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462 TRAVEL ANDTOURISMAirlines
Air transportation systems worldwide are being dramat-
ically affected by technological developments. Many of
these developments focus on the use of Internet tech-
nology to improve the efficiency of operations (Sheldon,
1997). The first applications of computer technology to
airline operations emerged in the 1950s when central
reservation systems (CRSs) were designed. The primary
function of computerized airline reservation systems was
to simplify the process of booking flights by allowing
travel agents to find relevant flight information and make
reservations directly from their terminals without hav-
ing to call airline reservations offices (Klein & Langenohl,
1994). Because of their many operational and cost-related
advantages, CRSs became essential for the distribution of
airline tickets through travel agencies.
Until the mid 1970s, airline computer reservation sys-
tems were used only for proprietary airline information
and the major airline companies all had their own CRSs
(Sheldon, 1997). Some of the CRSs were combined to
become global distribution systems (GDSs), which pro-
vided multiple carrier information and constituted im-
portant electronic distribution channels. The major GDSs
include Galileo, Amadeus, Sabre, and Worldspan, and
these are now available through the Internet. These air-
line reservation systems provide a number of function-
alities to travel agencies including flight schedules and
availability, passenger information, fare quotes and rules,
and ticketing. Most of the systems now also enable con-
sumers to view schedules, fares, and fare rules and to
book flights. In addition to developing reservation systems
as the predominant distribution channel, many airlines
have invested heavily in information systems to auto-
mate other areas of airline operations and management,
which can be categorized into two sections: (1) systems for
streamlining operations such as baggage and cargo han-
dling systems, cabin automation, and safety systems, and
(2) decision support systems to aid in decision-making
related to flight scheduling and planning, crew schedul-
ing and management, gate management, and departure
control.Travel Agencies/Online Intermediaries
Travel agencies are intermediaries that arrange and dis-
tribute travel information to individual travelers, with
some agencies specializing in certain market segments or
products. In addition, many travel agencies function as
tour operators, designing their own package tours and
selling them either directly to the traveler or through
other agents. Travel agencies use information intensely
and therefore need IT to process that information. In
fact, information on travel products, destinations, sched-
ules, fares, rates, and availability is their most important
product and defines their existence. The more informa-
tion a travel agency can access electronically, the more
timely, accurate, and efficient services it can provide to its
clients.
The most prevalent application of IT in travel agen-
cies is the GDS terminal, which was first placed in travel
agent offices by major airlines to facilitate airline bookings
in the 1970s (Sheldon, 1997). GDS terminals are still themajor information and booking tools used by travel agents
for all types of travel products. However, the advent of
the Internet has significantly changed the way travel and
tourism products are distributed. Increasingly, consumers
can access information online and travel agents have been
forced to adapt to this change. Travel agents have an am-
bivalent relationship with the Internet because it can be
a threat in that it makes products available directly to the
consumer and yet it also provides additional business op-
portunities. Many travel agencies offer services on the In-
ternet, giving them a much broader geographic consumer
base than if they operated in traditional ways. They can
receive bookings from clients through the Internet and
can even book the passenger on flights without issuing
paper tickets. Travel agents can also use the Internet as a
research tool, and this might be particularly important in
the future as some travel products become available only
via the Internet. In addition, IT applications can be used
by travel agencies to create value-added products or ser-
vices through the online provision of their travel expertise
in combination with the wider range of travel products
and services available on the Internet. However, realizing
that physical location is irrelevant in today’s electronic
marketplace, new types of travel agencies which exist
only on the Internet, such as Expedia and Travelocity, are
emerging and continue to raise the level of competition
among travel agencies.Destination Marketing Organizations
Destination marketing organizations (DMOs) are typi-
cally not-for-profit, small and medium-sized, information-
intensive organizations that perform a wide range of
activities to coordinate the diverse components of the
tourism industry (Gartrell, 1988). DMOs act as a liaison,
collecting and providing information to both the con-
sumer and the industry in order to facilitate tourism pro-
motion and development of a specific area.
In general, destination marketing organizations have
been slow to adopt IT in their operations and marketing
activities. It was not until the late 1980s that computer sys-
tems were adopted by the larger DMOs to enhance publi-
cations and information operations and, to a lesser extent,
to support reservation services. During the late 1990s,
as desktop computing technologies became more widely
available, DMOs began to use IT more extensively. More
and more DMO directors realized that Internet market-
ing was an inseparable, often critical part of their overall
marketing endeavor. They have since developed a high
level of interest in the Internet because the use of the
Internet offers the potential to reach a large number of
consumers at relatively low cost and provides informa-
tion of greater depth and quality than traditional media. In
other words, using Internet technology enables DMOs to
promote their destinations’ tourism products and services
better, present associated organizations more equally, and
collect customer information for effective customer re-
lationship management (CRM). More importantly, the
Internet allows them to improve business processes, con-
duct marketing research, provide customer service, and
facilitate destination management and planning with less
dependency on time and space.