TourismICTs and the Tourism System • The profilaration of the Internet and the expansion of networking have revelutionized tourism industry and have altered the core business for all stakeholders. • By networking tourism players globally, innovative operators have realized that a number of opportunities and challenges emerge. • Principlals use ICTs primarily to reduce operational and distribution costsby establishing powerful tools to interact directly with the consumers. • The innovative players took advantage of emerging ICT tools by developing appropriate products & services which add value in the process. Travel e22 Dimitrios BUHALIS - Information Technology for strategic tourism management
ICTs and the Tourism System • The key reasons for this slow migration process are: • Low profit margins in the industry result in reluctance to invest in ICTs. • ICTs develop faster than the industry is able or willing to follow • Small Players cannot aford. • Complete migration requires all members & channels of organization to follow this development. • On tourism supply side, ICTs play critical role on : • Production • Marketing • Financial • Operational and Distribution... Travel e22 Dimitrios BUHALIS - Information Technology for strategic tourism management
Distribution • Distribution have become the most critical factor for the competitiveness of the organizations & destinations. • Setting appropriate and effective distribution channels influence consumer behaviour as well as industry ability to respond guests & clients. • ICTs have revelutionized distribution channels effectively.(e.g.: CRSs, GDSs ). • As tourism intermediation is all about handling information & facilitating transactions, ICTs play critical role in the operation of intermediaries. Travel e22 Dimitrios BUHALIS - Information Technology for strategic tourism management
Distribution • While ICTs facilitate distribution, they influence the Marketing Mix (“P”s of Marketing): • Determine by assessing real-time demand & availability PRICE • Manupulate and formulate tourism by combining and specializing products according to customers’ needs & wants PRODUCT • Facilitate by targeting specific markets and establishing communucation PROMOTION • They also transform by introducing new distribution channels BUSINESS MODELS • Therfore, distribution channels bundle tourism products together, to make consumers confirm, and pay for the bookings. Travel e22 Dimitrios BUHALIS - Information Technology for strategic tourism management
Distribution • Consumer Needs & Wants that are satisfied by principle suppliers, Incoming&Outgoing tour travel agencies & our operators: • Non-stop creativity. • Pleasent experience • Individual attention • Product knowledge • Unbiased service • Product variety • Best Deals • Advice for decissions • Convenient Access • Value for time • Accurate & reliable information • Minimum form filling • Competent staff • Tourism distribution channels require detailed analysis before ICT needs are examined! Travel e22 Dimitrios BUHALIS - Information Technology for strategic tourism management
Operational Management • Today ICTs are in the center of tourism organizations’ tactical planning & operational management 1. Internet supported eTourism Management • Most tourism organizations today have their own detailed websites. They use internet to: • Selling travel products online directly to customers. They can also adopt dynamic pricing according to demand. • Brand building (Communucate the brand values on the webpage) • Loyalty clubs & affiliations. (Increase interaction with loyal customers, thus maximize customer loyalty). Airlines have pioneered loyalty clubs; e.g.: www.ba.com , www.thy.com .Not only to communucate, but also offer special priviliges and benefits, as well as they also assist customers to manage with their rewards, air-miles, etc. Travel e22 Dimitrios BUHALIS - Information Technology for strategic tourism management
Operational Management 2. Intranet systems & Intranet supported eTourism Management! • Communucation and interacting with staff and partners • Partner systems: e.g.: authorized tour operators can access • Facilitate a number of operational decissions • Controlling inventory helps principlals to actively anticipate and manage demand for their products. • Timely sharing of all data accross the organization, is critical for production; and selling • In addition, re-engineer, automate and facilitate entire business processes • Provides: eSales, eProcurement, eAccounting & eFinance, eHuman Resources... Travel e22 Dimitrios BUHALIS - Information Technology for strategic tourism management
Operational Management 3. Extranet systems supported eTourism Management! • Private intranet accessable to outsiders with privileges • Authorized tour company can access to a dedicated part of a hotel’s intranet to see corporate rates & availabilitiy, or update rooming list, etc. • Amadeus, Wordspan, etc screens at Travel Agency offices... Travel e22 Dimitrios BUHALIS - Information Technology for strategic tourism management
e-Airlines • Airlines have been using ICTs since 1960s. • Consequently, airlines moved fast towards Internet Protocol systems. • 20 % of all world airlines already established their webbased sales system, • 90% of airline companies have been reported to have started the migration to IPs. • Today airlines see their own websites, as the most important distribution channels • CRSs from 1970s, offered airlines a tool to manage their inventory internally, and also allowed distributors and partners to access information about availability and prices, schedules and routes • CRSs allowed airlines to compete fiercely, by adapting their schedules and fares according to demand. Travel e22 Dimitrios BUHALIS - Information Technology for strategic tourism management
e-Airlines • 1980s, the CRSs developed into a more comprehensive Global Distribution Systems (GDSs) • Scheduled Carriers = AirFrance, United Airlines, THY, etc • They primarily targeted Business Travelers for eTickets, hence they facilitated online tickets. • Developed interfaces with consumers over the web, but still keep their old traditional systems as alternative distribution channels (CRSs) • No Frills (Low Cost) = EasyJet, Jet Blue, etc. • All sold on the web with e-ticket; more often control, minimized distribution costs. • Charter = Britannia Airways, etc. • Not on the GDS. Travel e22 Dimitrios BUHALIS - Information Technology for strategic tourism management
e-Airlines • According to 2002 data, 2.8 % of all airlines revenue goes to ICT. • Strategic Functions of e-Airlines • Bussiness unit management. • Route Planning • Monitor competitors • Dynamic Pricing & yield management • Online Branding and communucation of principles to users • Partnerships and alliences Travel e22 Dimitrios BUHALIS - Information Technology for strategic tourism management
e-Airlines • Interface with consumers • Management of inventory & booking trhough GDSs and Internet • Reservation management, e-ticketing • Route Planning • Online Branding and communucation of principles to users • Dynamic Pricing & yield management • Special offers, promotions • eProcurement and management of supplies • Customer profiles, easy CRM, manage Loyalty clubs Travel e22 Dimitrios BUHALIS - Information Technology for strategic tourism management
e-Airlines • Crew Management Systems • Assist in creation of maintanence and duty schedules • Assess Crew planning & control • Comprehensive Crew databases to help contact with crew and crew control • Operations Control Systems • Enable airline to plan their operations and to analyse all incoming information • Automatic calculation and distribution of flight plans • Aircraft maintanence, etc. • Online catalogue system for ordering supplies • Various extranets.. Travel e22 Dimitrios BUHALIS - Information Technology for strategic tourism management
e-Airlines Hot NewsaboutEairlines & Low-costAirlines • “US sneezes, rest of theworldcatchescold” • Crisishittingall of us.. • Airpassengersfalldrammatically.. • Increasedoilcostsmakeallairtransportationsuffer.. • 1% oilincreasereducestravelby 0.12 % • -2% to -3% decrease in allWorld Travel is expected.. • Business & Corporate Travel getstheworstdecline.. • Vacationsarestillneeded; shortertripsclosetohometrips • Conference & Exhibitionindustrywillfall… • WebcastsandTeleconferenceswillincrease Travel e22 Dimitrios BUHALIS - Information Technology for strategic tourism management
e-Airlines Hot NewsaboutEairlines & Low-costAirlines • 2004 to 2008 LowCostairlinestripledtheirseatcapacity. • RyanAircarriesaroud 3,5 millionpassengersincomingtoGermany • 113 LowCostAirlinesoperate in Europe.. • 60% of allairtraffictoPoland is byLowCostAirlines… • LowCostAirlines stand for 40% of allEuropeanAir Travel… • Lufthansacloseddownmanyroutesduetolowcostcompetition • RyanAiropened 20 moreroutes in 2007-2008 • However… Travel e22 Dimitrios BUHALIS - Information Technology for strategic tourism management
e-Airlines Hot NewsaboutEairlines & Low-costAirlines • Lufthansafightbackwithadvertisements, alreadygot 10% seatcapacitybackfromLowCostAirlines.. (Lufthansamakes 1,5 billion Euro profiteveryyear, therforetheyhavecapitaltofightback..) • Duetocrisis in 2009, LufthansamighttakeoverAustrian.. • Duetohighoilprices, LowCostAirlineswill no longer be lowcost in 2009-2010. Therefore, reducedseatcapacity.. • Many of themwillgoout of business.. • Keyforairlineindustry is; peoplewanttoflyone-stop; same as airlineswanttoflyone-stop forcostreasons.. • That’showLowcostcarriersmadetheirwaysupby far.. Travel e22 Dimitrios BUHALIS - Information Technology for strategic tourism management
Forecastingfuture… / The Boeing Company, Seattle Travel e22
Forecasting future… / The Boeing Company, Seattle Travel e22
Airlines All Charts aretakenfrom : Current Market Outlook 2008-2027 / The Boeing Company, Seattle 2008 Travel e22
AirlinesWorldwideTrafficDistribution Travel e22
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Scenario Project FutureHotel Travel e22
www.futurehotel.de Travel e22
control of operational devices -voice control, sensoric control -control via mobile devices -usability -integrated solutions personalisation -guest profile -scenarios of usage -specific guest data -hotel management system media technologies & entertainment -TV-device -audio solutions -integrated displays -flexible projection surfaces -infotainment platform work place -network infrastructure -ergonomics -flexible display usage -standardised interfaces -services & support -integration of brought along private technical devices light -LED, OLED -light effects bathroom equipment -integrated sanitary objects -display mirror wellness & health -FutureSpa -EnergyBed automation -virtual mini bar -service and cleaning robots security -access technology, guest identification -check in, check out energy efficiency facility management technology integration comfort & guest satisfaction
