Internet Tourism Marketing: Potential and Constraints

 Hotel Online: Ideas and Trends. July 2000. Liu, Zhenhua.

(Fourth International Conference "Tourism in Southeast Asia & Indo-China:  Development, Marketing and Sustainability June 24-26, 2000 ") 

Part 2: THE CHARACTERISTICS OF TOURISM MARKETING

Travel and tourism products are ideal for marketing on the Internet. This is because tourism is an information-intensive industry and the Internet is the most effective and efficient means in information exchange worldwide. The Net can greatly facilitate the promotion and distribution of tourist products and potentially enable tourism destinations and enterprises to compete on a level playing field.

Tourism Is an Information-Intensive Industry
Tourism is very information-intensive and information is often dubbed the "life-blood" or "cement" of the industry which holds together the different producers within the travel industry - airlines,  tour operators, travel agencies, attractions, car rental, cruise lines, and other supplies. "In few other areas of activity are the generation, gathering, processing, application and communication of information as important for day-to-day operations as they are for the travel and tourism  industry"  (Poon 1993:154).  The perishability of tourism products and the often erratic tourist demand make the task of balancing tourism supply and demand far more significant than any other sector. That is probably why tourism became one of the first industries to widely apply IT and conduct electronic commerce from the 1960s in the form of computer(ised) reservation systems (CRSs) and then global distribution Systems (GDSs).

However, the traditional CRSs and GDSs had only improved the information communication between tourist businesses, originally between airlines and travel agents, as they do not directly interact with consumers. The systems are also expensive to both the tourism producer and the retailer. For instance, the GDS cost accounted for an average 8.1% of the International Air Transport Association (IATA) member airlines' distribution cost in 1996 (IATA 2000), and the major GDSs charge around US$600 a month to put a terminal in a travel agency. Moreover, the systems are flawed with incompatibility between each other, especially in the lodging sector, where "switch" companies such as THISCO (The Hotel Industry Switching Company) was needed to connect hotels with all the major GDSs to facilitate room reservations by travel agencies worldwide (Sheldon 1997). With the effective use of the Internet, these problems can be addressed effectively and cheaply. In addition to its traditional function, a web-based GDS can increase the speed of information transmission, improve the quality of information delivery (from the old viewdata to the window-based computer screen), reduce the cost to the user as no special connections are necessary, and most important of all, has the potential to interact with all web users in the world. Having realised the tremendous potential of the Internet, GDS companies already started to develop new and web-based systems which  could  transform  the  whole  tourism distribution landscape in the near future. For example, Amadeus launched Amadeus Pro Web in January 2000, which is a browser-based reservation tool allowing travel agents to service customers worldwide without a dedicated communications line and at a greatly reduced cost. In fact, with this system any Internet user can become an online travel agent within a week (Amadeus 2000).

Tourist Products and Services Are Difficult to Evaluate
As a service industry, most tourist products are intangible services, they are experienced and cannot be touched, tasted, smelt or seen and therefore
difficult for tourists to grasp and evaluate. Furthermore, the spatial fixity of tourist attractions and amenities means that a tourist cannot really assess their quality until he arrives at the destination. Tourists have, for a long time, relied on limited information from holiday brochures and other literature to evaluate tours and destinations. Comprehensive, relevant, timely and accurate information is essential in tourists' holiday decision making process. But they were not readily available to tourists until the emergence of the Internet, especially the wide use of the Web.

With the Internet, virtually unlimited amount of information can be stored at a web site and an unlimited number of users can retrieve it at any time from anywhere in the world. The Web can not only provide more information but also provide it from a much wider range of sources; while in the past, tourists are almost exclusively dependent upon representations and descriptions by the travel trade. The Web can also deliver the information in a greater variety of formats, from text to photos, graphs, audio and video clips, whereas in the past, tourists primarily relied on the printed brochures as the limited copies of videos of a limited number of tourism destinations or holidays were only available to the major travel agents. The web-based electronic brochure can also facilitate the complex process of choosing among the hundreds of holidays using browser-generated  selections  from  back-end databases linked to web servers whereas the printed brochures are usually arranged and indexed by one way, often by destination. Through Internet video telephony, tourists can also "test drive" a prospective holiday by viewing real-time scenes through  cameras  placed  in  hotels,  clubs, restaurants, scenic spots and other sites in the destination and transmitted via the Internet. Video clips can also show episodes and scenes of festivals, art performances and service delivery to facilitate tourists in the comparison and evaluation of intangible services, the quality of which is otherwise difficult to assess in advance.

Tourism Distribution Has Physically Nothing but Travel Tickets to Deliver
Since in tourism, it is the tourists who travel to the destination, rather than the tourist product be transported to the market. When a tourist books an airline seat, a hotel room, or a package holiday, he acquires the right to use that seat, room or holiday in the specified time period. After the tourist completed his journey or holiday, he takes nothing home but experiences (though often together with some photos and souvenirs). In the whole process, from the booking, through the out journey to the return journey, the only things being transported are travel tickets and the tourist himself. This unique characteristic offers tourism a great advantage in Internet marketing as the only cost of online sale will be the transaction processing expense plus a little postage cost; in contrast, for manufactured goods, the delivery cost is often substantial.

'With the increasing popularity of electronic-ticketing (c-ticketing) or ticketless-travel, especially among airlines, online tourism distribution over the Web may one day have no physical goods (not even a ticket) to deliver at all. Ticket-less travel means that check-in is achieved by proof of identity and a booking reference number. This saves the cost of ticketing for the airline which would usually include stationery, printing and postage and speeds up the check-in process at airports by enabling passengers to self check-in at check-in machines with a credit card. Worldwide, there are more than 30 airlines offer e-ticketing in at least some routes in its networks (IATA 2000). About 60% of United Airlines' passengers are now using c-tickets. British Airways has even announced that from May 2000 travellers will be charged £25 for a printed ticket where e-ticketing is available for the flight. It could also cost the traveller £50 to replace a lost paper ticket. Obviously, c-ticketing is a key development that will accelerate the acceptability and convenience of booking air travel via an on-line travel agent. Since such a web-based e-ticket seller has no physical ticket to deliver, it can potentially sell from anywhere in the world to anyone in the world (Richer and 0'Neil-Dunne 1998).

The Tourism Destination Product Is Fragmented
As a place product, tourism includes all the elements a destination has to offer to tourists, including the  social,  cultural  and  physical environments as well the "touristic" components of tourism supply such as attractions, transport and lodging facilities, and other travel related services. Pollock (1999) highlights the difficulties in tourism destination marketing which are attributable primarily to two factors. First, tourism is fragmented in that while the tourist looks at a holiday as a complete "experience", it is sold in the market place "in bits" as beds, meals, tours, seats, etc. by a plethora of independent suppliers that operate independently of one another. Second, no one agency controls or can deliver content about a destination's tourism product as the marketing of a tourism destination is shared by another plethora of organisations such as tourist information centres, regional  tourism  boards,  national  tourism organisations and national tourist offices overseas located in main generating markets.

The Internet provides the effective means for a destination to develop a sustainable electronic "infrastructure" that is capable of establishing a comprehensive and multi-lingual destination web site. This site can present existing and potential tourists with up to date information, from a variety of sources, about the destination in all aspects of tourism - tourist attractions,  transportation, accommodation, tour operators, travel agencies, shopping and leisure facilities - as well as the background of its people, culture, history, economy, climate. The master destination database can be integrated through hyperlinks with individual tourism companies as well as with suite of applications which enable tourists to pick and mix to make their own holiday "packages". As such a mega-site could be the "portal" or the "home page" of the web sites of all tourism enterprises in a destinations, it is a great deal easier for the destination to establish itself in the already crowded web-space. From this first stop-of-call, an visitor can search for all the information he needs to make a decision as to whether to visit the destination, what facilities to use and to arrange for reservations and transactions online. In comparison, with the traditional media, in order to get the relevant information of a destination a tourist often needs to go to a travel agency to get a brochure, to a bookshop to get a guide book, and may also contact the destination's national tourist office to get some promotional literature. Furthermore, the printed literature the tourists get is often outdated while a properly constructed and maintained web site can provide right-to-the-minute information.

The Vast Majority of Tourism Enterprises Are Small In Size
The fragmented tourism industry is also polarised in that on the one hand, there are a few large multinational airlines, tour operators, hotel chains and theme parks; on the other, there are millions of small and often family owned businesses, especially in the travel retailing, tour guiding, hotel and catering sectors. For example, in Scotland the average size of the accommodation establishment in the Bed and Breakfast sector was 2.5 rooms in 1999. For the small tourism enterprises, the Web is probably the first effective and feasible medium for them to carry out professional marketing function beyond the basic sales and operating activities.

The Internet has opened the door for small businesses with little capital to reach a worldwide market. Open access results in lower entry barriers so that virtually anyone can both access and provide content to the Internet. Travel retailing is one of the sectors m the economy that requires very little initial capital investment. The Net also re-defines economies of scale, allowing small firms to achieve low unit costs for products and services in markets (such as tour operating) dominated by large companies. In the hospitality sector, small firms could also have more cost-effective marketing through the destination's web-site than the printed tourist directory. In essence, the Web "levels the playing field" (Hoffman and Novak 1996). For this reason, Inkpen (1998:178) goes so far as to praise the Internet as a marketer's "dream" because it enables companies of different sizes to compete on more equal terms. This analysis also applies to tourism destinations (as resorts, regions or nations). For example,  a strong web presence  may substantially increase the exposure of many small and developing destinations in the Western market where the high cost of mass media advertising made such exposure practically impossible in the past. Nevertheless, it must be noted that although it costs little to achieve a web exposure, the development of a fully functional marketing and sales site and especially the promotion of the site to increase visitor numbers require huge investment. Therefore, the Internet provides a level playing field for all sizes of companies only at the point of entry - that is, to establish a web presence.