Demand-driven eTourism

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Chapter 6

• Demand-driven eTourism

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Chapter Objective

• The trends toward eTourism
• The reasons that motivate people purchasing
  tourism online
• The reasons that discourage people from
  purchasing tourism online
• ICT revolution and tourist satisfaction

3
Introduction

• Increasingly customers are become much more
  sophisticated and discerning, as a result of
  experiencing high levels of service and also
  because of standard of living has improved
  considerably, and thus they enjoy advanced
  facilities in their everyday environment.

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• Tourists become demanding requesting high-quality
  products and value for their money and perhaps
  more importantly, value for time for the entire
  range of their dealings with organizations.

5
Leisure vs Business Travel demand and the
internet implications

• Inevitably, frequent business travelers are more
  familiar with travel arrangements and often have
  considerable expertise as regards destinations or
  particular products.
• Business trips are often classified into
  Meetings, Incentives, Conferences and Exhibitions
  (MICE) categories.

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• It is increasingly evident that business
  travellers use the Internet independently to book
  their tickets and often to make more complicated
  travel arrangements.
• They often compare prices and offers available
  on-line versus arrangements proposed by Company.
• In contrast leisure traveling has been much
  slower to take off on the Internet than many
  industry analysts had anticipated.

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The Internet has not yet been explored fully by
the leisure market to a particular level, these
reasons include

• People that take package holidays often belong to
  lower economic classes and are less familiar with
  computers and have a lower Internet penetration
• The complexity of family holidays create
  conditions difficult to program and model
• Commercial interests of tour operators
• Fairly high degree of substitution between
  destinations and products

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• Higher price elasticity of package holidays
• Integrated nature of distribution channel
  facilitating direct sales
• Low profit margins do not allow great investment
  in ICTs
• Legacy systems used by tour operators.

9
Quantitative growth of tourism demand and online
population

• The WTO Tourism 2020 Vision forecasts that
  international tourism arrival are expected to
  reach over 1.6 billion by the year 2020.

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Online population and online tourism demand

• The Computer Industry Almanac estimates that
  nearly 625 million people or 6.7 per cent of the
  global population had Internet access worldwide
  in June 2001.

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Motivators for using the Internet for travel

• The richness and depth information
• Ease in identifying information
• Self-service and economical
• Available at all times
• Products are offered at discounted prices as
  suppliers pass distribution saving on to
  consumers.

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Motivation factors for Europeans to purchase more
products online
Better price Better security for credit card and personal information Easier comparison with shops Ability to get answers from merchant Better information about products Greater trust in particular online merchants Internet stores use local language Ability of loyalty rewards Easier to order Greater familiarity with the Internet and online purchasing 64 56 49 48 48 38 38 37 36 17
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Demand for tourism online and eCommerce

• Increasingly consumers become familiar with ICTs
  and expect that tourism suppliers will have
  interactive interfaces online to support
  purchasing and discussion about specific
  requirements.
• The Travel Industry Association of America has
  predicted that travel and tourism will be one of
  the most popular products for online purchasing
  in the emerging electronic marketplace.

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Reasons that discourage people from purchasing
tourism online

• User/client factors
• Plans were not definite
• Safety and security of credit cards on network
• Cannot see or touch the product
• No trust, unfamiliar name
• Prefer regular travel agency
• Afraid of making mistakes

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• Did not realize that they could make reservations
• Would rather talk to a real person
• Concerned about privacy of information
• Someone else made the reservations
• Dont own a credit card

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Reasons that discourage people from purchasing
tourism online

• Internet/business factors
• Takes too long to enter information
• Navigation difficulty
• Use corporate travel agency
• Cant get confirmation
• Internet chaotic and difficulty in finding
  suitable information
• Not enough selection available

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• Internet doesnt give lowest prices/deals
• Didnt need to book anything
• Internet too slow and takes a long time to find
  suitable products
• Too confusing/complicated
• Internet doesnt give up-to-date information

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Qualitative growth of tourism demand

• Tourism demand is undergoing a great
  transformation and qualitative trends are
  applying more pressure on the industry to use
  ICTs.
• Tourists become sophisticated and more demanding,
  requesting high-quality products.

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• The Internet has enable the new type of tourist
  to become more knowledgeable and to seek
  exceptional value for money and time. New
  consumers are more culturally and environmentally
  aware and they often like a greater involvement
  with the local society.

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• The Internet not only provides information about
  the tourism products they can consume but also a
  whole range of additional data about the
  resources, history and social and economic
  structure of destinations.

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ICT revolution and tourist satisfaction

• Customer satisfaction for travellers as a result
  of ICT tools
• Reduction of the gap between expectations and
  perceived experience due to more information and
  virtual experience before consumption
• Consumers have more information and enjoy greater
  choice

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• Better understanding of consumer needs based on
  research, interaction and data mining
• Consumers feel empowered to get information on
  products and services of Internet
• Pricing becomes more flexible as organizations
  are willing to provide great discounts for
  last-minute, target offers and special promotions
• New business models enable consumers to name the
  price they are willing to pay

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• New value-added services
• A reduction of the bureaucracy and paper-work
  frees employee time for better customer service
• Automation of boring operational tasks through
  ICTs
• Personalize services
• Better integration of departments and functions
  of organizations towards better service
• User-friendly and customize interface

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• Language barriers increasingly reduced through
  development of interfaces to serve all target
  markets and also through automatic translation
• Differentiated and customized services, according
  to personal lifestyle, preferences and attitudes,
  rather than socio-demographic segmentation
• Customization of the product and the establishing
  of one-to-one marketing by using intelligence by
  loyalty schemes
• Accurate and much richer marketing research by
  collecting data from all transactions and
  enquiries