SPICe Briefing 02/93

21 August 2002
Produced for the Enterprise and
Lifelong Learning Committee

TOURISM E-BUSINESS

This note is to brief members of the Enterprise and Lifelong Learning Committee
on e-tourism in advance of the case study on e-tourism on 2 September.

KEY POINTS – E-COMMERCE

• E-tourism describes a new way of doing business. It means fast

communications, global accessibility and minimal costs for new businesses
going online.
• On the positive side e tourism provides cost effective communications, it can
make purchasing easier for customers and can provide the impetus for
improved customer service. New opportunities open up for collaboration with
previous competitors.
• However customers are taking time to come to fully trust the technology and
many still prefer face to face contact. E-tourism can have job implications for
certain sectors and may begin to exclude the “digital have-nots”
• The general trend is for a growth in online business despite recent high levels
of closure amongst dot.coms.

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• In 2001 some 5% (900,000) of all UK tourism trips in Scotland were booked
through the Internet totalling £270 million.
• It is claimed that in the near future one third of the travel buying population will
purchase at least some of their travel products online
• The two key web based services developed at a Scotland level by the public
sector are the Scotexchange site (generally provided for communication within
the industry itself) and the visitscotland.com site (formerly known as the
Ossian project) which provides information to potential visitors.
• Following controversy over the appropriate use of public funds and the pace of
development the visitscotland.com site was re-launched later in 2002.

WHAT IS E-TOURISM?
The Internet has provided a new economic environment in which to conduct
business. E-commerce is a growing sector and many tourism businesses are
involved in developing their internet services including traditional travel agents,
tour operators, national tourist offices, airlines, hotels and other accommodation
providers and car hire firms. This means of doing business is known as ‘e-
tourism’, or ‘tourism e-business’. The key differences from traditional markets are
the speed at which information can be communicated, global accessibility and the
minimal costs of establishing a business online.1

Some of the suggested benefits of tourism e-business are2

• That it is the most cost effective way of communicating with target markets
and disseminating information
• It is a quick and easy way for the customer to buy travel products
• It offers opportunities for improvements in customer service and retention
through meeting and promoting individual preferences
• It reduces costs through increased efficiency in internal operations and
purchasing processes
• It encourages greater co-operation amongst traditional competitors through
the provision of hypertext links. Links are a cheap, quick way of raising the
profile of a new site and getting round the difficulty of up-dating information in-
house. The inclusion of links on tourism websites offers benefits to both the
user and the service provider. The service provider can offer a greater range
of information on related tourism products without having to enter into
contracts with the service providers and the user has access to immediate
information and online shopping opportunities.

1
Rayman-Bacchus, L. and Molina, A. (2001) “Internet-based tourism services: business issues and trends” in
Futures, 33, pp.587-605)
2
Source: E-Business for Tourism: Practical Guidelines for Tourism Destinations and Business
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Possible disadvantages have also been identified. These include:

• Tensions between a growing demand for personalised services tailored to the

individual’s needs and interests and reluctance amongst consumers to release
such information over the Internet in case it is misused.
• The preference of many customers to conduct complicated transactions in a
face-to-face environment (e.g. high street travel agents).3
• Existing travel agent business being superceded, with resultant job losses
• Growing inequality and increased social exclusion for those customers and
businesses without access to necessary technology

THE DEVELOPMENT OF E-TOURISM

E-tourism has only become possible through the spread of information and
communication technologies (ICT) and the Internet, which has changed the
distribution of tourism sales and information. An Internet-based tourism services
sector is developing based on networks that link producers and users. This has
resulted in a shift away from traditional supply chains and communication
channels (e.g. high street travel agents).

Such technologies have been developing over a number of years. In the 1970s, a
travel marketing and distribution system known as Computer Reservation
Systems (CRS) was introduced. This was an airline database that managed and
distributed reservations electronically to remote sales offices and external
partners. This allowed customers (travel agents) to make and confirm
reservations and allowed all travel businesses to operate flexibly. It offered travel
agents increased productivity and competitive advantage as thereafter they were
able to offer the consumer quick access to the most up-to-date information and
indeed access to CRS is of continuing importance to online travel agents. In the
1980s, geographical coverage was expanded via Global Distribution Services.
This has been developed since the Internet, offering consumers access to easily
comparable information. All three systems operate both independently and jointly.

The growing number of people utilising new ICT is shown by the following tables
on technology trends.4

3
Rayman-Bacchus, L. and Molina, A. (2001) Internet-based tourism services: business issues and trends,
Futures, 33, pp.587-605FCRS
4
A. Samji and S. Gray (2002) e-Marketing: our customers are ready, are you? MORI
http://www.mori.com/pubinfo/pdf/ags_emarketing.pdf
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Changing socio-economic conditions and technological developments have
implications for the development of Internet-based tourism services. At the same
time individuals are increasingly concerned about gaining the most from their

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leisure time (Claval, 1995).5 Altering work and leisure patterns and the integration
of business and leisure trips represent an aspect of this concern to make the most
of the leisure time available and affect the role of ICT in the travel industry.6
According to a 1999 survey conducted by TechMaPP7, approximately half of those
with access to the Internet regularly search for tourism information from their
workplace. A growing number of people also extend their business trips, staying
for additional night(s) away to take part in leisure activities.

Changing customer behaviour

In 2001 the focus of much of the publicity surrounding e-commerce was on the
failure of dot.com companies and the dramatic fall experienced in technology
stocks. However, according to figures collected by MORI8 the underlying pattern
in e-commerce in 2001 was one of growth. A 40% increase in visitors to websites
was noted during the 2001 Christmas period in comparison with the same period
in 2000.9

It has been claimed that customer expectations of e-tourism include:

• Quick response to enquiries

• More detailed and tailored information on tourism destinations
• Possibility of booking travel, accommodation and restaurants online
• Able to check out competition easily at the click of a button
• Importance of destination management and marketing
• Branding – collection of tourism products and services
• Tourism marketing as a means of facilitating regional development
• “marketing should be used as a strategic mechanism in co-ordination with
planning and management rather than as a sales tool”10
• must acknowledge travel motivations (moves towards personal service
through customer profiling).

There has also been a stark increase in consumer online spending over a five
year period.11

5
Claval, P. (1995) “The impact of tourism on the restructuring of European space.” In Montanari, A., and
Williams, A.M. (eds) European Tourism, regions, spaces and restructuring. Chichester, UK: Wiley.
6
Plog Research Inc, American traveller Survey (1997)
7
Street survey of tourists, conducted by TechMaPP, The University of Edinburgh in 1999. (Sample of 100
were interviewed).
8
Rayman-Bacchus, L. and Molina, A. (2001) “Internet-based tourism services: business issues and trends” in
Futures, 33, pp.587-605FCRS
9
JupiterMMXI
10
Buhalis, D. “Marketing the competitive destination of the future” In Tourism Management 21 (2000) 97-116.
11
Source: Datamonitor
available: http://www.nua.ie/surveys/analysis/graphs_charts/comparisons/consumer_spending_uk.html

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The diagram below12 shows the near equal gender distribution of online shoppers,
the high proportion (79%) of online shoppers over the age of 25 and the low
proportion of online shoppers belonging to the social grade DE.

A MORI survey conducted March 2001 showed that the Internet was used as
much as traditional brochures as sources of information for booking holidays and
travel. The research company Jupiter MMXI found that the UK is the biggest
online travel market in Europe with nearly six million people visiting travel sites in
January 2002. Large UK travel sites such as lastminute.com and easyjet.com are

12
A. Samji and S. Gray (March 2002) , e-Marketing: our customers are ready, are you? MORI
http://www.mori.com/pubinfo/pdf/ags_emarketing.pdf
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getting over a million visitors a month. In 2001 4.8% (900,000) of all UK tourism
trips in Scotland were booked through the internet, totalling £270 million.13

A problem that may inhibit the potential of e-tourism is the lack of customer
confidence in the security of the systems used and that the system over which
they communicate their confidential details could be accessed illegitimately. In
August 2000 the National Consumer Council 14 warned:

The overwhelming impression we received is that consumers sense there is a lack of

respect for their rights and their safety online

34% of those interviewed for this study said they were reluctant to release their
credit card details online and 35% described internet shopping as the ‘riskiest’ way
to shop.

However, more recently a poll conducted by MORI for the DTI15 found that around
26% of the population could be classified as online shoppers. This growth has
brought with it an apparent change of attitudes16 and though concerns were still
expressed over the security of shopping online, those interviewed were more
likely to be reassured by websites offering proof of independent certification
showing that they were safe for online users.

The following table demonstrates the percentage of customer purchases made

online.17 The information is taken from a Scottish Enterprise survey.

Online purchases (Approximately what percentage of your customer's purchases are made online?)

45%

40%

35%

30%
% of companies

25%

20%

15%

10%

5%

0%
None 1 to 10 11 to 20 21 to 30 31 to 40 41 to 50 51 to 60 61 to 70 71 to 80 81 to 90 91 to 100 Don't Know
% of customers' purchases made online

13
Figures published by VisitScotland (2002) in Tourism in Scotland 2001
14
15
MORI (2001) Informing consumers about e-commerce, Department of Trade and Industry, September
2001
16
MORI, (2000) Can’t Surf, won’t surf: the digital divide, Which? Online
17
This and other tables provided by Scottish Enterprise Network. Survey of 1,095 companies
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IMPACT ON THE TOURISM INDUSTRY
It has been argued that the challenges and issues faced by the industry include:

• Low / varied level of ICT literacy amongst some micro businesses and SMEs
• Degree of access amongst SMEs to technology
• Extent to which SMEs feel Government should be responsible for providing a
national website with links to information about their business
• Level of responsibility each SME should have for their own marketing and the
development of their own website
• Opportunities / disadvantages of Broadband – possibility of paying for use of
broadband to reduce Internet congestion.
• Collapse of dot coms in 1999-2000 led to significant losses for venture
capitalists. As a consequence investors are more cautious of business plans
based on costly marketing campaigns aimed at quickly raising the company’s
global profile. Instead it has been suggested that the future of many dot. coms
lies in the development of ‘clicks and mortar’/’bricks and clicks’ businesses,
which benefit from the advantage of both internet and traditional business.18

The following tables show internet access and related issues, e.g. access to ICT
and training problems.

Internet access (Does your business have and/or use access to the Internet?)

60%

50%

40%

All sectors
30%
Tourism

20%

10%

0%
Yes - Have and Use Yes - Have but don't use No Don't Know

18
Rayman-Bacchus, L. and Molina, A. (2001) “Internet-based tourism services: business issues and trends”
in Futures, 33, pp.587-605FCRS

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 Overhauling Existing Websites
How likely are you to rebuild or overhaul your business web site in the next year
to 18 months? (asked of all companies that have a web site)

13%
Don't know 14%

2%
Recently completed or overhauled 4%

5% Tourism
Definitely not 4%
All Sectors
5%
Very unlikely 5%

10%
Unlikely 8%

15%
Likely 19%

28%
Very likely 24%

21%
Definitely 20%

0% 5% 10% 15% 20% 25% 30%

First Web Sites

How likely is your business to develop a website in the next year to 18 months?
(asked of all companies without a website)

8%
Don't know 7%

27%
Definitely not 24%

20%
Very unlikely 21%

12%
Unlikely 13% Tourism
All Sectors
12%
Likely 14%

10%
Very likely 11%

11%
Definitely 10%

0% 5% 10% 15% 20% 25% 30%

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 Influences to adoption

Avoid losing customers to

competitors who are using
ecommerce

Accesssing new customers via

the Internet

Don't know
Not at all important
Increasing efficiency of internal Not important
processes Important
Very important
Essential

Improving the quality of service

or products

Reducing operating costs

0% 5% 10% 15% 20% 25% 30%

Factors discouraging businesses from developing ecommerce

Our staff do not have the skills

required to operate ecommerce

None of my competitors are using

ecommerce

My customers do not use

ecommerce
Don't know
Strongly disagree
Internet businesses are seen to Disagree
be failing Neither
Agree
Strongly agree
Advantages are outweighed by
the cost implications

Lack of management willingness

to adopt ecommerce

The business is concerned about

the risk of fraud

0% 5% 10% 15% 20% 25% 30% 35% 40%

In 1999 a study by the Moffatt Centre for Tourism at Glasgow Caledonian

University provided some information on the importance of the Internet to the
tourism industry, in terms of how significant on-line purchasing of travel products
would become. The study claimed that some of the headline projections on
Internet use were correct - namely that over a third of the travel buying population
will purchase travel products on-line in the future. However this does not mean
that a third of travel industry sales will come from the Internet, rather that this third
of the population will buy some of their travel on-line and some of it off-line. The
optimistic estimates for on-line travel sales are probably based on this third of the

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travel population buying all or at least a significant part of its travel from the
Internet.

The results showed that personal service is still a high consideration for many
people and the complexity of travel arrangements meant there will always be a
place for knowledgeable intermediaries. This is because there will always be
complex products - the Internet does not change the nature of the product only its
distribution. The authors concluded that the UK is significantly behind the USA in
terms of both the volume and value of Internet sales to travel firms. UK markets –
both buyers and suppliers – have traditionally been behind the likes of the USA in
the uptake of new technologies and there is little evidence to suggest that Internet
usage is any different.

Other recent survey work has highlighted the main disadvantages of internet
distribution for travel companies19 These include: lack of human contact during
the transaction; volatile customer base; issues of security; danger of standard,
rather than tailor-made products; alienation of potential customers; difficulty of
keeping up to date records.

In addition to the disadvantages outlined above SMEs may face other challenges.
They may lack the capital and the research and development resources and
time to justify the investment in ICT and the hidden costs of training and
upgrading packages. According to Evans (1999) smaller establishments tend to
employ older, less qualified staff. They may also feel an antithesis to IT itself
where personal service and contact is a key comparative advantage of the
owner-operator niche supply.20

There have been changes in the distribution chain in terms of suppliers, tour
operators and travel agents, and marketing organisations, which have affected the
behaviours and purchasing patterns of consumers. It has been argued that Small
and Medium Enterprises (SMEs) now have greater opportunities to access
potential customers directly through the Internet.

Furthermore, the ability to design their own website may empower small
businesses in presenting their product or services in their preferred way:

Web-sites linking small operators and destinations to consumers and retail travel
agents offer access to marketing and distribution systems controlled by NTOs, tourist
boards and importantly can mean that the local organisations can present their own
image and information, not the imposed images chosen for tour brochures and national
tourism marketing.21

19
Buhalis, D. and Licata, M.C. “The future of eTourism intermediaries” In Tourism Management, 23 (2002)
207-220, p.211
20
Evans, G.L. (1999) “Networking for growth and digital business” in Schertler, W. et al (eds) Information and
Communication Technologies in Tourism 1999, pp. 376-387, Springer-Verlag, Vienna
21
Evans, G.L. and Celverdon, R. (2000) Fair trade in tourism – community development or marketing tool? In
Richards, G. and Hall, D. (eds)Tourism and Sustainable Community Development, Routledge, London,
pp.137-153
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EVOLVING TECHNOLOGY: CHANGING NEEDS AND
EXPECTATIONS
Based on the findings of their study of 50 leading tourism websites, Rayman-
Bacchus and Molina (2001)22 argued that:

Perhaps the most powerful competitors emerging in Internet-based tourism services

are those with the resources to invest... they seem to be the portal sites,
reservation technology providers, and Microsoft. Portal sites are approaching the
sector through structuring their vast data warehouses into thematic sites (e.g.
tourism). CRS providers see the Internet as another distribution channel that
compliments their existing arrangements, while Microsoft recognise the potential of
the sector for exploiting their own considerable technological and financial
strengths.

Other possible technological innovations that may impact on tourism include:

• Interactive digital television (IDTV)

• Mobile and mCommerce distribution

RECENT POLICY DEVELOPMENTS IN SCOTLAND

Tourist Authorities have an important role in the development of a country’s tourist
industry. Though such organisations are non-profit making they influence the
sector’s capacity for generating revenue:

Indeed, as the initial point of enquiry for many travellers and tourists, they are uniquely
positioned to amplify commercial opportunities for travel agents and specialist service
providers. Close examination of public agency sites show them exploiting the new
medium to exercise greater influence than hitherto possible: providing hypertext links to
commercial service providers; varying degrees of interactivity offered; often accessible
in multiple languages.23

The Scottish Executive Strategy

The Scottish Executive’s strategy on developing tourism as an industry within

Scotland was described in ‘A new Strategy for Scottish Tourism’, published in
February 2000. The strategy stated that Scotland has the assets to become a
‘world class tourism destination’, as long as the industry is modern, embraces the
culture of lifelong learning, and provides the highest quality of service. It identified
five key areas where the tourism industry should improve if the full potential of the
sector is to be realised. One of these was to ensure the provision of the latest
technology as a means of understanding the demands of customers and

22
Rayman-Bacchus, L. and Molina, A. (2001) “Internet-based tourism services: business issues and trends”
in Futures, 33, pp.587-605FCRS

23
ibid
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communicating with them effectively. To measure the success of these
measures, and all the other initiatives contained in the tourism strategy, the
Executive set action points to establish improvements in the industry. In the case
of e-tourism, these were:

• On-line booking system to be fully operative by June 2000

• 30 per cent of accommodation businesses to be trading by e-commerce by
2002 (50 per cent by 2003 and 90 per cent by 2005)
• Scottish Tourist Board to establish a partnership with the private sector to
maintain Ossian’s competitive advantage
• New partnership to develop booking and payment by e-commerce
• Use of new interactive technologies to enable visitors to access information on
local attractions, accommodation and travel.
• To establish a call centre
• Tourism information and booking to be available through a single national and
international telephone number for 2001.

Following a shift in departmental portfolios in November 2001, the responsibility

for tourism (and sponsorship of VisitScotland) was moved from the Scottish
Executive Enterprise and Lifelong Learning Department to the Education
Department. In March 2002, Mike Watson MSP, Minister for Tourism, Culture and
Sport, announced the results of a review of the Tourism Strategy in the Tourism
Framework for Action 2002:2005. The Framework highlighted several areas
where action was to be prioritised in relation to e-business:

Actions Responsibility

Develop a scheme to assess sustainable Scottish Natural Heritage

use of natural heritage sites used by visitors
and develop corresponding web-based
visitor information
Look at the best use of the web for Business
information provision. Link to local area
tourist board and visitscotland.com
websites for the most cost-effective links for
promoting business.
Develop and promote the industry website VisitScotland, Scottish Enterprise,
–scotexchange.net–for two-way information Highlands and Islands Enterprise and Area
exchange. Tourist Boards

It also reported on the establishment of Scotexchange.com.

Launched in June 2000, Scotexchange was developed in partnership by

VisitScotland (then the Scottish Tourist Board), Highlands and Islands Enterprise
and Scottish Enterprise and to assist communication between the tourism industry
and tourism organisations.

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Its stated aim is to:

provide 'relevant market research information in an accessible form, allowing

tourism businesses to improve the nature and quality of the services they provide,
and tailor their individual marketing plans to suit particular niche markets.'

It provides information on the structure of the tourism business, different tourism

markets (e.g. niche tourism), business development, training, promotion, and a
news site. According to the Tourism Framework for Action, the site had an
average of 15,000 user sessions per month, by February 2001.

VISITSCOTLAND.COM (FORMERLY KNOWN AS OSSIAN)

VisitScotland.com is the national database of information about Scotland’s
tourism products, services and contacts, and e-commerce accommodation
booking system. It is intended to allow potential visitors to log on, view details of
available hotels and packages and make direct bookings for transport and
accommodation.

This was originally known as the Ossian project. Launching the project in July
2000, then Enterprise Minister Henry McLeish described the Internet as the “most
powerful marketing tool in the world” and claimed that the value of world-wide on-
line bookings would rise by $30 billion in the next three years – which could
amount to a £360 million increase in revenue for Scotland. To ensure Scotland’s
share of this lucrative market, Mr McLeish set a target of 90% of all
accommodation in Scotland trading on-line by 2005.

However, the initial launch was not regarded as a total success. The Federation of
Small Businesses in Scotland as said that Ossian “is incapable of delivering on-
line bookings” with “major inconsistencies in how the site is laid out”. An
accommodation provider in the Borders is quoted as saying: “Ossian is a long way
behind private sector sites” and “The technology is already out of date...I wouldn’t
be surprised if they eventually …write the whole thing off”. The project was also
criticised by an e-commerce entrepreneur giving evidence to the Enterprise and
Lifelong Learning Committee’s inquiry into the New Economy. Richard Irwin, who
provides online booking for hotels across the world, said the project had
extravagantly used up public money:

We (all-hotels.com) built up a business from a relatively small base, but now around
60,000 properties are bookable online through our site. The investment that was
required to get to that position was around £200,000. Investment in the Ossian
project has been many times more than that, and still nothing has been delivered.
We could have provided the project with that technology for a small proportion of
what has been spent so far. I am rather angry about the Ossian project.

Other criticisms were voiced at a meeting of the Committee on 1 November 2000

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 Fergus Ewing: I know that the Ossian project and the visitscotland.com online
booking system are a major part of the Executive's tourism strategy. I understand
that Ossian will be the subject of a public-private partnership. I have heard that
there are concerns that an extraordinarily high proportion of the costs of the PPP
will go into the coffers of consultants of various kinds—lawyers, financial advisers
and computer specialists. I am sure that that will be of great concern to the industry
in general, coming as it does on top of a large number of questions about the
operability of the visitscotland.com site and its online booking system.24

The development was originally carried out by an in-house team of information

technology developers and other professionals. In developing the online aspects
of future business three delivery options were considered:

• The development of the full e-business option internally by VisitScotland

• Contracting out the development and/or the management to qualified external
companies
• Establishing a joint venture between VisitScotland, Area Tourist Boards and
external companies

The delivery option eventually selected was the joint venture with the private
sector, on the basis of combining the respective skills and relationships of the
public and private sectors. Following discussions with the Private Finance
Initiative (PFI) Taskforce (now Partnerships UK – PUK) it was concluded that
VisitScotland and the Area Tourist Board network did not have the resources or
the level of business expertise necessary to make the Ossian Project a success.
VisitScotland, the majority of area tourist boards, Schlumberger Sema and PUK
set up a new venture, eTourism Ltd.25 The company replaces the existing website
and operates a national contact centre. It trades under the name of
visitscotland.com.

The contact centre is now operational and is expected is initially expected to

handle the majority of visitor bookings. In developing the service offered by this
centre a number of crucial issues will have to be addressed:

• The language capabilities of call centre staff

• The access of these staff to information database held information
• The script and customer service software the staff will be using in the provision
of the service

VisitScotland is due to re-launch its on-line customer information and booking

service later in 2002. The site is intended to:

• Act as a selling agency on behalf of subscribing tourism businesses

24
SPOR (2000) Enterprise and Lifelong Learning Committee, 1 November 2000
25
The preferred joint venture structure was for a company which was 25% owned by VisitScotland and the
Area Tourist Boards, 15% owned by Partnerships UK and 60% owned by the preferred bidder Schlumberger
Sema.

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• Provide all tourism enquirers with an information service about Scotland as a
whole
• Respond to requests for brochures
• Act as an information source for the tourism business sector, providing market
intelligence and other services
• Provide IT services to the tourism industry and VisitScotland.

VisitScotland will base its software on Touch Vision, which is a purpose built
tourism based booking engine already used in Iceland and Dublin and by Media
Surface a supplier of content management solutions. The following diagram
shows the structure of the company.26

Speaking (in July 2002) of the planned re-launch of the VisitScotland website and
portal, Tourism Minister Mike Watson said:27

With VisitScotland and area tourist boards, we have invested heavily in the web portal.
It will exist solely to maximise the return from marketing of Scottish tourism to potential
customers all over the world. To do that effectively, visitscotland.com needs high
quality information to reach potential visitors to Scotland.

This week, several thousand tourism establishments already registered with the
VisitScotland quality scheme are receiving information from visitscotland.com. Once up
and running, the new visitscotland.com system will be a powerful demonstration that
tourism is everyone’s business."

According to an article in the Scotsman28 tour operators including the Scottish

Incoming Golf Tour operators Association, have refused to join eTourism Ltd
claiming that the venture could not meet its bookings target of 500,000 bed nights
by 2005 without diverting inquiries from other website sponsors.

Eddie Friel, Chief Executive Officer of the Greater Glasgow and Clyde Valley
Tourist Board, expressed equally serious reservations about the new

26
Provided by Schlumberger Sema
27
http://195.92.250.59/pages/news/2002/07/SETC033.aspx
28
Scotsman, Wednesday 3 July 2002, Taylor-made approach to the future of country’s tourist body
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VisitScotland website and its predecessor, Ossian.29 In speaking about the
venture he highlighted his concerns over the mechanism created for the PPP
which he regarded as being “seriously flawed”. He also voiced the opinion that
VisitScotland’s theory of business was incompatible with the Greater Glasgow and
Clyde Valley Tourist Board’s approach. In addition, Friel mentioned his
fundamental disagreement with the Price Waterhouse Report, which suggested
that VisitScotland’s primary customer was the tourist industry itself. Such strongly
felt objections reveal the challenges facing VisitScotland if they are to regain the
trust of the industry.

EXAMPLES OF E-TOURISM INITIATIVES

EAST LANCASHIRE VISITDATA30

The East Lancashire Partnership (ELP) tourism website provides an example of
the development of customer profiles. Behind the website a package monitors
and records the pages visited by each potential customer/visitor and the time
spent on the visit to the site. It also monitors through online questionnaires and
opportunities to request brochures. This information (called ‘visit data’) is used to
create a profile of the potential customer/ visitor and provides the basis for direct
marketing initiatives, as members of the partnership and the local authority, can
access the database and search it. Potential customers can then be contacted by
email or brochure which reflect their interests as evidenced by their browser profile
and trail. The scheme was initially developed as a bid to the European Regional
Development Fund.

In the near future, the Partnership hopes to make ‘VisitData’ available to the
private sector in East Lancashire. However, there are data protection issues
involved with the sale of this information and this issue is still to be resolved.

EDINBURGH AND LOTHIANS ATB

E-tourism also offers opportunities for managing the presentation of destinations.
For example, Edinburgh and Lothians Tourist Board (ELTB) have put in place a
number of initiatives to help its members to use ICT effectively, including
developing the future skills programme and LothianExchange.net. ELTB has also
developed other customer focused services, such as the fist Internet cafe to be
located within a tourist information centre, Connect@Edinburgh.

UK ONLINE FOR BUSINESS: GO FOR IT

‘Go for IT’ was launched by UK Tourism Minister Kim Howells on 16 July 2002.
This UK wide initiative was developed with the support of the Department for
Culture, Media and Sport, the English Tourism Council and a diverse group of
companies ranging from a hotel in Devon to a Farmers’ Market in Ayrshire.

29
What follows originates from personal correspondence with Eddie Friel, Chief Executive Officer, Greater
Glasgow and Clyde Valley Tourist Board.
30
Information provided by Colin Taylor of the East Lancashire Partnership
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UK online for business is responsible for delivering the initiative. It is a partnership
between industry and UK government and is part of a wider government-backed
initiative which aims, “to make the UK one of the world’s leading knowledge
economies. UK online for business offers impartial advice to businesses to help
improve their competitiveness through the effective use of information and
communications technologies”. UK Business online also has a network of local
advisers who can be contacted through Business Link, Business Connect or LEC.
An E-business helpline is also available.

At the launch of Go for IT, the UK Tourism Minister, Kim Howells stated:

The Go for IT programme will help give small and micro-tourism businesses the
relevant tools to use the Internet to meet existing customers’ new demands and
target new customers.

UK ICT IMPACT STUDY

On the 17 July 2002 Kim Howells launched an impact study to look at how well
British Tourism businesses are using ICT. The research will look at:

• Current and future trends in take up levels of ICT and levels of IT skills in
tourism
• Opportunities and disadvantage created by e-commerce
• Barriers and opportunities for take-up
• Future developments such as digital interactive televisions and the use of
mobile phones

No further information or evaluation is available at present

SPICe Briefings are compiled for the benefit of Members of the Scottish Parliament and their
personal staff. Authors are available to discuss the contents of these papers with Members and
their staff but cannot advise members of the general public.

providing research and information services to the Scottish Parliament

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ANNEX 1: E-COMMERCE STATISTICS31

As at May 2002 there approximately 580 million people “online” in the world –
nearly 1 in every 10 people in the world.32 The value of tourism booked via e-
commerce has increased dramatically33 and revenues from eCommerce have
shown a similarly marked increase.34

31
Thanks to Simon Wakefield, SPICe Research Service
32
Source: NUA Internet Surveys (available at: http://www.nua.ie/surveys/how_many_online/index.html)
33
Source: Jupiter Communications.
Available at: http://www.nua.ie/surveys/analysis/graphs_charts/travel/total_online_travel_spend_96_2002.html
34
Source: PhocusWright
available at http://www.nua.ie/surveys/analysis/graphs_charts/travel/travel_revenue_98_2001.html

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ANNEX 2. E-BUSINESS READINESS RANKINGS

The Economist e-business readiness rankings (for all sectors of the economy)
show the UK is 3rd placed in the world for e-business readiness

Two indicators were combined to produce the rankings. The first concerned
“connectivity” which is based on both a qualitative and quantitative assessment of
a country’s communications infrastructure. The second element relates to a
“business environment” rating and according to the EIU “measures the quality or
attractiveness of the business environment in the 60 countries covered by Country
Forecasts using a standard analytical framework”.

E-readiness rankings, 2002

E-readiness E-readiness
2001 ranking Country
ranking (of 60) score (of 10)
1 1 US 8.41
2 10 Netherlands 8.40
3 3 UK 8.38
4 (tie) 11 Switzerland 8.32
4 (tie) 6 Sweden 8.32
6 2 Australia 8.30
7 9 Denmark 8.29
8 12 Germany 8.25
9 4 Canada 8.23
10 8 Finland 8.18
11 (tie) 7 Singapore 8.17
11 (tie) 5 Norway 8.17
13 13 Hong Kong 8.13
14 16 Austria 8.10
15 14 Ireland 8.02
16 19 Belgium 7.77
17 15 France 7.70
18 20 New Zealand 7.67
19 22 Italy 7.32
20 16 Taiwan 7.26
21 21 Korea 7.11
22 24 Spain 7.07
23 26 Greece 7.03
24 25 Portugal 7.02
25 18 Japan 6.86
26 23 Israel 6.79
27 27 Czech Republic 6.45
28 29 Chile 6.36
29 28 Hungary 6.05
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30 34 Mexico 5.67
31 30 Poland 5.52
32 33 Malaysia 5.50
33 35 South Africa 5.45
34 36 Brazil 5.31
35 31 Argentina 5.14
36 32 Slovakia 5.00
37 47 Venezuela 4.91
38 38 Colombia 4.77
39 40 Peru 4.43
40 37 Turkey 4.37
41 48 Bulgaria 4.25
42 43 Sri Lanka 4.05
43 45 India 4.02
44 52 Romania 4.00
45 42 Russia 3.93
46 46 Thailand 3.86
47 44 Saudi Arabia 3.77
48 40 Egypt 3.76
49 39 Philippines 3.72
50 50 Ecuador 3.68
51 49 China 3.64
52 54 Indonesia 3.29
53 50 Iran 3.20
54 52 Ukraine 3.05
55 56 Nigeria 2.97
56 58 Vietnam 2.96
57 60 Pakistan 2.78
58 54 Algeria 2.70
59 57 Kazakhstan 2.55
60 59 Azerbaijan 2.38

Source: Economist Intelligence Unit

http://www.ebusinessforum.com/index.asp?layout=rich_story&doc_id=5768

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