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464 TRAVEL ANDTOURISMthey constitute an information intensive industry where
transactions can be rather easily made online.E-commerce Activities
Before the onset of the Internet, electronic commerce
was usually conducted over a proprietary network con-
necting a group of organizations such as airline compa-
nies, travel agents, and hotels with each other through
CRSs or GDSs. The nature of the transaction was purely
business-to-business. Tourism businesses now use the In-
ternet as a means of redefining their focus, creating new
products, finding new distribution channels, and creating
new markets. For example, the major airline sites now
offer customer reservations, electronic tickets, seat selec-
tion, in-flight merchandise, and reward points; in addi-
tion, some of the airlines have enhanced their sites to
offer lodging, transportation-package deals, and cruises
through their alliance partners (Harrell Associates,
2002).
The use of the Internet in the travel and tourism indus-
try has also been driven by the convergent forces of the
shift of consumer behavior toward more intensive uses
of online environments and the successful adaptation of
marketing and sales strategies by the industry. For many
consumers, online booking of travel is already the norm,
and this can only be expected to strengthen in the imme-
diate future. Travel is a product that online consumers
want to purchase; indeed, according to Forrester
Research (1999), it is the product that those who are
online, but have not yet purchased online, want to pur-
chase most. From the point of view of travel and tourism
suppliers, however, there is some reticence from certain
sectors of the industry, such as the cruise line industry, to
compete directly with their traditional intermediaries by
making the move to direct sales, whereas others, such as
the airline industry, have embraced the new online chan-
nels with great enthusiasm.
E-commerce solutions are gaining momentum and
are expanding beyond reservations to include supply-
chain management (e.g., procurement), internal business
applications through intranets, and other business-to-
business transactions as well as business-to-customer
sales. It is certain that the Internet will continue to become
faster, more reliable and secure, and also more feature-
rich. In addition, it will become more mobile through
portable devices such as personal digital assistants (PDAs)
and cell phones that can communicate with ambient in-
telligent devices embedded in appliances and will increas-
ingly be enabled by speech, thus truly giving customers
anytime, anywhere access in a format conducive to their
needs.Customer Relationship Management
Customer relationship management (CRM) is a man-
agerial philosophy that calls for the reconfiguration of
the travel organization’s activities around the customer.
Successful CRM strategies evolve out of the ability to ef-
fectively capture exhaustive data about existing and po-
tential customers, to profile them accurately, to identify
their individual needs and idiosyncratic expectations, and
to generate actionable customer knowledge that can be
distributed forad hocuse at the point of contact (Newell,2000). Further, the success of CRM initiatives is depen-
dent on the ability to collect, store, and aggregate large
amounts of customer information from various sources.
One of the major driving forces of CRM using the Internet
is the ability to target each individual interactively. With
the Internet, individuals and travel marketers can inter-
act, and this direct interaction creates customer value and
sets the stage for relationship building. Travel marketers
continue to seek ways for compiling accurate databases
of personal information such as sociodemographic, so-
cioeconomic, geographic, and behavioral characteristics
for potential customers. Such a database creates a wealth
of relationship marketing opportunities. Crucial to the
establishment of such comprehensive customer databases
is the ability to use software agents, without human inter-
vention, to collect, categorize, and store large amounts of
personal customer information in a cost effective man-
ner for later data mining. A second important issue is the
ability to collect the desired information directly from the
primary source rather than having to purchase it from sec-
ondary sources such as travel and tourism consultants.Online Destination Management Systems
The term “destination management system” (DMS) has
come into use in recent years to describe the IT infrastruc-
ture of a destination marketing organization and may be
defined in a number of ways depending on the capabilities
of the system. Increasingly, a DMS is regarded as having to
support multiple functions. An integrated DMS supports
not only the DMO’s Web site, but also a wide range of other
promotion, marketing, and sales applications (Sheldon,
1997). These might include the design and production
of printed materials, tourist information center services
(for information and reservations), call center services,
kiosks, database marketing, project/event management,
and marketing research. DMSs can greatly enhance a
travel destination’s Web presence by integrating informa-
tion from various suppliers and intermediaries and are
increasingly used as the informational and structural ba-
sis for regional Web portal sites.TRAVELERS AND THE INTERNET
Internet technologies have not only changed the struc-
ture of tourism and its related industries. They have also
had a profound impact on the way consumers search for
tourism information, construct and share tourism expe-
riences, and purchase tourism products and services. In
contrast to many consumer goods and services, the con-
sumption of tourism experiences involves often extensive
pre- and post-consumption stages, in addition to the ac-
tual trip, which itself can spread over several weeks (Jeng
& Fesenmaier, 2002; Moutinho, 1987). These stages of the
tourism consumption process are typically information-
intensive, and Internet-based technologies have come to
play a significant role in supporting consumers through-
out this multistage process. The specific ways in which the
various technologies are used in the different stages de-
pend on the particular communication and information
needs they are expected to serve (see Figure 2). For in-
stance, Internet technologies are used in the preconsump-
tion phase to obtain information necessary for planning