Chapter 4��Demand-driven eTourism�

• Explore the growth of online population
• Demonstrate how that has influenced tourism demand
• Demonstrate different types of tourism demand
• Explore how ICTs satisfy the needs of consumers
• Examine the online population and the characteristics of the online markets
• Identify the factors that would encourage more online bookings
• Discuss the relationship between ICT utilisation and customer satisfaction

SESSION OBJECTIVES

• ICTs in the tourism industry are driven by the development of both size & complexity of tourism demand
• The volume & the quality requirements of contemporary travellers require powerful ICTs for the administration of the expanding traffic
• Quantitative growth & qualitative trends of tourism demand force industry members to adopt ICTs
• ICTs facilitate the expansion of the industry & the enlargement of the market
• The growing volume of demand require advanced ICTs for the management of tourism organisations

INTRODUCTION

• Business travel represents the highest proportion of online travel bookings
• Business travel is a more lucrative market than the leisure market
• B2B transactions grow at a faster rate than other sectors on the Internet
• Leisure travel is much slower in taking off on the internet
• Package holiday dominates the leisure activity
• People that take package holidays often belong to lower economic classes
• They are less familiar with computers and have a lower internet penetration

Leisure vs Business travel demand

& the Internet implications

• The complexity of family holidays makes them difficult to program and model
• Commercial interests of tour operators prevent transparency
• Fairly high degree of substitution between destinations and products
• High price elasticity of package holidays
• Integrated nature of distribution channel facilitating directions sales
• Low profit margins do not allow great investment in ICTs
• Legacy systems and videotex dominate tour operators

Package holidays difficult to sell on line

Quantitative growth of tourism demand & on-line population

625 millions wired customers �worldwide in 2001

Source:Based on Nua.ie

Wired customers 6.7%of population in 2001

Source: Based on Nua.ie

Motivation factors for Europeans to purchase more products online

Demand for tourism online & eCommerce

• The Internet enables travellers to:

- access reliable & accurate information

- to undertake reservations

• Most internet users are:

- well educated professionals

- travel frequently

- have a high disposable income

- have a higher propensity to spend on tourism products

• TIA predicts that travel & tourism will be one of the most popular products for online purchasing
• Airline tickets are expected to be the leading travel purchase on the internet by 2002
• Hotels & car rentals are expected to grow to $2.2bn by end 2002
• Internet use in the USA and travel are highly related

Usage of the Internet for travel planning

Travel products booked online

Barriers & catalysts for

on-line consumers & travellers

• Cost of access

- fee to access the Internet Service Provider (ISP)

- call to access the ISP which is charged at local rate

• 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 a mistakes
• Did not realise that could make reservations
• Would rather talk to a live person
• Do not own a credit card
• Concerned about privacy of information

• Takes too long to find information
• Navigation difficulty
• Can’t get instant confirmation
• Internet chaotic and difficulty in finding suitable information
• Not enough selection available
• Internet doesn’t give lowest prices/deals
• Didn’t need to book anything
• Internet too slow and takes a lot of time to find suitable products
• Too confusing/complicated
• Internet doesn’t give up-to-date information

Reasons quoted for Internet deficiency

Qualitative growth of tourism demand

• Tourists are becoming more sophisticated & demanding, requesting high quality products
• The ‘new’ tourist is more knowledgeable
• They seek exceptional value for time & money
• Travellers can network and exchange experiences
• New consumers are more culturally and environmentally aware
• Internet provides additional data about the resources, history, social & economic structure of destinations

ICTs can assist serving tourism demand

• Leisure time increasingly used for ‘edu-tainment’
• Multi-interest travel will replace the traditional family holiday on the Med
• Moving from a passive attitude to a much higher involvement
• Individualised product offered
• Transformation from the ‘5Ss’ model into the 5 modern ones : sophisticated, specialization, segmentation, satisfaction, seduction
• Customer needs should be identified efficiently
• Improve the service quality & contributes to higher guest/traveller satisfaction

Tourism demand trends: �dynamic developments

Tourism demand transformation

The ICT revolution contributes to tourist satisfaction

• Empower experienced travellers
• Allows tourism organisations to develop & deliver complex offerings
• Critical for the demand growth experienced in tourism
• protect & enhance the tourism experience
• Customer satisfaction depends on accuracy & comprehensiveness of information
• Ability to undertake reservations
• products can be differentiated to suit individual tastes
• can also reduce customer satisfaction if ICTs do not function properly
• Internet representation affects customer satisfaction

The ICT revolution & tourist satisfaction

• To survive in the long term, tourist organisations & destinations need to appreciate the needs of their customers and :

- take advantage of the new ICT tools

- research the requirements of their target markets

- ensure the accuracy and currency of their online

information

- coordinate online and off-line branding

- Manage pricing across the channel with all partners

- develop appropriate solutions on-line

- enhance their interactivity with the marketplace

- be proactive and reactive