INFORMATION AND COMMUNICATION TECHNOLOGIES AND TOURISM -

INTRODUCTION

Introduction:
Tourism is traveling, mainly for recreational purposes or utilizing the leisure or to know and
experience different cultures and heritage. Tourism is the fastest growing industry with a huge
potential to generate employment for people and revenue for the government. Emergence of
Information & Communication Technology (ICT) and internet transformed the way
business is done worldwide. Tourism industry is one of the early adopters of ICT and internet.
Ever since internet emerged, people predominantly used internet for travel planning (e.g.,
travel information search and booking). With internet penetration growing more and more,
importance of ICT in tourism is also growing more and more. ICT and internet have been
rapidly applied and diffused through tourism sectors. This is where E- Tourism comes into
picture. ICT is one of the external environment elements for tourism, travel & hospitality. It
offers the interface between consumers & suppliers globally.

Definition of Information & Communication Technologies (ICTs):

According to Dimitrios Buhalis (2003), ICTs include “the entire range of electronic tools,
which facilitate the operational and strategic management of organizations by enabling them to
manage their information, functions and processes, as well as to communicate interactively
with their stakeholders for achieving their mission and objectives.”
Thus, ICT consists of hardware and software which facilitate in the management of different
departments in an organization. ICTs emerge as an integrated system of networked equipment
and software, which enables effective data processing and communication for organizational
benefit, towards transforming organizations to e-businesses.

1. Definition of E-Tourism:
According to Dimitrios Buhalis (2003), E-Tourism is the digitization of all the processes and
value chains in the tourism, travel, hospitality and catering industries that enable organizations
to maximize their efficiency and effectiveness.
At the tactical level, E-Tourism includes e-commerce, ERP, eProcurement and other such ICT
functions which facilitate data processing and communication.
At the strategic level, E-Tourism revolutionizes all business processes, the entire value chain as
well as the strategic relationships of tourism organizations with all their stakeholders. E-
tourism applies ICTs to maximize efficiency and effectiveness of the tourism organization
through faster data processing and better communication. E-tourism is critical for the
competitiveness of the tourism industry in the longer term.

1.1 Significance of E-Tourism:

In order to serve increasing number of tourists, information has to flow quickly and accurately
among the customers, intermediaries and tourism suppliers. As a result, Information &
Communication Technology has become an inseparable feature of the tourism industry.
Internet has become the leading source of information for tourists across the world.

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Information & Communication Technologies are now critical for strategic management of
tourism organizations as they allow:
 Quicker expansion into new markets
 Empowering of employees with software tools to cater to more tourists
 Enhancing distribution online
 Reducing costs of operation by increasing the throughput
 Ease of information access to tourists, travel agencies, tour operators and all other
stakeholders.
Information & Communication Technologies assist the reduction of operation &
communication costs of tourism business by:
 Integrating different operational systems with quicker and accurate transfer of
information
 Maximizing the internal efficiencies with increased throughput
 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

2. History and Evolution of E-Tourism:

Like any other technology, E-Tourism also evolved over multiple stages starting from simple
Email system to Destination Management Systems. The stages in E-Tourism evolution are:
 First Stage (1970s) - Emergence of Computer Reservation System (CRS)
 Computerized networks and electronic distribution in tourism emerged.
 It is computerized system to store and retrieve information.
 Airlines pioneered this technology
 At also reduce communication cost.
 Second Stage (1980s) - CRS emerged into Global Distribution System (GDS)
 GDS originally stem from the airline industry
 GDS is a world point computerized reservation system
 It is a single point of access for reserving airline seats, hotel, rental cars and other
related items by travel agents and online reservation sites.
 Third Stage (Since 1990s) - Internet Distribution System (IDS) & Destination
Management System (DMS)
 These are the virtual or online travel agents.
 IDS is a collection of more than 2000 internet reservation system, travel
websites, online reservation systems and travel portals which specialize in
internet marketing of travel and related services directly to customers.
 DMS then merged
 It provides complete and up-to-date information on a particular tourist
destination.
 It handles both the pre-trip and postal-arrival information, as well as integrates
availability and booking service too.
 It is used for the collection, storage, manipulation, and distribution of tourism
information, as well as for the transaction of reservation and other commercial
activities.

2.1 First Stage (1970s): Emergence of Computer Reservation System (CRS)

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  Advent of Computer Networks and Electronic Distribution helped the emergence of
Computer Reservation System in 1970s.
 CRS consists of a database to manage inventory of tourism organization, and this
database could be accessed by remote sales offices, partners and intermediaries to make
reservations. Thus, the reservation offices will have online live data available.
 Tourists can go to these reservation offices and book their tickets.
 CRS formulated a new marketing and distribution system in travel and tourism industry.
 However, CRS is limited to airlines tickets booking only. Also, CRS developed by each
service provider will help booking of tickets of that service provider only. For example, a
tourist cannot book a ticket of British Airways using American Airlines CRS.
 American Airlines Computer Reservation System developed by American Airlines is an
example of Computer Reservation System.
2.2 Second Stage (1980s): Global Distribution System (GDS)
 CRS evolved into GDS as airlines expanded their geographical coverage by increasing
the reservation offices worldwide.
 GDS incorporated a wide range of services and products for the entire industry. It
integrates multiple airline systems horizontally. Thus, GDS helps in booking ticket of any
airlines which are integrated to the GDS. In this case, a tourist can book ticket of both
British Airways and American Airlines using the GDS.
 GDS vertically integrates services such as accommodation, car rentals, bus/train booking
etc. This is another improvement with respect to CRS. Using GDS, not only airline tickets
can be booked, but also accommodation, car rentals etc. can be booked.
 As several companies are connected to the GDS, it enabled the purchasing of the majority
of tourism products online.
 Information search and ticket booking is done faster as all the systems are interconnected.
Thus, more customers are served in lesser time.
 Owners charged commissions and participation fees. Transaction costs are too high for
small operators.
 Helped the standardization of processes as it interconnects most of the tourism
organizations and intermediaries around the world. Thus a standard had to be defined in
order to have uniform data communication. One example of standardization could be air
ticket format/template.
Amadeus, Galileo, Sabre, Abacus etc. are examples of Global Distribution System.

2.3 Third Stage (Since the last decade of the 20th century): Internet Distribution System
(IDS) & Destination Management System (DMS)
 Internet Distribution System (IDS):
 IDS are virtual travel agents or online travel agents where there is no physical booking
clerk available to book the ticket. Websites almost replaced the ticket booking clerks.
 IDS uses GDS systems internally, and leverage the internet to provide online services
 Virtual Travel Agents offer wide range of services and packages needed for tourism
 The major difference between the second stage and third stage is- in the third stage,
websites replace the ticket booking offices and ticket booking clerks. Tourists and
travelers are now empowered to search and book the ticket online.

Some examples of Internet Distribution Systemare yatra.com,

tripadvisor.in, makemytrip.com, travelocity.com etc.

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Web page Travelocity.com

Figure 1
Destination Management System (DMS):
 Destination Management System emerged after the Internet Distribution System. It
consists of product database, customer database, and a mechanism to connect the two.
 DMS allows customers to create personal destination experience
 DMS provides information and undertakes some marketing activities through mass media
advertising
 Provides advisory service for consumers and the travel trade with regular and
efficient communication with customer
 Designs and distributes brochures, leaflets and guides online
 DMS provides additional information to tourists on locally available attractions and
products and contributes immensely to tourism growth
 Helps to overcome seasonality problems by spreading and balancing tourism
demand
 Customer experience is enhanced through customer relationship management using
DMS. This is the main differentiator of DMS from its predecessor.

3. E-Tourism Mix:

E-Tourism Mix is a combination of

Tourism activities, business activities and
Information and Communication
Technologies. Thus, the E-Tourism mix
consists of regular business functions like
marketing and sales, finance, HRM,
procurement, inventory management, and
tourism activities such as transport, travel,
hospitality, Leisure and the Information

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 and Communication Technology used in
maintaining and managing the tourism
business.

Figure 2

4. E-Commerce and Industry Value Chain:

In the traditional business value chain, the supply channel consists of many intermediaries,
between Manufacturers and consumers, such as Distributors and Retailers, which not only
increase the cost of the product and service, but increases time of delivery. The cost increases
because of transport, inventory maintained at different levels and the commissions added at
each level.

In case of
Ecommerce, the
intermediaries are
reduced, and the
product and service is
delivered directly
from manufacturer /
service provider to
the customer.
Thus, E-
Tourism bypasses
Distributors and
Retailers to reach end
customers, and thus
saves cost on
commissions,
transport, inventory
etc.

Figure 3

5. Functions of E-Tourism:
E-tourism includes business functions like– E-Commerce, E-Marketing, E-Finance, E-
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Accounting, E-Human Resource Management & E-Procurement. The list of different functions
is provided below:
 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

 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 requests from headquarters/administration
 Share of common resource databases for customer and operational information

 Links between partners

 Availability/prices inquiries
 Negotiations and bargaining

 Reservations & confirmations

 Receipts/documents
 Vouchers & tickets production

 Travelling facilitation
 Keep partners informed about plans
 Follow up progress
 Amend plans should unexpected developments arise

 Feedback and clearing commissions

 Payment & commissions clearance
 Feedback & suggestions
 Complaint handling

 Building loyalty through data mining

6. Components of E-Tourism:
 The essential components of Tourism are – Accessibility, Accommodation, Tour
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 Operators, Travel Agencies, and Attraction.
 The corresponding components of E-Tourism are E- Airlines, E-Hospitality, E-
Tour Operators, E-Travel Agencies, and E-Destination.
 Accessibility consists of transport which is managed using E-Airlines.
 Accommodation consists of hotels where tourists stay when they visit a
destination, and it is managed using E-Hospitality.
 The traditional Tour Operators and Travel Agencies which have physical offices
and booking clerks are assisted by E-Tour Operators and E-Travel Agencies.
 And finally, the important component of Tourism, Attraction has E-Destination as
the corresponding component of E- Tourism.
 Though physical attraction can never be replaced with anything else, E-
Destination helps in providing as much information as possible to the tourist about
the destination.
 The information can be a combination of text, photos, videos etc.
 Thus, the E-Tourism components assist and support the components of Tourism,
and they do not replace the components of Tourism.

Figure below shows Components of E-Tourism via table:

Figure 4

6.1 E-Airlines:

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E-Airlines focusses on improving the accessibility and customer relationship using online
services and data mining. It provides electronic bookings and online ticketing. Distribution of
airline seats is done using ICT and internet. It also has E-Auctions for last minute deals, which
enhance customer satisfaction. It makes the business operations efficient, quick, low- cost and
accurate management of inventory. E-Airlines also help customize the services based on
customers.
Indigo, Spice Jet, Air Asia are some of the examples of e-airlines which customize the services
to provide low-cost fares to customers.

Webpage of Spicejet.com

Figure 5
6.2 E-Hospitality:
E-Hospitality helps manage inventory, automate frontend and backend operations using
software. E-Hospitality maximizes revenue and profitability by reducing the cost of operations
and enabling service of more customers in lesser time. Property Management Systems is an
ICT application that help manage end-to-end operations of hotels. Distribution and Marketing
is done using ICT in E-Hospitality. The cost of promotion is reduced with E- Hospitality.
CAPA e-hospitality Inc. is an example for e-hospitality system.

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Home page of CAPA Hospitality software. Source: capasoftware.com

Figure 6

6.3 E-Tour Operators:

Using ICT, tour operators connect to the databases of travel agencies to book services for the
customers. ICT improved productivity, capacity management and enhanced services to
customers. Tour operators promote their products and attract customers using internet. The
services can also be customized using E-Tour operators by providing packages which include
transport and accommodation. E-Tour operators internally use Global Distribution System for
making the bookings. Internet is extensively used by E-Tour operators to promote the products
and services.
Southern travels is a good example of domestic E-Tour operator.
Webpage of southerntravelsindia.com

Figure 7
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6.4 E-Travel Agencies:
E-Travel agencies operate reservation systems to check availability, prices and make
reservations for tourism products. They offer services for booking air ticket, hotel, car, bus,
train, cruise etc. E-Travel agencies act as intermediaries between consumers and principals.
With ICT, it has become easier for E-Travel agencies to coordinate and control information
among themselves and customers.
Makemytrip, Travelocity, Cleartrip, Yatra are some examples of e-travel agencies operating in
India.
Web page of yatra.com

Figure 8
6.5 E-Destination:
Destinations are a combination of tourism products, facilities, and services all under one brand.
It applies ICT to do planning, management and coordination functions of destinations. Tourism
organizations use ICT to facilitate the tourist experience before, during and after the visit.
Before the visit, a tourist can search for detailed information about the destination, and also can
make bookings to visit the destination. During the visit, E-Destination enhances customer
experience by promptly resolving the customer complaints and providing any additional
services as requested by the customer. Post visit, E-Destination seeks customer feedback and
keeps informing the customer on the upcoming offers and also offers customer loyalty points.
E-Destination helps coordinate with all partners involved in production and delivery of
tourism. It provides detailed information of the destination such as location, attractions,
amenities, accessibility etc. Most of the E-Destination websites provide multimedia content to
provide a glimpse of the destination. Tourists can make informed decisions based on the
information provided in the E-Destination websites.
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www.etourismindia.com, www.tiscover.com are examples of E-Destinations. Webpage
of etourism-india.com

Figure 9

7. Business Models of E-Tourism:

Depending on the parties

involved in the transaction, E-
Tourism can be classified into
four business models:
1. Business-to-Business (B2B)
2. Business-to-Consumer (B2C)
3.Consumer-to-Consumer
(C2C)
4. Consumer-to-Business (C2B)

Figure 10

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7.1 B2B Business Model:
This involves transaction between two Businesses. A seller business (ex: supplier) sells its
products to another business (ex: service agent).

Figure 11

Online procurement (eProcurement) is an ICT application for B2B business model. In this, the
procurement process is done over internet. E-Procurement reduces the cost of procurement.
Jet Airways online procurement website is an example for B2B business model.

7.2 B2C Business Model

This involves transaction between Business and Consumer. Here a business sells its products to
consumers directly.

Figure 12

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ITDC hotel booking website www.theashokgroup.com and MakeMyTrip website
www.makemytrip.com are examples of B2C Tourism Business model.
Webpage of theashokgroup.com

Figure 13

7.3 C2C Business Model

This involves transaction between consumers. A consumer either sells or shares information to
another consumer. eBay is a common example of online auction website.

Figure 14
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A C2C online community shares their travel experience through story telling or through the
distribution of artefacts such as photographs and videos. Online feedback, blogs etc. also come
under this category.
www.triadvisor.in is a good example where a consumer shares experience, information and
feedback on different tourism destinations and services.
Webpage of tripadvisor.in

Figure 15
7.4 C2B Business Model
In this, the end consumers create products and services which are consumed by businesses and
organizations. It is opposite to the B2C model where the companies make goods and services
available to the end consumers.
An example of C2B business model is where a consumer specifies a need and the various
businesses compete or bid to fulfill that need.
It uses reverse pricing models where the customer determines the prices of the product or
services. There is increased emphasis on customer empowerment.

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www.bid2travel.com is a good example for C2B business model. Webpage
of bid2travel.com

Figure 16

8. Limitations of E-Tourism:
 It might be difficult to integrate Internet and e-commerce software with some existing
(especially legacy) applications and databases. Even if it can be done, it would be costly.
 Computer hardware and software are needed which add to the cost of e-commerce
 Security and privacy concerns deter customers from buying as it involves using credit
card and bank account details online
 Lack of trust in e-commerce and in unknown sellers hinders buying. One reason is that
sensitive financial information needs to be provided while buying and the other reason
being not sure of the quality of product or service.
 Internet accessibility is still expensive and/or inconvenient
 E-Tourism is dependent on digital literacy
 Online fraud is increasing and this makes the customer sensitive financial information
vulnerable to hackers
 Survival of travel agents is getting difficult with the advent of virtual travel agents.
 The basic question remains - Can virtual travel replace real travel? Since, E-Destinations
can only provide information and multimedia content for the tourist, this does not by
itself replace the actual Destination.

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9. Summary:
E-Tourism is applying ICT in Tourism business to provide various products and services to the
tourists. E-Tourism helps service providers to cater to the needs of a huge number of tourists
faster, with reduced cost and improved accuracy. Though there are many definitions of E-
Tourism defined by many researchers, the popular definition is the one given by
Dimitrios Buhalis. Like many technologies and businesses, E-Tourism evolved from Computer
Reservation Systems to Internet Distribution Systems and Destination Management Systems,
effectively utilizing ICT and internet. E-Tourism reduces cost by directly selling products and
services from service provider to the end tourist bypassing the intermediaries. Thus E-Tourism
redefines the industry value chain by reducing the number of intermediaries. E-tourism
includes business functions like– E-Commerce, E-Marketing, E- Finance, E-Accounting, E-
HRM & E-Procurement. The different components of E-Tourism such as E-Airlines, E-
Hospitality, E-Tour Operators, E-Travel Agencies and E-Destination support the corresponding
components of Tourism. The different business models of E- Tourism involve faster and
accurate communication of information and delivery of products and services. Though buying
products and services online has a bit of risk associated with respect to financial transactions,
and quality of services from unknown sellers, E-Tourism enhances the customer experience by
providing enough information online to make informed decisions and also make purchases. E-
Tourism helps tourism organizations in enhancing customer relationship. Thus, for tourism
organizations to compete and survive in today’s world of internet, E-Tourism is a must.

GROUP ACTIVITY!

Together with your group, tour and evaluate the following sites, discuss and
describe the details of its services and inclusions of the following shopping
applications.

 Alibaba
 Amazon
 Chewy
 eBay
 Etsy
 Newegg
 Rakuten
 Walmart Marketplace
 Wayfair
 Travelocity.com
 Spicejet.com
 southerntravelsindia.com
 yatra.com
 etourism-india.com
 theashokgroup.com
 tripadvisor.in

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