Anatolia

An International Journal of Tourism and Hospitality Research

ISSN: 1303-2917 (Print) 2156-6909 (Online) Journal homepage: http://www.tandfonline.com/loi/rana20

Developments in Information Technology:

Implications for the Tourism Industry and Tourism
Marketing
MICHAEL RIMMINGTON & METN KOZAK
To cite this article: MICHAEL RIMMINGTON & METN KOZAK (1997) Developments in
Information Technology: Implications for the Tourism Industry and Tourism Marketing,
Anatolia, 8:3, 59-80, DOI: 10.1080/13032917.1997.9687121
To link to this article: http://dx.doi.org/10.1080/13032917.1997.9687121

Published online: 01 Aug 2011.

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Andtolid: An InternationalJournal of Tourism and Hospitality Research

Volume 8. Number 3, pp. 5980. 1997
Copyrlghr 0 1997 amtoila
hlnted in Turkcy. All rights rescrved
1300-4220/97 $20.00 + 0.00

Developments in Information Technology:

Implications for the Tourism Industry and
Tourism Marketing
~ nKOZAK
i ~

MICHAEL RIMNUNGTON

Lclwre Industries Research Center

SheWld Hdlarn University. Unit 1.
Shefield Science Park
S1 1 WB SheHleld. UK
E-mail: M.Kozak%hu.ac.uk

Hospitality Research and Devclopment

School of Lelsureand Food Management
SheffieldHalbm University
S1 1WB Shemeld. UK

E-mail:M.Rimmingto~huacuk

ABSTRACT
The purpose of this paper is to examine the present and potential impact of Information Technology (lT)on the tourism industry and tourism marketing.
Rcccnt developn~entsindicate that some of the services provided by travel
agencies, accomn~odationestablishments and leisure companies will increasingly be undertaken personally by customers using IT. The paper considers current IT applications and likely future developments. It is proposed
that tourism companies will need to establish appropriate inarketing strategies
which take account of these developmei~tsand the uncertain impact of consequent industry restructuring.

Keywords: Inforination tecl~nology,computer, central reservation systems,

Internet, virtual reality, marketing, distribution channels

Michael Rimmington is manager, Hospitality Research and Development in the School of Leisure and Food Managementat Sheffield Hallam University, UK. His MS was gained at Durham
University Business School in 1972. His career has involved management positions in industry
as well as various academic posts including Visiting Lecturer positions at Cornell/Essec (Paris)
and Virginia Polytechnic Institute and State University. His research interests encompass hospitality productivity (includingcustomer satisfaction)and entrepreneurship.
Metin Kouk has a Bachelor's degree in tl~efield of Tourism and Hotel Management from Cukurova University and a MA degrcr from Dokw Eylul University, both in Turkey. He is a research assistant at Mugla University, Turkey and is also currently pursuing his P11.D. at Sheffield Hallm University, UK. His research interests focus on destination management and
customer satisfaction.
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Developments in Information Tedmnology: Implications for the Tourism Industry and Tourism Marketing
TURKISH SUMMARY

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BILCI TEKNOLOJ~SINDAK~
G E L ~ $ M E L E R ~NNR ~ Z M ENDL~STRIS~ VE T U R ~ Z M
PAZARLAMASI ACISINDAN SONUCLARI
Hizla geligen teknoloji, 2000'li ylllarin bilgi qngr olacajji konusundaki varsaylmlan daha da gutlendirmektedir. 1990'11 yillarin baginda Interiiet'in de yogun bir gekilde kullanima aq~lmasiile
birlikte bilgi teknolojisi, sanayiden hizmet sektorune degin bir qok alanda onenlini liissettirmeye
baglamigtir. I-Ikmet sektoriinun bir alt dalt olarak kabul goren turizm ve seyahat endustrisi,
1970'li pllardan baglayarak gunumiize degin kullaiidigi ve teknolojisinjli hir parqasr konumundaki merkezirezzrvasyon sistemleruii (CSs)gu arida birkenara buakaraklnternet ve sanal
gerqekler gibi yeni uygulamalardan yararlanma qabasina girmi~tir.I4iq kugkusuz, bu qabalar turizm ve seyahat endustrisinin temel yaplsinda bazi dejjigiklideri de beraberinde getirecek niteliktedir.

Bu callsmanln
amaa, t u r i m ve seyahat endustrisinin bilgi teknoloiisindcCi son geli~melerden
*
.
giiniimiizde nasd yararlandiklan konusunda gene1 bir de&rlcndin;le yapxak, siiz konusu geli~melerinturizm endustrisi ve turizm pazarlamas~iizerinde gelt~ekteortaya qkaracagi olasl etkileri iizerinde durmaktu. Bu kapsanida 6ncelikle merkezi ~ezervasyonsktemleri, lnteniet ve
s a n d gergekler gibi bilgi teknolojisi uygularnalari haklunda bilgi verilmekte, diinyadaki buyuk
turizm i$etmelerinin bilgi teknolojisjlii, iizellikle Internet'i, kendi biinyelerh~denasil kullandiklarl konusunda b a n orneklere yer verilmekte, geli~enbilgi teknolojisinin turizm pazarlamasi stratejileri konusundaki sonuqlan dikkate ahnmakta; vesoz konusu uygulamalann turizm rndiistrisinin yapisi uzerindeki etkileri tart~gtlmaktadu.Caligrnanln sonuq k~smmdaise,
turkni eticiiistrisinde faaliyet gvsterm ilgili i g l e t m e l e ~hilgi
~ teknolojisindeki geligmelerjli g e
Icwcktc.ortavaqlkaracag~olumlu v e o l u m s u ~ctkilcrin yani sua,olaJ: belirsizlikleri de gijz oniinde
bulundurul~nalar~
Bnerilmekte ve yapllan ,irdgtrnnai;irln ciaha iuk tcori aglrhkl~olmalari n e
dcnivlc bu konuda ampirikaragtumalara daha fnzla yer verilmmi geregi vurgulanmaktad~r.
CaIi~;man~n
liazulanmasi ayarnasuida bilgi teknolojisinin turizm aray tumalanna sagladig1 k e
layhkldrda~~
(inemliolgude faydalandml$u. Intcniet ortamindd yapildii araghrmalar sonucunda,
ozellikle hiiviik olqckli turizm ve seyahat igletmelerinin soti uygulamalar~ilc ilgili olarak onemli
iilgidc. s6zc.I ve saylsal veriye ulagdm~gtir.Elde cdilen soz konusu veriler ve yapdan gozlemler,
ijzelliklc Internet'in otelcilik, havayolu tagimacdigi, tur operatBrluAu ve turbm bolgeleri (clestinasyon) konusunda tiiketicilerebilgi vcrmedcijnemli ol@dei~levesahipoldugunu ortaya koymaktndir. Daha da Bnemlisi, b a z ~igletmeler biribiri ile i~hirligiyaparak birqok liizmeti Internet
araclltjjr ile tiiketidlere u l a ~ t ~ r m a ba$lam~glard~r.
ya

INTRODUCTION
Applicahon of Information Technology (IT) within the tourism industry has
already brought about considerable gains in both efficiency and cffectiveness.
For example, hotel guests can view their account at any time during thcir stay
and hotel check outs can bc accurately complctcd more quickly, by fewer staff,
even without the gucsts' presence. In the airline industry, IT is used for schedule displays, flight planning, departure control, catering, crew management
and cargo control. Such operational applications have brought higher pro' "\/itv morP rontrol and, as a result, increased service quality and customer
S' t T , i a ~ t iIL'VI
o ~ ib.
~ * 2 i ~ , \ ~VS,
~ tl
T. dlso plays an increasingly important role in
tourism marketing, u i s t n b u ~pro111otio11
~ ~ ~ ~ , and ~o-ordl:,.t~io~i
(Buh~lis1 9 6 ) .
The tourisn~and travel industry is considered to be o w ~f t11c largest users of
I?' due to thc nature of travel industry inforn~ation(Shdldon 1994) Hotel, alr!

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line and car rental con~panieshave linked their reservation systems to create
broader distribution channels and better access for travel agencies.
According to the findings of the Secotld Erlviroirrr~e~rtal
Scati~liirgSurvey conducted by the International Hotel Association (IHA) in 1994, technology was
ranked as the most crucial factor affecting the marketing aspect of the hotel industry (I). The American Society of Travel Agents (ASTA) 1995 Automafio~z
Siirvey reported that 53% of agents already book ticketless travel for their customers. Twenty-one percent is currently on-line with Internet access. Ninetyone percent of airline and accommodation sales are also booked through one
of the computer reservation systems (2).
However, the trend towards application of new technology is not even.
Main (1995) found out that smaller hotels in the United Kingdom (U.K.)
with
less than 20 rooms were less likely than their counterparts with over 50 rooms
to use IT. Such smaller hotels had older managers and relatively unqualified
staff and used IT less than those where younger and well educated managers
were employed. In a different study, it was stated that 66% of small hotels had
not used IT (Mutch 1995a). Reasons mentioned were lack of resources and
computing experience. Similarly, large hotel companies reported that they had
significantly higher technology needs than small properties. They also perceived that IT plays an important role in improving the effectiveness of the
operations and increasing customer satisfaction (Hoof, Collins, Combrink and
Verbeeten 1995; Hoof, Verbeeten and Combrink 1996).
Findings of the Hospitality 2000 Research Study indicated that hotels of the
future would increase profits by focusing on new products and services rather
than traditional room sales. Ninety percent of respondents evaluated techtool to deliver a supply of new products and services
nology as an itnporta~~t
and 88% agreed that it would enable businesses to improve the delivery of
products and services (3). It is interesting to note that 87% nevertheless still
considered human beings as the key to delivering a high level of service quality.
Findings of the same survey also indicated that hotel operators expected to
refurbish their rooms to host business travellers, who will increasingly travel
with a mobile office includinga computer. Eighty-threepercent of respondents
stated that business travellers were more likely to prefer brand name accommodation. Business travellers may want to stay in a hotel that meets both
their technology and their service needs. For example, when the Marriott hotel
chain discovered that business travellers were likely to attach higher priority to
easy-access to telephone sockets for their modems, it made a multi-million
dollar investment in room refurbishment (Beckett 1996).
This paper reviews major current and future IT applications within the
tourism industry. It proposes that the nature and extent of these applications is
such that there will be very considerable impact, both on the structure of the
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Dwelopments in Information Technology: Impllcatlons for the Tourism lndustiy and Tourism Marketing

tourism industry and on the marketing strategiesbeing employed by the major

players within it.
Cho and Connolly (1996) suggest that the role and impact of IT must carefully be considered when planning and implementing new IT systems. The
aims of this paper are to review major IT applications such as central reservation systems, Internet and virtual reality; to discuss how leading companies in
the tourism industry a11 over the world are using IT, with particular reference
to the Internet; to consider implicationsfor marketing strategies and to conject
on the impact on the structure of the industry.

CENTRAL RESERVATIONSYSTEMS
Central Reservation Systems (CRSs), developed by airlines, exemphfy the
largest and most significant application of IT in the tourism and travel industry. There are currently four major CRSs in the United States:Sabre, Apollo,
Systemoneand Worldspan. In Europe, Amadeus and Galileo are the two CRSs
most commonly used, and Abacus is a well-known system in Asia (Go 1992;
Moon 1994; Sheldon 1994).
The primary objective of CRSs is to increase sales of hotel room-nights and
airline seats by ma king computer reservations easy and inexpensive (Summer
and Sellers 1996). CRSs are regarded as the most common indicator of a new
tourism marketing and distribution system. The rapid growth of both tourism
supply and demand in the last decades demonstrated that:
"...the taurism industy corild o d y be n~a~lnged
by powPrful conzputerized systems.
Airlines weretl~piotieersof tlris teclinologyaltl~ougltinter~latiolralllotel cluzitzsand tour
operators realized tlze potelltin1 arid followed by developing centralized reservntiorl systems." (Buhnlis1996: 35).

Buhalis examined the use of CRSs from both the tourism supply and demand
side. CRSs provide opportunities for customers to compare information about
different destinations, holiday packages, travel, lodging and leisure services.
Prices and availability of these services can be checked, enabling last minute
bookings. From the tourism supply side, CRSs enable tourism suppliers to
control, promoteand sell their products globally, increase their oocnlpancylload
factor leuels and reduce seasonality.
As a result of the rapid development of accommodation and akline booking
sites on the Internet, a number of customers have begun to bypass travel agents
and CRSs to book rooms and flights directly with hotels and airlines, via their
own personal computers (5). CRSs have provided the basis for the development of effective Internet delivery systems in the tourism and travel industry.
The Internet is being used to link to an improved generation of CRSs. Internet
Travel Network, a leading provider of on-line travel information via the Inter-

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net, has recently announced that it has become the first Internet travel service
to provide reservation services on all four main CRSs. It enables customers to
make reservatioiis 24 hours a day for flights, car rentals and hotel rooms directly through Apollo, Systemone,Sabre, and Worldspan (6). Moreover, Sabre
and Apollo are planning to launch their own web sites. Such evidenceindicates
that most first generation CRSs will be replaced by second generation Internet
enhanced CRS systems in the near future.

The Internet can be defined as a conputer netwdrk consisting of millions of

hosts from many organisations and countries around the world transporting
data across computers (Williams,Bascombe, Brenner and Green 1996).The Internet supports various functions such as the Worldwide Web (WWW), Electronic Mail (e-mail),Usenet, Gopher, Telnet, and File Transfer Protocol (FTP).
The Web is similar to a global library with millions of books, records and movies open all day, every day of the year.
Since the beginning of the 1 9 9 0 anyone
~~
who has a telephone link has been
able to gain access to the Internet, either at work or at home. Forty million
people are assumed to be directly connected to the Internet. The number is increasing by 100%every nine months and is expected to reach between 400and
800 million in tlie year 2000 when there will be over one million networks. The
travel industry currently has 20,000 web sites on the Internet, with 2,000 being
added each month (7). The value of total salesvia the Internet is estimatedto be
US$300 billion by the year 2000 Witchell 1995). Travel sales are expected to
reach U S 4 billion within the next three years, about US$1.5 billion of these in
the United States (8) (Alexander 1997). Travelweb alone processed US$1 million worth of hotel reservations via the Internet in November 1996 (9).

USING THE INTERNET FOR DIFFERENT PURPOSES

Using the Internet, there is no limitation of time, place and products. Someone
in any country is able to access the web page of any person or organisation either private or public in a different country, read the updated information and
news and see colour photographs.

As an educational tool, the Internet is increasingly becoming the choice of

students to communicate, learn and present their class assignments (Hams
1996). It is also possible to arrange teleconferencesvia the Internet and discuss
any topic with other contributors instead of arranging conferences and meetings in a specificlocation (Beckett 1996). As a research tool, the Internet can be
applied to the management of research and gathering relevant information
about industry. Williams et al. (1996) presented research findings obtained by
using Internet search instruments. They believe that the Internet will become
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Developments In lnformatlonTechnology: Implications for the Tourism Industry andTourlsm Marketing

a truly credible and effective tool for the tourism research community. For example, Murphy, Forrest and Vatring (1996)and Murphy, Forrest, Vatring and
Brymer (1996) have used web pages to carry out a survey. The Internet will
possibly become an effective way of gathering statistical data concerning
tourism supply and demand. It can also potentially remove some of the possible limitations which exist in tourism research studies by assisting the gathering of reliable data and enablingrespondentsin differentplaces to be reached
and communicated with directly.
This paper draws heavily on empiricalresearch of web sites to find evidence
of industry applications. As a marketing tool, the Internet is used either to enable people to become aware of goods and services and sell them or to interview customers. It offers good opportunity for marketing research by obtaining customer feedback at the beginning or end of the purchasing process.
Murphy, Forrest and Vatring (1996) discuss how restaurants can use the Internet for their marketing efforts and suggest that restaurants should produce
their own web pages. Berthorn, Pitt and Watson (1996)state that the Internet is
something of a mix between personal sellingand broadcast advertising:
"It can engage the visitor iri a dialogueand it can also bedesigned to generateawarems,
explain or demonstrate the product and provide information without interactive involvement. It can play a cost-efiective role in the communication mix in the early stages
of tlze process-need recognition, arid in the development of product spcifications and
supplier research. It can be useful as tlze buying process progresses t m r d evaluation
and selection. It can also be cost-efitive in providing fesdb~ckon prodz~ctor service
perfornlance" (Berthorn et al. 1996: 27).

The authors also describe the distinction between the Internet and other
media instruments as being the following:
Access opportunities are theoretically equal for everyone (later this paper
argues that some service providers using the Internet will become much
more powerful than others).
Share of voice is essentially uniform; nobody can drown out others.
The marketing communication cost structure is altered if the Internet is
used as an advertising medium.
WalIe (1996) produced the following table illustratingthe main differencesbetween telemarketing (telephone selling) and the Internet in terms of inboundoutbound strategies. As indicated in Table 1 below, telemarketing can take
place when customers contact the organisation or when the organisation contacts customers. The organisation has control over both the message and customers. The Internet encourages a new marketing approach involving customers' self control. Using the Internet, customers have the ability and

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Michael Rimmlngton- Metin Kozak

opportunity to complete all the salesand purchase process personally, without

getting help from a second person. Thus, customers need to choose well to
reach a satisfactory outcome. With telemarketing the organisation has direct
person to person contact with its customers.This applies whether the contact is
initiated by the customer or the organisation.Such direct contact can be viewed
either as a benefit or a limitation. A further difference is that, unless market research is built into the process, it is impossible to have a profile of people who
contact the Internet and to know whether the target market has been reached.
Additionally, people may be reluctant to make a reservation on the Internet
because of fears over the security of credit card purchases.
Table 1. Differencesbotwoen tdwnaketing and the lnternet
TY PE

ISSUES

TELEMARKETING

THE INTERNEI

Inbound

Dwiptian

(ustomars can be w v d

(ustomars can access informtion

themselves

Lin'Mms

Conlad people who call

Impmile tr have a profile of

pwpb who dlconlad the Internet

Advantages

Cohd over the message being

Access when it is convenient

and derted

doherod and people who wii

receiveit
Outbound

Dwipth

CaI d e r s of a cmtott IW
and d~businers
il

Contatt the organirofi via

h e Internetand negotiate the deal

liniir

Pwpb might not be at hams

and tinimg might be bad

Many peaple do not hove

access to the Internet because of
recurly of credit card purchaser

Adrantages

Speak with sammewhm

customushave qumtsrlm

Organbation m k o r money
by wring accwnting cmts

It reacher a numbw of psopk

whodo not have access to the
Internet

People d o use h e Intwnet

tend to be ideal tustrmors,
with dbcretionay income needed for
hard

*-

INTERNET MARKETING IN THE TOURISM INDUSTRY

Despite the uncertainty over use of the Internet, a survey of Internet users has
produced the following findings (10). The place of access to the Internet was
"home" (68.7 %), the purpose of the Internet was "to get information" (89.95
%), the gateway used was 'Travelwebff (71.5 %I, the service searched for was
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Developments in lnforrnatlonTechnology: Implications for the Tourism Industryand Tourism Marketing

"holidays" (69.5 %), the aspect of the service was "destinations" (36.69 %) and
the region mostly preferred to visit was "worldwide" (55.75 %). The annual
income of respondents was more than US$30,000 (50.84 %). These data were
gathered between January and June, 1996.
Evidence is given elsewhere in this paper that demand for Internet use in the
tourism industry is increasing. Moreover, businesses are using the system to
introduce new marketing strategies. Major airlines, travel agencies, food and
beverage facilities and hotel chains-such as Holiday Inn, Hilton Hotels, I'IT
Sheraton, Felcor Suite Hotels and Best Western International-have launched
their own home pages on the Internet offering information and reservation capability. Additionally, Hilton Hotels Corporation has completed an Internet
marketing and advertising agreement with Sabre Interactive to enable customers to access airline and car rental reservations (11). According to research
conducted in November 1996, the most accessed airline sites are American
Airlines, British Airways, and Air Canada. The most accessed hotel sites are
Hilton, Maniott, Holiday Inn, Intercontinental, and Hyatt Regency. The most
accessed car rental sites are Avis, Hertz, Eurodollar, Alamo, and Budget respectively (12). It seems that the impact ofbrand leadership extends to Internet
access; those seeking information will tend to access sites administered by the
brands they are aware of.
Figure 1below indicates that the most outstanding difference between traditional and Internet marketing is that the latter can be considered as an element of direct tourism marketing. Compared with traditional tourism marketing channels, the Internet is faster, less expensive and offers wider and
deeper material and richer advertisement contents (Ellsworth and Ellsworth
1995, cited in Morgan 1996).Inclusive tours produced by tour operators can be
directly offered to customers via the Internet and suppliers can play an active
role in the IT-based new direct tourism marketing process. It is not clear at this
moment whether retailers will be needed as sales agents in this new system and
how they will participate on the Internet as well. As Berthon~et al. (1996)conclude, marketing on the Internet will present the most exciting challenges and
opportunities facing marketing agencies in the late 1990s.
Travel agents are likely to become more specialised than they are today.
They will probably arrange specialist holidays such as safari tours or scuba
diving activities and offer a full range of services such as arranging for the
house, garden, pets, children, and mail to be taken care of while the traveller is
away (13). They may also assist the customer with decision making and the
reservation process through direct communication. If customers have a question while examining tourism products on television or on the Internet, the
customer will click on to the travel agent who can discuss queries directly.
Travel Ease in the U.S. arranges hunting and fishing and adventure tours such
as skiing, hiking, climbing, and mountain biking (14). L.A.S. Travel in the U.S.
offers routine and exotic tours such as honeymoons, cruises, safaris, as well as

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Traditional indirect tourism marketing where suppliers reach customers via tour operators or
p
travel agents 09 vice versa, this may involve first generation CRSs which can be accessed by
. a.
proved travel agents but not by the public.
Direct tourism marketing where suppliersand/or tour operators traditionallyreach customers
without using any retailers. Traditionallythis has been achieved by providing direct advertising
and promotion. Customers do not have access to CRSe.
New direct tourism marketing where suppliers and tour operators have the opportunity to
reach their customers directly on the Internet or vice versa. These are usually offered in tandem
through travel agents, for customers without IT capability.
lT-based new indirect tourism marketing where travel agents, as an information centre, would
like to be infonned about products and services of both suppliers and tour operators to assist
tustomers (if necessary, make reservations on behalf of customers who do not have their own
computers) and offer their own possible products and services to customers.
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Developments in InformationTechnology: implications for the Toudsm Industry and Tourism Marketing

diving, skiing and ballooning (15).Travel 88 in Australia specialises in organising honeymoon, scuba diving, and wildlife tours (16). Such initiatives demonstrate that retailers can retain an intermediary role when they guide clients
towards the no st appropriate supplier products from the plethora on offer.

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Schertler (1994) classifies the impact of IT on the industry using five points
produced by Porter (1980) to detennine the strength of competitive forces and
impact on industry profitability:
competition among existing businesses (new distribution channels)
l threat of new entrants (new distribution channels, new competitors)
l bargaining power of customers (access to prices, highly experienced customers)
l bargaining power of suppliers (direct selling)
l threat of substitute products and services (virtual reality, new distribution
systems)
are attempting to secure competitive advantage by adopting
Many busi~~esses
both direct and/or indirect tourism marketing methods in order to reach customers. Direct tourism marketing strategies, utilising electronic information
and reservation systems via the Internet, include the provision of information
about products, services, events and destinations, and the opportunity to purchase and sell travel, accommodation, leisure services and events. Different
organisations in the industry have recently produced their own web sites as
pioneers of such services. For example, Pegasuc ~ystems,owned by 16 of the
world's hotel and travel companies (Anasazi rnc., Best Western International,
Choice Hotel Inten~ational,Forte Hotels, "riilton Hotels Corporation, Hospitality Franchise Systems Inc., Hyatt Hotels Corporation, InterContinental
Hotels, ITT Sheraton Corporation, La Quinta Inns Inc., Marriott Hotels Corp.,
Promus Hotel Corporation, Reed Travel Group, Trident Capital, Ute11 International, Westin Hotel and Resorts [17]),is one of the most well-known organisations with its three sub-companies: Travelweb, The Hotel Industry Switch
Company (THISCO) and Hotel Clearing Corporation (HCC). It processed 14
million reservations in 1996, about two-thirds of all hotel rooms that were
booked electronicallyby travel agents (Selz 1997).
Travelweb, the first Internet web site from which hotel rooms can be selected
and reserved directly via access fro111 a personal computer, was established in
March 1996. Travelweb is the largest on-line hotel and airlines reservation
system for self-booking travellers, providing direct access to nearly 13,000 hotels in more than 125 countries and more than 300 airlines throughout the
world (18). lt presents a complete electronic brochure on which users are given
a chance to see not only room rates and descriptions of lodgings but also images of rooms, restaurants, meeting facilities, and maps. After selecting the

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hotel, Travelweb allows the user to directly access tlie hotel's reservation system to gain information on rates and room availability. The user can make reservations and receive immediate confirmation on the Intenlet. The booking
process can be modified or cancelled and Travelweb keeps a complete booking
history for tlie user (19).
As of December 1996, Travelweb has offered customers the opportunity to
make credit-card-guaranteed hotel reservations in more than 125 countries
around the world including 70 different hotel brands and 12 of tlie world's
largest hotel chains. Approximately 50,000 Travelweb pages are being accessed per day. Bookings are received from 29 different countries. American
Express, Carte Blanche, Diners Club, Discover, JCB, MasterCard and Visa are
all accepted for Travelweb bookings (20).
THISCO was founded as a division of Pegasus Systems to develop a universal electronic switch to connect hotel reservation systems to the major distribution systems selling the hotel product to the travel agency industry and
custoniers around tlie world. It has increased the marketing of rooms through
computerized global distribution systems by connecting 70 hotel chains with
major distribution systems and simplifying hotel reservatiolis by travel agents
(21). HCC, another subsidiary of Pegasus Systems, gained more than US$74
million in commissions in 1995, a 124% growth over 1994. More than 45,000
travel agencies in 10 countries are currently enrolled and 42 hotel companies
representing nearly 18,000 contracted properties are active in the network (22).
Using the facility to sell hotel rooms at differing rates during low and high demand periods.
Opportunity for suppliers to vary rates also exists through other Internet
sites. Travelweb has launched the Internet's first weekly hotel discou~~t
program called click-it roeekellds. Hyatt Hotels and I 7 T Sheraton Corporation and
Inter-Continental Hotels are the first hotel chains to participate in the program.
It is a special section that cl~angcswcckly and offers featured hotcls' lowest
published rates for the coming wcckend. The aim is to offer attractive prices at
selcctcd hotcls in different locatioiis to people who can decide quickly. The
custo1,:er can also request a weekly e-mail update from Travclweb with the
current list of the weekend 1-otelsand rates (23,24). Similarly, Hilton Hotcls
have begun to offer discounted room sales on the Internet. Users are allowcd to
make reservations at Hilton Hotels and Resorts just by browsing special offrrs
or Hiltoll value rates (25). In the airline industry, An~ericanAirlincs provides
special offers via the Internet including disco~llitedtravel opportunities to different domestic and overscas destinations. The easiest way for custoniers to bc
infonlied regularly is to subscribe to a company's e-mail list. They will then
automatically receive an e-mail when inforillation is updated (26).
As an intermediary company, Quickbook provides services for customers to
book rooms in different hotels and different locations at reduccd rates. It arVolume 8

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ranges rates with hotels in advance and buys blocks of rooms to sell to irLdividual customers. Quickbook reserves the room and the customer pays the
hotel directly as usual. The purpose of the service is to confirm the reservation,
match customers' needs and wants with appropriate and well-priced businesses and respond to questions. To make a reservation, customers search the
web site for hotels in different places of the U.S., select a hotel and complete a
reservation form, which is automatically sent to Quickbook via e-mail. The
process will then end with the confirmationvia e-mail, fax or telephone (27).
Pegasus systems launched the newest on-line air travel booking service in
1996. It offers travellers the opportunity to check air fares and purchase 300
airlines' tickets 24hours a day from anywhere in the world via the Internet.The
airline ticket is delivered to the traveller, via Federal Express, within 72 hours.
Customers do not have to pay extra fees for the reservations made via the Internet. The company plans to produce one-stop travel operatiot~sby adding the
largest car rental companies. Using Travelweb,
"...Once the preferred flights are chosen, the system at~tomaticallyseeks the lowest
available fare. The user can then try different flight tinres or dates to compare fares and
only after the user selects the "makea reservutioil" button is he or she rquired to provide
information for ticketing ... Users can transmit their credit card ~runlbersby rrsing a secure browser such as Netscap Navigator or Microsoft Itztert~efExplorer. Trfive.Irc~eb
immediately processes the reservation and provides a confirnmtbr wliile the user is still
on the line. Travelweb thenfollows up within minutes withan e-mail confirmation..."(28)

Some limitations still exist for the effective use of the Internet in the airline
industry. For example, British Airways requests Internet users to take into account the following points: on-line payment can only be accepted from customers with a U.K.issued credit card, the reservation process should be completed in at least five days before commencing flight, a customer can obtain nu
more than two bookings per day and infants cannot be booked through on-line
(29).
Businesses are placing more effort into improving service quality, satisfying
customer needs and wants and increasing their market share within the industry. Interactive multimedia products give hotel businesses an important
quality dimension that can differentiate them from competitors by providing
superior customer service (30).For example, La Quinta has recently produced
the hospitality industry's first use of a Quick Time Virtual Reality Program
application within its Virtual Gold Medal Room Tour (31). Though viewed on
a computer screen, customers can tour around La Quinta in the same way as
with full virtual reality, experiencing different views of the Gold Medal Room.
Having experienced their tour, customers can then make a reservation at the
hotel via the Internet. The marketing intention is that the familiarity gained
through viewing will stimulate the purchase decision.

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The in-room Internet service, launched and demonstrated at the Grosvenor

House Hotel, London and at Forte Hotels as the first of its kind in the world,
allows customers access to the Internet via their in-room television sets. This
service provides up-to-date news and sports, stock prices and business information, local information such as entertainment listings and bookings service and access via the WWW (32).More than 100,000 rooms across Europe and
Africa are expected to add the service to their television in the near future.
Customers will be charged on a "pay as you view" basis when they check out
(33).
As a final example of theuse of the Internet for tourism marketing in the 21st
century, Travelweb has launched The Business Traveller Resource Centre, the
latest service for the self-bookingbusiness traveller. This service provides links
to a variety of business-travel related products and services such as financial,
con~puting/software,overnight package delivery, news, catalogue shopping,
special offers, and promotions (34).

VIRTUAL REALITY
Virtual reality is computer simulation that offers the user the opportunity to
experience different kinds of pre-produced programs, as if in real time (Williams and Hobson 1994). It enables people to have a complete tourism experience without having to leave their home or office.
With virtual reality, it is now possible to recreate any tourist destination except for the important fact that it is not clear how to recreate the social and cultural aspects of the destination or the feelings of smelling and tasting (Bennett
1996). Even so it enables participants to enjoy computer-generated environments that offer three dimensional perspectives through the use of sound,
sight, and touch technology.
Cheong (1995) and Williams and Hobson (1995) examined the impact of
virtual reality on the future of tourism. The authors considered that people will
not need to visit a particular tourist destination because all variables in the
virtual tourist destination such as sun and weather conditions can be modified
to create the perfect virtual experience. As for business travellers, they would
not have to travel to attend meetings and conventions; with the virtual conferencing system, they could participate in these kinds of events either at home or
in the office.
Virtual reality potentially enables users to experience artificial tourism
products and services at low prices. The question remains whether the virtual
reality experience will encourage subsequent experience of the real thing, or
whether it will substitute it. It also potentially provides a number of tourism
experiences to those who are unable to travel because of physical disabilities or
illnesses (Hobson and Williams 1995). Finally, people can be given experience
of high-risk activities without the danger of being injured or killed (Bennett
1996).
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DISCUSSION
One of the primary uses of IT systems is to gain a competitive advantage by
lowering costs and differentiating products. This is bringing about important
new changes in the retail and service industries. Firstly, as has been demonstrated, distribution channels are being streamlined to connect suppliers
directly to customers. Secondly, major distribution channels are being joined
together to form powerful new alliances (Hoffman 1994). Kasavana (35)
stresses the dynamic nature of these developments by stating that nothing has
been so influential as technology in increasing the productivity of the 110spitality industry over the past several years. Computers have made a significant contribution to tourism establishments' ability to plan, co-ordinate,
evaluate and control their operations.
It is highly likely that IT will fundamentally change the shape of the tourism
industry in the near future by developing new types of products and services.
These new products and services mean that new marketing strategies will need
to be established. CRSs, the Internet, virtual reality and smart cards (which
look like credit cards and are used to record personal data, authorise expenditures and not only tell the airlines customers' seating and other preferences but also tell customs and immigration officials passport and other data)
are cited as current examples of the use of IT in the tourism industry, enabling
the development of alternative products and services (36).Such developments
represent both challenges and opportunities. Some of the challenges include:
Since IT is used to reach the mass market and proniotc a product to all interested users, there is no clear access to the target market. The customer,
who is interested in the product, is hopefully corltacted along with all
those who are not (Walle 1996).
Businesses have begun to provide cheaper services and to reach more
customers (compared to travel agents) as a direct result of 1T. The customer perceives this service as an opportunity to buy something at lower
cost. Such price perceptions may be restrictive regarding desired product/service positioning.
As custon~ersare given more access to the Internet, travel agents will need
to redefine their functions as travel consultants (Sl~eldon1994) and determine what added value they can attach to their services. As customers
become more sophisticated in their use of IT, delivering added value may
become Inore difficult.
Finding the financial resources to make the necessary capital investment
in IT can be a problem, particularly for small-sized business enterprises
(Mutch 1995a). Techi~ologicalignorance may also be a barrier for many
such businesses.

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However, opportunities also abound. Possible positive impacts of IT include:

Customers benefit by knowing in advance the facilities, attractions and
events at the destination. The Internet offers suppliers the ability to show
full-colour virtual catalogues, provide on-screen order or reservation
forms, offer on-line customer support, announce and even distribute certain products easily. It also provides opportunities for custon~erfeedback
(Berthon 1996). Such cominunication can give customers a clear impression of what they are likely to experience. This may bring about enhanced
customer satisfaction. It can also help to position the product/service,
counterbalai~cii~g
the high importance of price.
IT potentially reduces per transaction communication costs u efforts
(Schertler 1994).It provides inexpensive delivery of inforn~atic in that it
directly with existing and t\otential
enables suppliers to com~l~unicate
customers and differentiate their products by considering customers'
needs and wants. There may be less requirement to attend expensive international tourism fairs, open international offices and produce expensive hard copy publicity materials. lT could also be a powerful tool to
overcome bureaucracy. Paperless Society (Montgomery1995)and Cashless
Society (Sheel and Lefever 1996) signpost reduced paper and paper cash
tunlover.
It is also believed that better service quality in the tourisin industry may
be created by automatization of back-office activities. If the use of IT decreases working hours spent 011 back-office activities, e~nployeeswill
have more time to better serve custoiners (Schertler 1994).David, Grabski
and Kasavana (1996) examined the relationship of tecl~nologyand productivity in the hotel industry; they found that most of the respondents
agreed that IT had a positive impact on productivity and quality of business opcrations.
From the customers' points of view, they will be able to sit at home or in
the office and browse con~fortablywithout being pressured and having to
wait in the office of the travel agency (Hopc, Hope and Tavridou 1996). In
a few minutes, they arc able to make bookings, pay by credit cards and get
tickets out of the printer. The whole holiday and travel transaction will
become much more convci~iciit.
IT also offers a powerful public relations tool for businesses. Public relations departments may be ahle to infonn personnel, customers and
others about business activities and receive feedback (either negative or
positive) from thesc pcople in two-way communication via the Internet.
With regard to challenges and opportunities, attention must also be drawn
to uncertainties that will arise in the tourism industry as a result of the rapid
developments in IT. These uncertainties centre around issues concerning how
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tecl~nologicallyinspired industry restructuring and changes in service provision will develop. There is also uncertainty as to how customers will react,
and whether the tourist experience will be fundamentally changed as a result.
Tourism information systems can be categorised as computerized (low technology), basic computerized (middle-range technology) and advanced computerized systems (high-end tecluology) (Kingsley and Fesenmaier 1995).The
tourism industry is currently experiencing advanced con~puterizedsystems
such as CRSs, the Internet and virtual reality. These recent developments in IT
may help create first and second class tourism providers. For large multinational companies, there does not seem to be a problem. In fact exciting new
opportunities are opening u p through IT-linked strategic alliances. However,
small and medium independent groups will face challenges because of their
reduced lT resource capacity. Some of the greatest threats to these companies
are the potential barriers in marketing. Even if such companies access IT distribution channels, they may find that unless they enter into alliances through
consortia such as Best Westeri~,their individual efforts will lack impact and be
ineffective. Earlier, the authors reviewed evidence that customers tend to access web information provided by well-known brand leaders. Such negative
impacts may make these businesses unable to compete in the international
arena and maintain their market share (Buhalis 1994).Tourism boards and authorities will surely have an important role, in counterbalancing this, but will
need higher levels of resourcing if they are to adequately support small independent businesses.
Difficulties faced by small businesses may also be experienced by less established destination countries. Although newly established network systems
may in some respects lower a destination country's marketing and publicity
expenditures, they also require additional investment and ongoing payments
to maintain a full membership of the system. This is a challenge for developing
tourism destinations. They will be unable to compete in international tourism
and gain full benefits unless they can enter lT systems. Use of IT intermediaries
and IT alliances will be crucial. Otherwise, a two tier of first and second class
tourism destinations may result.
A division of customer groups into first and second class may also be created, reflecting an increased social and technological inequality between groups
of the population worldwide. The first class customer group represents people
who have high disposable income, high purchasing power and technological
literacy. They willbe able to experience first class destinations, have unlimited
choices and enjoy good terms of business. A second class customer group that
is technologically illiterate and lacking high levels of disposable income, may
not have access to either enhanced information or good prices. Of course, these
are extreme positions along a continuum. Specialist intermediaries will likely
cushion the impact and reduce the effect of customer inequality. Nevertheless
it does seem that customer heterogeneity might be exacerbated by these developments.

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A final uncertainty involves customers and their tourism experience. As a

direct result of these rapid IT developments, the industry may face the threat
of losing its distinctive features. At its best, tourism offers a positive opportunity to increase communicatio~~
and cultural links between individuals;
this is partly due to the simultaneous production and consumption of tourism
products. Increased use of IT will certainly depersonalise some aspects of the
total tourisn~experience. Though the core experience will retain personal contact, will this be in some way diminished through the increased use of technology at the periphery?
Even if virtual reality does not replace the actual tourism experience, it has
the potential to revolutionise the promotion and selling of tourism products.
Customers will be able to compare different destinations bj taking a tour or
visiting the different attractions on the screen (Hobson and Williams 1995).
Authors have also discussed whether theme parks could be virtually viewed
as substitutes for the real experience. For exalnplc, Sega and Disney are working to develop virtual reality theme parks in the near future. Initially, people
may want to also directly experience virtual reality attractions, but will interest
continue? Alternatively, just as video rentals have not impacted cinema attendance negatively, the need for direct rather than simulated experience may
continue to grow (37).
As new network systems are launched and become established, t l ~ csuccess
of conventional intermediaries may be reduced. Networks will be vital to coordinate all the functions and infonl~ationprovided by suppliers and destinations. As a result, travel agents could become relatively less powerful as sales
agents. They will need to discover some new role based on enhanced customer
service. At the moment, it is uncertain what f o m ~if, any, this value added approach will take, although as we have discussed, there is somc evidence that
specialisation and add-on services may provide a solution.
It can also be argued that the traditional travel agent will never be replaced,
because there will always be non-IT trained customers who will need help
sorting out their problems about prices and options. It is assumed that these
individuals will continue to want and need personal contact with a travel
agent, despite developments in IT n~arketingof products and services. However, holiday sellers can create virtual offices to maintain face-to-face contact
with their customers without being physically present. This system requires
agents to place monitors in public locations, such as shopping centres. In so
doing, the customer can just press a button on the screen and begin talking to
sales staff located anywhere in the city or country (Hoffman 1994).
Though fewer customer-agent personal transactions will be needed in the
future, it is difficult to predict whether substantial erosion of personal contact
will occur or whether it will diminish the tourism experience. The frequency of
business travel is probably more at risk due to the higher involvement of businesses in general F applications. Direct business transactions are easier to
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substitute by IT compared to holiday experiences. Actual tourism experiences

involving human and cultural exchange will surely coritinuc to be important.
The extent of all this change will inevitably lead to the reassessment of marketing theory. In a situation where both distribution clianiiels and conimuiiication media arc changingso substantially, it would be surprising indeed
if theoretical perspectives did not also require modification. Post modernist
consumer beliaviour is already complex and difficult to explain and the increasing impact of 1T can help bring about furtlicr hctcrogcneity. Devclopnient
of useful tlieoreticalperspectivcswhicli assist ul~derstanduigis a high priority.

CONCLUSION
IT is becoming increasingly vital for the efficient and effective managcinent of
operations and inanaging the distribution of products and services wi:liin tlie
tourism industry. Everything from information centres to c11eck out processes
can potentially be integrated. Businesses seem highly ambitious to set u p new
IT applications whicli will enable custoniers to manage tlieir own information
gatlicring and booking arrangements. The evidence seems to be that such facilities are found valuable by many customers and the volume of business
transacted through them is growing substantially. Changes in service distribution as a result of such developments will potentially iiiipact the structure
of tlic industry. Organisations involved in both direct and indirect niarketing
will need to take intoaccount tlicsc changcsand tlie opportunities, threats, aiid
uncertainties whicli they represent. Little is known about consuiner behaviour
in respect to the selection aiid purchase of services using IT. Marketing theory
\ V J ~ need
I
to develop to enconipass tlie impact of this relatively new sales and
d1%tri5:?r;:>??
~ncdiu~ii.
T11i.i paper prvseiitcd both theoretical knowledge and ciiipirical rescarcli of
~ ~ c:,iws
' b to ~ s ~ ~ n i dcveiopments
iiie
in IT. It reports on how IT'S current and
potential usc as a tourism nnd travcl inarketing tool in thc future. Rcsearch rcgarding implications of lT applications, especially thc Internet, for the touris~n
and travel industry is currc~~tly
very limited. Litcraturc relriew indicated that
n ~ o sresearch
t
in tlie area is theoretically bascd. Empirical research on this topic
is lacking. Future rescarcli should monitor the growth and impact of IT applications, the cost cffectiveiicss of IT bascd distribution and selling systcnis
and the consuiner beliaviour in respect of tlieir use.

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INTERNET ClTATlONS
(1) Technology Most Volatile Force Affecting Hotel Industry.
URL:http://www.hffipitalityr1et.r1l/~1nus/article/04010608.htrn

(2) A5fA's 1995Automation Survey Data Released. URL:http;//www.astanet.com

(3) Hospitality 2000: A View to the Next Millennium.

Downloaded by [Queensland University of Technology] at 04:15 31 May 2016

URL:http://www.
hosyitalitytzet,rll/trews/nrticle/l577216.htm
(4) Imaginative,Flexible Use of HotelTechnology: TheMessage of Eurohotec.
URL:http://www.hospitali&et.t1l/news/11rticle/3378473.Iztm

(5) Airline Reservation Systems Face Internet Threat.

URL:http://muw.
hospitalityt1et.trl/news/article/100605.~itin
(6) Internet Travel Network to Supply Connectivity with all 4 Major GDS Systems.
URL:http://www.hospitalityt1et.nl/t1eus/article/31O682.htin
(7) The Impact of InformationTechnologyon Travel and Transportation.
URL:http://www.hffipit~lity11et.i11/news/article/33022726.htm

(8)URL:http;//www.travelweb.com.
(9) Travelweb Records Best Month Ever, Celebrates Oneyear Anniversary with First MillionDollar Month. URL:http://www.hospitalityet.t~l/ne~~/~rticle/3552545.ht~n
(10) Intemet Travel Survey Establishes Big 3Travel Hubs.
URL:http://www.
hffipitalityi1et.nl/t1~ws/article/24815394.htm
(11) Hilton Hotels and Sabre Interactive to Provide Airline and Car Rental Reservations through
Hiltonnet Web Site. URL:http://wmw.
hospitalitynet.nl/neu~/~zrticle/31927125.htm
(12)Majewski, Richard (14 January 1997).Montly Travel Trends.
Available email: richard@ traviag.demon.co.lck
(13)The lmpad of Information Technology on Travel and Transportation.
URL:http://www.hospitnlityi1et.nl/news/nrticle/33O22726.htw1
(14) URL:http:]lmw.hatawl-ease.cm

(15) URL:http://www.las-trowl.wm.
(16) URL:http://www.i~rtemeti~orth.cmmu/travel88/t~lhome.htm#Spe~inl
Semices.
(17)TravelwebTake Flight. URL:http://www.trauelwb.com/thDa,/global/Ril
(18) Travelweb Records Best Month Ever Celebrates One-Year Anniversary with First MillionDollar Month. URL:http://www.lwspitality1et.?11/article/2217447.htm.

(19)TravelwebFacts and Stats. URL:http://www.trauelwb.com/thDco/globul/t.html

(20) World's Largest Hotel Chains Unite to LaunchTravelweb.

URL:http://www.trawlwb,com/t~~isw/global/twbnews.html
(21)Travelweb Facts and Stats. URL:http://mw.trawl~b.com/thisco/global/facfstar.hhnl
(22) Travelweb to Offer Both Hotel and Airbooking:
URL:http://www.hospitality11et.nl/artic/7.htm.
(23) Travelweb Launches Internet's First Weekly Hotel Discount Program.
URL:http://www.
trauelweb.wm/thisw/global/clickrelease.html

(24)Travelweband IntercontinentalHotels Launch Europe's First Weekly Internet Hotel Discount

Program: Click it Weekends.
Volume 8

Number 3

Fall 1997

79

Developments in lnformatlonTechnology: implications for the Tourism Industry andTourism Marketing

URL:htfy:~z~uw.~itnlity~1~t.nl/iiezm~article/10126821.hh
(25) URL:http://7uu~u~.hilto~r.witr.
(26) LIR L:htfp://u)ruulamericani~
ir.cmn.
(27) Quickbook, America's Leading Hotel Discounter to Launch Web Site.
LIRL:http://uluiw.f~iti~lity~rrt.i1l/itc~~/Iirticle/3
II27505.htn1

Downloaded by [Queensland University of Technology] at 04:15 31 May 2016

(28)Travelweb to Offer Both Hotel and Airbooking.

URL:http://ruzclw.hospitrrlitynet.i1l/irews/orticlc/2217447.htin

(30) Networking Technology Brings Multimedia to Hotel Rooms.

URL:kttp://u~ic1~.hosyiti1~ify1et.?l~/11~zl~/artic~~~/33
16957.hbn
(31) La Quinta Inns Debuts HospitalityIndustry's First Use of a Quicktime Virtual Reality Program
on the Internet. URL:htty://u~ua~.tr~rn.lweb.corn/thisco/glubriI/laqi~ir~t~~.~~t~~~l
(32)M.A.I.D. andThom Lunch World's First High Speed Hotel Internet Service.
LIRL:http://wrc~ur.~ita1itYiiett~~1/i~~t~/artic~r/31829932.t~ht~
(33)M.A.I.D. Plc and Thorn Uusi~~essCommunications
tosupply Internet Services to 100,000 Hotel
Rooms. URL:http://wzuw.hmpitalityrlut.i1l/~1ez1~/1irticlr/l9725962.htin

(34)Travelweb Launches Internet Business Traveler Resource Center.

URL:ht~://wu~ru.tr~iwlrtrb.cmn/tt~S~~/ylob~i~/btrcr~~l.hbnl

(35)Kasavana, Michael L. (1996).tIospitality Computer Systems.

URL:http://wwzu.incb.co.i1k/~t?'vi~~~/at1~~e11ce/11~96/~1~pitiili~/k~i~rn1nii/syste1ns.I1tir~
(36)The Impact of Information Technology on Travel and Transportation.

URL:http://ic~ww.~pitalityiret.nl/l/1rez~/article/33022726.lttir
(37) Ronald 0 Van, Pert (1996).Hotel Design for the 21st Century.
URL:h t f p : / / w w w . t r o s p i t r l l i ~ i ~ e t . t r I / ~ ~ r w s l ~ r w s /

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Anatolla: An international Journal ofTour\sm and Hospltallty Research