Posted: April 17th, 2015

“Internet usage now shapes the context for most holiday planning and booking.” Discuss the implications of this statement for the tourist industry.

Tourism assignment

 

2) “Internet usage now shapes the context for most holiday planning and booking.” (Mintel, Holiday Booking Process, November 2013).
Discuss the implications of this statement for the tourist industry. 

 

Developments in Information and Communication Technology (ICTs) in the late 1990s have undoubtedly changed structure of the tourism industry as well as have transformed the best operational and strategic practices in the industry dramatically. The energetic growth of the ICTs in recent times has made E-tourism significantly universal which reflects the digitalization of all processes and value chains in the tourism, travel, hospitality and catering industries (So good point). The e-tourism concept includes all business functions such as e-strategy, e-planning, e-booking and e-management for all sectors of the tourism industry, including travel, leisure, hospitality, intermediaries and public sector organizations.

 

At the tactical level, e-tourism includes e-commerce and applies ICTs for maximizing the efficiency and effectiveness of the tourism organization, while 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. From the recent years, Internet usage started to shape the context for most holiday planning and booking, meaning that advancement of ICTs empower the customers to identify, customize and purchase tourism products, but they also support the globalization of the industry by providing effective tools for suppliers to develop, manage and distribute their offering worldwide (Longhi, 2008). The introduction of ICTs in the tourism industry have an enormous impacts on the conducts of tourism activities, where the essay tries to access such impacts of internet in the organization and market dynamics in the leisure activities.

 

(In the introduction try to write more about the implication about the traditional booking, this means about the impact of Internet on travel agencies.)

 

 

 

Discussion

 

Adoption of the concept of Internet usage into the management of tourism industry would be appropriate considering the lack of efficiency and effectiveness of tourism industry, the way that business conducted in the market place, as well as how consumers interact with organization (Chen, 2006). In retrospect, most managers have been using the same technique over the years, due to lack of innovation in application of network development, as well as ineffective knowledge of both managers and operating staff. In this sense, Law and Jogaratnam (2005) advocated that internet became part of the strategic planning process of a business when managers make full use of it, means that when internet used to reengineer all business functions and processes towards supporting the organization on its entirety rather than automating. Although ICT developments have direct impacts on the competitiveness of enterprises, uncertainty about the reliability of the many new dot.com companies ensure that support for more traditional means of booking and planing will continue. However, gradually it is becoming evident that many travel agencies and tour operators still do not include the use of ICT to its industry operation. As a result, traditional agencies lack access to the variety of information and reservation facilities readily available to consumers and therefore their credibility in the marketplace is severely reduced. This commonly jeopardize their ability to maintain their competitiveness, and leads to threatened by disintermediation.

 

The application of ICTs, specifically Internet usage have enormous impacts on tourism industry which has revolutionized the sectoral system of production and innovation. The advancement of Internet provides a great deal of information directly accessible at low cost on prices, products and gain opportunities, where the efficiency of information has been increased by the multiplication of infomediaries offering easier access to the information. A simple assessment of the effects of the uses of the Internet lead to the reduction of information asymmetries on market and to the emergency of market of pure and perfect competition (Perfect point, well-done). According to the O’Connor (2005), proactive incorporation of Internet into tourism practitioners efforts improves the service quality, as Internet enable organizations to dynamically differentiate and specialize their product and service. This has tremendous impact on the market, which leads to the market segment of one, where consumers can build their tourism experience by bundling their products dynamically (Good, give reference).

 

 

 

 

The emergence of the Internet affected all Five Forces of Porter’s model which is a framework to analyze level of competition within an industry and business strategy development, as it changed the conditions of competition in the marketplace. The Internet is changing the industry structure by altering barriers to entry, minimizing switching costs, revolutionizing distribution channels, facilitating price transparency and competition, while enhancing production efficiency (Kim, Nam, & Stimpert, 2004) (good point, you can use five forces of Porter’s as framework for your whole essay, if you want). Rivalry among existing competitors was also revolutionized, as technology and the Internet affected differentiation and cost structures as well as switching costs. The Internet had a major impact on entry barriers as it altered market scope, economies of scale and the amount of capital required for competing. According to the Porter (2001), the accelerating and synergistic interaction between Internet and tourism in recent times has brought fundamental changes to the industry forces. This means that Internet has enhanced the bargaining power of suppliers as it enabled them to monitor competitors and offer tailored and differentiated products, in other words Internet provided alternative procurement opportunities. As a result, suppliers of travel products enhanced their position within the industry due to the increased possibility of interconnectivity and interactivity with consumers and partners. (Good point!) Perhaps marketing and distribution are the most affected functions from the technological revolution, specifically due to power of internet (O’Connor & Frew, 2002). This means that the advancement of ICT supported organization to develop their knowledge base to improve their management and marketing functions. For example, the use of Web and Internet as marketing tool brought some distinct effects in cost reduction, revenue growth, marketing research, database development and costumer retention (Morrison, Taylor, et all, 1999). The development of Internet has brought some opportunities into the industry such as the web enabled business to be able to distribute their products not only through direct distribution but also through a very wide range of channels. In this notion, third party intermediaries included online travel agencies as well as meta search engines, all distribute both static and dynamic information such as availability and pricing and increasingly challenge traditional distributors. For example, Expedia and Lastminute.com are now challenging the business model of Thomson Cook, forcing them to rethink their operation and strategies. In addition, Web 2.0 or Travel 2.0 providers such as Tripadvisor.com also enable consumers to interact and to offer peer to peer advice, where these changes force all tourism players to rethink their business model and to take drastic actions in re-developing their value chains. (Ok!, but expand it a bit more, and give reference)

 

Implications of the Internet are evident in the distribution of products and services, while revolutionary methods of interactivity between producers and consumers are initiated. Information, speed and interactivity become part of the core product for all enterprises worldwide and their competitiveness will be assessed according to their ability to out-perform both traditional competitors and newcomers. The internet enables business to deliver real-time information to the point of customer contact without any regard for geographical boundaries. This frequently reduces the buying cycle and improves the time-to-market of new products need constantly to follow the major trends in the new environment and assess how they can benefit from the new opportunities emerging (Turban, et al.,, 2002).

 

The electronic-business revolution gathers momentum everyday and transforms communication, collaboration and commerce. E-business replaces some of the offline business transactions, but more importantly it enhances the total transaction volume as both organization and consumers take advantage of the new tools to purchase products and services that many were unable to purchase before.

 

The emerging of ICT developments have direct impact on the competitiveness of enterprises and market share. For example, innovative organizations throughout the industry, such as easyJet, Marriott Hotels have strengthened their competitiveness, increased their market share and enhanced their position by driving their sector towards a higher level of ICT utilization (ok, but give reference).

 

ICTs also become instrumental to cost management in the industry and particularly for the distribution and promotion cost (Connolly, Olsen, & Moore, 1998). This means that redesigning processes and eliminating repetitive task reduced labout costs and increased efficiency. This has empowered the development of no-frills organizations that use technology heavily for operations and distributions and at the same time it has pt incredible pressure on traditional organizations to re-engineer their operations. On several occasions this has led to outsourcing functions and process to external organizations.

 

From a costumer perspective, the Internet affected the bargaining power of buyers. Buyers gained bargaining power as they now have instant access to information, understand market offers and conditions better and are constantly exposed to special offers. They have more choice and are able to make direct comparisons that are rising from their expectations and demands.

 

Conclusion

 

The rapid development of the internet in the late 1990s revolutionized the tourism industry in general. The sheer growth of e-commerce and costumer acceptance means that companies which do not embrace this new way of doing business would be left out in the cold. A number of organizations understand the impact of Internet on business function, where they all can witness that ICTs evolve rapidly providing new tools for tourism marketing and management. In a broad sense, the advancement of Internet support 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. Increasingly, the impacts of ICTs are becoming clearer, as networking, dynamic interfaces with consumers and partners and the ability to re-develop the tourism product proactively and reactively are critical for the competitiveness of tourism organizations. (Good conclusion, but also try to mention the impact of Internet on travel agency overall)

 

 

The comment for whole essay

Overall, the essay is in good quality, but it is not first class, you wrote a little bit general, try to write specifically by bringing particular examples. Use (Mintel, Holiday Booking Process, November 2013). Also concentrate on the essay question and make sure that you fully answer it. If you improve it you will have chance to take first class from this work.