Impact of E-Commerce on Business Performance: A Study With

Respect To Travel Industry

University

College

Department

Research proposal for ______________

Name

1. Amede
2.

Submit day

Submitted to: name of teacher

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Table of content page

Table of Contents
Abstract.......................................................................................................................................................2
CHAPTER ONE..........................................................................................................................................3
1. Introduction.........................................................................................................................................3
1.1 Statement of the proposal...........................................................................................................5
1.2 Research Question.......................................................................................................................5
1.3 General research objective:.........................................................................................................6
1.4 Research Objective......................................................................................................................6
1.5 Scope of the Study.......................................................................................................................7
1.6 Limitation of the Study................................................................................................................8
Chapter 2.....................................................................................................................................................8
2. Literature Review& Research Gap...................................................................................................8
Chapter three............................................................................................................................................16
3. Research Methodology..................................................................................................................16
3.1 Sampling Design Process.................................................................................................................17
3.2 Sampling Procedure.........................................................................................................................17
3.3 Data Collection Procedure...............................................................................................................18
3.4 Secondary Data................................................................................................................................18
3.5 Questionnaire Design......................................................................................................................18
Chapter four..............................................................................................................................................19
Conclusion.............................................................................................................................................19
Suggestion & Recommendation............................................................................................................21
Annexure 1 - Bibliography.........................................................................................................................23

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 Abstract

Online transactions in the travel and tourism industry are continuously increasing despite tough
economic problems in this arena and fewer travelers overall. This industry is the leading
application in the B2C (business-to-consumer) arena. Whereas other industries are displaying a
stronger hold to traditional processes, the tourism industry is witnessing an acceptance of
ecommerce to the extent that the entire 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
information-based industry it is one of the natural leading industries on the Internet). 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. Etravel is the leading and fastest
growing category of e-commerce. In order to exploit these opportunities in the market
environment, tourism businesses have developed and implemented several business models.

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 CHAPTER ONE

1. Introduction

Tourism Industry is one of the backbones of economy in developed, developing and

underdeveloped countries and one of the major sources of foreign 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 percent of world investment. (World Economic Forum, 2009).

The use of internet is rapidly growing day by day and as per International Telecommunication
union (2009), around 2 billion people will be online by end of 2010. Hence, internet will be
effective tool to promote and open up new opportunities for travel and tourism industry sector
though e-commerce. "Ecommerce is defined as the process of buying and selling or exchanging
products, services and information via computer networks including the internet. There are
various advantages of using internet in tourism as it is fast and easy to access destination, receive
price, and 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 limitations, it is essential for travel
and tourism industry to adopt e-commerce for their growth and success. With rise of internet
usage on people's daily life, tourism industries are tapping business through e-commerce. E-
commerce refers 2 both financial and informational transactions through electronic media
between on organization, between people or to third party (Chaffey et.al, 2006).

Through e-commerce, these industries are trying to reach global population to enhance their
business through different e-commerce tools and ad there will be more and more challenge to
these sectors in coming days for adopting e-commerce. Digital commerce in India has evolved
over the past decade in terms of magnitude. Total digital commerce market of India was valued

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at INR 47,349 Crores* in December 2012 and is expected to grow by 33% and reach INR 62,967
Crores by year 2013.

Out of the total transactions done on the PC as well as mobile: -

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 44,907
Crores. As a whole, the Non-Travel Industry segment is expected to mature by 41% and reach up
to INR 18,060 Crores by December 2013.

The proposal deals with what is the impact of structuring the e-commerce business on business
performance with respect to the travel industry and how ecommerce businesses can drive
competitive advantage enhance brand imagery and maximize Return on Investment. Though the
scope of the study extends too many service organizations, emphasis has been laid down on the
study of various service organizations in the Travel industry. The proposal focuses on 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 3 existing products and services, processes
and markets:

(1) Critical Success Factors that make e-commerce business profitable in the travel industry
related organizations

(2) Methods & practices to structure the e-commerce business in the travel industry related
organizations

(3) Factors which will have an impact on overall business performance as a result of the
structuring of e-commerce business in the travel industry related organizations and

(4) Factors that are Detrimental to the growth of the e-commerce business in the travel industry
related organizations. In addition to the structuring phase, the e-business development process

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also includes phases for feasibility analysis, implementation, testing, deployment and
performance review.

Ethiopia is the most dynamic and fast growing online travel market in the Truism region.

1.1 Statement of the proposal

From the above little introduction, we can simply say that e-commerce is bringing various
opportunities in travel and tourism sectors. Many industries on 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 developments have certain impacts on the behavior of customers as
well in industry.

The researcher prime focus on this research paper is to find out the impact and challenge of E-
commerce in travel and tourism industry and reviewing it through different 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 customers' perceptions on travel and Tourism Company
which adopts ecommerce and what are the benefits and limitations of e-commerce in travel and
tourism.

1.2 Research Question

 How to identify the methods & practices to structure the e-commerce business in
the travel industry related organizations.
 Why to identify the critical success factors that make e-commerce business
profitable & identify factors that are detrimental to the growth of the ecommerce
business in the travel industry related organizations
 What is the methodology to identify the factors which will have an impact on
overall business performance as a result of the structuring of e-commerce
business in the travel industry related organizations

1.3 General research objective:

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 To investigate the impact of e-commerce on business performance in case of truism sector and
provide solution on the way to upgrade the industry.

1.4 Research Objective

 To identify the methods & practices to structure the e-commerce business in the travel
industry related organizations.
 To identify the critical success factors that make e-commerce business profitable &
identify factors that are detrimental to the growth of the ecommerce business in the travel
industry related organizations
 To identify the factors which will have an impact on overall business performance as a
result of the structuring of e-commerce business in the travel industry related
organizations

1.5 Significance of the study

 This paper aim is to investigate the current situations as well as the prevailing effect and
to come up with possible, attainable and relevant solutions. In general the study will have
the following significance.
Identification
 and/or effect of
have adopted E-commerce
e-commerce on the performance
applications in Ethiopia.of companies that wish to adopt
 The finding provides a framework for the companies for the design of their future
directions and to adjust their goals and objectives as per real opportunities and
challenges. Additionally, it enables government, organizations and trade associations to
develop company’s e-commerce that are designed to address the factors identified by this
research.

 Provide an opportunity for decision-makers and managers of the organizations to

consider and evaluate the effect of E-commerce on business performance in the existing
practices, in order to take appropriate corrective measures in the area or to scale-up the
positive factors (if any) for involve and the promotion of e-commerce practices.

 The study serve as additional source for reference and it will also serve as a spring board
for other researchers and IT companies who want to conduct detailed research on the

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 issue. So apart from providing a useful insight, is strongly expected to instigate other
researchers to undertake a meaningful investigation by enlarging the scope of the issue

1.5 Scope of the Study

The internet‘s global reach, interactivity, and information-rich context have 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 dissertation is to assess the methods and practices adopted to structure the e-
commerce business in the travel related organizations and the factors that define the success of e-
commerce business in the travel related organizations. The dissertation also focuses on factors
that are detrimental to the growth of ecommerce business in travel related organizations. The
study draws attention towards the changing patterns in traveler’s 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 information technology to
enable business growth. It also aims to analyze some of the most critical IT developments and to
demonstrate how they influence the tourism industry and significantly enhance competitive
advantage. Tourism is inevitably influenced by the business process re-engineering experienced
due to the technological revolution.

Timely and accurate information, relevant to consumers' needs, is often the key to satisfaction of
tourist demand. Therefore, ITs provide the information backbone that facilitates tourism.

1.6 Limitation of the Study

The scope of the study will limit to how e-commerce as a business channel is established in the
travel and tourism industry. Other industries are not included in this study. The study is based on
opinions e-commerce practitioners have given with respect to how e-commerce can be set-up in
travel related organizations. Sample selection is limited to only 2 cities of Ethiopia and would

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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 ecommerce however they are slow in
adopting the new methods and practices emerging in the e-commerce space related to the travel
industry. Finally, although the number of respondents will sufficient to conduct this study,
however, a larger sample size will have strengthened the results obtained.

Chapter 2
2. Literature Review& Research Gap

Many researchers or scholars have done various researches about e-commerce in travel and
tourism industry. Many of them have pointed positive impact of ecommerce in travel and
tourism and some have pointed challenges for adopting e-commerce and barriers of e-commerce
in travel and tourism industry. Ecommerce in travel and tourism industries are continuously
increasing despite of tough economic problems. As per them, this industry is adopting
application of 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.
ecommerce via web and other online transaction software where as other industries are still
adopting the traditional way. Web is changing the behavior of consumers are well as they are
becoming less loyal, take less time for choosing and consuming the tourism products. As this
industry is service oriented business industry, companies are implementing various new
techniques to satisfy consumer needs and providing information to them through web and
different value generating strategies like value extraction, value capture, value addition value
creation. Travel and tourism is information based service orientated business and the product is
termed as "confidence good" and prior comprehensive assessment of quality is impossible
however due to use of ecommerce feeds backs from consumers can be obtained in short span of
time and this services can be enhanced accordingly.

Due to adoption of e-commerce in travel and tourism industry consumers are becoming more
powerful players as they can choose their destination and sites in few minutes whereas travel
12agents, travel websites etc. see diminishing power in sales however they are providing new
market functionality using new technologies to attract more consumers. Many tour operator,

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travel agents, online travel agents are using these strategy to attract more consumers however
using more high-tech 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 userfriendly 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 are top management
support, IT infrastructure, and customer acceptance. Top 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 explained that without proper IT structure and skilled human resources,
ecommerce strategy will fail. One of the factors he explained is customer 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
13information 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 increasing day by day. This is due to adaption of e-
commerce technology in travel and tourism industry.

There are various benefits for small and medium sized tourism enterprise to use e-commerce.
Few benefits of using e-commerce in tourism which are as follows; -

 Providing easy access to information on tourism products and services

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  Providing better information on tourism products and services
 Providing convenience for customers
 Expanding choices by customers
 Creating new markets
 Establishing interactive relationship with customers
 Improving customer services
 Improving image and public recognition of the small & medium sized
 tourism enterprises
 Saving time for providing tourism services
 Providing customized & specialized tourism products & services
 Reducing operating cost
 Simplifying the process business
 Interacting with business partners
 Founding new business partners

Due to adopting of e-commerce by small and medium enterprises are beneficial in various
aspects. In Kim research, he explained by adopting e-commerce 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 enterprises they can save time as well. 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 companies to adapt e-
commerce in their business, include 'limited knowledge of available technology,' 'lack of
awareness,' 'cost of initial investment,' 'lack of confidence in the benefits of e-commerce,' and
'cost of system maintenance.'

These barriers also include 'shortage of skilled human resources,' and 'resistance to adoption of e-
commerce.' Further he mentioned 'insufficient e-commerce infrastructure,' and 'small e-
commerce market size' might be barrier factors depending upon the market size. Moving from
traditional way to technological way is not easy so in order to adapt e-commerce huge

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investment on 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 adapting e-commerce. Further, websites and software must
be rich in content svery easy to use, updated time to time. If these factors are ignored than these
factors will be barrier of e-commerce in tourism.

There are several challenges to 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 ecommerce by company, they have to focus on their detailed of
services, product availability, special offers, personalized information which are important
factors consumers search on web for the product. He further mentioned "Individual ecommerce
customers have been known to be demanding and unforgiving". As such, regular maintenance,
upgrade of technologies and continuous improvement of customer service are the core factors for
enhancing business and attracting more customers. Consumers these days are far more
demanding and want convenience, speed and a seamless buying experience.

A main challenge is to create awareness among customers about product, make them loyal. Due
to drastic change in technology, Internet, mobile and handheld portals 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 that
adaptation of e-commerce in travel and tourism is to build trust of people in internet system so
that they could choose e-commerce instead of tradition way. To build the trust among people,
companies can try to capture a part of the traditional travel agent client market by focusing on
different advertisement, emphasizing online agents' knowledge. Companies can lure their

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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 to give telephone
numbers or e-mail contact information. This phone numbers and email address can be useful for
customers who want proper information about destination, services and some specific questions.
An e-mail reply or telephone call allows companies to respond more inquiries with politeness in
a professional way which of course provide sense of postal mail. In this way a browser may be
transformed to buyer.Similarly, to attract more consumers, website should provide virtual tour of
the destination. Virtual tour means description of the destination by through audio and visual
mode by sharing 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 supposed 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 that
companies focus is on how Ecommerce as a business channel can add business value in travel
related organizations and aims at providing the reader an overall idea about the nature and
activities of electronic commerce.

The 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 have a impact on overall
business performance as a result of the structuring of ecommerce business in the travel industry
related organizations. One of the studies investigated the critical success factors for e-commerce.
The dissertation addressed four research questions:

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(1) Regardless of industry, what are the critical success factors relevant to all companies engaged
in e-commerce?

(2) 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) How is the company‘s business performance?

In one of the thesis ―THE IMPACT OF E-COMMERCE ON BUSINESS VALUE IN

SERVICE ORGANISATIONS‖ the findings focus on the impact of e Commerce in the following
areas:

 Brand Image
 Customer service
 Product promotion
 Time to market

An article on ―Critical Factors Classification for Firm Adoption of ECommerce‖ emphasizes on

the factors affecting e-Commerce adoption decisions by firms. The categorization resultedin two
main Categories: internal and external factors. Internal factors are within the firm while external
factors are mainly environmental.

Analyzing the Effects of Social Media on the Hospitality Industry was conducted to explore the
areas and functions hospitality businesses use social media for, and understand how consumers
perceive these new vehicles of communication. The study brought out a consumer‘s perspective
of the advantages of social media over traditional marketing methods.

Potential E-Business Development in Tourism E-business is the use of information and

communications technologies in all activities of a firm both internally and in relation to its
outside partners. The tourism industry consists of many companies dabbling in various activities,
ranging from

(1) Tour operators

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(2) Travel agents

(3) Tourist guide services

(4) Airlines

(5) Transportation

(6) Hotels and guesthouses

(10) Tourism education and training institutions;

(11) Local tourist offices. ICTs are seen as major tools with the potential to fundamentally
change business behavior and company strategies. The adoption of ICT in the tourism industry
can provide detailed upto-date information on the availability and prices of products and
booking, which could also contribute to increased sales volume and profits. However, there
exists other literature, which report on the benefit of e-business to tourism. ECommerce 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 Internet‖.
One of the major arguments is management‘s perception of the internal organizational readiness
to adopt e-business. Organizational barriers among non-adopters include the lack of
technological and financial resources, the negative attitude of management (lack of their support
and less risk taking propensity), and the lack of IT knowledge.

Online marketing has become very important over the years as a more cost effective method of
doing business. However in spite of the obvious advantages of internet traditional marketing
continues to be used by majority of the businesses. More and more customers are using the
internet to research products and services online which they later buy offline. Most customers
compare product features, attributes and prices to get the best product at the best price.

Online search helps in this process. So online and offline strategies integration is a very
important factor for the strategic success of any business.

An attempt has been made to identify areas in the existing studies, which are yet to be addressed,
which will form as research questions to be answered through the proposed study.

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The gaps identified are as follows:

Critical Success Factors that make e-commerce business profitable in the travel industry related
organizations Factors which will have a impact on overall business performance as a result of the
structuring of e-commerce business in the travel industry related organizations

 Analyze the impact of e-commerce on brand imagery

 Methods & practices to structure the e-commerce business in the travel industry related
organizations
 How can one sustain competitive advantage in Web commerce?
 How does one measure e-commerce business success (or 'derive ROI‘)
 Barriers and challenges e-commerce business face during the implementation and growth

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 Chapter three
3. 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 (Global distribution system). Quantitative
survey will be conduct in this study to investigate the perceptions of the travel related
organizations like the traditional travel agents & tour operators, Online travel agents, hotels,
travel meta search engines, global distribution system with respect to structuring of the
ecommerce business in the travel industry. The travel related organizations were asked to judge
critical success factors that make e-commerce business profitable, Factors which will have a
impact on overall business performance as a result of the structuring of e-commerce business in
the travel industry related organizations, Methods & practices to structure the e-commerce
business in the travel industry related organizations, Factors that are detrimental to the growth of
the e-commerce business in the travel industry related organizations.

The research exercise will be focus on educating the travel industry with regards to what all areas
are critical and need to be implemented in order to structure the ecommerce division which will
lead to profitable results and impact the overall business process. T test is applied to determine if
two sets of data are significantly different from each other. The t-test looks at the t-statistic,
tdistribution and degrees of freedom to determine a p value (probability) that can be used to
determine whether the population means differ.

3.1 Sampling Design Process

This study will base on the exploratory & causal research design, which included both secondary
and primary information sources. The target population for this study is drawn from members of

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Travel Agents in Ethiopia (Addis Ababa). There are many members in the association. Members
of TAFE fall in categories of aviation, hotels, IATA approved agents, e-commerce digital
agencies managing travel clients. The samples for this study are drawn from TAFE and primarily
focus on the travel industry related organizations in the Addis Ababa. Primary data is proposed
to be collected from 19 travel industry related organizations, which fall in different categories of
TAFI via a structured questionnaire. The respondents will be selected on the basis of their
designation, profile and tenure in the organization. 2 hotels, 1 airlines, 3 online travel agent, 3
tour operators, 8 travel agent, 1 travel meta search engine and one global distribution system
participate in the study.

Travel related organizations are classified into two categories: Organizations who own inventory
to be sold through intermediaries and their own websites (hotels, airlines) Organizations who
display inventory by connecting with the systems of the organizations who own inventory
(OTA‘s, traditional travel agents, travel meta search engine, global distribution system)

3.2 Sampling Procedure

For the purpose of this study, a probability sampling method will be used. Stratified sampling,
followed by simple random sampling will be used in this 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 be performed separately on each stratum. The different
categories of the TAFI in the study compiled the different strata.

3.3 Data Collection Procedure

In regards to the primary sources, data would be collected in form of a structured questionnaire
through face-to-face, email and telephone interviews with the ecommerce practitioners.
Questionnaires would be sent beforehand to the respondents, so that they could prepare prior to
the interview.

3.4 Secondary Data

Secondary sources of information was gathered from e-journals, e-articles, ecommerce related
cases studies, online e-commerce research reports produced by Internet and Mobile Association
of India providing up-to-date insights on the growth of e-commerce in India.

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3.5 Questionnaire Design
The questionnaire is designed on a five-point likert scale in order to gather insights on what
according to the e-commerce practitioners in the travel industry related 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 ecommerce business, What are the factors which will have an impact on overall
business performance as a result of the structuring of e-commerce business in the travel industry
related organizations. The questionnaire will be design in line with the research objectives. The
questionnaire will circulate among the e-commerce practitioners within the travel and tourism
industry.

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 Chapter four
Conclusion

Tourism is backbone of country's economy. Due to increment on people income, more 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 adapt e-commerce at once from traditional way, investment on information
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 towards e-commerce is
necessary; website should be user friendly, informative, 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,
consumer's loyalty, lack of human skill resources, government policies about ecommerce,
customer confidence etc.

Due to e-commerce in travel and tourism, behavior 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.

E-Commerce has provided great advantages for both demanders (consumers) and suppliers
(businesses) of economic activities. With Ecommerce, 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

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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 collecting clients and it
provides the ability to identify their desires. Promotional visualization of tourism services and
products through multimedia technology leaves greater impression on potential customer than
standard brochures, catalogues and leaflets. Overbooking has become almost impossible because
all communication 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 pool of information available online, an increasing number
of travelers are seeking 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
workforce within in to meet changing customer behavior.

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Suggestion & Recommendation

Recommend that adaption of e-commerce is very fruitful to tour and travel companies however
along with adaption of e-commerce, companies have to focus on changing behavior of customer
as well, what customer expects while booking and buying through the web. What will be
customer perception using ecommerce in travel and tourism? Research on customer perception,
customer exception, level of customer satisfaction, compensation in case of bad services, secured
online payment system etc. should be deeply researched while adapting e-commerce in travel
and tourism. In this competitive environment, business decision makers need to know some
guidelines for developing their e-commerce presences. Understanding what is important to users
is essential in differentiating its website from the competitors‘, creating a more compelling
ecommerce experience, thereby potentially boosting profits. Client engagement — both
acquisition and retention — is the key to success in the travel industry.

Whether a boutique travel agency or large tour operator, travel industry companies need to
ensure they attain the right volumes of business by consistently finding and retaining new clients.
As disintermediation and intensifying competition continue to commoditise travel packages and
shrink 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 costeffective? The answer is multichannel marketing.

Delivering on the promise of Customer Relationship Management, multichannel marketing is

intelligent, data-driven marketing in the online environment. As more and more travel industry
companies are discovering, multichannel marketing is the key to winning more business and
strengthening client relationships through personalized, relevant communication. Multichannel
marketing means more sales by enabling you to continuously profile prospects and find out more
about them — what their changing travel likes, needs and preferences are — multichannel
marketing will help you: Identify promotions and special offers that will appeal to the largest
number of clients; Ensure promotions are always relevant — targeted at the right prospects;

Ensure promotions are delivered to each chosen prospect at the most opportune time and in the
preferred manner (web, mobile or email). Multichannel marketing means strengthened client

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relationships by enabling you to personalize your client communication, request feedback and
record client responses, multichannel marketing will help you: Capitalize on client relationships
by consistently anticipating their specific needs;

Exploit the growing preference for self-service by presenting the right value offering to each
individual client at the right time; Eliminate the frustration and cost caused by irrelevant
messages sent at inappropriate times.

Two key areas for growth are predict 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

Marketing, Search Engine Marketing, Mobile and Location Based Marketing, 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 infrastructure of the organization, which determines the readiness to respond
to customer requirements. As more travelers are expect personalized products and services to
meet their demands, it is important for tourism businesses to have 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 and other fundamental information management systems are essential
for businesses to scale-up.

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Annexure 1 - Bibliography

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