Impact of the internet on tourism : e-tourism

Impact of the internet on tourism : e-tourism

E-tourism Nowadays, the Internet is a very important engine for Global Economy. In 2007 the number of Internet users attempted more than 1. 250 billion (La Documentation Francaise 2007). And nowadays the Internet not only allowed to communicate, it also allowed to advertized a product, to market this product and ultimately to sell it/buy it. So the Internet become a new market and creates a new way to consume: the “Electronic commerce, commonly known as e-commerce consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks” (Webster’s online Dictionary 2010).

Actually, 40% of web users are also online buyers and this market was estimated in 2001 at more than 1 trillion dollars (Z. Zhou 2004 p56). So the Internet is a big economic sector but it is also playing a big role on the development of other economic sectors in Global Economy. Another sector had strangely grown up in parallel of the Internet development and become one of the current main economic sectors in the world: the tourism. Indeed “Travel and tourism represent approximately 11% of the worldwide GDP (Werthner & Ricci 2004 p 102). The World tourism represented in 2009

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880. million of arrivals and a recipe of $852. 2 billion (Ministere de l’economie, des finances et de l’industrie 2010). So the tourism and hospitality market are very popular but their development is maybe not only due to the rising standard of living and to the increased leisure time. Indeed there is maybe an important link between these two sectors. We could analyze what is the impact of the e-commerce on the tourism sector? As say Z. Zhou (2004 p3) “the hospitality and tourism industry has always been among the first to capitalize on new technology”.

This is justified by the fact tourism market is a sector where the distribution of the information is the key element and the Internet is the best way to realize that. People want the maximum of information on their destination, their hostel, before to go on. The Internet offers a new way of communication which allows more focus on a target than TV, radio or newspaper, while remaining a mass media (Z. Zhou 2004 p7). This point shows that Internet not only creates the e-commerce, but also the e-marketing: marketing of products using electronic technology to determine the consumer market (allbusiness 2010).

In fact, “The internet has broken both time and geographical barrier” confesses Z. Zhou (2004 p6). Thus, information is always up to date and can be communicating very quickly to the customer who can consult it 24/7. Even if Masoomeh (2006 p24) recalled that for booking holidays and travel information, traditional brochures are approximately use as much as the Internet in 2001. The Internet information flow is very important because it has been proved that approximately 60% of online travelers, to let know information for future travel planning, use the Internet (Z.

Zhou 2004 p9). Thus, traditional travel agents represent only 6. 9% of information sources for future travel planning. So the Internet permits to the tourism market to be more powerful in its communication, and above all, to be in touch directly with its customers. All companies, even if a small bed-and-breakfast in a small town, can be in touch with a potential customer at the other side of the world thanks to Internet and without any other intermediary. Zhou explains that the potential of all tourism suppliers are tenfold and new opportunities appeared (2004 p6).

And this point is almost true for developing or underdeveloped countries. For instance, “if designed and promoted properly the Internet can be an effective marketing tool for tourism SMEs in island countries of the South Pacific” conclude Mc Master et al (2005) because this way of communication is adapted to their budget. But the Internet not only impacts the tourism market on its way to communicate and to market and go further again according to Zhou. “In fact the biggest impact on the travel and hospitality industry is in the area of travel planning and reservations” advise Zhou (2004 p9).

This idea is supported by a survey of the International Air Transport Association which proved that “the number of travelers using the Internet to actually book a trip has almost doubled, from 9 percent in IATA’s 1998 poll to 17 percent this year”(Levere 1999). Following all these opportunities, many strong financial groups invested in the tourism market, especially in online booking site. So actual biggest tourism web sites like Expedia, for instance, is owned by Microsoft and “Travelocity […] is owned by Sabre”. So the Internet has promoted the arrivals of new actor, especially financial in his case, in the market.

The supplier’s side has changed in fact, they do not have just to give the possibility for customers to book online, but they have to influence the customer to do it because it is more profitable (Z. Zhou 2004 p9). Thus, they cut an intermediary and the profit on a ticket is higher and the arrival of this strong financial groups permits to boost the market supply. Moreover, the Internet goes further in its influence on the tourism market because it succeeds to change it in its “interior”. Indeed the Internet has also modified travel and hospitality product and service purchases.

Thus, “In years to come, hotel guestroom will be wired with high-speed Internet connections at little or no charge to guests” (Z . Zhou 2004 p11). Indeed, for lodging suppliers, for instance, the Internet has two main impacts according to Zhou (2004 p133). First the Internet revolutionizes the communication in this type of supplier because all institutions which compose it are able to make a web site to, at least, become known. Secondly, the Internet forces hotels to become e-hotels. It means that to be competitive, lodging suppliers have to offer all digital technologies (high-speed wireless Internet, videoconferences …) to their clients.

Following this last point the Internet has not input only advantages into the tourism market for companies. “Adopting new technologies without dramatically increasing the cost of doing business will be a challenging task for every commercial manager. ”(Z. Zhou 2004 p11) Indeed the Internet creates new needs for customers but it also permits the increase of competition. So the competition leads to a decrease of the price but in the same time an increase of the service. With this view, it is the customer who is the only beneficiary.

However E-commerce had not integrated the tourism market without destroy something. It has eliminated a major actor, an intermediate between suppliers and customers: travel agents. So for this last one, the advent of the Internet is not good at all and they are certainly big losers of this innovation. Thanks to the Internet, suppliers can distribute their information and permit to customer to book online, so they do not need travel agent to do this intermediary. Moreover customers do not need to go on a travel agent because they are many offers directly at home, on the Internet.

It is cheaper for suppliers which have no longer to pay commissions to travel agent. It can also be cheaper for customers if they affect this decrease on price (Z. Zhou 2004 p128). For instance, in Airlines, they cut commissions from 15% to 5% in only few years and in the same time they build “their own Web sites as an e-commerce point-of-sale online store-front” (Z. Zhou 2004 p128). Thus, offline travel agents have suffered of the Internet because of this direct contact throughout the Internet between suppliers and customers.

But with the creation of online travel agents, they thought to find a solution, but in fact they “being threatened by low-cost airlines expanding their holiday services into car rental, hotels and insurance” (Mamaghani 2009 p372). Zhou explained that this problem for travel agents has to be nuanced. Indeed this phenomenon is true for airlines and some other sectors of tourism market but in cruise lines, for instance, the customization of the product is more difficult; so in 2000, 98% of reservations were still made in a travel agent because it is very difficult for customers to create heir customized services/products alone, on the Internet (Z Zhou 2004 p131). In conclusion, we can clearly recognize that “Travel and tourism are illustrating how e-commerce can change the structure of an industry—and in the process create new business opportunities » (Werthner ; Ricci 2004 p101). Each supplier has taken many advantages of the advent of new technologies and permits to boost this market. All the aspect of the tourism market has been revised with the arrival of the Internet.

Even the customer takes advantage of the Internet because it is more flexible and cheaper to book online than in a travel agent. In fact, the only concern is for travel agents that clearly suffered of this tourism mutation: the e-tourism. Finally, as say Hung (2001), with the dematerialization of the intermediary between customer and the supplier, it is maybe difficult to know if the Internet is really beneficial for the tourism market, notably for the employment. References * Hung, H. (2001, June). The impact of the Internet on travel agencies in Hong-Kong.

Journal of travel ; tourism marketing, p105-126. Retrieved June, 2001 from EbscoHost. * La Documentation Francaise. (2007). Internet dans le monde. Retrieved December, 2007, from la documentation francaise : http://www. ladocumentationfrancaise. fr/dossiers/internet-monde/index. shtml. * Levere, J L. (2009, December 1st). Business travel; Business fliers worldwide are increasingly using the Internet to research and book their flights. The New York Times, Retrieved December 1, 2009, from http://www. nytimes. om/1999/12/01/business/business-travel-business-fliers-worldwide-are-increasingly-using-internet. html. * Mamaghani, F. (2009, December). Impact of E-commerce on travel and tourism : an historical analysis. International journal of management. Retrieved December, 2009, from Bnet The CBS Interactive Business Network * Masoomeh, M. (2006). Electronic satisfaction in tourism industry. Retrieved June 20th, 2006, from: epubl. ltu. se/1653-0187/2006/20/LTU-PB-EX-0620-SE. pdf. * Mc Master, J. Kato, M. Khan, N. (2005). Economic impact of e-commerce on small tourism enterprises.

Retrieved March, 2005, from www. usp. ac. fj/… /Economic%20impact%20of%20e-commerce%20on20%small%20tourism%20enterprises. pdf. * Ministere de l’economie, des finances et de l’industrie, (2010). Le tourisme dans le monde en 2009. * Ricci, F. ; Werthner, H. (2004). E-commerce and tourism [Electronic Version]. Communication of the ACM, 47(12), 101-105. * World Tourism Organization 2010 * Zhou, Z. (2004). E-commerce ; information technology in hospitality ; tourism. Clifton Park, N. Y. : Thomson/Delmar Learning.