The Internet Encyclopedia (Volume 3)

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THETRAVEL ANDTOURISMINDUSTRY 461

Travel

agent

Tour

operator

Incoming

agent

Hotel

chain

CRS/GDS

Consumers

Suppliers

DMO,

Planners &

Administration

Intermediaries

Tourists

Primary Suppliers Airlines

NTO

RTO

LTO

NGO

Government

bodies

Note: NGO=Non-Governmental Organization NTO=National Tourism Organization

RTO=Regional Tourism Organization LTO=Local Tourism Organization

CRS=Central Reservation System GDS=Global Distribution System

Figure 1: The travel and tourism industry and the Internet. Source: Werthner & Klein

(1999). Reprinted with permission.

operations and to gain strategic advantages (McGuffie,

1994). Others, such as the hotel sector, have been less

enthusiastic and have only recently begun to take advan-

tage of many of the benefits that the technology can bring

(Connolly & Olsen, 1999). Many traditional travel agen-

cies are also lagging behind other sectors in terms of tech-

nological adaptation, and it is increasingly evident that

experienced consumers are often better informed than

professional advisors. However, given the way in which

information technology is reshaping the basic structure

of both commerce and society in general, its importance

to the success of all types of tourism companies can only

grow in the future. As a result, tourism companies have

changed dramatically the way in which they conduct their

business and are under pressure to invest further in new

technology in order to maintain their competitiveness.

Hotels

The hotel industry bases much of its distribution on di-

rect contact with customers (WTOBC, 1999). Historically,

hotels have distributed information through print-based

media such as brochures, travel planners or regional

guides, and received reservations by mail, phone, and fax.

More recently, hotel rooms have been made accessible for

booking through global distribution systems (GDSs) and

through direct access to hotels using central reservation

systems (CRS). However, such technologies have been in-

adequate as customers have traditionally not had access to

these systems and travel intermediaries have experienced

difficulty and delay in finding and booking appropri-

ate hotels, whereas hotels have experienced high clerical

costs attracting and processing bookings from customers.

The emergence of new information and communication

technologies (i.e., Internet technologies) presents new

opportunities to make these processes more accessible

and more efficient.

The use of the Internet in the hotel industry is growing

exponentially and this enables hotels to reconsider the

way they are doing business. Although the hotel sector

overall has been slow to use the Internet as compared to

other industry sectors (Connolly, Olson, & Moore, 1998),

many hotel managers are becoming increasingly aware

of the potential distribution, promotion, and interactive

marketing advantages of the Internet. The Internet offers

several advantages for hotels of all sizes. One of the ad-

vantages is increased effectiveness due to cost reduction

and revenue growth. Another advantage is higher quality

customer relationships due to the possibility of per-

sonal contact services and dialogue with the customer

(Morrison, Taylor, Morrison, & Morrison, 1999; Sterne,

1999). For example, customers can answer questions

about their personal preferences for rooms, and based on

this information, a customer receives services at the hotel

that are adapted to his/her preferences.

It is now generally agreed that Internet-related tech-

nologies are the single greatest force driving change in

the hotel industry and will continue to have dramatic and

sweeping implications on how hotels conduct business

in the future. Hotels are expected to position themselves

strongly on the Internet to take advantage of its distri-

bution capabilities such as reach, content dissemination,

feedback collection, interactivity, and one-to-one market-

ing. Further, current trends indicate that this greater in-

volvement in IT by the hotel industry will increasingly

encompass customer-centric approaches to capitalize on

the cost structure and long-term potential of the Internet

while at the same time differentiating products and build-

ing lasting value propositions.