ICT and Tourism

By

Dr. Renu Malra

Assistant Professor
University College
Kurukshetra University
Kurukshetra

Email: rmalra@kuk.ac.in

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Abstract:

ICT (Information and Communication Technology) is benefiting every individual citizen in his/her
daily life. It can be used to support distance learning, health care service, e-government
initiatives, virtual shopping, virtual communities and so forth.
For the last fifty years or so tourism has been the fastest growing industry in the world, making it
one of the world’s largest industries in present time. The fast development of ICT and expansion
of internet have changed the structure of tourism industry around the world. New technologies
have been adopted by the tourism industry for the last thirty years and the trend is still going on.
ICT is playing an important central role in various businesses connected travel and tourism.
Hence e-commerce as well as mobile commerce has been widely utilized in tourism industry.
ICT has been applied in tourism since the early adoption of Computer Reservation System
(CRS) in airlines in 1950s and in the transformation of Global Distribution Systems (GDS) in the
1980s. Hotel property management Systems (PMS) and Hotel CRS Systems appeared
afterward brought interconnectivity and interoperability.
The most recent development in etourism applications are at the destination level. ICT-based
tools/applications are used in various areas of tourism even the area of Sustainable Tourism
Development also didn’t remain untouched. The various tools used in tourism are Geographical
information System (GIS), Tourism Information System (TIS), Destination Management System
(DMS), The Internet, Global Positioning System (GPS), Intelligent Transport System (ITS).
These tools and applications are used in tourism planning, information management, host
community benefits, tourist experience, local participation, sustainable consumption and so
forth. ICT tools and applications are now directly concerned with development of destination in a
sustainable fashion by using indicators, monitoring, eco-labeling, codes of conduct, educating
the tourist and other best practices. Here ICT can be seen as a new and innovative approach to
deal with the areas like Sustainable tourism development.
Hence it can be said that ICT tools and applications are used not only for promoting and
developing the tourism industry but proper measures also for developing this industry in such a
way that negative impacts can be reduced.

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What is ICT?
Tourism is reputed to be the world’s largest industry. Its revenues support a significant
proportion of the economies of many nations and it is one of the largest employers worldwide.
Its contribution to gross national product, employment and regional development are well
documented and, unlike many other sectors, it is forecast to grow in importance in the coming
decades as leisure time increases.

Tourism is for many social, economic, technological, and geopolitical reasons the biggest
industry in the world today, with an actual high quantitative and qualitative growth dynamics and
high growth potential in future. The most important benefit associated with the access to the
new technologies is the increase in the supply of information. Information is shared and
disseminated to larger audience. Secondly it reduces the cost of production. Knowledge is
produced, transmitted, accessed and shared at the minimum cost. With the reduction in the
transactional costs, there is also a reduction in the degree of inefficiencies and uncertainty.
Thirdly it has overcome the constraints of distance and geography. ICTs have cut across the
geographic boundaries of the nation states. Buyers and sellers are able to share information,
specifications, production process etc across the national borders. It enables all to know the
comparative advantage in the market economy. It leads to the larger markets and increased
access to global supply chains. Fourthly it has led to more transparency. Networking and
information sharing definitely leads to demands for greater openness and transparency. OECD
(2000) revealed that the advent of Internet-based electronic commerce offers considerable
opportunities for firms to expand their customer base enter new product markets and rationalize
their business. WTO (2001) also indicated that electronic business offers SMEs the opportunity
to undertake their business in new and more cost-effective ways.

The introduction of ICT has affected all the players in the tourism sector. For potential travelers
new technologies have revolutionized how they research travel options, compare prices and
book their travel. For travelers on their trip the availability of information and contact with their
home through the Internet, the use of mobile phones and geographic location services based on
Global Positioning Satellites (GPS) has increased the convenience, pleasure and security of
travel. For tourism operators, ICTs have affected the way they market their products as well as
offering opportunities to change the way they operate (Buhalis and Deimezi 2004).

ICT empowers consumers to identify, customize and purchase tourism products and supports
the globalization of the industry by providing tools for developing, managing and distributing
offerings wrldwide. Increasingly, ICTs play a critical role for the competitiveness of tourism
organizations and destinations (Buhalis 1998, 2003; O’Connor1999; Sheldon 1997; Poon1993).

But for this to happen, mere improvement of ICT infrastructures is not enough. Even an
appropriate endowment of e-skills, as advocated by international organizations is by now a
necessary but not sufficient condition. As for every new technology, the introduction ICTs
cannot produce the promised benefits if it is not accompanied by complementary changes in
organizational settings and structures to fit them with its distinctive characteristics

Buhalis (2008) stated that, “potential tourists have become more independent and sophisticated
on using a wide range of tools to arrange for their trips. These include reservation systems and
online travel agencies (such as Expedia), search engines and meta-search engines (such as
Google and Kayak, respectively), destination management systems (such as visitbritain.com),

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social networking and web 2.0 portals (such as Wayn and Tripadvisor), price comparison sites
(such as Kayak or Kelkoo) as well as individual suppliers and intermediaries sites”.

Information and communication technologies (ICTs) make large, medium and small companies
more flexible. Especially, the importance of ICTs for Small and Medium Enterprises is
increasing in time since the share of SMEs in countries is about 95-98 % and they have some
difficulties to finance and manage their companies, enter market and produce their goods and
services. Information and communication technologies provides a lot of opportunities for SMEs
such as increasing productivities, gaining competitive advantages, becoming flexible, reaching
many customers and other numerous benefits.

Benefits of ICT
As the world is being ushered into the information age, adoption of the information and
communication technology (ICT) is rapidly increasing. Internet has transformed the world into a
global village that can be navigated at the click of a mouse. It provides potential tourists with
immediate access to textual and visual conformation on destinations throughout the world. The
Internet has also become an essential tool in business to business (B2B) and business to
consumer (B2C) transactions, the distribution of products, networking of business partners, and
is an instantaneous means of accessing knowledge on all kinds of subjects including travel and
tourism information. The Internet can be accessed through mobile telephones, cable-television,
fixed telephones using traditional personal computers and laptops. Information is readily
available 24/7 and the resulting cost transparency enables consumers to make more informed
choices (Sinha, 2000).

Internet also offers tourism destination and businesses the means to make information and
booking facilities available to millions of consumers around the world at a relatively low cost,
while at the same time enabling them to cut down drastically on amounts invested in the
production and distribution of promotional materials. Travel and tourism are fast becoming the
largest category of products sold on the Internet, which must therefore be seen as the new
marketing battlefronts for tourism destinations in Asia-Pacific. Apart from the Internet,
technological advances gave rise to other electronic distribution platforms such as interactive
satellite television and mobile devices. The expected proliferation of satellite TV and m-
commerce will gradually intensify competition among intermediaries who will have to reengineer
their business processes and evolve new business models in order to survive and remain
competitive (Buhalis & Licata, 2002)

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 WEB 2.0

RSS

Blogs

Different E tourism applications

Social –
collaborative
networking

Pod casting and

online video

Mash – ups

Wikis

Different E tourism applications (Figure.1)

Different internet applications in tourism

WEB 2.0: The arrival of Web 2.0 will further emphasize the internets role in the travel industry.
These days’ tourists more rely on the websites like virtualtourists.org instead of companies’
website, where they get tourists feedbacks. Tripadvisor is one of the original and most popular
Web 2.0 travel sites with user- generated content includes comments by travelers on the quality
of hotel accommodation, and post videos to share their experiences lively.

RSS (Really Simple Syndication): RSS (Really Simple Syndication) is an XML-based format
for distributing and aggregating Web content. News feeds update about new contents, latest
headlines and video in one place, as soon as it’s published. The most popular are Travel daily,
Travel weekly and so many.

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  Blogs: Blogs are a form of an online journal (newspaper or personal diary) that is
published on a website and are usually distributed through RSS and/or trackback
technologies (these inform the creator of a comment that someone has “replied” and/or
linked to his/her contribution). Numerous examples of general and-or specific blogs exist
in the tourism industry, such as tripadvisor.com, hotelchatter.com, igougo.com,
gazetters.com (a B2B weblog for travel agents). Many travelers – tourists are using
weblogs as fun and-or as a way of self-expression.

 Social – collaborative networking: Social networks and online communities are the
hottest trend in the industry. They allow you to grow your traffic economically by using
viral marketing to create a community of travelers who promote your destination or travel
service. Social networks also help to increase your search engine visibility, because
Google, Yahoo, and MSN favor websites with frequently updated content.
travelpost.com, realtravel.com, traveltogether.com are new types of travel cyber
intermediaries that provides Internet users with the tool to create an online itinerary,
share it and e-mail it to friends travelling with them.

 Podcasting and online video

Podcasting refers to the uploading of audio and video files by users on websites.
Podcasting is used as marketing as well as communicating tool. Orbitz.com provides
podcasting of many destinations that travellers can download to their MP3 players and
use them as guides while visiting the destination.
 Mash – ups
Mash ups describe the flawlessly combination of two or more different sources of content
and-or software for creating a new value added service to users. For example, based on
a project amongst Google Earth, Carnegie Mellon University, NASA, the Pennsylvania
Tourism Office and the National Civil War Museum, virtual tourists would have the
opportunity to view Pennsylvania`s Civil War trails online
 Wikis
Wikis are technologies that enable users to add, delete, and in general edit the content
of a website. In tourism wikitravel.org represents the effort of Internet users to
collaboratively create and continuously update an online global travel guide. Visitors’,
creators and content sizes at wikitravel.org are mushrooming.

According to BUHALIS, adapted the ICT is a driver for tourism industry:

 Cost: increasing efficiency; low distribution, communication, and labor costs; facilitation
of flexible pricing; minimization of the waste factor.
 Market: satisfying sophisticated demand; flexibility in time of operation; specialization
and differentiation support; providing last minute deals; accurate information (consumer
protection, comparison products, destinations etc.); support of the relationship
marketing strategies for frequent flyers/guests; quick reaction to demand fluctuations;
multiple/integrated products; yield management (marketing strategy for profit
maximization via overbooking, price differentiation, or choice of short/long terms
reservations); corporate intelligence; marketing research.
 Competition: enterprises networks management; value-added skill building; flexibility;
knowledge acquisition; strategic tool; barrier to entry.
 Government and regulatory: deregulation; liberalization; government supported.

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Figure.2
Source: Werthner and Klein (1999)
GDS: Global distribution system
CRS: Central reservation system
DMC: Destination Management Company
DMO: Destination Marketing Organization

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The overall structure of the industry has been transformed ever since Internet has been the
essential communication tool for the industry. Several new developments can be noted.
1. Direct selling to the customer has increased
2. Increase in new intermediaries such as Internet portals specialized in selling tourism
products.
3. Customers have access to the distribution channels traditionally used by tour operators
through internet.
4. Companies can regularly alter products and services based on the needs and
expectations of clients through regular interaction through Internet.
5. Increase in the transparency and the efficient relationship between customer and
management.
6. Change in the consumer behavior. Consumers are now asking better services. They are
more specific with regard to content and the details of the arrangement. They are more
cost conscious and often tend to make comparisons between two products.

Strategic potential for ICTs

Ives and Mason (1990) suggested that there were three ways in which ICTs could be used to
improve the customer service strategy of a business. These are:
 Personalized service. Central to this notion is the ability to identify repeat customers
and their particular characteristics and needs.
 Augmented service. This involves a differentiation strategy.
 Transformed products. More recently, Schlenker and Crocker (2003) have suggested
that ICTs can be used to help redesign and (therefore) improve business processes.
One of the reasons that small businesses have not taken advantage of Internet
technologies to a greater extent is that they are more comfortable with designing new
products or services than in changing existing business processes to develop new ways
to produce existing products.

Ahituv and Neumann (1990) have identified three factors that influence the likelihood of
strategic IT potential in an organization:
 The presence of significant information content in key relationships between buyers and
sellers. IT (and communications technology) is obviously suited to the transfer of such
information. It can provide benefits in the areas of cost, speed of data transfer and
improvements in data entry errors.
 The presence of competitive pressures in the industry (such as deregulation, IT
innovation, or competition intensity). This forces industry participants to find ways of
gaining competitive advantage by closely examining the potential of IT as a part of their
constant investigations of all parts of their business to try to gain an edge on
competitors.
 Limited product or service life (such as unsold airline seats or vacant hotel rooms). The
importance of having effective and flexible systems to manage these effectively cannot
be overstated, generally offering the organizations the opportunity to package the price
of their products and/or services to be lower during off peak periods to maximize sales.

Customer resource life cycle

Ives and Learmonth (1987) suggest that ICTs can be used to improve customer service by
targeting the customer resource life cycle (CRLC), where ICTs can be used to target different
aspects of customer service:

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  Phase One: Requirements. This is where a customer recognizes a need for a resource
and begins to specify what is required. ICTs can help by helping to specify these
requirements.
 Phase Two: Acquisition. This involves activities such as sourcing, ordering, paying for
and receiving delivery of the resources. ICTs can assist in a number of these activities.
 Phase Three: Stewardship. This is where ICTs are used to help the customer use the
resource, or to help with after-purchase problems.
 Phase Four: Retirement. This is where ICTs can assist in accounting for the use of the
resources (especially in rapid and accurate charging for services rendered) or even help
to dispose of them where they are no longer needed.
These days it is more difficult to sustain competitive advantage solely on the value offered by
products or services. Businesses are starting to integrate information and other services into
their product offerings and ICTs can be employed to help to do this

Virtual Incoming Agency

(Schlenker and Crocker 2003).

The virtual incoming agency model (Figure.4)

Source: C.Petti and G. Passiante

As it can be seen from figure there are three main categories of actors involved in the virtual
incoming agency:

1. Tourists, including same-day visitors, but also residents interested in organizing their free
time in the surroundings.

2. Enterprises, mainly all the local providers of tourism and tourism-related services, such as
hoteliers, restaurant owners, entertainment service providers, travel agencies, local transports
and other complementary services providers within the destination. Also intermediaries and
transport providers (such as airlines, rent-a-car or cruises) that are usually outside the
destination region can be targeted by some of the virtual incoming agency services, for example
the creation of personalized packages to be sold to their customers or the provisioning of local
reliable tourism information for their catalogues and brochures.

3. Institutions, in particular local and regional tourism authorities. For their functions in the
coordination and promotion of local tourism offerings these actors are the main beneficiaries of
virtual incoming agency services. Institutions include also other local and regional authorities
concerned with tourism activities (for example regional investment boards or

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 Table 1. Functions of the Virtual Incoming Agency
Functions Activities
Aggregation & integration of information/data Research, acquisition, organization
and management of information on
tourism attractions and services;

Collection of statistical data on tourism

demand and supply;

Management of access and accounts

of tourism (-related) service providers;
realization of electronic catalogues.

Tourism planning & development Market research and intelligence,

which include the analysis of demand,
supply and tourism market trends, as
well as the impacts of tourism activities
on the destinations and the monitoring
of the tourism system as a whole;

Tourism marketing planning, which

include the formulation, implementation
and control of integrated marketing
plans for the destination;

Support to local tourism businesses,

which include the accompaniment in
finding and servicing target markets,
the improvement of the quality of the
offerings as well as processes
employed through benchmarking,
consulting and training services.

Promotion & marketing Coordination of the activities aimed at

the creation and management of
destination notoriety and image;

Management of branding and

marketing mix;

Creation of packages, co-marketing

programs;

In general, all the activities directed to

attract tourism flows (new and/or
repeated) within the destinations such
advertising, participation to exhibitions,
organization of educational tours and
so on.

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 Servicing & sales Delivery of services in order to allow
tourist to plan, book and enjoy their
vacation at the destination;

Facilitation of selling activities of local

tourism service providers (for example
in providing and managing an e-
booking engine),

Management of relationship with

customers (or the support to local firms
in doing so effectively).

Different technologies used in ICT

ICT is an umbrella term that includes all technologies for the manipulation and communication
of information (Wikipedia 2009). One early attempt to examine the extent and implications of
tourism ICT was developed by Tremblay (2000) who developed a fourfold typology shown in
Figure.

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 A map of tourism ICT technologies (Figure.5)
Source: Tremblay and Sheldon (Tremblay and Sheldon 2000, p. 349)

In addition to a wide range of ICTs currently available there are numerous indications that ICT is
continuing to evolve rapidly. For example Buhalis and Law (2008) provides a summary of more
recent developments including interoperability and ontology, multimedia, mobile and wireless
technologies, web design in both functionality and usability and proposes the future
development of ambient intelligence.

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 The e-adoption ladder (Figure.6)
Source: (Buhalis and Deimezi 2004)

Few other industries depend on partnerships as much as tourism. ICTs empower networking
throughout the industry and also improve the interactivity between tourism production and
distribution partners, supporting a closer cooperation towards the provision of wide ranging
products. The creation and delivery of tourism products is based on partnerships between a
range of organizations, including: transportation, accommodation, catering, entertainment and
cultural heritage. Taking advantage of the characteristics of virtual reality, organizations will
force firms to adapt their product constantly to satisfy tourism demand; use information
extensively; develop partnerships; and outsource a significant amount of functions in order to
achieve economies of scope (Hale and Whitlam 1997). Virtual organizations will allow tourism
firms to develop extended products and services, produced independently and instantaneously,
in response to customer demand. Informational networks can link up and bring together the core
competence of independent firms breaking traditional organizational boundaries. Trusted
partners can offer flexible and speedy value added products and services, through accessing
world-class competencies, exploiting fast changing opportunities by sharing costs, skills, and by
accessing global markets. These corporations do not necessarily need to be located near the
consumer, as ICT networks and tools empower corporations to develop a virtual proximity to
consumers and their needs ( D. Buhalis and P. O’Connor, 2005).

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 Interconnectivity in Tourism (Figure.7)
SOURCE: I.C.T. and Tourism: D. Buhalis and P. O’Connor (2005)

Conclusion: ICT is providing new tools for tourism marketing and management. It supports the
interactivity between tourism enterprises and consumers and as a result they re-engineer the
entire process of developing, managing and marketing tourism products and destinations.
However, there is a requirement of awareness of marketers working in the tourism sector of
electronic evolution. The speed of development of new distribution channels and the lack of
ample source of information about the features of these systems means that the tourism
industry is currently in a reactive rather than a proactive position.

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