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School of Management
MASTER OF PHILOSOPHY
IN
BUSINESSMANAGEMENT
Submitted by:
Research Guide:
PROF DR. R. GOPAL
School of Management
November 2014
DECLARATION
Management is my Original Work and the thesis has not formed the basis for the
The material borrowed from other sources and incorporated in this thesis has been
duly acknowledged.
I understand that I myself could be held responsible for plagiarism, if any detected
later on.
The research papers published based on the research conducted out of and in the
course of study are also based on the study and not borrowed from other sources.
ii
CERTIFICATE
work for the award of the Master of Philosophy in Business Management at the D.Y.
Management and that the thesis has not formed the basis of the award previously of
any degree, diploma, associate ship, fellowship or any other similar title of any
university or institution.
Also it is certified that the thesis represents an independent work on the part of the
candidate.
Date:
Dr. R. Gopal
(Director and Head of the Department, Signature of the Guide
School of Management)
iii
ACKNOWLEDGMENT
accepted me for the M.Phil. program and provided me with an excellent opportunity
giving me his valuable guidance for the project. Without his help it would have been
I would also like to thank the various types of travel related organizations who have
I would be failing in my duty if I did not acknowledge with a deep sense of gratitude
to my family and friends for their endless love, prayers and encouragement.
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TABLE OF CONTENTS
Certificate iii
Acknowledgement iv
List Of Abbreviation‟s ix
Executive Summary x
1 Introduction 1
6 Adventure Tourism 61
Internet Usage, Online Travel Industry In India, Key Success
7 74
Factors When Applying E-Commerce To Travel Industry
v
7.2 Scenario Of Online Travel Industry In India 78
11 Conclusion 202
Reference Section
vi
LIST OF FIGURES
vii
LIST OF TABLES
viii
LIST OF ABBREVATIONS
PE – Private Equity
VC – Venture Capitalist
ix
Executive Summary
Online transactions in the travel and tourism industry are continuously increasing
despite tough economic problems in this arena and fewer travelers overall. This
other industries are displaying a stronger hold to traditional processes, the tourism
industry structure is changing. The Web is used not only for information gathering,
but also for ordering services. A new type of user is emerging, one who acts as his or
her own travel agent and builds a personalized travel package. Tourism is an
It is anticipated that most, if not all, sectors in the travel and tourism industry
throughout the world will have sites on the Internet; showing the suitable marriage of
two of the world‟s fastest growing industries: information technology and tourism. E-
travel is the leading and fastest growing category of e-commerce. In order to exploit these
implemented several business models. Table below shows the most frequently used
Brokerage
Brokers are market makers; they bring buyers and sellers together and facilitate
transactions (Law & Huang, 2003). Brokerage models include the following forms:
(Law, 2002b).
x
Demand Collection System: it is the "name-your-price" model pioneered by
Priceline.com. Prospective buyer makes a final (binding) bid for a specified good or
Auction Broker: conducts auctions for sellers. Broker charges the seller a listing fee
and commission scaled with the value of the transaction (examples: eBay and
Skyauction.com)
Advertising Model
The web-advertising model is a Portal;usually a search engine that may include varied
content or services. A high volume of user traffic makes advertising profitable and
Infomediary Model
sellers understand a given market. Travel infomediaries are globally branded „virtual
businesses‟ on the Internet that collect and sell information about a specific sector of a
market and create a convenient platform (Cyber marketplace) on which buyers and
E-tailing
Business operating exclusively in electronic retailing. This model might take three
forms
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Valuable insights are provided into the Priceline.com model. It offers products
for sale in two categories: a travel service that offers airline tickets, hotel rooms,
rental cars, packaged vacations and cruises; and a personal finance service that
use the Internet to save money on a wide range of products and services while
first buying service through which consumers name the price they are willing to
online travel company that enables travellers to search for and purchase a broad
Researchers have attempted to approach and analyse the critical success factors
successful Web site is its ability to focus on customer needs. The key is how to
Web presence must be used efficiently; that is to say for marketing purposes.
xii
E-commerce in travel and tourism is growing day by day which provide
challenging and various factors are standing as a barrier for companies to adapt
industry along with the impact on this industry after adaption of ecommerce.
What will be benefits after adapting e-commerce and what are the barriers,
Tourism and the Internet are ideal partners. For consumers, when they are
planning a trip to a new destination, they face the problem of making a costly
purchase without being able to see the product. The Internet provides them with
and depth than has been available previously, about destinations throughout the
production and distribution of print and on other traditional activities (e.g. call
centres and information centres); and it provide a tool for communication and
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relationship development with tourism suppliers and market intermediaries, as
well as end-consumers.
Tourism has a key difference from most other sectors of e-commerce – its
consumer goes and collects the product at the point of production – i.e. the
destination. Thus the tourism sector avoids the need to deliver products around
the world - a task that faces real logistical problems that have been a major
These factors, taken together, have resulted in the travel and tourism sector
taking a larger and larger share of e-commerce globally. As a result, the Internet
does it provide tourism destinations and businesses with direct access to end
consumers, but also it is becoming the primary channel for business to business
communication. The tourism market demand is growing and nearly all tourism
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performance of the tourism industry is being influenced by the adoption and
travel agent and traveler. The travel services provided by travel service
providers can be distributed by the joint operation of travel operator and travel
the travel operator plays the role as a wholesaler of travel service, which
service through travel agent. Here, travel agent is the retailer of travel service,
the information flow among the different participants in the value chain, and
selling the information to travelers. The value chain is based on the co-operation
among travel service provider, travel operator and travel agent. In developing
that of travel agent and most travel agents take the responsibilities of the travel
understanding of the aspects that have to be taken into account during the
research also aims to Identify potential success factors, which make ecommerce
organizations. Primary data was collected from travel agents, tour operators,
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airlines, travel meta search engine, GDS (Global distribution system).
the travel related organizations like the traditional travel agents & tour
operators, Online travel agents, hotels, travel meta search engines, global
performance in the travel industry. The target population for this study is drawn
e-commerce digital agencies managing travel clients. The samples for this study
is drawn from TAFI and primarily focus on the travel industry related
organizations in the Mumbai, Delhi & Bangalore market. Primary data was
Internet and Mobile Association of India providing up-to-date insights on the growth
of e-commerce in India.
xvi
The questionnaire is designed on a five-point likert scale in order to gather insights on
organizations are the methods & practices followed to structure the e-commerce
business, what are the critical success factors that make e-commerce business
profitable, what are the factors that are detrimental to the growth of the e-commerce
business, what are the factors which will have an impact on overall business
T test is applied to determine if two sets of data are significantly different from
each other while comparing the level of importance each data set lays over
selected factors. The two sets of data categorized are a) Organizations who own
of the organizations who own inventory (OTA‟s, traditional travel agents, travel
meta search engine, global distribution system). The t-test looks at the t-statistic,
can be used to determine whether the population means differ. The mean of the
sample is applied to find out the most critical success factor that would make e-
business in travel related organization, the most important factor that will have a
xvii
related organization. Travel related organizations place high importance on
competitive pricing. Pricing needs to be set that creates value. Create a value
statement that clearly articulates why customers should purchase their product
can create a competitive edge and attract a greater market share. It can also help
comparable to the competition and another slightly higher. This allows you to
stay competitive for a larger pool of customers, yet doesn‟t undercut the
strategy and financial analysis. In determining the rate for your product, you
need to consider your operating costs, profit margin and distribution network
seasonality. Discounts are often applied in the off-season or to assist with yield
entry fees, transport, are presented as one upfront cost. This method disguises
the exact cost of individual components and also the extent of discount provided
xviii
by individual operators. In general, a minimum of three elements should be
greater efficiencies and integration for improved guest services. Technology has
through decision support tools, databases and modelling tools assist the
manager‟s job.
In the mobile travel era, travellers expect real time answers wherever they are
and at any time, before, during and after the trip. These include booking
One of the key trends for 2013 is expected to be tour operators expanding their
more flexible itineraries but still with all the security and benefits of a package.
With global travel becoming more common, consumers are looking for more
xix
individual holiday experiences that their friends/family might not have done.
clearer idea of what kind of sights and activities interest them and want to
ensure that they get the most value out of their holidays by doing and seeing the
While tailor-made tours used to be just for the luxury end of the market there
are now many tour operators offering more affordable options due to the growth
more destinations in their trip are also growing in popularity and fuelling the
trend for tailor-made holidays. This is particularly the case for longer haul
holidays where travellers look to make the most out of their journeys. The
various types of business and operations. Firms are adopted in Internet and
change and high competitive of the world market today, firms are imperatively
to conduct business in the modern and easy way in order to remain competitive
business. Most firms are adopted e-commerce initiative into their operations n
order to improve quality of service, lower cost and reduce time to market.
However, there are many failure in adopting e-commerce initiative, those failure
are significantly concern with the strategy, both the corporate strategy and e-
commerce strategy. The tourism industry has proved particularly suitable for the
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As an extremely information intensive industry, tourism is undergoing rapid and
industry. Today, a wide range of tourism sectors is taking the advantage of the
advancement of the Internet has deeply affected the way tourism and travel
has redefined the travel business. This has led to the formation of various last
minute online travel portals, which effectively organize and distribute distressed
tourism inventories to the clients. Tourism suppliers like British Airways have
flight search and go through the various options available and finally take a
purchase decision. The Internet has made it possible for customers to access
high quality information within a short time. Also it has made service
xxi
customers expect to be served at all times rather than the office hours of the
tourism providers. Thus it has been seen that the travel and tourism industry has
revolutionized their travel plans and strategies with the help of improved
solutions and are aiming to provide a one stop solution for all travel related
work in collaboration with each other to provide a one point platform to all its
clients. Hence, they must embrace newly developed and effective information
same time, the prime focus should be on providing excellent customer service.
For all these, the only answer is to embrace best and updated information
impacted the tourism and travel industry. This has been possible due to the
various travel and tourism options by surfing the internet through their mobile
booking confirmation can simply be presented to the airline or the hotel and one
is allowed to enjoy the service. The emergence of new and high tech mobile
helpful as these phones allow a user to access internet and book services online.
Hence, one can also book tour packages and other travel related services
on having flights and hotel both as a independent product on their website. The
advantage of having flights and hotels makes the travel website one stop
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Chapter 1
Introduction
exchequer. This industry is growing very rapidly and millions of people are
directly and indirectly associated with this Industry. This industry represents
accounts for 9.9 percent of global GDP, 10.9 percent of world exports, and 9.4
of 2010. Hence, internet will be effective tool to promote and open up new
opportunities for travel and tourism industry sector though e-commerce. "E-
fast and easy to access destination, receive price, search popular destinations
and get information about destination etc. as well as it generates income for
many people around the globe. However, it has some limitations as some
information may not be correct, outdated, portrayed and we have seen several
online fraud case too. In a nutshell, due to its various benefits rather than some
for their growth and success.With rise of internet usage on people's daily life,
1
both financial and informational transaction through electronic media between
their business through different e-commerce tools and ad there will be more and
Digital commerce in India has evolved over the past decade in terms of
magnitude. Total digital commerce market of India was valued at INR 47,349
Crores* in December 2012 and is expected to grow by 33% and reach INR
Travel transactions have proved to be the primary fueling factor of the digital
commerce industry. As of 2012, among Internet users, online travel leads the
pack with 73% share in Digital Commerce (INR 34,544 Crores). This segment
is estimated to show 30% growth by the end of year 2013 and reach to INR
The thesis deals with what is the impact of structuring the e-commerce business
and maximize Return on Investment. Though the scope of the study extends to
many service organizations, emphasis has been laid down on the study of
seeking insights from the organizations in the travel industry in four key areas
major steps make up the structuring phase for new e-business projects using
2
existing products and services, processes and markets: (1) Critical Success
Factors that make e-commerce business profitable in the travel industry related
the travel industry related organizations (3) Factors which will have a impact on
business in the travel industry related organizations and (4) Factors that are
process can be set within a development life cycle spanning all these phases.
Increasingly we have observed that travel and tourism are not influenced by
more than ever reading and sharing travel-related content online which has been
Understanding who these consumers are, how they determine whether content is
credible, and what motivates them to post reviews is one of the most valuable
input for any marketing initiative by the travel industry including aggregated
service providers and travel companies. India is the most dynamic and fast
growing online travel market in the APAC region. Online travel contributes
70% of all e-commerce activities globally. Private equity players have made
huge investments in the online travel agency (OTA) segment in the past two
years. With the Indian holiday season on the horizon, Hitwise India conducted a
3
information source for planning pleasure trips. The study highlights that Search
Engines are the point of origin for initiating activities. They act as ‗Home Page‘
of the digital world and the point of U-turn. It also outlines strategies to increase
traffic from search engines through Hitwise Search Intelligence, which includes
how people search for travel related information using various search term
variations e.g. ‗Flight tickets‘, ‗hotels in Goa‘. The search term ‗Hotels in Goa‘
is the most searched term in the accommodation segment. ‗Flight tickets‘ is the
most searched term variation in the Airline segment recently, increasing number
of travelers use the internet for travel planning. Indeed, searching for travel-
related information is one of the most popular online activities. Advertisers need
audience will enter into search engines thus increasing relevance and being
present when and where it matters. Non-air ticket booking segment is growing
fast with the entry of Indian Railways in the online space and many OTA‘s
providing online bus and train bookings. Demand for tour packages have
The study indicates that the typical Indian traveler does not like to makes
spontaneous decisions and plans the trip in advance. An evolved traveler starts
planning the trip 3 months in advance by visiting travel related blogs, forums,
travel related video‘s/photographs, travel review sites. Online travel reviews are
traveler‘s experience which helps travelers learn about a travel destination and
narrow down their choices. The study identifies that an online traveler evaluates
his holiday destination options and then initiates the trip booking process by
visiting the OTA‘s and accommodation sites to evaluate, compare and book.
Thus indicating that most travel purchases take place well after a consumer‘s
4
initial search. The study indicates that the Indian internet consumer uses emails
after visiting airline websites. The study also indicates Social Media is now a
marketing tool used by marketers to engage with the target audience through
networking sites helps users plan their trips by getting tips from users, by
where the target channel for marketing is social media. Selling happens more
and more in the virtual world. Travel companies are increasingly targeting
consumers directly on Twitter and Facebook. Hyatt was the first major hotel
group to offer a global 24/7 ‘Twitter Concierge.‘ Almost every major travel
brand offers customer service via social media, but Hyatt was the first to
now asking guests to use it to book spa appointments, dinner reservations, etc.
and make special requests. Behavior of Indian traveler is quite different when he
makes purchase of an air ticket and a hotel room night. Unlike purchase of air
Top 5 Trends
• Meta search engine is the latest innovation in online travel. They help
people find the best travel choices easily by searching the data from hundreds
5
• Competition in online booking is moving away from air to non-air segment
• Social media will exert greater influence on travel planning and purchasing
Players Overview
• Makemytrip, Yatra, Cleartrip and Travelocity are the leading players in the
OTA segment.
• IXIGO, Ezeego1 and Zoomtra are the leading meta search engines in Online
travel
• Club Mahindra Resorts, Taj Hotels and Resorts and Palaces and
From the emerging trends, the clear message that emerges is that not only would
necessary to keep a finger on the pulse of the ever dynamic travel industry.
Describe Ecommerce
electronic means.
6
From a business process perspective, e-commerce is the application of
workflow.
delivery
and selling products and information on the Internet and other online
service.
19,249 Crores in the year 2009 to INR 47,349 Crores in 2012. This
growth has been mainly driven by the Online Travel industry, which
In 2013, the market is estimated to mature and reach INR 62,967 Crores
travel leads the pack with 73% share in Digital Commerce (INR 34,544
7
The figure, below, illustrates the growth in the market size since 2009.
Figure no. 1
Figure no. 2
Online travel industry has on an average grown by 32% from INR 14,953
another 30% and be valued at INR 44,907 Crores by the end of December 2013.
Changing the trend from the past year, at present, out of total Online Travel
market, domestic air tickets contribute 50% i.e., INR 17,335 Crores followed by
8
railway tickets contribute 39% i.e. INR 13,639 Crores. Others such as
international air travel (INR 1,926 Crores) Hotel bookings (INR 700 Crores),
Bus tickets (INR 641 Crores), Tour packages & travel insurance (INR 303
Figure no. 3
with nearly 50% share (INR 6,454 Crores). Financial Services stands second
with 23% share (INR 2,886 Crores). Classifieds segment amounts to 18% of the
whole Non-Travel Industry pie (INR 2,354 Crores). Other Online Services
contribute to the remaining 9% (INR 1,110 Crores). Of the market size of INR
47,349 Crores; online travel, which includes booking rail, air, bus tickets, hotel
services such as paying insurance premiums and renewals, paying utility and
9
mobile bills, trading shares and securities amounts to 6% of the overall share.
B2B and B2C Classifieds (jobs, matrimony, car, real estate etc.) contribute to
5%, whereas other online services such as online entertainment ticketing, online
market.
Internetusage in India has gone up with more and more InternetUsers using the
Internet on a regular basis. In June2013, India had 190 Million Internet Users.
Of this 130 Millionbelonged to Urban India and the rest 60 Million werefrom
Rural India. In October, the number of internet usersreached 205 Million and is
estimated to reach 213 Millionby December 2013. The number of internet users
inurban India is 137 Million in October 2013 and is estimatedto touch 141
has garnered a huge base among the Active InternetUsers. In India, there were
India, there were 70.2 Million Mobile Internet users in June 2013.This number
rose to 85 Million in October and is estimated grow by 47% and reach 103
Million by December 2013. Rural India is not that far behind in this regard with
inOctober 2013 and will touch 27 Million by December 2013.Internet users can
Users based on the frequency of Internetusage. Claimed Internet users are not so
frequent users of the Internet,whereas Active Internet users access the Internet at
10
Chapter 2
travel and tourism industry. Many of them have pointed positive impact of e-
commerce in travel and tourism and some have pointed challenges for adopting
B2B (business to business) and B2C (business to consumer). This industry has
changed the ways of do business for traditional ways to modern way, i.e. e-
commerce via web and other online transaction software where as other
industries are still adopting the traditional way. Web is changing the behaviour
of consumers are well as they are becoming less loyal, take less time for
to satisfy consumer needs and providing information to them through web and
different value generating strategies like value extraction, value capture, value
orientated business and the product is termed as "confidence good" and prior
commerce feeds backs from consumers can be obtained in short span of time
in travel and tourism industry consumers are becoming more powerful players
as they can choose their destination and sites in few minutes whereas travel
11
agents, travel websites etc. see diminishing power in sales however they are
consumers. Many tour operator, travel agents, online travel agents are using
technologies needs huge investments, need more high skill human resource etc.
There are various factors, which are considered that travel and tourism will
adapt ecommerce strategy. There are main two factors for conducting successful
e-commerce strategy which are security of the e-commerce system and user-
friendly Web interface. Security means not only securing own system but also
providing security assurance to users who are using the sites or online software.
User friendly web interface give consumer trust and it's easy to convenience for
customers. Beside these factors other factors are also essential to succeed which
management support plays vital role as they are the decision makers and their
support and decision will direct the company to use the strategy. Further, he also
acceptance; customer acceptance means the way customer accepts the web or
online software of the company and it should have very rich contents and very
easy to use. These factors will decide whether business will get more customers.
Customers intend to use research website quality due to content richness and
ease of use. (Law and Bai, 2008). Law and Bai on their research paper
mentioned there are two types of customers who use travel companies websites,
those are buyers and browsers. Buyers are those people who actually intend to
buy the services whereas browsers are those who intend to surf and get
12
information only. Those browsers can be converted to buyers by improving the
website contents, making it attractive, provided very rich in contents and very
user friendly to use. As more and more travel companies are applying these
strategies, the increase in percentage of website buyers and browsers are also
There are various benefits for small and medium sized tourism enterprise to use
follows; -
Improving image and public recognition of the small & medium sized
tourism enterprises
13
Due to adopting of e-commerce by small and medium enterprises are beneficial
companies can interact with customers frequently which will enhance their
customer service and use of ecommerce also reduce their operating costs as lots
of human resource is not needed and new opportunity of finding new agents,
creating new markets etc. Due to use of ecommerce by small and medium
E-Commerce is huge lap in travel and tourism industry moving from traditional
way to technological way and there are various barriers for travel and tourism
These barriers also include 'shortage of skilled human resources,' and 'resistance
depending upon the market size. Moving from traditional way to technological
Information Technological (IT) have to done along with this staffs have to be
trained accordingly. It is not always possible for small and medium size
companies to invest huge amount and get skill human resource people. Some
countries have different rules and regulation for e-commerce business rather
than traditional ways. Government rules and regulation also plays a vital role for
very easy to use, updated time to time. If these factors are ignored than these
14
adopt e-commerce in travel and tourism industry. The behaviour of customers is
changing and due to e-commerce they swap agency in few minutes if they are
not happy with them. Customers expect the same service, same treatment as
offered by travel agencies through their outlet or through the web. Different
customers have different ways of surfing internet as per their level of internet
knowledge as well user friendly website and website's rich contents. To adapt e-
improvement of customer service are the core factors for enhancing business
and attracting more customers. Consumers these days are far more demanding
available, consumers access the Internet for travel planning and companies have
to grasp these technologies and move as per the change in technology which of
course is expensive and need skilled human resource manpower. Some countries
have weak Information technology structure and people from these countries
might have problems for using e-commerce. One of the main challenge is t that
way.To build the trust among people, companies can try to capture a part of the
15
emphasizing online agents' knowledge. Companies can lure their customers via
providing personalized service through email, web texts customized web sites
that are built "on the fly" based on users' specific profiles and needs. The main
theme of writers is to gain customer confidence and trust toward the website.
"The challenge is determining how a web site can exude trust and good service".
To build customer trust, Wolfe et al have suggested online travel agencies have
and email address can be useful for customers who want proper information
professional way which of course provide sense of postal mail. In this way a
website should provide virtual tour of the destination. Virtual tour means
videos, photo, destination details with pictures etc. (Cho et. al, 2002). Cho et. al
have mentioned that virtual tour attracts customers as it give the picture of the
destination, hotel details where they are suppose to go ,stay and enjoy . Virtual
tour enables tourists to become more confident about their trip, they can choose
the destination which leads them more satisfaction rather than booking the
product through tradition way. At least, they can picture destination, hotel,
transportation system etc about the destination before their travel date. Browsing
through variety of journals, articles, thesis & dissertation its has been observed
business value in travel related organizations and aims at providing the reader an
overall idea about the nature and activities of electronic commerce. The
16
literature review reveals several gaps in knowledge with respect to how firms
structure their e-commerce business function and what are the factors that will
studies investigated the critical success factors for e-commerce. The dissertation
addressed four research questions: (1) Regardless of industry, what are the
What are key requirements that all e-commerce companies must have in order to
enter the industry? (3) What is the company‘s ecommerce business model? (4)
Brand Image
Customer service
Product promotion
Time to market
external factors. Internal factors are within the firm while external factors are
mainly environmental.
conducted to explore the areas and functions hospitality businesses use social
17
media for, and understand how consumers perceive these new vehicles of
ranging from (1) tour operators (2) travel agents (3) tourist guide services (4)
airlines (5) transportation (6) hotels and guesthouses (10) tourism education and
training institutions; (11) local touristoffices.ICTs are seen asmajor tools with
strategies.The adoption of ICT in the tourism industry can provide detailed up-
could also contribute toincreased sales volume and profits.However, there exists
Commerce experts have noted, ―despite all the benefits that can be achieved by
ICT, many small and micro-tourism businesses have failed to embrace ICT and
the negative
attitude of management (lack of their support and less risk taking propensity),
Online marketing has become very important over the years as a more cost
18
of internettraditional marketing continues to be used by majority of the
businesses. More and morecustomers are using the internet to research products
and services online which they laterbuy offline. Most customers compare
product features, attributes and prices to get thebest product at the best price.
An attempt has been made to identify areas in the existing studies, which are yet
19
Chapter 3
20
Chapter 3
From the above little introduction, we can simply say that e-commerce is
this field had already adopted e-commerce and some are on the way to adopt it
to enhance their services and better facilitate their customers however these
industry.
My prime focus on this research paper is to find out the impact and challenge of
academic journals. Through those journals I will be able to answer, how will be
travel and tourism industry benefit if they adopt e-commerce, what are the
commerce and what are the benefits and limitations of e-commerce in travel and
profitable & identify factors that are detrimental to the growth of the e-
21
To identify the factors which will have a impact on overall business
redefined the travel industry. Online travel commerce has evolved significantly
from the initial sales of less complex products like airline tickets,
accommodation and car rentals to include more complex products like vacation
packages and cruises. Several studies have revealed that online travel rates
among the top three products and services purchased online. The goal of this
commerce business in the travel related organizations and the factors that define
towards the changing patterns in travelers trip planning behavior. The study
highlights the advertising channels used for brand awareness and customer
acquisition. The dissertation dwells deep into how travel and tourism have used
of the most critical IT developments and to demonstrate how they influence the
industry, effective use of ITs is pivotal. Hence, "a whole system of ITs is being
22
rapidly diffused throughout the tourism industry and no player will escape its
are bought before the time of their use and away from the place of consumption.
by the travel trade, (e.g. information in brochures), for their ability to attract
often the key to satisfaction of tourist demand. Therefore, ITs provide the
The scope of the study was limited to how e-commerce as a business channel is
established in the travel and tourism industry. Other industries are not included
would limit the ability to draw generalization in this study. Main concern comes
from the fact that though travel industry has been the first adopters of e-
commerce however they are slow in adopting the new methods and practices
23
3.4 Research Methodology
This research aims to explore the impact of structuring the e-commerce business
on the overall business performance in the travel industry. The data is collected
from travel agents, tour operators, airlines, travel meta search engine, GDS
investigate the perceptions of the travel related organizations like the traditional
travel agents & tour operators, Online travel agents, hotels, travel meta search
commerce business in the travel industry. The travel related organizations were
travel industry related organizations, Factors that are detrimental to the growth
research exercise was focused on educating the travel industry with regards to
what all areas are critical and need to be implemented in order to structure the e-
commerce division which will lead to profitable results and impact the over all
significantly different from each other. The t-test looks at the t-statistic, t-
24
Sampling Design Process
This study is based on the exploratory & causal research design, which
managing travel clients. The samples for this study is drawn from TAFI and
airlines, 8 online travel agent, 3 tour operators, 8 travel agent, 2 travel meta
search engine and one global distribution system participate in the study.
organizations who own inventory (OTA‘s, traditional travel agents, travel meta
25
Type Of Organization
Frequency Percent
Hotel 3 9.1
Airline 8 24.2
Online Travel Agent 8 24.2
Tour Operator 3 9.1
Valid
Travel Agent 8 24.2
Travel Meta Search Engine 2 6.1
Global Distribution Systems 1 3.0
Total 33 100.0
Table no 1
Sampling Procedure
For the purpose of this study, a probability sampling method will be used.
study. The reason for selecting Stratified sampling technique is that the sampling
frame of the study is divided into subgroups, strata, and the sampling process will
26
Secondary Data
Questionnaire Design
organizations are the methods & practices followed to structure the e-commerce
business, what are the critical success factors that make e-commerce business
profitable, what are the factors that are detrimental to the growth of the e-
commerce business, What are the factors which will have an impact on overall
travel industry related organizations. The questionnaire was designed in line with
the research objectives. The questionnaire was circulated among the e-commerce
27
Chapter 4
The travel and tourism industry is one of the world‘s largest industries with a
trillion U.S. dollars in 2013. The direct economic impact of the industry,
approximately 2.2 trillion U.S. dollars that year. A number of countries, such as
France and the United States, are consistently popular tourism destinations, but
other, less well-known countries are quickly emerging in order to reap the
increased from 528 million in 2005 to 1.09 billion in 2013. Each year, Europe
receives the most international tourist arrivals. It also produces the most
travelers: with just fewer than 566 million outbound tourists in 2013, the region
had more than double that of the second largest tourist origin, the Asia Pacific
1.16 trillion U.S. dollars, having almost doubled since 2005. That year, China
had the largest international tourism expenditure, followed by the United States
and Germany. The leading city in international visitor spending was London,
exceed twice the world average. Today, international tourism receipts exceed $1
28
several times larger. Tourism truly has become a global economic and social
travel abroad, and they tended to travel to affluent countries with quality tourism
infrastructure and services. Not surprisingly, Europe and North America have
been the largest sources and recipients of international tourists. But this, too, is
much faster than in developed ones. The Asia-Pacific region has seen—and will
The Travel and Tourism (T&T) industry directly contributes about 3.6% of the
world‘s Gross Domestic Product (GDP) and indirectly contributes about 10.3%
to it. As one of the biggest contributors to the global GDP, this industry directly
employment implying that one in every twelve jobs in the world is in the
tourism industry. The industry also represents about 12% of the total world
country tourism, rural and ethnic tourism, wellness and health holidays, cultural
tourism and cruises are a few emerging areas of tourist interest. From a
particularly from China and East Asian countries. Further, the average age of the
young tourists who would typically travel to take a break from increasingly
29
Statistics and facts on the travel and tourism industry in the U.S.
The travel and tourism industry is one of the largest industries in the United
States, making a total contribution of 1.42 trillion U.S. dollars to GDP in 2013.
The industry was forecasted to contribute more than 2.5 trillion U.S. dollars by
2024. In 2014, U.S. travel and tourism entered the spotlight when President
Barak Obama took on a campaign to promote the industry and make the airport
entry process easier in order to attract more international visitors. The campaign
more jobs for U.S. residents as a result. There were 69 million non-resident
visitors to the United States in 2013, with New York City often proving the
Visitors from Japan and the United Kingdom also spent generously. However,
residents spent 748 billion U.S. dollars traveling their homeland in 2013. The
number of outbound tourists from the U.S. is much smaller than the number of
they would choose if they could go anywhere in the world, the most popular
choice for U.S. travelers was their own state of Hawaii. Many Americans prefer
beach locations for their vacations but cruises are also well liked – in 2014, over
half of the passengers of the global cruise industry came from the U.S.
In 2013, the travel agency industry in the United States generated 33 billion U.S.
30
commission and the rest by service fees. In 2014, over half of travel agent users
in the U.S reported that travel experiences planned by agents were better than
those that they planned themselves. That said, many leisure and business
travelers admitted that they did not use travel agents because they liked
researching and planning their trips themselves. While many in the travel
industry have declared the era of travel agents to be over, recent research shows
that travel agents in the United States are reporting an increase in business. In
2013, over half of travel agents reported an increase in revenue. The share of
just 14 percent in 2012. Sales of tour and group holidays increased the most in
2013, followed by sales of travel insurance and cruise holidays. Many of these
sales could have been made over the internet. Travel management, like many
amounted to 103 billion U.S. dollars. In the same year, Expedia was the online
travel agent with the largest share of pages views at 31.6 percent. However, in
January 2014, only 14.3 percent of people said they used online travel agencies
to plan their travel. A much larger share of people, 44.3 percent, preferred to use
agents use social media for general promotion and advertising and to generate
new business.
The travel and tourism industry is one of the largest industries in the United
States. Despite being one of the first industries to suffer greatly in the aftermath
31
2013, made a total contribution to GDP of over 1.4 trillion U.S. dollars.
billion U.S. dollars directly to GDP in 2013 – 29.2 percent of travel and
tourism‘s overall direct contribution. This is likely to increase year on year with
domestic business trips predicted to reach 480.5 million by 2016 – and more
business travel means more business travel spending. Business travel spending
the global outlook, however, it is Brazil (15.9%), Russia (8.2%), India (13%)
and China (16.8%) who are expected to see the biggest increases in business
travel spending in 2014. The average cost of business travel in the U.S. amounts
to 293 U.S. dollars per day. In San Francisco, the most expensive U.S. city for
business travel, this figure is much higher and average costs per day can reach
444.66 U.S. dollars. With such large amounts of money being invested in this
In 2012, Travel Leaders Group was the most successful travel management
company in the world in terms of air ticket transactions, making over 2.1 million
transactions. However, in the same year, a global footprint was one of the least
supplier: the most important factor was finding the lowest negotiable rate,
followed by finding the highest level of service. But this could all change within
the next two years according to business travel managers. In 2013, 50 percent of
business travel managers thought health and well-being was a mega-trend that
would affect travel management over the next two years, and 49 percent thought
much more mobile in recent years. By 2012, more people than ever were using
32
smartphones and tablets to book travel and, in 2013, 54 percent of U.S.
travel.
Abstract
products in the world including China. Online channels are growing important
in travel service distribution. This paper sheds lights on the B2C e-commerce
development in China. It explores this issue from the three different participants
in the B2C e-commerce model intourism industry - consumer, travel agent and
travel service provider. The paper also identifies the barriers in the B2Carena
China. The results in this study revealthat B2C development in tourism largely
Introduction
have developed in almost every sector. In tourism industry, new and efficient
Internet business models, including both B2B and B2C, have gained a strong
foothold and the travel industry is ranked as the prime sector in e-commerce
33
(Heung 2003). Online transactions in the travel and tourism industry are
industry. In China tourism industry has been developed rapidly with the
their market through the Internet in order to achieve more business benefits and
development in tourism industry in China has not been explored. This paper
sheds lights on the B2C e-commerce development in China. It explores this issue
from the three different participants in the B2C e-commerce model in tourism
industry - consumer, travel agent and travel service provider. The paper also
identifies the barriers in the B2C arena and discusses the possible approaches to
develop B2C in tourism industry in China. The results in this study reveal that
behavior. The findings of the study are expected to assist travel organizations to
commerce development in China is required. In the past several years, with the
34
Network Information Centre (CNNIC), the number of Internet users in China
has arrived at 210 million until the endof 2007, and Internet penetration rate in
almost as fast as the number of Internet users in China. According to the report
commerce was about $138.4 billion in China, and the e-commerce market will
continue to expand in China (RIC 2006). The e-commerce market in China will
Business (B2B) e-commerce in China has arrived at $169 billion in 2006, which
takes nearly 95% of the total e-commerce avenue in China in 2006, and B2C
takes a small size in the e-market in China (iResearch, 2007). The Chinese-
commerce market will continue to expand and perhaps total as much as $654.3
E-Tourism In China
China since 1999 the government has put effort on further pushing tourism
has arrived at about 124.9 million, the number of outbound travelers has
arrived at 345.2 million, and the number of domestic travelers has arrived
35
at 1.39 billion (CNTA, 2006). World Tourism Organization (UNWTO) also
predicts that China's tourism industry will take up to 8.6 percent of world
market share and become the world’s top tourism industry by 2020 (CNTA
to reduce business cost since there will be less intermediaries in the new
value chain in e-tourism. Mean while, travel organizations are facing great
more and more travel organizations have begun to perform business online
Information Center, about 8.6% of Internet users in China are using the
benefits from their online service channels, and at the same time keeping
their off line service channels to keep competitive in the market. Travel
channels since online travel service booking in China has not been popular
government has started the Golden Tourism project, which aims at pushing
36
B2C E-Commerce Model In Tourism Industry In China
The increased penetration of online service and home computing has resulted in
service suppliers to sell their products to consumers directly and omit the
traditional travel retailer – travel agency. The Internet has been considered
ideally suited as a medium for travel service delivery since the travel industry is
Online travel service delivery helps travel service providers to establish direct
There are three different travel service distribution channels in the B2C model.
First, travel service providers can deliver travel service to customers through the
Internet directly, which is the main goal of travel service providers are expected
the corporation between travel service providers and travel agents, which is
based on the traditional travel service delivery channel. Third, travel service
providers offer online booking service to customers, and the services are finally
barriers and security risks. Ctrip and Elong, the two big online travel companies
in China, have achieved big success in its B2C business based on the third
37
Method
This research aims to explore the issue on the B2C e-commerce development
model in China. The study issue is investigated based on the data collected from
the three different participants in the B2C model in tourism industry in China:
travel service provider, travel agent and customer.In this study interviews were
travel service providers and travel agents perspectives. Some qualitative data
study to investigate customer‘s attitude towards online travel service in the B2C
passengers were asked to report on their current use of the Internet to book
travel service or search travel information, and their future intentions on online
travel service booking. The survey was conducted by the airline company
onboard. In the study totally 190 copies were received, and 169 copies are
usable.
Data Analysis
interviewees from the airline company, which helps to understand the travel
38
service providers‘ perceptions on B2C e-commerce development models in
interviewees‘ opinion they are attempting to develop both B2B and B2C e-
commerce in their business, and B2C is what they are eager to develop. In
fact its B2C business has not achieved great improvement compared to its
and it still have to rely on the travel agencies and their sales office in China
available for individual customers to book ticket online. They agreed that
They keep their previous consumption habits, and it is hard to make them
change their habits. Its B2C development depends largely on the individual
still its main ticket sales channel in China. Even in its B2C business,
the value chain of tourism. Nowadays, travel agencies have adopted both
B2B and B2C in their e-commerce development, which tie the travel service
39
service through online or offline channels, which is their advantages
China are still the main intermediaries of travel service providers in China.
Travel agencies offer travel services by both the traditional offline channels
mainly on B2B, and only 1 travel agency focuses on both of them since B2C
model in China has not achieved great success in tourism industry. They
expect that B2C business can achieve good development in their business in
customer, which is a new cooperation trend between them with the adoption
security risk is the main barrier, and 4 of them stated that payment is another
barrier.
Customer Perspective
experience, online travel service searching and online booking for future
travel service in the B2C arena. Among the 169 respondents, most of them
40
as the most important travel information-searching channel and the Internet
For their future travel service booking, travel agencies are still more important
than the Internet, 45.6% of the respondents are intended to use travel agency to
book travel service and 33.1% of them will use the Internet to book their future
trips.
Summary
its initial stage. The research findings in this study reveal that in China B2C
customer – through both the traditional offline and the popular online
combined business model are not what travel service providers can offer to
41
customers through their direct online sales. The results in the study state that
half of the investigated customers will still book travel services from travel
agencies, which is much higher than that of the Internet bookers for future
trip. Even in B2C business, travel service providers have to rely on travel
agencies to complete its business process. The role of travel agency as the
customers in China with a large size of population. This study has provided
and offered some valuable guideline for travel organizations. Future study
development in China.
42
Chapter 5
According to the Economic Survey 2011-12, the sector has the capacity to
create large-scale employment both direct and indirect, for diverse sections in
society, from the most specialized to unskilled workforce. It provides 6-7 per
cent of the world‘s total jobs directly and millions more indirectly through the
from the fact that in India every one million invested in tourism creates 47.5
creates only 44.6 jobs and manufacturing a mere 12.6 jobs. Moreover tourism is
the third largest foreign exchange earner after gems and jewellery and ready-
made garments.
Given the Global Tourism perspective, buoyancy in the Indian Economy and
growth in the related ancillary industries like Infrastructure and Aviation, the
4.43 million in 2006, up 13% from 2005 (3.92 million). Taking into account
the fact that these figures exclude the NRIs visiting India, the total number
43
India‘s outbound travel is twice the volume of inbound, and destinations in
arrivals from India. In terms of the growing travel and tourism economy and
the real growth rate of travel market, India is the number one country in
Asia-Pacific region.
The Travel & Tourism Industry in India is expected to grow and generate
annum, in real terms, between 2007 and 2016. In the year 2006, India
India‘s rich cultural and geographic diversity provides the basis of a wide
The last few years have been highly successful for India Tourism. The
market and reach the ultimate consumer through electronic, print and
internet media. On account of the spurt that India has witnessed in tourist
arrivals in the recent times and given the unique and immense potential the
44
Council has identified India as one of the foremost tourism growth centers in
international acclaims: -
Conde Nast Traveller, the worlds‘ leading travel and tourism journal
the world
The Incredible India campaign has been the winner of PATA Gold
Award for best Print Ad Campaign and PATA Gold Award for Best
bureau.
Though there are many definitions for tourism, it could be simply defined as a
45
must be a reason. For example a person may travel for leisure, business, visiting
friends and relatives, health, education etc. He/she chooses a destination for one
needs aided by modern technology. These components have also came a long
way to offer a range of products which suit the needs of multitude tourists
around the world, and are still working hard to cater to an ever changing test of
them. Tourism is ranking the top ahead of all other categories of international
trade. This growth of tourism activity clearly marks tourism as one of the most
the Tourists
components: namely,
the internet.
visitors
46
Attraction Sector
In the case of attractions both manmade and natural attraction owners need
their production. Information about the kind of attraction, where they are
located and how to get there is of vital importance. The attraction owners
dissemination tools.
Accommodation Sector
visitor can access information about the kind of hotels at the destination,
their ranges of product, the price and other relevant information without
leaving his/her office. What one has to do is ring up a travel agency and get
This will help any visitor greatly as to where to stay during any kind of away
from home. Here the information can be obtained aided by still or moving
services of ones choice. At a destination also visitors are at ease during their
47
other information back home. They are also at ease to relax with the videos
and television entertainment programs, which now days are part and parcel
Advertising Sector
Travel and tourism fit especially well with interactive media because they
and current web users are heavy users of travel and tourism products and
interactive marketing is the use of information from the customer rather than
Attracting users
Transport Sector
Transport provides the essential link between tourism origin and destination
48
people visiting friends and relatives and those undertaking educational and
health tourism. Before setting out on a journey of any kind, every traveler
To this effect airplanes coaches and even taxis in many countries with
systems for various uses. For e.g. 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. Fast and
traveling public. In recent years, the confidence built due to use of modern
travelers worldwide.
During 2011 FTAs in India were 6.31 million with a growth of 9.2% over
2010. FTAs during 2012 were 6.65 (provisional) million with a growth of
FTAs in India and FEEs from tourism fro the years 2000 to 2012 is given
below:
Figure no 4
Domestic Tourism
The domestic tourist visits during the year 2011 are estimated to be 851
facility of Long Term Tourist Visas‟ of five years duration with multiple
entry, carrying a stipulation of 90 days for each visit, has been introduced on
50
The findings of an evaluation study conducted by this Ministry have
reinforced the belief that the presence of the facility of ―Visa on Arrival‖
During 2012, a total number of 16,084 VoAs (Visa on Arrival) were issued
thereby showing a growth of 26%. Efforts are on to extend the VoA facility
promote tourism and create social awareness through the print and electronic
highlighting the tourism potential of North-East and J&K were also carried
Olympics, 2012, during the International Film Festival of India (IFFI) held
in Goa, and during the International India Film Academy (IIFA) Awards
2012 in Singapore.
51
Market (WTM) in London, International Meetings Exhibitions (IMEX) in
countries. The delegates were taken for a visit to Sarnath and Bodh Gaya.
For the first time, an International Tourism Mart was held at Guwahati in
tour operators from different parts of India participated in the Mart and
engaged in one-to-one meetings with sellers from the North East Region and
tourists with specific interests and to ensure repeat visits for the products in
and Promotion:
52
Cruise
Adventure
Medical
Wellness
Golf
Polo
Eco- Tourism
Film Tourism
Cruise Tourism
components of the leisure industry worldwide. India with its vast and
Central financial assistance for Cruise Tourism project of Rs. 1450.00 lakh
amount of Rs. 491.53 lakh had been sanctioned and Rs. 245.77 lakh released
53
Adventure Tourism
for undertaking activities, which test the endurance of both a person and his
Figure no. 5
54
Medical Tourism
dental surgery, and cosmetic surgeries. Besides India, there are several
Asian destinations like Singapore, Malaysia and Thailand that are offering
Medical care facilities and promoting medical tourism. India excels among
Health Tourism holds immense potential for India. The Indian systems of
etc., are among the most ancient systems of medical treatment, in the world.
their brochures.
Health Tourism holds immense potential for India. The Indian systems of
etc., are among the most ancient systems of medical treatment, in the world.
their brochures.
Golf Tourism
Sports Tourism in India is gaining interest. One of the latest trends in golf
tourism is the fact that there has been a recent surge in the interest levels
amongst youth the world over. India has several golf courses of international
56
standards. Further, golf events held in India also attract domestic and
international tourists.
January 2011. The objective of this workshop was to evolve a road map for
India.
Polo Tourism
India has rich historical ties with many of the sporting traditions including
Polo. The game of Polo originated in India and India is one of the few
countries in the world where this game is still preserved and practiced. The
Kolkata Polo Club is the oldest Polo club in the world and is 150 years old.
2012, held at Imphal from 22-29 November, 2012, coinciding with the
Sangai festival.
travel industry had, under the patronage of the Ministry of Tourism, set up
57
organization, with members comprising of national airlines, hotels, travel
Conventions.
objectives.
Eco-Tourism
going back to natural products in every aspect of life. It is also the key to
58
Gross Domestic Product, 11.4% of all consumer spending.Eco- Tourism in
India is still at a very nascent stage, but there are conscious efforts to save
the fragile Himalayan Eco System and culture and heritage of the indigenous
Film Tourism
The Ministry of Tourism has recognized films as powerful tool for the
The Ministry of Tourism has taken following steps to promote Film Tourism
in the country:
Financial Assistance of Rs.2 lakh per film will be given to each of the
59
Conclusion
To sum up, Indian tourism has vast potential for generating employment and
earning large sums of foreign exchange besides giving a flip to the country‘s
overall economic and social development. Much has been achieved by way
necessary that all wings of the Central and State governments, private sector
inthe tourist industry. India the second largest tourism market in Asia after
China, the country was also ranked in the twenty fastest-growing tourism
eleventh in the list, the direct contribution of travel and tourism to GDP in
and 2024. In 2013, there were 6.85 million international tourist arrivals in
India. This was a large increase from the 2.65 million seen just 13 years
earlier in 2000. The largest source market for visitors to India was the
United States, followed by the United Kingdom. Outbound travel from India
60
Chapter 6
Adventure Tourism
Adventure travelers often seek unique or new travel destinations and activities.
Given their penchant for exploring new destinations and seeking new
stages of tourism development and also in more mature destinations that have
segment, primary research to quantify the size and scope of this market in the
U.S. or internationally (Schneider 2006) has been lacking. For this reason,
George Washington University, along with its partners, the Adventure Travel
Trade Association (ATTA) and Xola Consulting, sought to better understand the
adventure traveler. This study‘s focus area was limited to three major markets:
trends. The information in this report may provide guidance for destination
61
organizations or state/regional tourism offices seeking to build or enhance their
target market.
Methodology
This study of the adventure travel market was conducted in late 2009.
one person may not be to another. Therefore, for the purpose of this study, a
international trip that includes at least two of the following three aspects:
asked to choose what activities they had participated in. These activities
surveys of consumers.
62
Adventure Travel Expenditures
economic times;
The ―soft‖ adventurer spends the most per trip, (excluding airfare);
or female. The majority are between 35-47 years old. Industry followers
familiar with research from the Adventure Travel Trade Association may
general; it includes people who organize their own trips and therefore
Geographic.
exploring new places and meeting and engaging with local cultures
2006).
63
Compared to other forms of pre-trip research, the majority of adventure
travelers (35%) conduct research online, but they also consult friends
and family.
Profile of Respondents
Who are adventure travelers? They are fairly evenly split male to female,
slightly more female, but not as much as other types of travelers who are
35 (again, this may seem low from the perspective of adventure travel tour
operators, however, this number reflects the overall adventure traveler, not
just consumers of tours), slightly younger than the ―other‖ traveler who is on
than 10% are divorced or separated. They are also more highly educated
Figure no. 6
64
Interestingly, while many hard adventure travelers clearly view international
travelers, only 56.5% have valid passports. From this we can theorize that
table below shows the percentage of adventure travelers who hold valid
passports.
two segments: hard adventure and soft adventure. In certain instances, they
The central question is — how many people are taking adventure trips?
Hard Adventure
Hard adventure includes trekking, climbing (mountain, rock and ice) and
caving. These activities are high risk and require a high level of specialized
but still uncovered a sizable market. The trend over the past three years
65
indicates that the number of hard adventure trips has held steady, at around
indicated that they intended to take a hard adventure trip for their next
vacation. In North America, the trend was opposite, and the percent of
slightly.
Soft Adventure
Europeans, Latin Americans are taking the most adventure trips at 35% of
all three regions are soft adventure trips. Soft adventurers are an important
market for destinations, gear companies and tour operators. They are more
likely to try different activities and destinations than hard adventurers. They
In all three regions — Latin America, North America and Europe — soft
adventure increased steadily over the traveler‘s past three trips and
indicated that for their next vacation they would take a soft adventure trips.
66
Adventure Activities (Risk/Satisfaction)
based on the perceived or real riskiness involved in that place. However, this
survey finds that the perceived level of risk associated with the activity
Adventure travelers rated the level of risk associated with their activities
higher than other types of tourists, but did not extend this assessment of risk
their activities but less sensitive to destination safety; this is an area for
further research.
people, who in the past chose to engage in other types of travel, are
indicating that on their next trip they will be more adventurous in their
capitalize on these dreamers and create soft options to ease them into the
world of adventure travel. This will mean catering to their trip length and
67
Adventure travelers are early adopters: they are more likely to go to a new
destination or try new products before most people. But they still take their
cues from sources such as magazines, tour operators or even social media
what this market is truly seeking: meaningful connections with the place and
One example comes from Thai tourism, which has disseminated tourism
operators may consider putting more effort into press FAM trips. Reading
Figure no. 7
As for seasoned adventure travelers, they are passionate about and dedicated
to this mode of travel. They are always searching for new destinations and
friends and family. They often use official websites. Destinations and
68
operators should invest in understanding keywords and optimizing their sites
for searches in the key engines. Ensuring that a website is findable in all
Segmentation
There are many ways to segment the adventure travel market. Recognizing
increasing specialization in the tourism industry along with the shared values
From there, specific marketing tactics can be developed with the addition of
The younger generations, GenY (people aged between 18 and 30) and
GenX (people aged between 31 and 44). These people have often
traveled throughout their youth, studied abroad during college and are
adept at navigating the Internet to find good deals and new destinations.
This segment can further be broken down into two groups that are of
workforce and has a limited amount of vacation time each year. They
will seek to fill as much as possible into their vacation time, often
hiking Mt. Kilimanjaro. This group is more likely to book through a tour
69
operator. They are mostly likely reached through social media —
communities and places they go. Many young people take the
years in the workforce. With low budgets and big dreams, they travel
they are more likely to go trekking or take long train journeys, such as
the cross-Siberian railway. Budget and value will be the key selling
The ―baby boomer‖ (people aged between 45 and 64) adventure traveler
experience later in life. Many find themselves with extra time and money
as their children have moved from the house or they enter retirement
with good health and a curiosity to do things they couldn‘t during their
working years. They have large budgets and value adventures combined
with a cultural experience. They also book through tour operators and
70
Conclusion
The findings of this study support the notion that adventure travelers
value of the global adventure market is $89 billion. Adventure tourism does
not appear to be a trend specific to any one geographic area, as the results
and seek to connect with nature. Even in the midst of growth, we found
some adventure travelers do not hold valid passports and are not necessarily
Various trends around adventure tourism are positive: more people intend to
take adventure trips and these people intend to spend more than they have on
their previous vacation. Adventure travelers are specialty travelers and thus
branding should speak to their desire to have natural, cultural and active
is moving towards more adventurous travel. They may return to the same
but this time try more adventurous activities (safaris, visiting cultural sites).
71
between tour operators, specifically targeting past clients. This also speaks
outlets such as resorts, hotels, cruise lines to offer smaller day trips to entice
characteristics for this group will be shorter trips, perception of safety, and
unusual opportunities.
Interestingly, over the course of their past three trips, respondents have
that they intend and desire to become more adventurous, but it remains to be
seen if they will in fact select a more adventurous option when it comes time
capitalize on these travel aspirations. This study illustrates that the adventure
the actual size of this market, this study calls into question the often,
assertion from within the adventure industry is that the typical adventure
traveler today is likely to be over 50, with a secure income and desire to
explore and experience new places. Based on this research and others,
however, we find the average adventure traveler age might be closer to 40,
and although these people engage in adventure activities, they might not be
paying tour operators and guides for their experiences, and hence not
economic situation, the cost of an international flight may make travel cost
72
prohibitive to some people, thus domestic or regional, closer to home
adventure travel may provide an attractive alternative for many and also
the future.
adventure activities each day of their trip. For many countries, the size of
Overall, this piece of research provides further insight into the size and
shape of the adventure travel industry. The findings support the notion that
impact, with specific features for engaging in risky sports that require
Adventure travel is associated with that tourists could discover new things.
Therefore, they did travel the world to be so large that it knows the existence
73
Chapter 7
Industry
74
Chapter 7
International in June 2013, indicates that the Internet usage in India has gone up
with more and more Internet Users using the Internet on a regular basis. In
June2013, India had 190 Million Internet Users. Of this 130 Million belonged to
Urban India and the rest 60 Million were from Rural India. In October, the
number of internet users reached 205 Million and is estimated to reach 213
Million by December 2013. The number of internet users in urban India is 137
2013. In Rural India, there are 68 Million Internet users in October 2013 and
will reach 72 Million by December 2013. Mobile Internet, too, has garnered a
huge base among the Active Internet Users. In India, there were 91 Million
users accessing the Internet on Mobile devices in June. In Urban India, there
were 70.2 Million Mobile Internet users in June 2013. This number rose to 85
Million in October and is estimated grow by 47% and reach 103 Million by
December 2013. Rural India is not that far behind in this regard with a base of
75
Purpose Of The Internet Access In Urban India
Of all the Active Internet Users surveyed, it has emerged that for close to 90%
of the respondents the prime use of Internet is Online Communication and under
this e-mail communication commands the lion‘s share of 78%. Social use the
Internet for Entertainment. Apart from Networking continues to be the rage with
75% of the users engaging in it actively. 69% now listening to songs and
watching videos online, sizeable numbers are downloading mobile VAS. Online
shopping has also picked up in a big way. Every second active internet user
Figure no. 8
Purpose Of The Internet Access In Rural India
For the Rural Active Internet User, Entertainment is observed to be the main
purpose of Internet access and a huge 84% of them have used it primarily for
entertainment. Majority of the users like to access Music/ Videos/ Photos and
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observed to be the second most important purpose of accessing internet for
the most important reason for using the Internet with 43% using it. Number of
users engaging in text chat has also gone up significantly compared to last year
and is used by 22% of them. Compared to last year, the awareness levels of
usage also subsequently has increased over 2012 with 62% and 52% of them
having used Online Services and Social Networking respectively. Further, over
half of the rural population is observed accessing Internet for social networking
purpose. Also, maintaining last year‘s trend, most of the users are seen availing
online services related to job search on the Internet. This is followed by online
Railway Ticket Booking is the most performed activity when it comes to Online
Shopping, which has also seen a significant growth over the last year. With a
very low awareness level, Online Transaction is still an area about which the
a pressing need to educate and inform the user of the benefits of the internet
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Figure no. 9
7.2 Scenario Of Online Travel Industry In India
The report begins with an introduction to the e-commerce market in India and
offers information regarding the market size and growth. It also gives a break-up
of the revenue for the e-commerce market. It goes on to explain the market
structure of the e-commerce market and also provides an overview of the factors
which drive this market. In the market overview section the structure of the
online travel market is explained. Market size, growth and the break-up of the
revenue generated is also provided for the online travel market. Increasing share
of online travel market as well as the prevailing commission structure has been
highlighted. Porter's five forces analysis gives an overall picture of the online
travel industry and helps to understand the major influencers. The business
model explains the role of global distribution systems and their role in the online
travel industry. This section also explains the various incentives provided by the
OTA's to attract more customers and the operational edge OTAs have over the
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internet, especially broadband, which has increased online traffic considerably.
Rising disposable income has also acted as a driver for online travel portals.
Indian railways online portal has proved to be extremely efficient and user
drivers identified include rise in low cost airlines, which has paved a way to
travel by air for the large middle class segment in India thus increasing traffic to
these online portals. Secure payment mechanisms have given people the desired
confidence to carry out transactions online. On the other hand tremendous rise
in medical tourism has led to influx of foreign travelers to India which again
coupled with low margin and high operating costs which has caused profit
margins to shrink. In addition, limited awareness about portals adds to the woes.
Trends identified are emergence of value added services among various OTAs
including discount vouchers to woo customers and gather a large market share.
following a hybrid model constituting online and offline stores to penetrate the
market even further. OTAs are also moving towards better technology so as to
cater to the increased traffic and offer a user-friendly experience to its clients.
They are also becoming more responsible and addressing customer queries and
complaints swiftly through social media interfaces. It has been identified that
OTAs are also a means of information verification and cross checking among
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Figure no. 10
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7.3 Key Success Factors When Applying E-Commerce To The
Travel Industry
As the Internet has developed, more and more consumers can now find travel
information or even purchase travel through the Internet due to its convenience
and capacity for huge information, and this has led to many traditional travel
the characteristics of the travel industry well, and can make the best of the
scale key success factors when developing e-commerce for the travel industry,
which means the agencies can‘t focus on the important things, and this can
cause disorder and inefficiency. Therefore, these key success factors should be
up a plan, helping the company allocate their resources rationally, enabling them
to meet their consumers‘ demands efficiently and increase profits. Nine key
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7.4 Traveler’s Trip Planning Behavior
Travel provides people with an escape from their everyday life. In fact, this
research project asked about vacation motives. The answer ―to relax‖ was given
by 71.7 percent of respondent and ―to escape from daily routines‖ was stated by
66.9 percent. In addition, a Canadian study found that one of three common
factors motivating travel was ―the need to escape, followed by ―To experience
new and different cultures‖ and ―jetsetting, prestige seeking.‖ The big question
is how are the goals that consumers want to achieve from their travels translated
product differentiation that can offer travelers the experience they have longed
for is a key factor. There is very little differentiation in the actual travel product
– the offerings of tour operators, travel agents and other travel professionals can
motivator that sets a particular product offering apart, i.e. added psychological
value. Many travel professionals may think, rightly so, that making a trip as
options are all value-added options that consumers are offered on a regular
basis. In many cases, this strategy can be very successful. The Psychology of
Travel takes a look at general consumer behavior and how that affects peoples
desire to travel. The area of consumer behavior is highly researched and studied
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as marketers continually review consumer behavior and how it affects purchase
decisions.
friends and relatives and novelty seeking. All of these factors have been studied
Ego Involvement
The largest portion of psychological research on travel and tourism is in the area
boost for consumers. They want the product providers to know that they are
smart, informed and will not be sold something that they do not want. One great
example which most tour operators, tour suppliers and destinations are keenly
aware is the rise in travel planning and booking over the Internet. Sites like
Expedia, Travelocity and others have placed the product out there –at often
incredible prices –and put the consumer in control. Often times this even turns
into gamesmanship among the traveling public. Consumers are interested in the
price that others paid for the same flight, hotel room, cruise and will compare
the deal they got to those of their fellow travelers –priding themselves on
finding the better price or vowing to do more research and get a better deal the
next time. One can see that the majority of consumers not only think of
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themselves as well informed and in charge their life, they also believe they are
smarter than most other people. This is a huge psychological consideration when
working with and selling to these consumers. Their ego and belief in their own
instincts and intelligence is very important –and very high! This should not be
informed consumer.
participate in the creation of product, no longer a ―one size fits all‖ world. They
also want to turn existing brands into their own and control the transaction. All
of this has been influenced by the amount of information supplied today via the
related to the above statement of price loyalty replacing brand. Consumers will
go with the best deal, not necessarily the same airline, hotel or tour operator they
used last time. Therefore, companies attempt to hold customers by making it too
expensive for them to switch. For example, if a traveler earns points or rewards
difference of $50 or $100 is not enough to lose the perceived value they have
within the rewards program. Therefore, the company keeps the consumer not so
much for the loyalty to their brand but more to the rewards the consumer will
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keep a customer than to get a new one. However, loyalty in today‘s competitive
very aware of the rewards programs developed by airlines and hotels. However,
travelers with discounts or a points system whereby the traveler can earn points
toward extra amenities or prizes like digital cameras, travel books, etc. can be as
customers. While many tour suppliers already have programs, those that do not
influence buying decisions, it is always smart to keep in mind that advice from
family or friends is a huge influencer in buying decisions. These are people who
are trusted by the consumer and, in turn, their suggestions are valued.
more on how travel brings a family together and how to make trips ―kid
friendly‖ to attract the family market, it would be smart for travel professionals
to understand that kids today have influence and more of a voice in decisions
and their demographic is as necessary as studying that of their parents. Not only
does a company have to be concerned with influencing the buyer directly, they
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must also overcome any objections or previous bad perceptions that any number
of friends and family members may have. However, if these influencers are
identified and considered in the equation, the company will have a better shot at
Novelty Seeking
This aspect of consumer behavior is probably the most well known to travel
motivator in the reason people travel. Researchers have also stated that
vacationers taking novel trips (those to places that are not familiar) seek more
advice on the destination and spend more time and money during the trip than
information that will help tour operators design more creative itineraries and
look for unique destinations and attractions. All of this will add to the novelty of
a travel package and pique the interest of travelers, especially with the arrival of
the Baby Boomers into today‘s new senior market and the generations behind
them that have disposable income and are emerging as the new consumer. These
groups do not want to take the same vacation every year –a majority of them are
well traveled from years of family vacations and work-related activities that
have taken them to any number of destinations. Therefore, they must find
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What does this mean to me?
Understanding consumer behavior is one of the top jobs for all marketers. To
sell product, one must understand their consumer and what motivates them.
There are any number of factors that affect a consumer‘s decision making.
Travel professionals not only have to appeal to the ego of the consumer with a
product that makes them feel important and in control, they must also deal with
loyalty today may be more fleeting than in the past with consumers often
looking at price over brand. With that being the case, there are ways to make
your company a bigger part of the consumer‘s life. The number one way to
accomplish this is through loyalty programs. While tour suppliers have been the
ones to really incorporate this strategy, tour operators could utilize these models
successful.
Leisure travellers seek travel inspiration online, anticipate more family travel,
and want to stay connected while traveling. Below graph shows the key
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Figure no. 11
When it comes to business travellers, they continue to prioritize brand sites,
price and convenience. 65% of business travellers book travel directly on brand
sites more often than via OTAs, this is a 11% increase from 2012. For business
travellers, the top three key requirements when selecting travel include:
Air travel
Price
Lodging
Price
Car Rental
Price
Past experience
Reward/travel points
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Apparently, business travellers are more inclined (compared to leisure
Figure no. 12
Travel Inspiration And Planning
Internet remains as a key channel for both trip inspiration and planning. In case
spot.
Figure no. 13
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Travel review websites take the sixth and seventh place among leisure and
Figure no. 14
Many opinions were being suggested about what the future of e-commerce in
tourism sector could become in few years, greater percentage explained that the
conventional commerce may not exist anymore in couple of years because of the
recent awareness especially almost all the youth of nowadays are able operate
computer at average level and also the sound educated and informed tourists
seem to have new types of attitudes and tastes. Those mentioned are the groups
that make use of internet more thoroughly than the other groups, so therefore
with them data and information will become factors for the tourism industry just
information this becomes more transparent. Reports showed that in the nearest
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lead to a market expansion, resulting in a change in the arrangement of the
tourism industry which will see the emanation of online tourism, destruction of
and resources. Very soon, the request for diversification will be all over in the
travel e-commerce will provide the personalized and value-added service that
could also enhance the quality of tourism distribution, which can quickly turn
development are improving yearly because travel e-commerce is the only means
electronic accounts and online payment services which are related to tourism
nations in the 21st century, and has since turned a new growth point of tourism
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Travel e-commerce application is the continuity process of logistics, customer
gain. It is also an area of e-commerce that mainly enhances internal and external
distribution could also be bolstering. Tourism e-commerce has got back in shape
after ten years of continual development, however it has seriously affected the
traditional tourism enterprises especially in the developed world, but today not
many of the traditional merchants have realized the need for internet marketing
while a high percentage still pays attention to offline advertisement modes, such
require a high expenditure, which has been a difficulty to the firm‘s good sales
travel companies still prefer managing internal business with the usage of
to stay in the primary stage with limitation to easy data processing and report
In the business world, airlines could be the biggest winner of the Internet, or e-
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the nature of airline business and its cost structure. An airline‘s costs usually
consist of two parts: direct operating costs and indirect operating costs. Direct
operating costs — such as aircraft, fuel, and salaries — make up about 60% of
the total cost, and indirect operating costs — such as distribution costs — about
40%. Direct operating costs are more or less ―fixed‖ and there is not much an
airline can do to cut them down. So most airlines would focus their cost-saving
potentially play an important role. A major part of an airline‘s indirect cost is its
Ticketing fees
Traditionally, airlines pay 3-25% commissions to travel agents who sell their
selling and issuing tickets of their own. To reduce distribution costs, airlines
Reservation Systems (CRS) and sales agents. At least in the USA, big airlines
have already been doing that. They have set up on-line sales networks, and
almost every airline‘s web site offers on-line booking functionality. Some
airlines jointly set up on-line booking sites to offer B-B, B-C, and other travel-
related services.
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Travel websites (such as Priceline) and Internet booking engines (such as
Airlines sell their product at different prices. The same seat in the same airplane
can fetch different prices depending on when and where it is sold. Generally
speaking, the earlier you buy a ticket, the cheaper it is. Moreover, airline seats
are time-sensitive and perishable—seats that are not sold at time of departure
become ―spoiled‘.‘ On the other hand, seats sold too early at discount prices
stay.
ticket.
tickets.
avoid competition.
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Booking agents‘ special offers—certain travel agents get special offers
from the airline & sell these tickets at a lower price to the passengers.
These conditions change from season to season and from market to market, as
air traffic demands fluctuate from time to time and from market to market. The
fact is most airlines do not have the technology to handle all these ―conditions‖
loses revenue; if the fares are too high, they may remain unsold when the plane
departs. Without knowing when to sell a ticket at what price under what
In order to fully realize the benefit of e-commerce and to avoid the potential
revenue dilution, airlines are turning for help to new tools such as revenue
passenger traffic demand for each flight and each market segment. In other
the forecast and given fares of the booking class, it recommends an optimal
revenue.
Many airlines are using revenue management systems for such a purpose. But to
instantly determine the flights, itineraries, prices, and number of seats to put on
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circumstances would the airline be able to dynamically, optimally and
proactively price all seats in response to requests that may come at any second.
Only in this way can Internet bookings prevent revenue dilution and
customer satisfaction.
airline industry. But at the moment, e-commerce brings greater benefits to the
consumers than to the airlines, which explains why many airlines are reluctant
to take their business on-line. Other industries may differ from the airline
industry, and their e-commerce practitioners may not have to deal with as many
complicated factors. But it is safe to say that any industry will have its own
problems, and that the promise of the Internet is almost always mixed with
certain risks. We cannot expect e-commerce to grow as fast as the Internet age
seems to promise.
One of the risks of e-commerce is that it increases the chance of making wrong
decisions. If something goes wrong, the damage would be huge and swift. This
some companies at high cost. Another risk is the impact it may have on the
the airline would have to change its business procedures, even its organizational
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7.8 E-Commerce’s Impact On The Travel Agency Industry
The travel agency industry‘s response to E-commerce offers insight into how
electronically and are served by numerous small outlets share two key
who are increasingly more experienced at using the Internet and other new
communication technologies.
The traditional travel agency industry still accounts for the majority of total
travel sales. Airlines continue to acknowledge this fact that most of their ticket
travel accounts, and in general, aiding customers with a variety of issues related
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capabilities give travelers wide access to travel recommendations, reviews,
destinations. One key question for these agencies to consider is whether the cost
costs will remain a significant and ongoing cost of conducting business online.
With the huge amount of information on the Internet, search has become
search engines provide the means for travelers to access travel products in a
companies are joining to tap the potential market created by e-commerce. This
access. It is argued, from this analysis, that there area number of emerging new
technologies such as mobile devices and global positioning systems which need
concludes that a major challenge facing the industry is to assess the impact of
these technologies on different aspects of the travel industry and to find out how
Information is the key element in the tourism industry. Tourists want to know in
advance about the attractions and the facilities of a particular destination. The
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tourist also wants to know other related information of his/her visit to make the
travel and tourism-related products and services are highly important. Using of
the e-marketplace for tourism is the need. The most important benefit associated
with the new technologies is the supply of information. The role of ICT in
the Internet and the World Wide Web. These developments have impacted both
consumer and industry behaviors in the areas of travel and tourism. Consumers
have more options regarding vacation and budget planning. 95 per cent of web
users have searched the Internet to gather travel related information. 93 per cent
visited destination web sites and nearly one half used e-mail to gather travel-
related information. Almost three- fourths of online travel buyers used search
gadgets such as GPS 's, mobile phones, smart phones and hand-held devices
and tourism industry for at least 50 years, particularly in the areas of automation
and networking of distribution channels. Local travel agents that used the global
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order to realize increased competitive advantage. Local tourism business
registering with online travel agents, online advertising agents, and inter-
developed websites which offer planning, booking and payment services online
for added consumer convenience. Businesses that have not made use of the
Internet cannot compete and therefore they must grasp the opportunity before
Information technology has played a central role in the growth and improvement
of the travel and tourism industry. The lasting effects of technology are
market of consumers and businesses around the globe. During the pre-
computerized time, the role of the travel agent was to advise clients on travel
arranging travel bookings. Even as late as the early 1990's, consumers booked
cruise travel and tourism through travel agents as many companies did not offer
direct bookings. There were two waves of information technology that have had
a major impact on the industry. The first of these is the development of the
direct reservation systems, such as the American Airlines SABRE system. The
second is the development of online sales channels via the Internet. Tourism still
remains the major strength of every developed and also developing nations
based on the number of employees in the sector, because without tourism sector
it would have been impossible for all other important sectors to play a key role
in the everyday development of the global market. The hotel and airline
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industries are the ones who cannot survive without the use of e-commerce in
developed nation especially because online access makes it easy for them to
method which is only person to person mode of business since the world of
activities of a firm both internally and in relation to its outside partners. The
ranging from tour operators to cafes and restaurants. The companies include
SMEs and the types of enterprises that comprise the tourism industry are: (1)
tour operators (2) travel agents (3) tourist guide services (4) airlines (5)
transportation (6) restaurants and cafes (7) hotels and guesthouses (8) museums
and historical sites and buildings (9) nature reserve services (10) tourism
education and training institutions; (11) local tourist offices. Within the
discourse on the information society and the e-economy, ICTs are seen as major
tools with the potential to fundamentally change business behavior and company
virtual business can be conducted. The adoption of ICT in the tourism industry
products and booking which could also contribute to increased sales volume and
profits.
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Competition
include:
Agencies.
travel
Figure no. 15
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While online travel sites have certain advantages in providing these services,
characteristics that may help traditional agencies differentiate from online travel
agencies include:
changes;
Personal Relationship.
The Internet and new technologies have provided online travel agencies the
tools to duplicate the five ―R‘s‖ of service provided by offline travel agencies.
Figure no. 16
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Chapter 8
Mobile is making it more convenient for both business and leisure travelers to
find places nearby to visit, receive last minute travel alerts, make travel
arrangements and use their mobile browsers to enhance their travel experiences.
percent of online leisure travelers who have Web-enabled mobile devices have
Display – the inclusion of static, animated and rich media banners within
Bluetooth message
This white paper looks at the use of mobile in the travel industry through four
agencies – and shows how each benefit from the use of mobile advertising to
Transportation
The transportation category – e.g. cruises, buses, trains, airlines, car rental
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messaging alert advertising to sell and promote their perishable inventory. These
ads expose consumers to great deals on transportation services that will soon be
one of a handful of airlines that offer passengers the option to check-in via their
mobile phone or to use digital boarding passes displayed on their mobile device
leisure travelers looked up a flight‘s on-time status using their mobile device.
with deals for future travel or things to do while they are away is a great way to
Hospitality
The hospitality category, which consists of hotels, resorts and inns, uses mobile
by keeping guests within their venue for more than just lodging
their points
Travelers are using their Web-enabled handsets to interact with the hospitality
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percent of leisure travelers researched hotel availability on their mobile devices
and coupons to consumers resulting in higher repeat and referral sales. Many of
these mobile campaigns include promotional Web landing pages that are mobile
Tourism/Entertainment
mobile destinations
venues
to drive consumers to their locations with special mobile coupon offers and
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leisure travelers looked up dining/ restaurant information on their mobile phone
Restaurants, casinos and amusement parks are using mobile advertising to stay
venues are using mobile advertising to invite consumers to opt-in for future
communications from them so that they may promote and share complimentary
Online travel agencies such as Make My Trip, Clear Trip, Yatra, Trip Advisor,
travelers looked up flightschedules using their mobile devices in the past year.
immense.
Display and search advertising creative with special deals and offers are proving
customers.
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The Mobile Opportunity For Travel
Targeted mobile display, search and text ads are helping travel companies such
as Continental Airlines, MGM Grand, Walt Disney World, and Expedia build
brand awareness and turn purchase intent into sales with their target audience.
Targeted mobile display, search and text ads are helping travel companies such
as Continental Airlines, MGM Grand, Walt Disney World, and Expedia build
brand awareness and turn purchase intent into sales with their target audience.
Figure no. 17
With 65 percentof all mobile Internet users making airline, hotel or car rental
purchases in the past six months, it is clear that there is an important intersection of
mobile and travel.
Mobile is both media (to promote advertising messages) and a channel to sell
and transact. Consumers are using their mobile devices to stay connected using
Mobile web – Consumers are using the mobile sites of travel companies to plan
their trips and enhance their travel experience. Travel companies such as
airlines, car rental companies, tour services and travel agencies should consider
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having mobile commerce-enabled sites as an additional revenue stream.
For example, STA Travel, a global travel specialist for students and young
people, used mobile advertising on the mobile web to promote flights to its key
global destinations. The ads drove consumers to STA Travel‘s mobile site.
Search – Consumers are using their mobile devices for local search with
need to ensure they are present at the time of the consumer‘s expressed need;
HotelsByMe, for example, launched iPhone and Android applications that use
the mobile device‘s geolocation services to help travelers find nearby hotels.
The applications sort the list by distance from the user‘s current location and
Users can also access more than 44,000 hotel properties worldwide, search by
city or landmark and also view photos of the hotel. Coupons can be included
mobile Internet:
Make travel arrangements – 27 percent of consumers use the mobile web once
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a week or more to make travel arrangements.
Book travel reservations - 17 percent of smart phone users have booked travel
mobile phone.
phone users use their handset to compare prices. Three percent use their mobile
smart phone users use handsets to search for coupons. Additionally, four in 10
are more likely to shop at travel outlets offering digital travel coupons/deals.
Buy goods and services - A quarterly study by Compete found that 37 percent
of smart phone owners have purchased something non-mobile with their handset
Travel brands and service providers are also using mobile search to drive
Ongoing mobile search campaigns are helping these companies ensure that they
are easily discovered in application stores and through the mobile web. For
travel companies (such as airlines and hotels) with a mobile commerce site, this
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has become a proven approach to drive additional revenue. Mobile search is
mobile Internet users conducted mobile searches at least once per day.
percent of mobile Internet users indicated they were willing to shop at travel
Travelers searching with a location-based mobile phone are most likely looking
for something nearby or seeking to buy something. Travel service providers and
brands would be wise to revamp their mobile search efforts to make sure that
consumers who are traveling can find and buy from them on mobile.
Mobile web search engine optimization follows many of the same technical
structure, use of headers, keywords and titles, along with various types of
browser support.
Mobile advertising puts your brand in the hands of your audience and enables
Travel companies are using mobile display, text and search advertising
simultaneously with other marketing (print, online, direct mail, gaming and out-
of-home) to acquire new customers, diversify their user base and drive
incremental revenue.
high – the tourism industry has already seen the impact of this with the decline
of the traditional high street agent in favour of online travel agencies and
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travel booking has been slower to catch on and still significantly lags behind
mobile travel research. So, whether it‘s because of fears about security or simply
having better functionality with a traditional mouse and keyboard, it looks like
enhanced search engines, industry experts expect to see mobile bookings nudge
ahead of traditional channels by 2016. One area where we will see mobile make
of wireless devices (Mobile Marketer, October 29, 2009). In this case, mobile
ads were five-to-ten times more effective than the online component of the
and search, out-of-home, radio and mobile – both SMS and the mobile web. For
the mobile web aspect of the campaign, consumers who clicked mobile banners
ads were directed to a mobile site which achieved an average of 1.4 page views
per visitor. For the SMS mobile aspect of the campaign, TV, radio and out-of-
home ads urged Hispanic consumers to text one of two keywords - VOLVER or
VIAJAR - to the short code 88188 to participate. Out of the total audience that
entered the mobile-site, driven to it by SMS media, 7.51 percent provided their
name, email address and phone number to enter the contest. Voting components
and SMS forwarding created a viral effect, in effect giving Continental Airlines
more bang for its buck. Consumers are using their mobile devices for a wide-
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2009 in the figure below:
Figure no. 18
There are numerous best practices that travel industry players should consider
relevant when the consumer is traveling, and often is no longer relevant once the
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customer is nearby, it is more convenient for her to redeem your offer.
Consider the person’s situation to tailor and target your message.Is she
the trip for business or pleasure? Tailor mobile advertising messages based on
these and related situational data points. Targeted and relevant messages will
Make the purchase and booking process easy on the mobile device. The less
clicks the better. There is nothing worse than losing a customer because she gets
Use specials and promotions. Specials and promotions within mobile search
and banner advertising can be used to sell perishable inventory such as show
tickets, flights, hotel rooms and vacation packages for specific dates.
Use a multichannel mobile approach. Use various mobile channels to get the
word out on deals and package offers (e.g. mobile coupons, alerts, etc.).
you can send consumers offers for airfare, entertainment and related offers.
Consumers who are willing and eager to hear from you are a prized possession,
can help you leverage the power of the various mobile media and mobile
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vendor that aligns with your needs.
The MMA‘s guidelines help marketers and travel companies support the rights
and privacy of consumers, stay compliant with industry best practices and
regulations, and get the most out of the practice of mobile advertising.
simplicity works. Consumers should not have to think about your ad‘s
experience and make sure the total experience is consistent and on point
life of your mobile advertising campaign. Do this and you will see
improved results.
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Chapter 9
There was once a time when hotel marketing focused on brochures, newspaper
listings, magazine ads, banners, and lots of printed paper. Things have changed,
and print media is less effective at driving new bookings as it once was. Today,
it can be hard for hoteliers to learn how to acquire new guests aside from turning
used today by the most successful hoteliers and hotel marketers around the
world.
Figure no. 19
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Digital vs. Traditional
print advertisements, to build brand awareness and find new guests. This form
of marketing is becoming less effective with each year. In the first half of 2012,
advertising. That means for every $25 they lost in print ad revenue, they gained
Radio, magazines and other mediums are now dwarfed by digital online
billion in all of print advertising ($35b today—that‘s a loss of 8.5% over four
years).
One can only conclude that productive customer acquisition channels are almost
exclusively digital, and the disparity between traditional and digital channels
where guests are concerned will only increase. Therefore, though there are other
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primarily on digital marketing channels and hospitality exclusive channels that
OTAs are consumer-facing web interfaces for travel bookings many are familiar
Expedia, Priceline, Travelocity, Make My Trip, Clear Trip, Yatra and others.
OTAs were created to give travelers the ability to book their own travel plans
can help sell a hotel‘s vacant inventory, but the cost of this partnership can
cause a hotel to lose an undesirable portion of its profits. Hotel owners usually
prefer that guests book travel directly through their own booking engines instead
of OTAs, and then list their room inventory with OTAs and GDSs when they
Guests are increasingly booking travel directly from hotel websites, due to the
attractive user experience of trip planning using search engines like Google, and
through OTAs, then in the course of doing independent research using search
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It will be important for hotels to partner with OTAs for the foreseeable future
due to their popularity. Many guests prefer to purchase package deals, including
airfare, car rentals and accommodations, which is the benefit of using an OTA,
important to have an alternative direct booking option for guests who prefer to
PROS:
CONS:
Some OTAs will not accept inventory unless the hotel meets its price
requirements, thus forcing hotels to sell their rooms for cheaper than
process.
GDS
There are four major GDSs in the world today: Worldspan, Amadeus, Galileo,
and Sabre, and many other minor ones. GDSs are used to make reservations for
multiple airlines, hotels, car rentals, and other vendors. The airline industry first
reservation data. GDSs are today used by various entities, including airlines,
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travel agencies, OTAs, car rentals, hotels and more to manage and process
reservations.
GDSs run on legacy systems, meaning that they are powered by outdated code
and methods. This is a large problem for the travel industry for many reasons.
Old code can only run on old hardware, which is becoming hard to repair and
replace. Those who knew how to repair and adapt legacy systems retired or
forgot how to use them, and the information was lost with them.
technology. The best solution is to use a SaaS CRS that is updated over time as
Today, GDSs are still used in one way or another by airlines, hotels, and OTAs
all over the world. For the time being, it is still important to integrate an
independent hotel CRS with GDSs in order to benefit from the additional
PROS:
Listing inventory with a GDS can ensure your rooms are seen by
CONS:
GDSs are built on legacy systems and may not be compatible with
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Not all CRSs and booking engines can integrate with GDSs.
Directories
databases of hotels guests can explore to find what they are looking for. Instead
of going directly to the hotel‘s website, they browse the directory and filter
Instead of communicating with the GDS and managing the guest‘s transaction,
directories simply display the desired results and provide price comparisons and
links to OTAs and hotels. Many directories are free and make money on ads.
Some directories make their money by charging hotels for privileged placement
on the directory. The hotel that pays the most gets the highest placement for
on that directory so that guests can find the hotel. While some directories like
TripAdvisor are used frequently by guests, most directories are never used by
actual guests and are therefore not valuable marketing channels. The ones that
take payments for prominent listings also take payments from OTAs. It‘s
outspent by an OTA selling the hotel‘s own inventory, thereby costing the hotel
PROS:
Can place your hotel before the eyes of guests who are accustomed to
brand familiarity, services, and existing marketing channels. Guests know what
they‘re getting when they book with a franchise. They know exactly the style,
This allows guests to make a purchase decision quickly, and to seek out specific
franchises where they have stayed in the past, enjoyed their stay, and therefore
business travelers, are members of loyalty programs for flights, car rentals, and
hotels. Guests who are part of these programs often seek out and stay at a
specific hotel brands time and time again in order to build up points.
Running a franchise hotel takes away some of the cost and hassle of providing
partnerships with taxis and airport transport, food service providers and catering,
insurance companies, maintenance, and so on, removing the necessity for hotels
franchise can reap the benefit of pre-existing business relationships made with
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the franchise brand. The combination of lack of surprises, expected standards,
PROS:
Hotels gain frequent guests who are loyal to the franchise brand.
Hotels can take advantage of extant services provided by, and business
CONS:
Some brands take a percentage of the hotel‘s profit, in exchange for the
hotel having use of the brand. Others charge annual brand and franchise
fees.
Some franchise owners have pricing flexibility, but many others are
Direct Channel
The direct channel is the most straight-forward and intuitive marketing channel,
but it sometimes comes with costs necessary to work well, including the costs of
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time, money, and hotel resources. The most prevalent manifestation of the direct
channel is a hotel website complete with reservation capture system. From the
website, guests book rooms directly from the hotel. This removes the need for a
properly market and maintain the direct channel. The following are some
considerations hoteliers need to think about when creating and publishing their
Website
A hotel website is the heart and soul of the direct channel. It is the destination to
which all other marketing activities funnel traffic, and acts as a ―conversion
their property that guests can use to make inquiries and book rooms. It can be
evolves quickly, faster than any other industry, and websites published
yesterday are out of date tomorrow. For example, websites published five years
on top of web technologies as they emerge, and keep their digital marketing up-
to-date. It is possible to find services that do this for the hotelier, each with its
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Online Reservation Capture (Internet Booking Engines, or
IBEs)
Many smaller hotels opt to have a simple contact form on their website. When a
reservation inquiry comes in, they open their email, record the information, and
process the credit card. This is a manual process that works best for small
properties with a handful of rooms. For larger hotels, they need a more robust,
automated booking engine that can deliver updated availability to guests when
OTAs or with the GDS on their own. Thus, it is often necessary for hoteliers to
a plethora of options, however, many CRSs take a commission fee for every
reservations for some time. Having a solid SEO plan in place allows a hotel‘s
algorithms are volatile, changing daily, implementing any SEO strategy can be
risky.
For example, implementing an SEO strategy popular five years ago could cost a
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could become completely invisible on search engines if it contracts
Social Media
The goal of social media is to point guests and fans to a direct marketing
media correctly. More often than not, hoteliers will create their social media
profiles, speak to an empty room for a few weeks, and then give up.
In order to use social media correctly, hoteliers and hotel marketers need to
invest time and passion into the network before it will ever bear fruit. This time
can be costly and exhausting, and may not deliver results for weeks, months or
even years.
Search Engine Marketing (SEM) and Pay Per Click Ads (PPC)
superseded by web advertising. SEM and PPC advertising accounts for the
advertising alone has made more money each year than all print advertising
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Anyone can start an SEM or PPC campaign, but the learning curve to execute
such a strategy effectively can be steep. It is very easy to quickly waste a year‘s
marketing budget in a month, if one does not take care. It takes good intuition
and experience to choose the right advertising targets, place the correct bids and
For these reasons and more, many hotels hire agencies to perform SEM and PPC
services for them. This compounds costs, levying the cost of the campaigns and
the agency fee upon the hotel. It can be very difficult to see positive return on
Mobile
Mobile devices are increasingly being used to make travel related planning and
purchases, including hotel bookings. Google predicts that guests will be booking
travel from mobile devices more than they do from desktop or laptop PCs by
Mobile optimization entails crafting a new website with fewer scripts, larger
buttons and text, and smaller images in order to improve load speed over
wireless networks and aid swipe navigation. Good mobile optimized hotel
expensive to optimize for mobile, but the cost has been going down
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Email
Online deal services like Groupon, Living Social and Amazon Local have
millions of subscribers who are looking for good deals. Joining one of the
services and offering their members a substantial discount is a quick way to fill
empty inventory.
One drawback of using deal services is that many of them won‘t accept a
proposed deal unless the hotel offers a significant discount--so significant that
the hotel might not make much money. However, the brand exposure is a great
opportunity for a hotel to snag repeat customers and future online bookings. The
risks and rewards need to be weighed heavily before embarking on this strategy.
PROS:
It can be cost effective to pick one or two direct marketing activities and
excel at them.
CONS:
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Summary
A little knowledge can help hoteliers understand their options and select
marketing channels to pursue, but it takes hard, constant work to keep up with
them in order to make them profitable. SaaS seeks to solve this problem by
placing the hassles of research, time and expertise in the hands of industry
Customer acquisition channels have evolved so much over the years that to
ignore the digital channel is a business crippling decision. Hoteliers should start
with a new, modern website and mobile optimized website hosted in the cloud
and optimized for search engines. From there, hoteliers should choose the
customer acquisition channels that work best for their own goals. buuteeq‘s
advantage of an active digital travel market, they will wield substantial influence
as gatekeepers, imposing fees and charges for directing the consumer traffic to
the hotel. Growth in digital travel shopping will expand the transparency of
costs imposed for intermediation and the pressure on rates will challenge the
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Chapter 10
Competitive pricing is the most important success factor that creates product
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for the organizations products. Prices are to be set that captures the value of the
product. The right way to set prices involves capturing the value that customers
the truism that customers differ from each other. However, when it comes to
setting just one price for each product. The key to developing a comprehensive
pricing strategy involves embracing (and profiting from) the fact that customers‘
pricing needs differ in three primary ways: pricing plans, product preferences,
and product valuations. The travel industry, like many others, relies on
consideration when consumers are buying travel or planning their holidays. This
including its price and any inclusions or exclusions. It applies equally to all
upgrades, airfares, duration of the trip, any tours, transfers or other inclusions,
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Things to consider when setting your pricing strategy
How unique is your business? The more unique your tourism product
What market do you want to attract and what positioning in the market
For most tourism businesses setting prices will be more market based –
that is, what do competitors with similar products and services charge
own financial position (debt levels, cash flow etc) before you can decide
Pricing Components
Rack Rates
All tourism businesses should have a rack rate – this is your ―full rate‖ before
any discounts are applied and typically is what is provided to wholesalers and
printed on brochures for the season ahead. For activity and attraction operators
their full rate is more likely to be charged all the time without any day to day
middle of the market will be changing pricing almost daily for the month or 2
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Seasonal Pricing
Using a mix of pricing throughout the year to cover low, high, and shoulder
seasons is a standard way for tourism businesses to cater for differing levels of
demand due to the time of year. Typically these will be the same date periods
each year but may also apply for school holiday dates and for local events where
A common method for accommodation suppliers to fill those last minute gaps in
Per Person pricing: A set price per person e.g Adult and Children
Per Unit pricing: – A set price for 1 unit of the product e.g. Price per night, this
is the standard way to price accommodation, usually the advertised price is for 2
people so if the accommodation fits more than 2 guests it can have a mix of the
per person pricing with extra adult and extra child rates.
Single or double occupancy – common for B&B‘s there is a single rate and a
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Discounting
While discounting has it‘s place, and often unavoidable in a competitive market
missing that vital break-even point. Be selective with last minute pricing deals –
don‘t make every day reduced, just select those where you really do need extra
booking at all, customers do become used to a certain price level and you
therefore run the risk of not only making it hard for you to charge your normal
rack rates, but it will also devalue your product – remember perception is
everything in tourism!
Package Deals
discount. Strike up deals with local businesses to provide a full package and
share business with each other – you should be able to get their products or
services at a ―net‖ rate so the package pricing is better than if they had
niche markets effectively e.g golf weekend, food and wine tours, pampering
packages etc.
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Commissions
Many bookings will come via some sort of third party who will charge you a
Many tourism operators are tempted to add the value of the commission on to
the pricing for these providers but this should actually be considered in the
setting of your rack rates anyway – if you have different pricing across different
distribution channels it just confuses both travellers and can jeopardise industry
At the present time, the airline industry faces many cost pressures. The industry
Higher costs inevitably lead to higher prices for airline passengers. Therefore, it
is crucial that reliable and appropriate estimates are available to assess how
higher prices impact on the level of demand for air travel. This impact will, of
course, differ according to the level and location at which prices are changed.
This report provides groundbreaking new research into the sensitivity of air
travel demand to changes in air travel prices and incomes. It provides clear
guidelines for the appropriate use of demand elasticities and robust and reliable
estimates of their value. Air transport provides economic benefits not just for its
passengers and cargo shippers, but also for the wider economy by connecting
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businesses and individuals to global markets. Modern, just-in-time, global
supply chains and multinational businesses are made possible by global airline
implement air transport policies that are not in the best interests of the aviation
industry and the wider economy. Monopolistic airports that raise charges but do
not improve the services they offer will see passengers quickly shift elsewhere.
Governments that impose new taxes on the industry are taking advantage of less
industry‘s expense.
The elasticity of air travel demand varies according to the coverage and location
of the market in which prices are changed and the importance of the air travel
price within the overall cost of travel. The appropriate elasticity to use will
depend on the type of question being asked. What is the price that is being
changed (e.g. an individual airline ticket price or prices within the market as a
whole)? What is the unit of demand that is being assessed (e.g. demand for an
individual airline or demand for total air travel)? Examining the traffic impact of
by the boom in low cost travel, the transparency brought by the Internet and the
less sensitive to price, as increasingly lower air travel prices, in real terms mean
that the air travel price itself becomes a smaller and less important part of the
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Information Technology in tourism is the second most important success factor
especially of the World Wide Web, has increased tremendously over the past
years and this trend will certainly continue. However, since the technology itself
is now available to almost everyone, its use alone does not necessarily bring a
It is difficult for most destination marketing organizations to keep pace with the
strategies, the changes in the consumer market, and the growing competition
technologies are in use in the tourism sector around the world. They are used for
and satisfy the ever-changing demands for tourism products. One of the unique
characteristics of tourism products is the need of the role played by the so-called
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operators, conference organizers booking agents etc. They are so important
sales outlets around the world. Unlike the CRSs used solely by an airline or
hotel chain, GDS distribute more than one CRS to users who are usually travel
agents.
of the travel industry, effective use of ITs is pivotal. Hence, "a whole system of
ITs is being rapidly diffused throughout the tourism industry and no player will
escape its impacts". Unlike durable goods, intangible tourism services cannot be
They are bought before the time of their use and away from the place of
ITs provide the information backbone that facilitates tourism. The revolution of
ITs has profound implications for the management of the tourism industry,
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tools for globalisation. In few other economic activities are the generation,
important for day-to-day operations. The rapid development of both supply and
demand makes ITs an imperative partner and thus they increasingly play a more
structure of the entire industry. Thus, ITs have a dramatic impact on the travel
industry, because they force the sector to rethink the way in which it organises
its business, its values or norms of behaviour and the way in which it educates
its workforce.
"The key to success lies in the quick identification of consumer needs and in
information". The rapid growth of both the volume and the quality requirements
requesting high quality products and value for their money. Thus, destinations
and principals need new methods to serve the new types of demand. The usage
of ITs in the industry is driven by both the development of the size and
require to interact with suppliers in order to satisfy their specific needs and
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wishes. The contemporary/connected consumer "is far less willing to wait or put
In order to satisfy tourism demand and survive in the long term there is no
choice but to incorporate technology and enhance the interactivity with the
effectively frees time for customer service; customising the product and
(e.g. telephone operator acknowledges guest by his name); and finally better
satisfy the needs of consumer for convenient access to transparent and easy to
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compare information. They cover the entire variety of choices of travel, lodging
and leisure services, destinations, holiday packages, as well as display the actual
prices and availability of such services. These services also provide immediate
packages.
the proliferation of the Internet and the World Wide Web since 1995, illustrate
that consumers increasingly rely on the Internet for travel information. They
the emergent opportunity by utilising the ITs tools. This is already the case with
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The emerging super highway - the Internet and the World Wide
Web
between consumers and suppliers. Since the early 1990s, the World Wide Web
(WWW) has emerged as the fastest growing area of the Internet, enabling
As textual data, graphics, pictures, video, and sounds are easily accessible
through the WWW, it soon became the flagship of the ITs' revolution and
instituted an innovative platform for efficient, live and timely exchange of both
are drawn for the future of tourism marketing and consumer behaviour.
Although there is no accurate estimate of Internet users or sites, the pace of the
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dimensional content marketing that requires the following paradigm shifts: from
The Internet and the WWW provide unprecedented opportunities for the
industry as they bridge the gap between consumers and suppliers and empower
wide range of diverse products and services. ITs also provide the infrastructure
ITs also assist the provision of tailored made products in order to meet the needs
The Internet can also strengthen the marketing and communication functions of
and misleading, mainly due to its immaturity and lack of any type of
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transmissions; credibility of information; intellectual property and copyrights;
hotels as key products to the consumers. Flight and hotels are key terms search
searched in the search engines. An airline usually connects with the computer
reservation systems of the hotels and displays the inventory on the airline sites.
This gives the consumer an option to book air and accommodation through the
airline website. The intermediaries like tour operators, travel agents, and online
travel agents provide the consumers not only with just flight and hotels but also
car rental and holiday packages. The integration between airline and hotels is
commission per room night, which the airlines will receive through the referrals.
travel and tourism sector. Excellent customer service results in a high level of
organization to others. Many organizations in the travel and tourism sector offer
the same or similar products and services, and it is often the quality of the
customer service, which distinguishes one from another. Travel and tourism
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ensure customer loyalty and improve business performance. This unit introduces
learners to the principles of customer service as they apply to travel and tourism.
providing information and selling products and services, and learners will have
the opportunity to develop and demonstrate these skills with customers in real or
simulated situations across different industries within the sector. Meeting the
specific needs of different customer types will be dealt with to ensure that all
knowledge that learners gain from this unit will help to prepare them for
offering excellent customer service within any travel and tourism organisation.
Customer service is important because you must ensure that customers are so
pleased with doing business with you, they will keep returning to you. You have
to keep your customers away from your competitors. It costs five times as much
tell others of their bad experiences and those people will avoid using your
just price, i.e. customers are prepared to pay more for your product or service.
Your organisation needs to be secure and able to develop, and so do you. You
want the buzz you get out of providing excellent customer service. Some
horizontally. This gives them control over each level of the products they
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market but leads to an underlying consistency in customer service across that
integrated group. People operating small private companies may have a niche
market and know many of their clients as regular customers, which helps give a
more personal style of customer service. Large organisations may depend more
upon systems to help provide customer service but, with the right approach and
by selecting and training staff who have a real desire to provide excellent care to
their customers, such organisations can also provide a personal style of service.
N Mean Std.
Deviation
B9. Customer friendly website for consumers to easily locate
33 5.00 .000
and book tr
B6. Competitive pricing 33 4.73 .517
B4. Differentiated products & services from competition 33 4.73 .452
B5. Advance Technological infrastructure to meet the
33 4.70 .529
dynamic consumer demands
B2. Prompt response to customers' problems, suggestions,
33 4.67 .540
and complaints.
B3. Customer Loyalty & satisfaction 33 4.61 .659
B7. Efficient deals/packages/inventory distribution system 33 4.48 .566
B1. Customer-tailored marketing via customer profiling 33 4.33 .736
B8. Human resources skill set pertaining to travel industry 33 4.21 .781
Most important factor which will have an impact on the over all business
friendly website.
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Methods & practices to structure the e-commerce business in the
N Mean Std.
Deviation
C1. Customer friendly website for consumers to easily
33 4.97 .174
locate and book travel related products
C5. Advance Technological infrastructure to meet the
dynamic consumer demands & fasten business 33 4.88 .415
operations
C2. Regular updating the website with latest and correct
33 4.82 .392
information for consumers to make informed decision
C3. Prompt response to customers' problems,
33 4.79 .485
suggestions, and complaints.
C16. Multi-Channel Marketing 33 4.70 .529
C4. Investment in tablet and smart phone apps 33 4.70 .637
C11. Consistent Promotion design tailored according to
33 4.61 .496
the consumer purchase patterns
C8. Business alliance with white label products e.g.
33 4.48 .667
hotels, flights, cab, insurance, holiday package
C14. Improve Process efficiency - The time taken to
33 4.48 .566
quote the offering & price
C15. Engage with exciting content on social media to
encourage engagement between travel products and 33 4.42 .663
consumers
C9. Informed reports for forecasting and decision
33 4.39 .659
making
C6. Analytical tools to track consumer behavior &
33 4.36 .653
transactions
C7. Consistent offline and e-media advertising without
33 4.27 1.153
any blackout periods
C12. Innovative payment gateway features to enhance
33 4.27 .719
consumer experience & increase business performance
C10. Interactive feedback between customer and
33 4.27 .674
business
C13. Improve Process efficiency - streamline the time to
33 4.18 .727
develop a custom itinerary
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Travel websites have to be regularly updated with latest deals, products,
services, promotions, and policies. One of the most common issues found with
websites is ―Build it and Forget it‖ syndrome. In simple terms, it‘s the website
that you build today and do not change a thing for the next few years. This
is simple: it‘s ―old web‖ thinking in a ―new web‖ world. In the old web (say
mid-1990‘s to early 2000,) the idea was simply to copy and paste the content
from your company‘s brochure into your website and then you were set. At that
point, you were fine to leave it for the next few years and many businesses did
just that. The new web is all about content, but not just any content… fresh
content. In the new web, the websites that get the most traffic are those where
the content is constantly changing, being added to, and improved. Users want
and expect to see or learn something new each time they visit your website and
they view those websites that do so as more valuable. Think about it, you
website:
The value in search engines is that you can find just about anything you are
looking for on the web. But, we don‘t want to just find anything, we want to
find the ―right thing.‖ So in order to remain a valuable tool to users, search
engines needed a way to identify what listings are considered ―good stuff‖ and
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what is not. One identifier, a term called ―frequency,‖ is used to determine how
often your website is updated. If a website is updated often, then search engines
that can help move its listing up in the search results. This is very beneficial as
Think about it. If your local newspaper delivered this Sunday‘s edition, then
next Sunday they delivered exactly the same thing, then again the next Sunday
and so on and so forth, eventually you‘d just cancel your subscription. Why?
Because there is no longer anything of value. The content is exactly the same so
why would you want to keep receiving it? Its the same with your website in that
if it never changes, why would someone who has already read it want to come
back? Search engines know this and could penalize you by moving you down in
the rankings.
This one actually builds off the previous reason. If search engines think your
website is outdated, then wouldn‘t you think the visitors to your website feel the
same? If I came to your website today, then came back next month and nothing
has changed, I would probably think that nothing is really happening with your
business. You must not be growing. You must not be innovating. You must not
service is any good? Is there something wrong with you? Think about it this
way, seeing even simple changes like posting news and announcements shows a
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visitor progress and progress is good at getting a prospect to realize why they
What does providing new content translate into? A better chance at closing a
transaction with a prospect who visits your website. They may not be ready the
first time they drop by, but by the second or third time they visit and read that
new announcement about ―special financing‖ or our ―great new service‖ it may
performance
We‘re big fans of making decisions based on data. Knowing what works and
what doesn‘t in terms of attracting traffic that can become customers is what
helps make a website successful. So, if the website never changes, then how do
you know if it is operating at its peak performance? Even with web statistics
software giving you data about who‘s coming to your website and how many,
it‘s not as valuable as knowing that you could get more traffic by simply
changing something or posting something new. How do you learn what that
is? Simple, analyze the data, make changes, and track the affect the change had
on performance. Who knows, that one piece of information that currently is not
on the website may draw in a whole new type of customer you never thought
about, but then again you‘ll never know if you never post it
Travel goes mobile: The Travel & Tourism sector has been one of the most
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boarding passes; using mobile messaging as a CRM tool to keep passengers
informed about delays and cancellations; giving iPads to in-flight staff to enable
them to conduct appraisals 35,000 ft. off the ground; and of course creating
efficiency for them, and the ticket-buying experience for their customers.
Reality to help travellers find their way around a strange city. And travel agents
producing companion apps to help their customers plan their holiday before they
leave, and make the most of it when they arrive at their destination.
Add to that the plethora of hotel- and tax-booking apps, underground maps and
bus and train timetable services, and it‘s clear that the Travel & Tourism sector
Since travelers invest so much more time using apps than mobile websites, it's
no surprise that the majority of purchases and bookings coming through mobile
devices occur in apps rather than mobile websites. In 2012, a full 20% of
smartphone owners used their device to book air travel or make a hotel
reservation, and 80% of these transactions were made with an app. Again, these
numbers are certain to rise as the market penetration of mobile devices increases
Beyond the standalone benefit of increasing market access, mobile apps allow
With the increasing number of travelers using their mobile devices, there are
outstanding opportunities for the travel industry predicated on the real time
ability to connect and interact with consumers at any time or place. The portable
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media landscape of mobile offers a powerful medium to deliver content to
improving travel efficiency and building ancillary revenues. Mobile offers the
traveling consumer the ability to research products and services, make instant
engage in signups and buy on the spot. You can communicate information or
alerts, send coupons, offer distressed inventory, make timely offers and last
minute deals, up sell and cross sell ancillary products and services.
Airlines are leading the way by upgrading their mobile Web experience from
being mainly information driven to providing the ability to book and purchase
flights, join the standby list and upgrade seating. Hospitality brands are diving in
to the space with SMS call to action campaigns for promotions on discounts for
rooms, dining, amenities, etc. and creative concepts like a mobile concierge for
and conveniently sent by text message, there‘s the ability for paperless ticketing
are looking to the channel to engage with customers at all stages of the
consumer buying cycle. The innovative use of mobile technology offers the
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with customers on the go with messages on the move gives you the opportunity
Mobile users are just that, mobile. They don‘t have time to spend navigating and
deciphering, so you need to have a mobile version of your site and create a user
experience that is optimized for the mobile Web – one that is simple, quick,
friendly and easy to browse. Make sure contact information is easy to find and
Mobile marketing is all about opt-in marketing. The key is to get consumers to
say ―yes ―to hearing from you and then enthusiastically take part in the mobile
permission. Since you can‘t purchase a mobile phone list, all subscribers must
To start the process and build a permission-based SMS audience, reach out to
existing customers through every touch point and ask if you can be in contact
with them on their mobile device. Promote your mobile services by leveraging
all your existing marketing channels and capture mobile numbers through
information queries and bookings. On the customer profile page of your Web
site, add a line for mobile numbers and provide a choice of different opt-in
options. By using mobile banner ads you can also drive consumers to your WAP
(Wireless Application Protocol) site and encourage them to opt in to your SMS
database. Once people have joined, you can let the interaction and value
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information.
All text message communication should include a link to your mobile site to
drive users there. Have a special offers section on the mobile site where visitors
connects consumers to a live person. Be sure to indicate that rates may apply,
and provide clear instructions on how to opt out if desired (i.e. text STOP to a
short code). As in any CRM strategy, be sure to deliver what they ask for. At the
end of the day, content has to be relevant, useful and valuable. The end game is
according to ABI Research, New York, and it will account for 83 percent of all
It‘s an application most mobile users are familiar and comfortable with, and the
opportunities are endless. One way to build a mobile database and acquire new
include an opt-in SMS message after the entry. You can ask users to text a
keyword (also known as a mobile alias) to a short code, and those wanting to
―mob.‖ The customer then gets a return text message which qualifies them for
the offer and they can become an opt-in member for future mobile marketing.
That keyword can be promoted in any number of ways, generally with an offer
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travel magazine can offer consumers a free night or complimentary service by
texting your keyword (and joining your mob). When the consumer joins, they‘re
given a promotion code to use when making the booking. On an ongoing basis
One of the greatest features of broadcast text messaging is the ability to create
time sensitive offers to fill need periods. A restaurant can send a message with
an offer to guests and locals before the lunch or dinner hour if business is slow.
A hotel can fill weekend space with a last minute offer. To increase internal
capture during a guests‘ stay, get them to opt in to receive offers on check-in if
they‘re not already enlisted. For example, if the spa has afternoon cancellations,
you can text to guests on property with a reduced rate on a service. And as a
final text to culminate the stay, the last message can be a thank you with a Web
the most exciting opportunities in mobile marketing is the use of Location Based
Services (LBS), predicated on the concept that exact location is the basis for
delivering the right message to the right person at the right place and time.
Couple that with a detailed profile on a customer – their likes, interests and
personal data – and you can target that individual through text offers or mobile
sending offers and discounts via mobile when they are within walking or driving
distance.
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consumer experience and interaction with the brand. By accessing the mobile
passengers looking for the next flight can enter their destination and get every
airline‘s flight and gate information for the entire day, as well as call the airline
or connect to its Website. For the traveler on the go, the phone can be an
invaluable and condensed source of information, from mobile guide books and
maps to restaurants and reviews, GPS-driven walking tours and audio guides on
(the iPhone alone offers more than 30,000 applications, with travel a dominant
category offering everything from product branded Web sites for destinations,
hotel companies and airlines to guide books, reviews, currency converters, voice
For hospitality marketers, the medium offers the ability to locate guests prior to
arrival and send a text message to start the check in process. Having knowledge
of one‘s profile and interests enables you to customize their stay by pushing
menus and specials, spa options, attractions and more. For destination marketing
organizations and convention and visitors bureaus, mobile can provide the
means to deliver full destination guides with location based features and
services.
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The mobile environment offers a variety of measurement capabilities and
analytics that can report participation and demographics of your mobile database
capture the right kind of data, and use it once you have it to measure your
results.
Summary
travel marketers to be deliberate about their forays into the mobile arena. A
mobile marketing plan can help you navigate through the hype to carefully
research and implement mobile marketing efforts that are integrated with the
working with your online efforts like paid search marketing, local search
marketing, and email marketing, can help you leverage and see synergistic
Many would agree that mobile is indeed the new frontier. As the technology,
devices and applications become more affordable and accessible, those who
embrace some degree of mobile marketing will be well positioned to reap the
benefits of this burgeoning and potentially lucrative market. Whether you test
the waters by establishing a mobile Web site, start building your ‗mob‘ by
multitiered campaign, the smart marketer will let the engagement begin.
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Multi-Channel Marketing:
communicate directly with users, engage with advocates and create branded
applications. Facebook is the most powerful social media channel for travel
empower brand advocates and push consumers further into the travel purchasing
process.
experiences. In 2012, Facebook reviewed the top stories people shared to their
Facebook timelines and discovered that the top story being shared by users was
travel experiences, more than double that of the next category. In the evolving
digital marketing landscape, it is clear that consumers want to share their travels
with others and tourism marketers need to tap into this consumer behavior to
Brand awareness
Inspire visitation
Consumer engagement
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Generate visitor leads
Facebook Page is your brand‘s storefront and where you will be able to
showcase your destination‘s most important news on your time line. Within
your Facebook page, you can brand your profile in name and images, select a
vanity URL, list your business details and link to your website. Facebook Pages
also allow you to list upcoming events, map your location and feature photo and
video galleries. Your Page is where you will generate connections and long-term
relationships with your brand advocates (residents and past visitors) and attract
Facebook Ads are a paid advertising solution used to attract new fans, amplify
your message and expand the reach of your brand. Facebook Ads allow you to
Traditional Ads for brand awareness and to drive traffic to the website, page
connections with your Page and Promoted Posts to showcase your Page posts.
Facebook Offers allow Facebook Pages to provide offers such as hotel deals that
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Facebook Ads are a cost effective approach for generating awareness,
install Facebook Page Apps that will be located on a Facebook Page. Facebook
Page Apps are available from third party application developers or can be
Page Apps for destination pages include sign up form for newsletters and
vacation guides, contests and sweepstakes, co-op programs and integration with
other social media channels. While some third party applications are available
for free, customized Page apps will require a web development investment.
Facebook Login and Open Graph as free tools for brands to develop
In order to properly market your destination on Facebook, you will need to have
location and interests. Whether you have in-depth visitor studies readily
available to you or simply have website analytics to work with, be sure to utilize
the data you have available to clearly identify your audiences Facebook will also
serve as a consumer market research tool for your destination to gather user
insights, measure content engagement and crowd source ideas before bringing
them to market.
objectives and goals. Ultimate goal is to drive traffic. However, consumers are
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looking to your organization to help them decide where they should go and what
they. You will need to balance the goals of both your organization and your
overemphasized. 40% of Facebook users time is spent in the news Feed and the
more engaging your content is the more users you will reach, impressions you
will generate and the longer your post will be featured in the News Feed. To
achieve your goals and provide value to your Facebook audience, you will need
review your web analytics to understand what content consumers are searching
162
With the knowledge of who your target audiences are, what information your
audiences are most interested in and what stories you want to tell, develop a
content matrix to match consumer segments to the messages you want to relay
increasing your Facebook Ads budgets and timing it with unique and innovative
campaigns your organization can make sure to differentiate itself and gain the
your audience and build your following, think about layering in a contest,
giveaway or sweepstakes.
anywhere else to peak the most interest. When running a Facebook campaign
always be sure to collect email addresses and require entrants to like your
Search engines have become one of the primary tools for travel planning and, as
dynamic relationships among the search engine providers, the tourism industry
substantial understanding of how search engines are used within the travel
163
important components of an overall Internet marketing program. With the
engines such as Google and Yahoo! have become the ―Hubble‖ of the Internet
information that might be useful in the travel planning process. Indeed, recent
studies by the Travel Industry Association of America and others have shown
that the huge majority of U.S. travellers use search engines for vacation
potential visitors. As a result, search engines have been recognized as the ―first
step‖ in a travel planning process, and therefore, are seen as a critical starting
point with which DMOs can communicate with existing and potential visitors.
There are three general components or stages of search engine use as related to
reflects the integration of the information search process used to plan a trip and
Internet; 2. The search process which includes the frames used to evaluate
search results; and, 3. The evaluation of the overall search process which
planning. Thus, within the context of online travel planning, it is argued that
these pre-search conditions reflect travellers‘ use of (or preference for) various
tools (i.e., types of websites) available on the Internet to find this information.
164
The second stage of the search process describes the basic strategies travellers
use to navigate through the Internet to find relevant information so that the
etc) can be made. As such, these strategies act as ―frames‖ within which the
stage, then, focuses on the overall evaluation of search engines within the travel
planning process. Importantly, this stage of search engine use not only results in
some sort of overall evaluation (i.e., satisfied vs. not satisfied), but also attitude
formation toward search engine use for travel planning. Finally, it is important
to note that this third stage sets the stage for future use of search engine for trip
have shown that the process of using a search engine consists of two major
sciences as well as travel and tourism. In travel and tourism, recent studies
indicate that travelers‘ questions tend to be short, consisting of less than four
keywords; and, most travelers do not go beyond the results provided on the
second page.
As a result, only a relatively small number of websites are visible to the traveler
though millions of potential web pages were found study also indicates that
destinations, or transportation.
165
Measuring The Value Of Email Marketing For The Travel
Industry
email has become so wide-spread and so often used that it has firmly been
cost, speed and convenience of getting something into market. However, peer
deeper and you‘ll see that the medium has matured. Email is a vital link between
marketer and consumer that can provide companies with rich information about
their products and services. Email extends well beyond the boundaries of opens
and clicks, and must be optimized and measured as an important part of the
research. More than half of respondents have a favorable opinion of the travel
companies that send them email because of the communications they receive
and feel more loyal towards companies and products. Travel reflected better
loyalty than other categories in the study, with 63% of recipients of permission-
based email from travel companies more likely to buy from companies that send
them email. The travel industry was one of the first industries to enter the e-
commerce arena and therefore travel consumers have a high comfort level in
today more receptive to email opt-ins and more adept at Internet search, they are
166
Instead of relying on one sole provider of travel information, respondents to the
about sales, discounts and special offers. With advanced targeting and dynamic
content, travel companies can customize content for users based upon their past
purchases, preferences, and website activity. Email drives many online activities
often take easily measurable actions such as booking travel online, clicking links
receiving an email from a travel company. However, there are other popular
sites, search for reviews, type/copy a URL directly into their browser or contact
their travel agent. Results show that emails influenced the recipients ‗purchase
of airfare and hotels most often, and to a lesser degree vacation packages, rental
cars, and cruises. In all cases the vast majority of those purchases took place
online.
Figure no. 20
167
Figure no. 21
Patterns
marketing. It is the way we tell the world our product. Promotion provides
manner. This, we hope, will sooner or later result in sales of our services or
168
The ultimate purpose of promotion is to modify behavior through
achieves this by informing, persuading, and reminding - the three principal goals
of promotion. Promotions usually fit into one of these categories; they are either
services to another, and most sales promotions, fit into this category. Persuasive
and maturity) and the buying process (evaluation of alternatives and purchase).
they may have seen, and to stimulate repurchases. They are most effective in
the late product-life-cycle (maturity and decline) and buying process stages
169
communication objectives, however, only a small number of people can be
of people at low cost. Public relations is more credible than advertising, but
there is more control over advertising messages and they can be repeated on a
regular basis.
coverage. Sales promotion may produce an initial trial for a product, but this
Each part of the promotion mix has its own strengths and weaknesses. While
these may include the factors of cost, ability to target different groups, and
control, there are other important considerations. On the following figure, they
are compared on the basis of the level of awareness of the communication, and
research and planning. The stage of customers‘ decision processes and product
life cycle stages affect the promotional campaign decisions. However, there are
170
Target Markets
The effectiveness of the five promotional mix elements varies according to the
lodging property might find that personal selling to key meeting planners is
much more effective than advertising. On the other hand, using personal selling
location of potential customers also has an impact. Where they are widely
dispersed, advertising may be the most efficient and effective way to reach
them.
Marketing Objectives
The promotional mix selected should flow directly from the objectives for each
percentage, the emphasis may be placed on media advertising. If, on the other
hand, it is to build sales significantly in a short time period, the focus may be put
on sales promotion.
There is a distinct tendency in certain parts of the hospitality and travel industry
hotels and airlines focus on frequent-traveler award programs, and cruise lines
extremely risky for one competitor to ―break from the pack‖ in this respect.
171
Promotional Budget Available
Obviously the funds available for promotion have a direct impact on choosing
publicity and sales promotions. Larger organizations can better afford to use
partnerships, and joint ventures all describe the coming together of two firms
They may assume the form of: (a) a buyer seller relationship as in the case of an
airlines and retail travel agencies; (c) an alliance between two or more suppliers
between two companies like The SABRE Group and ABACUS International
elements that they can be treated as a basic unit of analysis. In the current
the motivation to partner, in one or all of these forms, is great. Many airline
172
Factors that are detrimental to the growth of the e-commerce
N Mean Std.
Deviation
D3. Lack of Advance Technological infrastructure to meet
33 4.73 .517
the dynamic consumer demands
D4. Slow time to market then competition 33 4.67 .645
D5. Brand lacks loyalty & satisfaction 33 4.64 .549
D6. Brand lacks consumer preference 33 4.61 .659
D2. Non Differentiated products & services from
33 4.52 .795
competition
D1.a Flight + Hotels 33 4.48 .834
D1c Flight + Hotels + Car Rental + holiday package 33 4.36 1.194
D1b Flight + Hotels + Car Rental 33 4.21 1.053
D7. Delay in payments of suppliers/partners leading to
33 4.15 1.034
suspension of business deals and advertising campaigns
match the price. The systems should be capable enough to match the
price real time so that competition is unable to capture the entire share of
Time to market is the total amount of time it takes to develop and get a
173
Why does time-to-market matter? How well a company does is often not
just related to how good its products are but how quickly they are gotten
months can have a dramatic impact on the success of a new product. One
larger market share. once a company has an edge, it will often keep it.
Has any company really overtaken Sony for their Walkman products?
On the other side, IBM was a big part of the development of the personal
computer market, and then lost much of its market share to other
manufacturers.
One good reason for having a fast time to market is to allow a company
to start later on designs than the competition for a similar product. This
can allow for more feasibility studies and for the use of the latest
certainly have old technology by the time it is being sold. Quicker design
How does this relate to quality and cost? A quicker time to market
market before it is ready, the quality may suffer and the customers will
not be willing to pay as much for it. As companies feel an increased need
to bring products to market faster, the need to get it right the first time is
and tools.
174
Poor execution of design; wasting of resources
lack of focus
Lack of strategy
Management support
Equipped systems
differentiator.
175
TESTS FOR SIGNIFICANCE (T-Test)
176
A9a. Products that are of most Hotels/Airlines 11 4.64 .505 .152
interest / most importance to travel
related organizations to increase Agents/Tour
business performance - a) Flight + Op/Search 22 4.68 .477 .102
Hotels Engines/GDS
Hotels/Airlines 11 4.00 1.095 .330
Agents/Tour
A9b. Flight + Hotels + Car Rental
Op/Search 22 4.50 .913 .195
Engines/GDS
Hotels/Airlines 11 4.09 1.221 .368
A9c. Flight + Hotels + Car Rental Agents/Tour
+ holiday package Op/Search 22 4.45 1.101 .235
Engines/GDS
Hotels/Airlines 11 4.18 .751 .226
A10a. Widen the travel product
Agents/Tour
distribution system - a) E-Tailing
Op/Search 22 4.05 .785 .167
sites
Engines/GDS
Hotels/Airlines 11 4.18 .982 .296
Agents/Tour
A10b. Tourism sites
Op/Search 22 4.32 .780 .166
Engines/GDS
Hotels/Airlines 11 4.73 .647 .195
Agents/Tour
A10c. Deal sites
Op/Search 22 4.41 .734 .157
Engines/GDS
Hotels/Airlines 11 3.82 .982 .296
A10d. Tour operators brochures & Agents/Tour
websites Op/Search 22 4.14 .834 .178
Engines/GDS
Hotels/Airlines 11 4.45 .688 .207
A11a. Differentiated products &
Agents/Tour
services - a) Exciting holiday
Op/Search 22 4.59 .590 .126
itinerary
Engines/GDS
Hotels/Airlines 11 4.64 .505 .152
Agents/Tour
A11b. Prompt customer service
Op/Search 22 4.86 .351 .075
Engines/GDS
Hotels/Airlines 11 4.91 .302 .091
Agents/Tour
A11c. Competitive pricing
Op/Search 22 4.82 .395 .084
Engines/GDS
177
Independent Samples Test
t-test for Equality of Means
t df Sig. (2-
tailed)
A1. Commitment (Commitment and
support from top management in term of -1.026 13.178 .323
strategy and implementation)
A2. Technological infrastructure that
-.941 31 .354
supports the dynamic business demand
A3. Online media marketing budgets -.681 14.098 .507
A4. Promotions to drive incremental
-.196 31 .846
business
A5. Customer purchase patterns and tailor
-.594 31 .557
products according to the purchase patterns
A6. Customer retention through customer
.119 31 .906
loyalty
A7. Multi-Channel Marketing .000 31 1.000
A8. Partnership/Alliance to expand the
-.670 31 .508
product offering
A9a. Products that are of most interest /
most importance to travel related
-.253 31 .802
organizations to increase business
performance - a) Flight + Hotels
A9b. Flight + Hotels + Car Rental -1.388 31 .175
A9c. Flight + Hotels + Car Rental +
-.863 31 .395
holiday package
A10a. Widen the travel product
.477 31 .637
distribution system - a) E-Tailing sites
A10b. Tourism sites -.434 31 .667
A10c. Deal sites 1.219 31 .232
A10d. Tour operators brochures &
-.975 31 .337
websites
A11a. Differentiated products & services -
-.592 31 .558
a) Exciting holiday itinerary
A11b. Prompt customer service -1.340 15.014 .200
A11c. Competitive pricing .670 31 .508
178
Definition of (t-test)
It can be used to determine if two sets of data are significantly different from
each other. Tests for statistical significance are used to address the question:
variables is really just a chance occurrence? Tests for statistical significance tell
us what the probability is that the relationship we think we have found is due
only to random chance. They tell us what the probability is that we would be
making an error if we assume that we have found that a relationship exists. The
test statistic in the t-test is known as the t-statistic. The t-test looks at the t-
(probability) that can be used to determine whether the population means differ.
Analysis
systems (GDS) perceive that commitment from the top management play
179
distribution and training of tourism sector personnel. These technologies
knows that coupons, deals, and rebates are indispensable tools to both
acquire first-time customers and retain existing ones. This fact accounts
for why deal sites have existed for so long and continue to have legs
under almost any economic circumstance. Since the early days of the
Internet, retailers could get their offers posted to all kinds of deal sites
without much difficulty (or the need for a professional media buyer).
With the advent of affiliates, many retailers didn't even need to post their
offers – their affiliates would do it for them or even develop whole deal
sites filled with nothing more than affiliate links. One of the most
that they may need or just want. Individuals may think that these offers
may be too deferential to be real, but in all reality these offers are
individual could find terrific presents for friends and close relatives. If
180
someone has a big family but does not necessarily have the disposable
beneficial. Gifts could be bought way in advance and put away for future
discovered that someone may not have even known about. Items can be
discovered that someone may not have seen or observed about in years.
hotels
registrations, sales and click streams. These data are used to extend
users can register for email updates and are asked for a range of
activity and composition of travel party. With the customer‘s data held
centre staff. By accessing the customer‘s profile the call centre is able to
prioritize that customer and possibly explore up sell and cross sell
181
organisations in the travel and tourism sector. Excellent customer service
182
C7. Consistent offline Hotels/Airlines 11 4.55 .522 .157
and e-media advertising Agents/Tour
without any blackout Op/Search 22 4.14 1.356 .289
periods Engines/GDS
C8. Business alliance Hotels/Airlines 11 4.55 .688 .207
with white label products
Agents/Tour
e.g. hotels, flights, cab,
Op/Search 22 4.45 .671 .143
insurance, holiday
Engines/GDS
package
Hotels/Airlines 11 4.64 .505 .152
C9. Informed reports for
Agents/Tour
forecasting and decision
Op/Search 22 4.27 .703 .150
making
Engines/GDS
183
exciting content on
social media to Agents/Tour
encourage engagement Op/Search 22 4.41 .666 .142
between travel products Engines/GDS
and consumers
Hotels/Airlines 11 4.64 .674 .203
C16. Multi-Channel Agents/Tour
Marketing Op/Search 22 4.73 .456 .097
Engines/GDS
184
C11. Consistent Promotion design tailored
-.490 31 .627
according to the consumer purchase patterns
C12. Innovative payment gateway features
to enhance consumer experience & increase -1.028 31 .312
business performance
C13. Improve Process efficiency -
streamline the time to develop a custom -1.558 31 .129
itinerary
C14. Improve Process efficiency - The time
-.867 31 .393
taken to quote the offering & price
C15. Engage with exciting content on social
media to encourage engagement between .183 31 .856
travel products and consumers
C16. Multi-Channel Marketing -.459 31 .649
consumer complaints.
for hotel rooms and airline tickets are growing in the double- and triple-
invest a great deal more in mobile apps and cloud services, and try to
information and plan their trips. And how the travel industry responds to
185
those needs. Mobile technology is also allowing people to book travel
image gets amplified across both offline and online advertising channels.
how effective one is over the other. The former practice consisted mostly
now consider that melding the two together can reap better benefits, as
media increases, the revenues of offline media decrease, even though the
186
price of advertising might increase. he Internet has allowed many
previously excluded.
product. For example, in selling seats for a flight, the number of seats is
fixed, they can be sold until the departure time, thereafter they simply
187
because the forecast is the main driver of the pricing/room allocation
188
&satisfaction Agents/Tour
Op/Search 22 4.68 .568 .121
Engines/GDS
Hotels/Airlines 11 4.36 .809 .244
D6. Brand lacks consumer Agents/Tour
preference Op/Search 22 4.73 .550 .117
Engines/GDS
D7. Delay in payments of Hotels/Airlines 11 4.00 1.000 .302
suppliers/partners leading to Agents/Tour
suspension of business deals Op/Search 22 4.23 1.066 .227
and advertising campaigns Engines/GDS
Travel agents, tour operators, travel meta search engines, GDS perceive
range of travel solutions not just selective travel solutions. Travel agents,
tour operators, travel meta search engines, GDS place high importance
189
consumers to book on a single platform when the consumers visit.
book different travel products. Multiple products under one roof invites
new customers and enhances brand image and hence brand preference
Travel agents, tour operators, travel meta search engines, GDS place
products are built with the help of technology. Technology trends in the
payments and more. Some new technologies are designed to improve the
delivery. But all innovations must work within the context of a rapidly
way they interact with devices and suppliers can deliver new capability
Travel agents, tour operators, travel meta search engines, GDS place
high importance that lack of brand preference in the consumers mind can
190
behavior. Brands with a strong hold on consumer minds can capitalize
on that hold through brand extension. The new products get traction in
the market, at least in theory, on the strength of the brand name. A weak
brand name that lacks this hold on consumer minds cannot lend strength
of importance)
Descriptive Statistics
N Mean Std.
Deviation
A11c. Competitive pricing 11 4.91 .302
A10c. Deal sites 11 4.73 .647
A2. Technological infrastructure that supports the dynamic
11 4.73 .467
business demand
A11b. Prompt customer service 11 4.64 .505
A9a. Products that are of most interest / most importance to
travel related organizations to increase business performance - 11 4.64 .505
a) Flight + Hotels
A4. Promotions to drive incremental business 11 4.45 .688
A11a. Differentiated products & services - a) Exciting holiday
11 4.45 .688
itinerary
A7. Multi-Channel Marketing 11 4.45 .820
A1. Commitment (Commitment and support from top
11 4.45 .820
management in term of strategy and implementation)
A3. Online media marketing budgets 11 4.36 .809
A10b. Tourism sites 11 4.18 .982
A8. Partnership/Alliance to expand the product offering 11 4.18 .874
A10a. Widen the travel product distribution system - a) E-
11 4.18 .751
Tailing sites
A9c. Flight + Hotels + Car Rental + holiday package 11 4.09 1.221
191
A6. Customer retention through customer loyalty 11 4.00 .632
A5. Customer purchase patterns and tailor products according to
11 4.00 .894
the purchase patterns
A9b. Flight + Hotels + Car Rental 11 4.00 1.095
A10d. Tour operators brochures & websites 11 3.82 .982
Valid N (listwise) 11
Hotels and airlines perceive the following as key success factors that makes e-
Competitive pricing
Information technology
importance)
Descriptive Statistics
N Mean Std.
Deviation
B9. Customer friendly website for consumers to easily
11 5.00 .000
locate and book tr
B6. Competitive pricing 11 4.64 .505
B2. Prompt response to customers' problems, suggestions,
11 4.64 .505
and complaints.
B4. Differentiated products & services from competition 11 4.55 .522
192
B5. Advance Technological infrastructure to meet the
11 4.45 .688
dynamic consumer demands
B7. Efficient deals/packages/inventory distribution system 11 4.36 .674
B1. Customer-tailored marketing via customer profiling 11 4.27 .786
B3. Customer Loyalty & satisfaction 11 4.27 .786
B8. Human resources skill set pertaining to travel industry 11 4.18 .874
Valid N (listwise) 11
Hotels and airlines perceive the following as key factors that will have an
experience
Efficient deals/packages that can be offered to the b2b and b2c markets
Descriptive Statistics
N Mean Std. Deviation
C5. Advance Technological infrastructure to
meet the dynamic consumer demands & fasten 11 4.91 .302
business operations
C1. Customer friendly website for consumers to
11 4.91 .302
easily locate and book travel related products
C2. Regular updating the website with latest
and correct information for consumers to make 11 4.82 .405
informed decision
C9. Informed reports for forecasting and
11 4.64 .505
decision making
C16. Multi-Channel Marketing 11 4.64 .674
193
C8. Business alliance with white label products
e.g. hotels, flights, cab, insurance, holiday 11 4.55 .688
package
C7. Consistent offline and e-media advertising
11 4.55 .522
without any blackout periods
C4. Investment in tablet and smart phone apps 11 4.55 .820
C3. Prompt response to customers' problems,
11 4.55 .522
suggestions, and complaints.
C11. Consistent Promotion design tailored
11 4.55 .522
according to the consumer purchase patterns
C15. Engage with exciting content on social
media to encourage engagement between travel 11 4.45 .688
products and consumers
C14. Improve Process efficiency - The time
11 4.36 .505
taken to quote the offering & price
C6. Analytical tools to track consumer behavior
11 4.27 .647
& transactions
C10. Interactive feedback between customer
11 4.09 .701
and business
C12. Innovative payment gateway features to
enhance consumer experience & increase 11 4.09 .831
business performance
C13. Improve Process efficiency - streamline
11 3.91 .701
the time to develop a custom itinerary
Valid N (listwise) 11
Hotels and airlines perceive the following methods and practices required to
engines results
Consistent offline and online advertising for retention and new customer
acquisition
194
Prompt response to consumers complaints and improvise brands
reputation
Improve process efficiency – time taken to develop the product and offer
Derive trends.
importance)
Descriptive Statistics
N Mean Std. Deviation
D4. Slow time to market than competition 11 4.73 .467
D5. Brand lacks loyalty & satisfaction 11 4.55 .522
D3. Lack of Advance Technological
infrastructure to meet the dynamic consumer 11 4.55 .522
demands
D1.a Flight + Hotels 11 4.45 .688
D6. Brand lacks consumer preference 11 4.36 .809
D2. Non Differentiated products & services
11 4.36 .674
from competition
D1b Flight + Hotels + Car Rental 11 4.18 .874
D1c Flight + Hotels + Car Rental + holiday
11 4.09 1.221
package
D7. Delay in payments of suppliers/partners
leading to suspension of business deals and 11 4.00 1.000
advertising campaigns
Valid N (listwise) 11
Hotels and airlines perceive the following factors are detrimental to the growth
products, but actually the leader often has the luxury of time, while the
offering to consumers.
of importance)
Descriptive Statistics
N Mean Std.
Deviation
A11b. Prompt customer service 22 4.86 .351
A2. Technological infrastructure that supports the dynamic
22 4.86 .351
business demand
A11c. Competitive pricing 22 4.82 .395
A1. Commitment (Commitment and support from top
22 4.73 .456
management in term of strategy and implementation)
A9a. Products that are of most interest / most importance to travel
related organizations to increase business performance - a) Flight 22 4.68 .477
+ Hotels
196
A11a. Differentiated products & services - a) Exciting holiday
22 4.59 .590
itinerary
A3. Online media marketing budgets 22 4.55 .510
A4. Promotions to drive incremental business 22 4.50 .598
A9b. Flight + Hotels + Car Rental 22 4.50 .913
A7. Multi-Channel Marketing 22 4.45 .596
A9c. Flight + Hotels + Car Rental + holiday package 22 4.45 1.101
A10c. Deal sites 22 4.41 .734
A8. Partnership/Alliance to expand the product offering 22 4.36 .658
A10b. Tourism sites 22 4.32 .780
A5. Customer purchase patterns and tailor products according to
22 4.18 .795
the purchase patterns
A10d. Tour operators brochures & websites 22 4.14 .834
A10a. Widen the travel product distribution system - a) E-Tailing
22 4.05 .785
sites
A6. Customer retention through customer loyalty 22 3.95 1.174
Valid N (listwise) 22
Online travel agents, tour operators, traditional travel agents, travel meta search
Advance technology
Competitive pricing
implementation
197
Factors that will have an impact on overall business
importance)
Descriptive Statistics
B9. Customer friendly website for consumers to easily locate and book tr 22 5.00 .000
B4. Differentiated products & services from competition 22 4.82 .395
B5. Advance Technological infrastructure to meet the dynamic consumer
22 4.82 .395
demands
B6. Competitive pricing 22 4.77 .528
B3. Customer Loyalty & satisfaction 22 4.77 .528
B2. Prompt response to customers' problems, suggestions, and complaints. 22 4.68 .568
B7. Efficient deals/packages/inventory distribution system 22 4.55 .510
B1. Customer-tailored marketing via customer profiling 22 4.36 .727
B8. Human resources skill set pertaining to travel industry 22 4.23 .752
Valid N (listwise) 22
Online travel agents, tour operators, traditional travel agents, travel meta search
engines, Global Distribution Systems perceive the following as key factors that
Competitive pricing
198
Methods & practices to structure the e-commerce business in the
Descriptive Statistics
N Mean Std.
Deviation
C1. Customer friendly website for consumers to easily locate and
22 5.00 .000
book travel related products
C3. Prompt response to customers' problems, suggestions, and
22 4.91 .426
complaints.
C5. Advance Technological infrastructure to meet the dynamic
22 4.86 .468
consumer demands & fasten business operations
C2. Regular updating the website with latest and correct information
22 4.82 .395
for consumers to make informed decision
C4. Investment in tablet and smart phone apps 22 4.77 .528
C16. Multi-Channel Marketing 22 4.73 .456
C11. Consistent Promotion design tailored according to the consumer
22 4.64 .492
purchase patterns
C14. Improve Process efficiency - The time taken to quote the
22 4.55 .596
offering & price
C8. Business alliance with white label products e.g. hotels, flights,
22 4.45 .671
cab, insurance, holiday package
C6. Analytical tools to track consumer behavior & transactions 22 4.41 .666
C15. Engage with exciting content on social media to encourage
22 4.41 .666
engagement between travel products and consumers
C12. Innovative payment gateway features to enhance consumer
22 4.36 .658
experience & increase business performance
C10. Interactive feedback between customer and business 22 4.36 .658
C13. Improve Process efficiency - streamline the time to develop a
22 4.32 .716
custom itinerary
C9. Informed reports for forecasting and decision making 22 4.27 .703
C7. Consistent offline and e-media advertising without any blackout
22 4.14 1.356
periods
Valid N (listwise) 22
Online travel agents, tour operators, traditional travel agents, travel meta search
199
Customer friendly websites which creates superior booking experience
engines results
consumers
importance)
Descriptive Statistics
200
Online travel agents, tour operators, traditional travel agents, travel meta search
products, but actually the leader often has the luxury of time, while the
Non-competitive pricing for flight, hotels, car rental and holiday package
harms your reputation, damages your supply sources and strains your
suppliers you may find that their terms worsen. The way
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Chapter 11
Conclusion
and more people are travelling and they are using various channels to purchase their
holiday, some are still using traditional ways buying tourism with the travel agents,
tour operators, hotels etc and some are using electronic way to book and buy tourism
product. Even many travel and tour companies are adapting e-commerce to boom their
business, they are moving from traditional ways to e-business ways to grasp markets
as people are using internet and other online software more often. E-commerce is the
new way for promoting and selling tourism products through web.It is not easy to
technologies costs huge amount and further it need skill human resources. After the
adaption of e-commerce in business, it has to face many challenges; one of the main
challenges is to attract traditional buyers who prefer buying products from travel
agencies rather than booking through web. To lure these customers, awareness
should have very rich contents, if possible they should provide virtual tour of the
destination. There are several benefits as well as barriers for adaption of e-commerce
in travel and tourism, benefits are low operating costs, interaction with customers,
customer can choose products using internet, fast and speed in service, easy to find
new business partners, can communicate with customers during holidays in case of
any problems etc however key barriers for adopting e-commerce is huge investment,
202
behaviour of consumer is changed, they are less loyal toward the company and it's
easy for them to change the company in few seconds. To retain customer, companies
have to provide excellent services and offer loyalty programs to customers. While
going through the above literature have found many things in common. It has been
found that companies have to consider various things while adopting e-commerce
although it is beneficial for them as it reduces costs, save time, their brand presence
worldwide etc however they admired that companies can lose personal touch with
customers and their loyalty as it is very easy to switch companies due to variety of
choices offered to customers. E-Commerce has provided great advantages for both
commerce, consumers can search and compare a variety of products and services in
the global market, and then place their orders conveniently anytime and anywhere
without geographic limitations. This simplifies the buying process and provides more
selections to consumers than traditional businesses are able to. The Internet serves as a
new communication and distribution channel for travelers and suppliers of travel
services and products. Commercial websites have many attributes with different roles
and functions in company‘s marketing efforts. The websites with appropriate set of
attributes can influence satisfaction, affect consumers‘ online shopping behavior and
play a positive role in creating demand. Proper use of the attributes can increase
online transactions and repurchase intention judgments, not only consumers‘ current
purchases but also future purchase intentions. Therefore, it is important for companies
to better understand how online consumers evaluate these attributes and what makes
them remain on the websites. In contemporary travel agencies and tour operators
business, the Internet has shown to be a profitable medium of tourism promotion and
sales. The Internet represents an interesting and useful distribution channel for
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collecting clients and it provides the ability to identify their desires. Promotional
problems that may cause it are removed. The Internet allows the improvement of
travel agencies and tour operators by speeding up communication and providing all
the necessary information. Product distribution and services of agencies do not depend
on the quantity of printed catalogues anymore and information about them can reach
millions of the Internet users. The Internet provides selling services of travel agencies
on demand. As technology is evolving faster than ever before, it has made most
travellers around the world much more technology-savvy than in the past. The internet
has revolutionized the tourism industry more than any other factor in the last few
decades. Also, as more people are connected to each other, with access to the vast
information via the internet prior to making any travel decisions. Hence, it has become
important for the tourism industry to adapt and uplift its practices and skills of the
of technology take-up by tourism businesses. The biggest challenge imposed upon the
tourism industry in adopting technology is the lack of accurate education of the ‗right‘
technology that is suitable for their business. There is a very big gap between the
tourism industry and the technology industry. Some organizations have been able to
tap into this gap and have turned into Online Travel Agents (OTA). However, it is not
is more important to understand each business‘s competitive edge and adopt the
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Chapter 12
booking and buying through the web. What will be customer perception using e-
secured online payment system etc. should be deeply researched while adapting
decision makers need to know some guidelines for developing their e-commerce
— both acquisition and retention — is the key to success in the travel industry.
margins, both client acquisition and retention have become critical competitive
advantages. Yet how can travel industry companies communicate and engage
with large numbers of both prospective and existing clients in a way that is not
only personal and relevant enough to produce the right results, but is also cost-
205
Delivering on the promise of Customer Relationship Management, multichannel
and find out more about them — what their changing travel likes, needs and
Identify promotions and special offers that will appeal to the largest
number of clients;
specific needs;
inappropriate times.
206
Multichannel marketing means cost-efficient communication - By enabling
marketing will help reduce the administrative burden and costs of regular or
advantage of last minute specials by sending out personalised, high speed, high
Two key areas for growth is predicted with regards to utilizing tourism
technology in the tourism industry correctly. The first area is the marketing of
the tourism destinations, products and services. Selling tourism products and
services online has changed from being just ―price-conscious‖ to being ―an
inspiration‖ to the viewer to travel. As the online user absorbs information from
a variety of sources, it is usually the site or information source that can best
stimulate the viewer to travel that will be remembered by the user. Digital
and a variety of other channels exist today for reaching the potential traveller.
However, it is the appeal of the content, combined with the right pricing that
will ultimately attract the user to your business. The second area is the
tools that can store and monitor information in order to meet the individual
needs of their clients. The better you know your customer, the more likely you
will retain them for a longer period of time. Customer relationship management
businesses to scale-up.
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Annexure 1 - Bibliography
Australia, chongs@cbs.curtin.edu.au
Issue–1, 2013
2005
208
Hassan M. Selim, Critical Factors Classification for Firm Adoption of E-
Gaurav Seth, Analyzing the Effects of Social Media on the Hospitality Industry,
Hsu-Kuan Jonathan Liu and Liwen Chen, The perception of travel agents in
Taiwan regarding travel website and training needs for adopting E-commerce,
209
Annexure 2 – Webliography
www.google.com
www.wikipedia.com
www.tnooz.com
www.emarketer.com
www.questia.com
www.pioneerjournal.in
www.buuteeq.com
www.tourism.gov.in
www.gidb.org
www.statista.com
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Annexure 3 – Questionnaire
Critical Success Factors that make e-commerce business profitable in the travel
1 2 3 4 5
Technological infrastructure that supports the
dynamic business demand 1 2 3 4 5
Online media marketing budgets
1 2 3 4 5
Promotions to drive incremental business
1 2 3 4 5
Customer purchase patterns and tailor products
according to the purchase patterns
1 2 3 4 5
Customer retention through customer loyalty
1 2 3 4 5
Multi-Channel Marketing
1 2 3 4 5
Partnership/Alliance to expand the product offering
1 2 3 4 5
Products that are of most interest / most importance
to travel related organizations to increase business
performance
a) Flight + Hotels
1 2 3 4 5
b) Flight + Hotels + Car Rental
1 2 3 4 5
c) Flight + Hotels + Car Rental + holiday package
1 2 3 4 5
Widen the travel product distribution system
a) E-Tailing sites
1 2 3 4 5
b) Tourism sites
1 2 3 4 5
c) Deal sites
1 2 3 4 5
D) Tour operators brochures & websites
1 2 3 4 5
Differentiated products & services
a) Exciting holiday itinerary
1 2 3 4 5
b) Prompt customer service
1 2 3 4 5
c) Competitive pricing
1 2 3 4 5
1
211
Factors which will have a impact on overall business performance as a result of the
1 2 3 4 5
Prompt response to customers
Problems, suggestions, and 1 2 3 4 5
complaints.
Customer Loyalty & satisfaction
1 2 3 4 5
Differentiated products & services
from competition
1 2 3 4 5
Advance Technological
infrastructure to meet the dynamic
consumer demands 1 2 3 4 5
Competitive pricing
1 2 3 4 5
Efficient deals/packages/inventory
distribution system 1 2 3 4 5
Human resources skill set
pertaining to travel industry
1 2 3 4 5
Customer friendly website for
consumers to easily locate and 1 2 3 4 5
book travel related products
212
Methods & practices to structure the e-commerce business in the travel industry
related organizations
Multi-Channel Marketing
1 2 3 4 5
213
Factors that are detrimental to the growth of the e-commerce business in
1 2 3 4 5
Lack of Advance Technological
infrastructure to meet the
dynamic consumer demands 1 2 3 4 5
Slow time to market then
competition
1 2 3 4 5
Brand lacks loyalty &
satisfaction 1 2 3 4 5
Brand lacks consumer
preference
1 2 3 4 5
Delay in payments of
suppliers/partners leading to 1 2 3 4 5
suspension of business deals and
advertising campaigns
214