Chapter 3

eTourism: the dynamic interaction

of ICTs and tourism

SESSION OBJECTIVES
Introduce the eTourism concept
Demonstrate technological solutions & equipment. Explore
how each element of ICTs is used in tourism. Introduce ICTs
which are used extensively in tourism
Understand the structure and components of the tourism
system. Explore some generic ICTs applications and
identify them as technological enablers for the tourism
industry
Engage with the concept of Computer Reservation System
& Global Distribution Channels
Appreciate the issue of technological convergence in the
tourism field
Conceptualise a framework for dynamic use of ICTs
Identify the tourism organisation stakeholders
Explore how ICTs can integrate the entire industry &

INTRODUCTION
The tourism system is inevitably influenced by the new
business environment created by the diffusion of ICTs

Information Technology is one of the external environment

elements for tourism, travel & hospitality

In recent years technological developments have supported

tourism innovation and vice versa

ICTs have become an imperative partner for tourism

They offer the interface between consumers & suppliers
globally

ICTs provide the tools and enable the evolution of tourism

demand & supply

The eTourism concept

eTourism reflects the digitisation of all processes and value

chains in the tourism, travel, hospitality & catering
industries

At the tactical level it includes eCommerce, eProcurement

and all ICT empowered functions

eTourism applies ICTs for maximising the efficiency &

effectiveness of the tourism organisation

At the strategic level it revolutionises all business

processes and changes the industry structure

Hence it revolutionises the entire value chain & the

strategic relationships of tourism organisations with all
their stakeholders

The eTourism concept (continued)

eTourism determines the competitiveness of all tourism
organisations and destinations

Takes advantage of intranets, extranets & the Internet

It includes all business functions
eTourism bundles together three distinctive disciplines
- Business & management
- Information systems and information management
- Tourism, travel, hospitality

The eTourism mix

The eTourism
concept and
eTourism
domains

Best operational practices

in tourism by ICTs
Major drivers make ICTs an integral part of
the tourism industry
o Economic necessity
o The proliferation of the Internet
o Development of 3G mobile devices & interactive

television
o Improvements in ICTs' price/performance ratios
o Rising consumer expectations
o ICTs can also assist the reduction of operation

and communication costs

ICTs changes best operational practices

in tourism

Integrating operational systems

Maximising internal efficiencies
Decreasing the number of people required for

back office jobs

Reducing the amount of face to face or

telephone communications
Enabling consumers to have access to all

information that was previously only

obtainable by direct contact with tourism
organisations.

ICTs assist the reduction of operation

& communication costs by:

Integrating operational systems

Maximising the internal efficiencies
Decreasing the number of people required for

back office jobs

Reducing the amount of face to face or

telephone communications
Enabling consumers to have access to all

information

THE TOURISM SYSTEM & IT

The tourism industry and tourism system

Source: Adapted from Leiper (1995); Cooper and Buhalis (1998)

Critical tourism and hospitality functions

supported by ICTs
Front office: reservations, check-in, payments
Back office: accounting, payroll, human resources
management, marketing, procurement
Communication with consumers and partners
Control of business processes and personnel
Customer entertainment and service
Marketing research and industrial espionage
Reaction and management of unexpected events
Flexible and dynamic pricing
Differentiation and personalisation of products
Monitoring performance indicators
Building feedback mechanisms

Telecommunications & Networking tools

in the Tourism Industry
Telephone, telex and fax
Mobile devices
Telex
Videotext and viewdata
Teletext
Electronic Data Interchange (EDI)
Inter-organisational & Intra-organisational

networking
Virtual reality
Information superhighway (converges media,

telecommunications and information technology)

Software classification scheme

Examples of ICT Applications in the

tourism industry used currently
Entire range of hardware, software and netware
Stand-alone computers and network devices
Office automation, reservation, accounting, payroll and
procurement management applications
Portable/wireless communication devices
Internal management tools such as management support
systems, decision support systems and management
information systems
Tailor-made internal management applications
Databases and knowledge management systems
Internet/Intranets/Extranets
Networks with partners for regular transactions (EDI or
Extranets)
Networking and open distribution of products through the

Examples of ICT Applications in the

tourism industry used currently (continued)
Computer Reservation Systems (CRSs)
Global Distribution Systems (GDSs) (e.g. Galileo, SABRE,
Amadeus, Worldspan)
Switch applications for hospitality organisations (e.g.
THISCO and WIZCOM)
Destination Management Systems (DMSs)
Internet-based travel intermediaries (e.g. Expedia.com,
Travelocity.com, Preview Travel, Priceline.com etc)
Mobile/WAP based reservation systems
Traditional distribution technologies supporting
automated systems (e.g. Videotext)
Calling centers
Interactive Digital Television (IDTV)
CD-ROMs
Kiosks and touch screen terminals

Major ICT applications in the tourism industry

Computer Reservation Systems (CRSs) assist tourism
enterprises:
o Handle their inventories profitably
o Facilitate the tourism products distribution
o Normally operated by airlines, hotels & tour operators
o Distribute products nationally or globally
o Use computerised or videotext systems
o Use mainframes & extensive networks to support remote
terminals in travel agencies
o Instant update of information

Advantages: support reservation/confirmation/purchase of

a wide range of tourism products
Disadvantages: installation and usage costs, lack of user
friendliness and bias in favour of their vendors

Major ICT applications in the tourism industry (continued)

Global Distribution Channels (GDS)
o incorporate a comprehensive range of services and products
o provide a global distribution info-structure
o satisfy consumers' need for easy access
o provide transparent and easy to compare information

Tourism suppliers use CRSs & GDSs to manage &

distribute their capacity as they
o enable flexible pricing & capacity alterations
o reduce communication costs
o provide managerial information on demand patterns or
competitors' position
o serve the travel trade (intermediaries)
o support quick and firm responses to customers' enquiries

Computer Reservation Systems and Global Distribution Systems as

drivers for tourism and hospitality globalisation

Functions of intranets in tourism

Information exchange within a tourism
organisation
Management support
strategic planning
competition analysis
financial planning and control
accounting and finance
marketing research
marketing strategy & implementation
pricing decision and tactics
middle term planning & feedback
management statistics/reports
operational control
management functions
Source: Adapted from Buhalis (1998)

Functions of intranets in tourism (continued)

Communication between departments
business functions
networking & information exchange
human resources management
staff coordination
operational planning
accounting/billing
payroll
supplies management

Communication and function with branches

coordination of operations
reports and budgeting
availability/prices/information orders from
headquarters/administration
share of common resource databases for customer
and operational information
Source: Adapted from Buhalis (1998)

Functions of extranets in tourism

Links between partners
availability/prices inquiries
o negotiations and bargaining

reservations & confirmations

o lists of groups/visitors
o receipts/documents
o vouchers & tickets production

travelling facilitation
o follow up progress
o keep partners informed about plans
o amend plans should unexpected developments arise
o follow up developments

feedback and clearing commissions

o payment & commissions clearance
o feedback & suggestions
o complaint handling
o building loyalty through data mining

Functions of Internet in tourism

Information distribution
Electronic commerce
Request availability/prices/information
Reservation & confirmation
Expanding value chain with complementary

products
Deposits and full settlements
Specific requests/enquiries
Feedback/complaints
Ancillary services

Networking eTourism organisations

.