leased telephone lines. The travel agent is connected online to the central host computer system or CRS. The host computer is almost always a mainframe with massive database attached. The mainframe host polls each travel agent terminal every second or so, to see if it has any massages to send. In this system it is possible that airlines, hotels and car rental companies can talk to the travel agent and vice versa. This system contributes to a great extent in increasing sales volume and giving precise information on the availability and selling the products efficiently ensuring substantial profit gain (Mekonnen G / Egziabher, 2001).




Global Distribution System GDS is a form of inter organizational system, evolved from computer reservation systems and enable the aggregation of information from airlines which enables travel agents and tourists to ‘make reservations and order other services in a single marketplace’ (Joo, 2002). There is increasing debate concerning the long term viability of large GDSs. The systems themselves are dated, based on 1960s architecture and code, never intended for use (Pease & Rowe, 2001). Unlike the CRSs used solely by an airline or hotel chain, GDS distribute more than one CRS to users who are usually travel agents. Some leading GDS are Amadeus, Galileo, Sabre and world Span (Nath & Menon, 2005). This world leading GDSs are switches or simply computers that are connected on the one side to many different supplier systems and on the other side to many end users. The end users of switch comprise travel agents with a single reservation system to support the sale of airline seats and related travel products such as hotel and car hire, via a single computer terminal, usually a personal computer. GDSs require massive investment because they are extremely large computer systems that link several airlines and travel principals in to a complete network of PCs, telecommunications and large mainframe computer (Buhalis D, 1998). Internet Forums An internet forum is an online facility ‘that provides local businesses with an internet portal using the locale or an industry particular to the locale, as the unique selling point, or common brand’ (Galway, Mochrie & Deakins, 2004). This acts as an anchor providing more of a profile to entire visitors to the website that represents the location or destination. This internet based virtual business forums assist tourist operators in rural areas. By developing a strategic approach that adopts a clear identity focusing on the destination and its features encapsulated in an integrated website, the forum concept has significant merit with respect to regional tourist destinations (Pease & Rowe, 2001). Collaborative Filtering Collaborate filtering is a data mining type of software. This type of application uses the power of customer databases to identify customers who have similar profiles like preferences, interests and travel patterns etc based on previously accumulated customer knowledge. The findings are used for direct marketing. Great examples are Amazon.com Barnes & Noble and Skymall (Antonio, Andres and Roman, 2010). Video Conferencing Developing any product needs data input and discussion to confirm the viability of a product. Nowadays it is quite possible to exchange data and hold discussions between producers and researchers or producers and marketers in any part of the world without leaving ones office. This is done by the use of the information technology called video Conferencing. The technology works using PCs so as to enable people to meet one another (Mekonnen G /Egziabher, 2001). Electronic Travel Authority System Facilitation is one important aspect of enhancing tourism business. Facilitation includes, issuing of visa, customs clearing and immigration check in ports. Lack of appropriate management in giving fast and efficient service to tourist in this area will deter the tourist flow substantially. Recently, development has come about in using electronic medium for facilitation purpose that is called ETAs (Electronic Travel Authority System). This is “Automated Visa Application System” (Michael & Steiner, 2003). The Internet and Cultural Tourism Cultural tourism is a good example of the way in which online technologies have been influential as its emergence has been fostered by the internet. Cultural tourism focuses on the presentation of an area cultural heritage, ranging feom environmental attractions through historical, artistic, archaeological and folkloric components. A specific example of this form of tourism is the MEDINA (Mediterranean by internet access) project started in 2002 (Gazotto et al. 2004). By this the information to tourist is given through mobile devices, which allows the tourist to make informed decisions concerning cultural sites (Badnjeric & Padukova, 2006). Knowledge – Based Software This software is based on the belief that people want more choices but they just do not want to be burdened with those choices. This type of software takes criteria set by customers and goes into digital databases. It then gets available choice for the customers. This type of software not only automatically finds information for customers but also narrows down the choices and lets customers find the best deal (Gretzel, Yuan & Fesenmaier, 2009). Personalization Software / Profiling Personalization software is also a form of data mining. This software rests on the belief that people live busy lives and want other people to look after their needs. This type of software tracks and monitors the preferences and purchasing behaviors of customers.




Thus it can customize products / services based on needs and preferences and perform direct marketing accordingly (Nath & Menon, 2005). Electronic Payment This type of software enables electronics transactions. It simplifies a very complex buying – payment process that leads to a by passing of intermediaries. It lowers the entry barriers into the tourism industry and increases competition and helps in understating the relationship between the effect of ads and purchase patterns. Online Word of Mouth (WOM) Monitoring Consumer to consumer interaction contributes the most to the success of web-based advertising. Like through conventional communication channels such as phone and mail, people share their travel experience on the web. Statistical evidence shows that there are more and more people using different features of the internet (i.e. email, chat) to keep in contact with their friends and relatives. Tourism organizations have the ability to influence conversation related to the travel product and the end destination through WOM. Providing a virtual community for people to share their experience and stories is the most common example (Gambia, 2008). Virtual Reality and Web Casting Virtual Reality displays three - dimensional world web casting provides online live videos and events. Two things could happen: one is the loss of intrigue. Intrigue is one of the reasons that motivate people to travel. If people can go on the internet and experience cyber space vacations, they may lose their motivation to visit that place in the real world. The other thing is the balance between advertisement and reality. If people obtain an accurate view of the destination before they visit it they are going to have really well formulated expectations of what they will see at their travel destination (Ulrike & Yuan, Fesenmaier, 2009). THE PROBLEMS AND ISSUES The problem and issues concerning information technology application in tourism are as following:       

Inadequate and unreliable telecommunication information. ICTs do not guarantee profitability unless their adoption is related to the company’s strategy. The cost involved with adopting and using ICTs. The lack of relevant knowledge and skills. Tourism especially in India is relatively young and is not well organized to absorb the advances in information technology. They generally lack technical and financial resources and their scale of operation is too limited to take advantage of information technology. There has not been any specific policy or coordinated approach so far for the development of information products on tourism at the national level in India. It is yet to be evolved and implemented. The information industry in India presently consists of a few software development firms and some information centre in the government sector. However there are no database vendors in India who prepare there own databases and market them. In the absence of such units, all efforts are government dominated and the products are generally not available in the market. It is therefore essential to provide adequate government support and incentives for the development of such industry in India.

CONCLUSIONS In this paper, many of the prominent mediums and uses of IT in the tourism industry is discussed. As can be seen they have enormous contribution to tourism business worldwide. It is noted also that, because of the special characteristics of tourism products, the use of IT is more pronounced in this industry. The impact of using information technology on tourism industry is also discussed. The paper discussed the various technologies available to enhance the exising infrastructure. The technologies mentioned are mostly applicable in advertising and attraction sectors. Using the modern technologies, the present situation of tourism in whole can be improved tremendously. At the end, the problems relating to application of ITs in tourism industry is also discussed. To conclude this, we can say, that the development of tourism industry cannot be achieved without keeping pace with development of information technology. REFERENCES 1.

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An Overview of Information Technology in Tourism Industry

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