1

CERTIFICATE

This is to certify that the thesis entitled “IMPACT OF E-COMMERCE BUSINESS

ON BUSINESS PERFORMANCE: A STUDY WITH RESPECT TO TRAVEL

INDUSTRY” and submitted by MrMurtaza Adenwala is the bonafide research

work for the award of the Master of Philosophy in Business Management at the D.Y.

Patil University, Navi Mumbai, School of Management in partial fulfillment of the

requirements for the award of the degree of Master of Philosophy in Business

Management and that the thesis has not formed the basis of the award previously of

any degree, diploma, associate ship, fellowship or any other similar title of any

university or institution.

Also it is certified that the thesis represents an independent work on the part of the

candidate.

Place: Navi Mumbai

Date:
2
Dr. R. Gopal
(Director and Head of the Department, Signature of the Guide

D.Y.Patil University, Navi Mumbai,

School of Management)

3
 ACKNOWLEDGMENT

I am greatly indebted to D.Y.Patil University School of Management, which has

accepted me for the M.Phil. program and provided me with an excellent opportunity

to carry out the present research work.

I thank Dr. R.GOPAL, Director, D.Y.Patil University School of Management, for

giving me his valuable guidance for the project. Without his help it would have been

impossible for me to complete the dissertation.

I would also like to thank the various types of travel related organizations who have

contributed in providing vital information related to the “impact of structuring of the

e-commerce business on business performance” via a structured questionnaire without

which the research could not have been completed.

I would be failing in my duty if I did not acknowledge with a deep sense of gratitude

to my family and friends for their endless love, prayers and encouragement.

Place: Mumbai Signature of the student

4
Date: (MURTAZA ADENWALA)

5
 PREFACE

Online transactions in the travel and tourism industry are continuously increasing

despite tough economic problems in this arena and fewer travelers overall. This

industry is the leading application in the B2C (business-to-consumer) arena. Whereas

other industries are displaying a stronger hold to traditional processes, the tourism

industry is witnessing an acceptance of ecommerce to the extent that the entire

industry structure is changing. The Web is used not only for information gathering,

but also for ordering services. Tourism is an information-based industry it is one of

the natural leading industries on the Internet). It is anticipated that most, if not all,

sectors in the travel and tourism industry throughout the world will have sites on the

Internet; showing the suitable marriage of two of the world‟s fastest growing

industries: information technology and tourism. E- travel is the leading and fastest

growing category of e-commerce. In order to exploit these opportunities in the market

environment, tourism businesses have developed and implemented several business

models.

E-commerce in travel and tourism is growing day by day which provide opportunity

to this industry to groom and grow. Due to change in Information technology, e

commerce is emerged in this industry and companies are now heading toward e-

business through website, internet and different online software. Moving from

traditional business way to e-commerce way is quite challenging and various factors

are standing as a barrier for companies to adapt e-commerce. There several

advantages and disadvantages of e-commerce in travel and tourism industry. To adapt

6
e-commerce, this industry's main challenge is to transform traditional buyers to e-

commerce buyers. The purpose of this literature review is to give short introduction

on travel and tourism industry along with the impact on this industry after adaption of

ecommerce. What will be benefits after adapting e-commerce and what are the

barriers, which stop firms to enter in e-business? A short description on consumer

behavior on e-commerce is also gazed on this review.

Tourism and the Internet are ideal partners. For consumers, when they are

planning a trip to a new destination, they face the problem of making a costly

purchase without being able to see the product. The Internet provides them with

the means to gain immediate access to relevant information of greater variety

and depth than has been available previously, about destinations throughout the

world; and to book quickly and easily.

For tourism destinations and businesses, it offers the potential to make

information and booking facilities available to large numbers of consumers at

relatively low cost; it enables them to make large-scale savings on the

production and distribution of print and on other traditional activities (e.g. call

centres and information centres); and it provide a tool for communication and

relationship development with tourism suppliers and market intermediaries, as

well as end-consumers.

Tourism has a key difference from most other sectors of e-commerce – its

consumer goes and collects the product at the point of production – i.e. the

destination. Thus the tourism sector avoids the need to deliver products around

the world - a task that faces real logistical problems that have been a major

source of customer dissatisfaction.

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 These factors, taken together, have resulted in the travel and tourism sector

taking a larger and larger share of e-commerce globally The study of E-

Commerce in the tourism industry has emerged as a „frontier area‟ for

information technology. E-commerce deals with the process of buying and

selling or exchanging products, services and information via computer network .

The introduction of smart phones represents one of the most significant

technological developments of recent years, and it is having a major impact on

the travel industry, due to the mobile nature of travellers.

In the mobile travel era, travellers expect real time answers wherever they are

and at any time, before, during and after the trip. These include booking

capabilities when on the go.

The emergence of new and high tech mobile phones has again stirred a revolution in mobile

technology. This is especially helpful as these phones allow a user to access internet and book

services online. Hence, one can also book tour packages and other travel related services through

the mobile.Travel industry related organizations place high importance on having flights and hotel

both as a independent product on their website. The advantage of having flights and hotels makes

the travel website one stop destination for key travel needs.

In this dissertation technological as well as commercial both aspects have been dealt with .

This attempts to study how E commerce in travel related organizations impacts overall company’s

growth. I have tried my best to do justice with this topic and I also hope that this project proves to

be a source of updated information on latest E commerce technologies , trends and developments.

8
 TABLE OF CONTENTS

Chapter No Particulars Page No

Declaration ii

Certificate iii

Acknowledgement iv

Table Of Contents v & vi

List Of Figures vii

List Of Tables viii

List Of Abbreviation‟s ix

Executive Summary x

1 Introduction 1

2 Objective & Research Methodology 20

2.1 Purpose Of The Study 21

3.2 Scope Of The Study 22

3.3 Limitation Of The Study 23

3.4 Research Methodology 24

4 Tourism Sector – Global Scenario 28

5 Tourism Sector – Indian Scenario 43

6 Adventure Tourism 61

Internet Usage, Online Travel Industry In India, Key Success

7 74
Factors When Applying E-Commerce To Travel Industry

9
7.1 Internet Usage In India 75

10
7.2 Scenario Of Online Travel Industry In India 78

Key Factors When Applying E-Commerce To The Travel

7.3 81
Industry

7.4 Traveler‟s Trip Planning Behaviour 82

7.5 The Future Of E-Commerce In Travel 90

7.6 The Effect Of E-Commerce In Travel 91

7.7 E-Commerce In Airline Business 92

7.8 E-Commerce Impact On The Travel Agency Industry

97

7.9 Information Technology In The Tourism And Travel Industry 98

8 Travel Industry‟s Guide To Mobile Advertising 104

9 Customer Acquisition Channels For Hotels 117

10 Data Analysis& Findings 131

11 Conclusion 202

12 Suggestion & Recommendation 205

Reference Section

Annexure 1 – Bibliography 208

Annexure 2 – Webliography 210

Annexure 3 – Questionnaire 211

11
 LIST OF ABBREVATIONS

OTA – Online Travel Agent

CAGR – Compound Annual Growth Rate

GDP – Gross Domestic Product

IAMAI – Internet and Mobile Association of India

IMRB – India Market Research Bureau

ROI – Return on Investment

PE – Private Equity

VC – Venture Capitalist

ROI – Return on Investment

GDS – Global Distribution System

TAFI – Travel Agents Federation of India

IATA – International Air Transport Association

CRS – Computer Reservation System

UNWTO – World Tourism Organization

FAM – Familiarization Trip

12
CCID - China Center for Information Industry Development

CNTA - China National Tourism Administratio

13
14
Chapter 1

Introduction

Tourism Industry is one of the backbones of economy in developed, developing

and underdeveloped countries and one of the major sources of foreign

exchequer. This industry is growing very rapidly and millions of people are

directly and indirectly associated with this Industry. This industry represents

accounts for 9.2 percent of global GDP, 10.9 percent of world exports, and 9.4

percent of world investment. "E- commerce is defined as the process of buying

and selling or exchanging products, services and information via computer

networks including the internet.‖ There are various advantages of using internet

in tourism as it is fast and easy to access destination, receive price, search

popular destinations and get information about destination etc. as well as it

15
generates income for many people around the globe. However, it has some

limitations as some information may not be correct, outdated, portrayed and we

have seen several online fraud case too. With rise of internet usage on people's

daily life, tourism industries are tapping business through e-commerce. E-

commerce refers both financial and informational transaction through electronic

media between on organization, between people or to third party . Through e-

commerce, these industries are trying to reach global population to enhance their

business through different e-commerce tools and ad there will be more and more

challenge to these sectors in coming days for adopting e-commerce. Digital

commerce in India has evolved over the past decade in terms of magnitude.

The research focuses on seeking insights from the organizations in the travel

industry in four key areas major steps make up the structuring phase for new

e-business projects using

existing products and services, processes and markets:

(1) Critical Success Factors that make e-commerce business profitable in the

travel industry related organizations

(2) Methods & practices to structure the e-commerce business in the travel

industry related organizations

(3) Factors which will have a impact on overall business performance as a result

of the structuring of e-commerce business in the travel industry related

organizations and

(4) Factors that are Detrimental to the growth of the e-commerce business in the

16
travel industry related organizations.

Increasingly we have observed that travel and tourism are not influenced by

advertisements but by word-of-mouth and references. In addition to the

traditional channels of referencing and word-of-mouth, the current traveler is

more than ever reading and sharing travel-related content online which has been

created and posted by peers rather than by travel service providers. Online travel

contributes 70% of all e-commerce activities globally. Private equity players

have made huge investments in the online travel agency (OTA) segment in the

past two years. With the Indian holiday season on the horizon, Hitwise India

conducted a study to understand trip-planning behavior exhibiting how

internet is used as

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information source for planning pleasure trips. Non-air ticket booking segment

is growing fast with the entry of Indian Railways in the online space and many

OTA‘s providing online bus and train bookings. Demand for tour packages have

increased among both domestic and international tourists.

The study indicates that the typical Indian traveler does not like to makes

spontaneous decisions and plans the trip in advance. An evolved traveler starts

planning the trip 3 months in advance by visiting travel related blogs, forums,

travel related video‘s/photographs, travel review sites. Online travel reviews are

traveler‘s experience which helps travelers learn about a travel destination and

narrow down their choices. The study identifies that an online traveler evaluates

his holiday destination options and then initiates the trip booking process by

visiting the OTA‘s and accommodation sites to evaluate, compare and book.

Thus indicating that most travel purchases take place well after a consumer‘s

initial search. The study indicates that the Indian internet consumer uses emails

after visiting airline websites. The study also indicates Social Media is now a

marketing tool used by marketers to engage with the target audience through

online communities to generate exposure, opportunity and sales. Social

networking sites helps users plan their trips by getting tips from users, by

browsing photos and video‘s, suggestion on itineraries. We are now at a stage

where the target channel for marketing is social media. Selling happens more

and more in the virtual world. Travel companies are increasingly targeting

consumers directly on Twitter and Facebook. Hyatt was the first major hotel

group to offer a global 24/7 ‘Twitter Concierge.‘ Almost every major travel

brand offers customer service via social media, but Hyatt was the first to

18
specifically name it and create a separate account (@HyattConcierge). They‘re

now asking guests to use it to book spa appointments, dinner reservations, etc.

and make special requests. Behavior of Indian traveler is quite different when he

makes purchase of an air ticket and a hotel room night. Unlike purchase of air

ticket, Indian traveler always looks for bargain opportunities while

purchasing/booking a room night.

Top 5 Trends

• Online travel going mobile changing e-travel to m-travel

• Religious travel is becoming a hot segment in online travel

• Meta search engine is the latest innovation in online travel. They help

people find the best travel choices easily by searching the data from hundreds

of travel sites at once

• Competition in online booking is moving away from air to non-air segment

• Social media will exert greater influence on travel planning and purchasing

Players Overview

• Makemytrip, Yatra, Cleartrip and Travelocity are the leading players in the

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 OTA segment.

• IXIGO, Ezeego1 and Zoomtra are the leading meta search engines in Online

travel

• Club Mahindra Resorts, Taj Hotels and Resorts and Palaces and
Intercontinental Resorts are the leading players in the Accommodation Segment

From the emerging trends, the clear message that emerges is that not only would

it be prudent to focus on the domestic travel market, but it would also be

necessary to keep a finger on the pulse of the ever dynamic travel industry.

Internet usage in India has gone up with more and more Internet Users using the

Internet on a regular basis. In Sep 2019, India had 451 Million Internet Users. In

India, there were 390.9 Million users accessing the Internet on Mobile devices

in 2018.

India has second highest number of internet users after china , According to the

report of economic times.

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 Chapter 2

Literature Review& Research Gap

Many researchers or scholars have done various researches about e-commerce in

travel and tourism industry. Many of them have pointed positive impact of e-

commerce in travel and tourism and some have pointed challenges for adopting

e-commerce and barriers of e-commerce in travel and tourism industry. E-

commerce in travel and tourism industries are continuously increasing despite of

tough economic problems. As per them, this industry is adopting application of

B2B (business to business) and B2C (business to consumer). This industry has

changed the ways of do business for traditional ways to modern way, i.e. e-

commerce via web and other online transaction software where as other

industries are still adopting the traditional way. Web is changing the behaviour

of consumers are well as they are becoming less loyal, take less time for

choosing and consuming the tourism products. As this industry is service

oriented business industry, companies are implementing various new techniques

to satisfy consumer needs and providing information to them through web and

different value generating strategies like value extraction, value capture, value

addition value creation. Travel and tourism is information based service

orientated business and the product is termed as "confidence good" and prior

comprehensive assessment of quality is impossible however due to use of e-

commerce feeds backs from consumers can be obtained in short span of time

and this services can be enhanced accordingly. Due to adoption of e-commerce

in travel and tourism industry consumers are becoming more powerful players
21
as they can choose their destination and sites in few minutes whereas travel

22
agents, travel websites etc. see diminishing power in sales however they are

providing new market functionality using new technologies to attract more

consumers. Many tour operator, travel agents, online travel agents are using

these strategy to attract more consumers however using more high-tech

technologies needs huge investments, need more high skill human resource etc.

There are various factors, which are considered that travel and tourism will

adapt ecommerce strategy. There are main two factors for conducting successful

e-commerce strategy which are security of the e-commerce system and user-

friendly Web interface. Security means not only securing own system but also

providing security assurance to users who are using the sites or online software.

User friendly web interface give consumer trust and it's easy to convenience for

customers. Beside these factors other factors are also essential to succeed which

are top management support, IT infrastructure, and customer acceptance. Top

management support plays vital role as they are the decision makers and their

support and decision will direct the company to use the strategy. Further, he also

explained that without proper IT structure and skilled human resources, e-

commerce strategy will fail. One of the factors he explained is customer

acceptance; customer acceptance means the way customer accepts the web or

online software of the company and it should have very rich contents and very

easy to use . Buyers are those people who actually intend to buy the services

whereas browsers are those who intend to surf and get

information only.

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There are various benefits for small and medium sized tourism enterprise to use

e-commerce. Few benefits of using e-commerce in tourism which are as

follows; -

Providing easy access to information on tourism products and services

Providing better information on tourism products and services

Providing convenience for customers

Expanding choices by customers

Creating new markets

Establishing interactive relationship with customers

Improving customer services

Improving image and public recognition of the small & medium sized

tourism enterprises

Saving time for providing tourism services

Providing customized & specialized tourism products & services

Reducing operating cost

Simplifying the process business

Interacting with business partners

Founding new business partners

24
E-Commerce is huge lap in travel and tourism industry moving from traditional

way to technological way and there are various barriers for travel and tourism

companies to adapt e-commerce in their business, include 'limited knowledge of

available technology,' 'lack of awareness,' 'cost of initial investment,' 'lack of

confidence in the benefits of e-commerce,' and 'cost of system maintenance.'

These barriers also include 'shortage of skilled human resources,' and 'resistance

to adoption of e-commerce.' Further he mentioned 'insufficient e-commerce

infrastructure,' and 'small e-commerce market size' might be barrier factors

depending upon the market size. Moving from traditional way to technological

way is not easy so in order to adapt e-commerce huge investment on

Information Technological (IT) have to done along with this staffs have to be

trained accordingly. It is not always possible for small and medium size

companies to invest huge amount and get skill human resource people. Some

countries have different rules and regulation for e-commerce business rather

than traditional ways. Government rules and regulation also plays a vital role for

adapting e-commerce. Further, websites and software must be rich in contents

very easy to use, updated time to time. If these factors are ignored than these

factors will be barrier of e-commerce in tourism.There are several challenges to

adopt e-commerce in travel and tourism industry. The behaviour of customers is

changing and due to e-commerce they swap agency in few minutes if they are

not happy with them

One of the studies investigated the critical success factors for e-commerce. The

dissertation addressed four research questions: (1) Regardless of industry, what

are the critical success factors relevant to all companies engaged in e-

25
commerce? (2) What are key requirements that all e-commerce companies must

have in order to enter the industry? (3) What is the company‘s ecommerce

business model? (4) How is the company‘s business performance?

Potential E-Business Development in Tourism

E-business is the use of information and communications technologies in all

activities of a firmboth internally and in relation to its outside partners. The

tourism industry consists of manycompanies dabbling in various activities,

ranging from (1) tour operators (2) travel agents (3) tourist guide services (4)

airlines (5) transportation (6) hotels and guesthouses (10) tourism education and

training institutions; (11) local touristoffices.ICTs are seen asmajor tools with

the potential to fundamentally change business behavior and company strategies

The gaps identified are as follows:

Critical Success Factors that make e-commerce business profitable in the

travel industry related organizations

Factors which will have a impact on overall business performance as a

result of the structuring of e-commerce business in the travel industry
related organizations

Analyze the impact of e-commerce on brand imagery

Methods & practices to structure the e-commerce business in the travel

industry related organizations

How can one sustain competitive advantage in Web commerce?

How does one measure e-commerce business success (or 'derive ROI‘)

Barriers and challenges e-commerce business face during the

implementation and growth

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 Chapter 3

Objective & Research Methodology

Purpose Of The Study

Scope Of The Study

Limitation Of The Study

Research Methodology

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 Chapter 3

Objective & Research Methodology

Purpose Of The Study

From the above little introduction, we can simply say that e-commerce is

bringing various opportunities in travel and tourism sectors. Many industries on

this field had already adopted e-commerce and some are on the way to adopt it

to enhance their services and better facilitate their customers however these

developments have certain impacts on the behaviour of customers as well in

industry.

My prime focus on this research paper is to find out the impact and challenge of

e-commerce in travel and tourism industry and reviewing it through different

academic journals. Through those journals I will be able to answer, how will be

travel and tourism industry benefit if they adopt e-commerce, what are the

customers' perceptions on travel and Tourism Company which adopts e-

commerce and what are the benefits and limitations of e-commerce in travel and

tourism. Further my main objectives of research are to find out following: -

To identify the methods & practices to structure the e-commerce

business in the travel industry related organizations

To identify the critical success factors that make e-commerce business

28
profitable & identify factors that are detrimental to the growth of the e-

commerce business in the travel industry related organizations

29
 To identify the factors which will have a impact on overall business

performance as a result of the structuring of e-commerce business in the

travel industry related organizations

Scope Of The Study

The internet‘s global reach, interactivity, and information-rich context have

redefined the travel industry. Online travel commerce has evolved significantly

from the initial sales of less complex products like airline tickets,

accommodation and car rentals to include more complex products like vacation

packages and cruises. Several studies have revealed that online travel rates

among the top three products and services purchased online. The goal of this

dissertation is to assess the methods and practices adopted to structure the e-

commerce business in the travel related organizations and the factors that define

the success of e-commerce business in the travel related organizations. The

dissertation also focuses on factors that are detrimental to the growth of e-

commerce business in travel related organizations. The study draws attention

towards the changing patterns in travelers trip planning behavior. The study

highlights the advertising channels used for brand awareness and customer

acquisition. The dissertation dwells deep into how travel and tourism have used

information technology to enable business growth. It also aims to analyze some

of the most critical IT developments and to demonstrate how they influence the

tourism industry and significantly enhance competitive advantage. Tourism is

inevitably influenced by the business process re-engineering experienced due to

the technological revolution. As information is the life-blood of the travel

30
industry, effective use of ITs is pivotal. Hence, "a whole system of ITs is being

31
rapidly diffused throughout the tourism industry and no player will escape its

impacts". Unlike durable goods, intangible tourism services cannot be

physically displayed or inspected at the point of sale before purchasing. They

are bought before the time of their use and away from the place of consumption.

Hence they depend exclusively upon representations and descriptions, provided

by the travel trade, (e.g. information in brochures), for their ability to attract

consumers. Timely and accurate information, relevant to consumers' needs, is

often the key to satisfaction of tourist demand. Therefore, ITs provide the

information backbone that facilitates tourism.

Limitation Of The Study

The scope of the study was limited to how e-commerce as a business channel is

established in the travel and tourism industry. Other industries are not included

in this study. The study is based on opinions e-commerce practitioners have

given with respect to how e-commerce can be set-up in travel related

organizations. Sample selection is limited to only 3 metro cities of India and

would limit the ability to draw generalization in this study. Main concern comes

from the fact that though travel industry has been the first adopters of e-

commerce however they are slow in adopting the new methods and practices

emerging in the e-commerce space related to the travel industry. Finally,

although the number of respondents was sufficient to conduct this study,

however, a larger samplesize would have strengthened the results obtained.

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 Research Methodology

This research aims to explore the impact of structuring the e-commerce business

on the overall business performance in the travel industry. Factors which will

have a impact on overall business performance as a result of the structuring of e-

commerce business in the travel industry related organizations, Methods &

practices to structure the e-commerce business in the travel industry related

organizations, Factors that are detrimental to the growth of the e-commerce

business in the travel industry related organizations. The research exercise was

focused on educating the travel industry with regards to what all areas are

critical and need to be implemented in order to structure the e- commerce

division which will lead to profitable results and impact the over all business

process.

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 Chapter 4

Tourism Sector – Global Scenario

The travel and tourism industry is one of the world‘s largest industries with a

global economic contribution (direct, indirect and induced). The direct

contribution of Travel & Tourism to GDP in 2018 was USD2,750.7bn (3.2% of

GDP). This is forecast to rise by 3.6% to USD2,849.2bn in 2019.

Tourism truly has become a global economic and social force. Travel is costly.

Historically, only wealthy individuals could afford to travel abroad, and they

tended to travel to affluent countries with quality tourism infrastructure and

services. Not surprisingly, Europe and North America have been the largest

sources and recipients of international tourists. But this, too, is changing. In

recent decades, tourist arrivals in emerging countries have grown much faster

than in developed ones. The Asia-Pacific region has seen—and will continue to

see—the fastest growth.

From a geographic viewpoint, there has been a remarkable rise in Asian tourists,

particularly from China and East Asian countries. Further, the average age of the

international tourist has also been reducing representing a growing segment of

young tourists who would typically travel to take a break from increasingly

stressful professional lives

34
35
 Chapter 5

Tourism Sector – Indian Scenario

The growing influence of the tourism sector as an economic powerhouse and its potential as a tool for
development are irrefutable. Not only does the tourism sector spearhead growth, it also improves the
quality of people’s lives with its capacity to create large scale employment of diverse kind. It supports
environmental protection, champions diverse cultural heritage and strengthens peace in the world.
Facilitation as well as strengthening of tourism in India is the main objective of Ministry of Tourism.
Augmenting tourism infrastructure, easing of visa regime, assurance of quality standards in services of
tourism service providers, projection of the country as a 365 days tourist destination, promotion of
sustainable tourism etc. are some of the policy areas that need to be constantly worked upon to
increase and facilitate tourism in India

Tourism Outlook – India

Given the Global Tourism perspective, buoyancy in the Indian Economy and

growth in the related ancillary industries like Infrastructure and Aviation, the

Tourism Industry is expected to be on an upswing in India During 2018, a

total of 2.4 million foreign tourists arrived on e-Tourist Visa registering a

growth of 39.6% over the previous year. 3 FTAs during 2018 were 10.56

million (Provisional) with a growth of 5.2% over the previous year. 1.4

36
Foreign Exchange Earnings (FEEs) during the period 2018 were Rs.

1,94,892 crores (Provisional estimates) with a growth of 9.6% over the

previous year. FEEs during the period 2018 were US$ 28.592 billion

(Provisional estimates) with a growth of 4.7% over the previous year.

India Tourism – Global Recognition

The last few years have been highly successful for India Tourism. The

‗Incredible India‘ campaign has enabled the destination to penetrate global

market and reach the ultimate consumer through electronic, print and

internet media. On account of the spurt that India has witnessed in tourist

arrivals in the recent times and given the unique and immense potential the

country has as a ‗vacation destination‘, The World Travel and Tourism

37
 Council has identified India as one of the foremost tourism growth centers in

the world, in the coming decade. Integrated endeavors of the Ministry of

Tourism, Government of India have led to India winning the following

international acclaims: -

Conde Nast Traveller, the worlds‘ leading travel and tourism journal

has ranked India amongst the top 4 preferred holiday destinations of

the world

India amongst the top 5 favorite destinations – Lonely Planet in a

survey of 167 countries

ABTA (Association of British Travel Agency) has ranked India as

No. 1 amongst top 50 places for 2006

The Incredible India campaign has been the winner of PATA Gold

Award for best Print Ad Campaign and PATA Gold Award for Best

Destination Marketing Campaign

The Incredible India Campaign has been ranked as the ‗Highest

Recall Advertisement worldwide by Travel and Leisure World

Travel Awards received for a) Asia‘s Leading Destination b)

World‘s leading Travel Destination Television Commercial c)

Worlds‘ Leading Responsible Tourism Project, for Endogenous

Tourism Project and d) Asia's leading tourism and convention

bureau.

Increasingly, Tourism as a sector seems to be emerging to be one of the main

driving engines of the Indian Economy.

Though there are many definitions for tourism, it could be simply defined as a

38
―travel and stay of a non-resident‖. In order to travel to a particular area there

39
must be a reason. For example a person may travel for leisure, business, visiting

friends and relatives, health, education etc. He/she chooses a destination for one

or the other reason. Transport is necessary to travel and accommodation to stay

at the destination. So, tourism as an industry has three major components:

Attraction, Accommodation and Transport. In the developed world, today, all

these components have reached at their zenith in satisfying their customers‘

needs aided by modern technology. These components have also came a long

way to offer a range of products which suit the needs of multitude tourists

around the world, and are still working hard to cater to an ever changing test of

them. Tourism is ranking the top ahead of all other categories of international

trade. This growth of tourism activity clearly marks tourism as one of the most

remarkable economic and social phenomena in the world.

The Tourism Industry Components and Requirements of

the Tourists

As indicated above the tourism industry is made up of three major

components: namely,

Attraction sector which comprises manmade and natural attractions

which are developed to satisfy visitors educational, recreational,

aesthetic needs etc.

Advertising sector, which includes advertising through mass media and

the internet.

Accommodation sector, all types of establishments that offer lodging to

40
visitors

Transport sector, which includes air, water and surface transport.

41
 Attraction Sector

In the case of attractions both manmade and natural attraction owners need

to communicate or inform their customers and potential customers about

their production. Information about the kind of attraction, where they are

located and how to get there is of vital importance. The attraction owners

particularly the national tourists offices discharge their duty of promoting

country‘s tourist attractions using the information technology products.

Information through promotional videos, Internet web sites, television

advertisements and travel documentaries are the main information

dissemination tools.

Accommodation Sector

In the accommodation sector also the contribution of information technology

is prominent. Any individual or group wishing to travel to any part of the

world now has an easy access to the accommodation service providers. A

visitor can access information about the kind of hotels at the destination,

their ranges of product, the price and other relevant information without

leaving his/her office. What one has to do is ring up a travel agency and get

the expert advice.

This will help any visitor greatly as to where to stay during any kind of away

from home. Here the information can be obtained aided by still or moving

pictures in order to give exact feature of an accommodation, facilities and

42
services of ones choice. At a destination also visitors are at ease during their

stay in every respect, in getting information about their business, family or

43
other information back home. They are also at ease to relax with the videos

and television entertainment programs, which now days are part and parcel

of many accommodation units.

Advertising Sector

Travel and tourism fit especially well with interactive media because they

are an information intensive industry where transactions can be made online,

and current web users are heavy users of travel and tourism products and

services. Interactive media call for interactive marketing. The essence of

interactive marketing is the use of information from the customer rather than

about the customer. It differs from traditional marketing since it is based on

a dialogue instead of one-way communication and it deals with individual

consumers instead of mass markets. According to parsons the success

factors for marketing on web are

Attracting users

Engaging users interest and participation

Retaining users and ensuring they return

Learning about user preferences

Relating back to users to provide customized interactions

44
 Transport Sector

Transport provides the essential link between tourism origin and destination

areas and facilitates the movement of holidaymakers, business travellers,

45
people visiting friends and relatives and those undertaking educational and

health tourism. Before setting out on a journey of any kind, every traveler

makes sure which transport company has a good safety record.

To this effect airplanes coaches and even taxis in many countries with

developed tourism business, they are equipped with radio communication

systems for various uses. For e.g. the driver or the tour guide updates the

tour company headquarters about the progress of the tour throughout the

touring period. This communication ensures the safety of tourists. Fast and

easy information flow is of paramount importance to build confidence in the

traveling public. In recent years, the confidence built due to use of modern

IT has been demonstrated by a tremendous increase in the number of

travelers worldwide.

Foreign Tourist Arrivals (FTAs)

During 2011 FTAs in India were 6.31 million with a growth of 9.2% over

2010. FTAs during 2012 were 6.65 (provisional) million with a growth of

5.4%, as compared to the FTAs of 6.31 million during 2011.

Foreign Exchange Earnings (FEE) from Tourism

Tourism is an important sector of Indian economy and contributes

substantially in the country‘s Foreign Exchange Earnings. FEEs from

tourism, in rupee terms, during 2011 was Rs.77,591crore (provisional), with

a growth of 19.6%, as compared to the FEEs of Rs.64,889 crore

(provisional) during 2010.

46
During 2012, the Foreign Exchange Earnings (FEEs) from tourism

registered a growth of 21.8% from Rs.77,591 to Rs.94,487

47
crore(provisional) when compared to FEEs during 2011. A statement giving

FTAs in India and FEEs from tourism fro the years 2000 to 2012 is given

below:

Figure no 4

Domestic Tourism

The domestic tourist visits during the year 2011 are estimated to be 851

million, showing a growth of 13.8% over 2010.

Visa on Arrival (VoA)

Considering the importance of Visa facilities in enhancing tourist inflow, the

48
facility of Long Term Tourist Visas‟ of five years duration with multiple

entry, carrying a stipulation of 90 days for each visit, has been introduced on

a pilot basis for the nationals of the 18 selected countries.

49
The findings of an evaluation study conducted by this Ministry have

reinforced the belief that the presence of the facility of ―Visa on Arrival‖

(VoA) significantly influences the tourists‟ travel plans to any country.

During 2012, a total number of 16,084 VoAs (Visa on Arrival) were issued

as compared to 12,761 VoAs during the corresponding period of 2011,

thereby showing a growth of 26%. Efforts are on to extend the VoA facility

for the nationals of more countries.

Publicity And Marketing Strategy

As part of its domestic and global publicity and marketing strategy to

promote tourism and create social awareness through the print and electronic

media, the Ministry of Tourism launched campaigns on Clean India,

AtithiDevoBhava and Hunar Se Rozgaar through radio channels. Campaigns

highlighting the tourism potential of North-East and J&K were also carried

out through Doordarshan. Campaigns were also taken up for ―Incredible

India‖ branding on TV during 2nd Formula Grand Prix and London

Olympics, 2012, during the International Film Festival of India (IFFI) held

in Goa, and during the International India Film Academy (IIFA) Awards

2012 in Singapore.

The Ministry had participated in major international Travel Fairs and

Exhibitions in important tourist generating markets the world over, as well

as in emerging and potential markets, to showcase and promote the tourism

products of the country. These included Arabian Travel Market (ATM) in

Dubai, International Trade Business (ITB-Asia) in Singapore, World Travel

50
Market (WTM) in London, International Meetings Exhibitions (IMEX) in

Frankfurt, International Tourism Trade Fair (FITUR) in Madrid, etc.

To showcase and project the Buddhist Heritage of India, an International

Buddhist Conclave was organized by the Ministry of Tourism in Varanasi in

September 2012 and attended by 132 international delegates from around 30

countries. The delegates were taken for a visit to Sarnath and Bodh Gaya.

For the first time, an International Tourism Mart was held at Guwahati in

January, 2013 to showcase the largely untapped tourism potential of the

north-Eastern region in the domestic and international markets.79

International Buyers and media delegates from 23 countries and hundreds of

tour operators from different parts of India participated in the Mart and

engaged in one-to-one meetings with sellers from the North East Region and

West Bengal. The international delegates were taken on Familiarization

Tours of the North Eastern Region.

Niche Tourism Products

The Ministry of Tourism has also taken the initiative of identifying,

diversifying, developing and promoting the nascent/upcoming niche

products of the tourism industry. This is done in order to overcome the

aspect of „seasonality‟ to promote India as a 365 days destination, attract

tourists with specific interests and to ensure repeat visits for the products in

which India has comparative advantage. Accordingly, the following Niche

Products have been identified by the Ministry of Tourism for development

51
and Promotion:

52
 Cruise

Adventure

Medical

Wellness

Golf

Polo

Meetings Incentives Conferences and Exhibitions (MICE)

Eco- Tourism

Film Tourism

Cruise Tourism

“Cruise Shipping is one of the most dynamic and fastest growing

components of the leisure industry worldwide. India with its vast and

beautiful coastline, virgin forests and undisturbed idyllic islands, rich

historical and cultural heritage, can emerge as an attractive tourist

destination for cruise tourists.

Central financial assistance for Cruise Tourism project of Rs. 1450.00 lakh

was sanctioned by the Ministry of Tourism for development of Tourism

Infrastructure in Willing Island, Cochin Port, during the year 2008-09. An

53
amount of Rs. 491.53 lakh had been sanctioned and Rs. 245.77 lakh released

during 2011-12 to Cochin Port Trust for the development of Cruise

Passenger facilitation center at Cochin Port.

54
 Adventure Tourism

Adventure tourism involves travel to remote, exotic areas, for exploration as

for undertaking activities, which test the endurance of both a person and his

equipment. Adventure tourism is rapidly growing in popularity as tourists

seek different kinds of vacations. Central Financial Assistance is being

extended to State Governments/Union Territory Administrations for

development of tourism infrastructure in destinations including adventure

tourism destinations. These include facilities for trekking, rock climbing,

mountaineering, aero-sports, winter/water related sports, trekker huts,

wildlife viewing facilities, etc. Financial assistance to State Governments is

also provided for the purchase of water sports equipments consisting of

kayaks, canoes, paddleboats, fibre glass boats, hovercrafts, water scooters,

etc. This year, the Ministry of Tourism has sanctioned an amount of

Rs.220.76 lakh to the Indian Institute of Skiing & Mountaineering; Gulmarg

(IISM) for conduct of adventure courses as follows:

Figure no. 5

55
 Medical Tourism

Medical tourism (also called medical travel, health tourism or global

healthcare) is a term used to describe the rapidly-growing practice of

traveling across international borders to obtain health care. Services

typically sought by travelers include elective procedures as well as complex

specialized surgeries such as joint replacement (knee/hip), cardiac surgery,

dental surgery, and cosmetic surgeries. Besides India, there are several

Asian destinations like Singapore, Malaysia and Thailand that are offering

Medical care facilities and promoting medical tourism. India excels among

them for the following reasons: -

State of the Art Medical facilities

Reputed health care professionals

Quality nursing facilities

No waiting time for availing the medical services

India‘s traditional healthcare therapies like Ayurveda and Yoga combined

with allopathic treatment provide holistic wellness. Financial support as per

guidelines and availability of funds under the Market Development

Assistance Scheme (MDA) is provided to following approved Medical

Tourism Service Providers:

Representatives of Hospitals accredited by Joint Commission

56
International (JCI) and the National Accreditation Board of

Hospitals and Healthcare Services (NABH).

Medical Tourism facilitators (travel agents/tour operators) approved

by Ministry of Tourism, Government of India.

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 Wellness Tourism

Wellness Tourism is about traveling for the primary purpose of achieving,

promoting or maintaining maximum health and a sense of well-being.

Health Tourism holds immense potential for India. The Indian systems of

medicine, that is Ayurveda, Yoga, Panchakarma, Rejuvenation Therapy,

etc., are among the most ancient systems of medical treatment, in the world.

India can provide medical and health care of international standard at

comparatively low cost. Most of the hotels/resorts are coming up with

Ayurveda Centres. The leading tour operators have included Ayurveda in

their brochures.

Wellness Tourism is about traveling for the primary purpose of achieving,

promoting or maintaining maximum health and a sense of well-being.

Health Tourism holds immense potential for India. The Indian systems of

medicine, that is Ayurveda, Yoga, Panchakarma, Rejuvenation Therapy,

etc., are among the most ancient systems of medical treatment, in the world.

India can provide medical and health care of international standard at

comparatively low cost. Most of the hotels/resorts are coming up with

Ayurveda Centres. The leading tour operators have included Ayurveda in

their brochures.

Golf Tourism

Sports Tourism in India is gaining interest. One of the latest trends in golf
58
tourism is the fact that there has been a recent surge in the interest levels

amongst youth the world over. India has several golf courses of international

59
standards. Further, golf events held in India also attract domestic and

international tourists.

Recognizing this potential to develop Golf as a niche tourism product for

attracting both international and domestic tourists, the Ministry of Tourism

had organized a one day Workshop on ―Promotion of Golf Tourism‖ on 21

January 2011. The objective of this workshop was to evolve a road map for

formulating strategies for development and promotion of golf tourism in

India.

Polo Tourism

India has rich historical ties with many of the sporting traditions including

Polo. The game of Polo originated in India and India is one of the few

countries in the world where this game is still preserved and practiced. The

Kolkata Polo Club is the oldest Polo club in the world and is 150 years old.

Therefore, Polo can rightly be termed as ―Heritage Sports‖ of India.

The Ministry of Tourism had sanctioned an amount of Rs.5 Lakh to the

Government of Manipur for organizing the 6th International Polo Festival

2012, held at Imphal from 22-29 November, 2012, coinciding with the

Sangai festival.

Meetings Incentives Conferences and Exhibitions (MICE)

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In order to promote India more effectively as a convention destination, the

travel industry had, under the patronage of the Ministry of Tourism, set up

the India Convention Promotion Bureau (ICPB) in 1988, a non-profit

61
organization, with members comprising of national airlines, hotels, travel

agents, tour operators, tourist transport operators, conference organizers, etc.

The important objectives of ICPB are as under:

To promote India as a venue for International Congresses and

Conventions.

To undertake a continuing programme of creating awareness of the role

and benefits of Congress and Conventions in the context of national

objectives.

To undertake research on the international conference market for

development of India‟ s conference industry.

To diffuse knowledge to conference industry personnel through

educational programmes, seminars, group discussions, courses of study

and exchange of visits with India Associations/Organizations.

Eco-Tourism

Eco-tourism means making as little environmental impact as possible and

helping to sustain the indigenous populace, thereby encouraging the

preservation of wildlife and habitats when visiting a place. This is

responsible form of tourism and tourism development, which encourages

going back to natural products in every aspect of life. It is also the key to

sustainable ecological development.Eco-tourism focuses on local cultures,

wilderness adventures, volunteering, personal growth and learning new ways

to live on our vulnerable planet. It is considered the fastest growing market

62
in the tourism industry, according to the World Tourism Organization with

an annual growth rate of 5% worldwide and representing 6% of the world

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Gross Domestic Product, 11.4% of all consumer spending.Eco- Tourism in

India is still at a very nascent stage, but there are conscious efforts to save

the fragile Himalayan Eco System and culture and heritage of the indigenous

people, which is probably the largest concentration in the world.

Film Tourism

The Ministry of Tourism has recognized films as powerful tool for the

development and promotion of destinations under Niche Tourism Product.

The Ministry of Tourism has taken following steps to promote Film Tourism

in the country:

Signing of a Memorandum of Understanding with the Ministry of

Information and Broadcasting in 2012;

Joint participation with the Ministry of Information and Broadcasting in

the Cannes Film Festival and Market, International Film Festival of

India (IFFI, Goa), and European Film Market, Berlin;

Institution of a National Tourism Award in 2012 in the category ―Most

Film Promotion Friendly State/UT‖ to encourage the State Governments

and Union Territories to facilitate filming in their region;

The Ministry of Tourism has formulated guidelines for extending

financial support to State Governments/Union Territory Administrations

for promotion of Film Tourism. As per these guidelines, Central

Financial Assistance of Rs.2 lakh per film will be given to each of the

State Governments/UT Administrations during each financial year.

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 Conclusion

To sum up, Indian tourism has vast potential for generating employment and

earning large sums of foreign exchange besides giving a flip to the country‘s

overall economic and social development. Much has been achieved by way

of increasing air seat capacity, increasing trains and railway connectivity to

important tourist destinations, four-laning of roads connecting important

tourist centers and increasing availability of accommodation by adding

heritage hotels to the hotel industry and encouraging paying guest

accommodation. But much more remains to be done. Since tourism is a

multi-dimensional activity, and basically a service industry, it would be

necessary that all wings of the Central and State governments, private sector

and voluntary organizations become active partners in the endeavour to

attain sustainable growth in tourism if India is to become a world player

inthe tourist industry. India the second largest tourism market in Asia after

China, the country was also ranked in the twenty fastest-growing tourism

destinations worldwide by the World Travel and Tourism Council. Placed

eleventh in the list, the direct contribution of travel and tourism to GDP in

India is expected to grow an average of 6.4 percent annually between 2014

and 2024. In 2013, there were 6.85 million international tourist arrivals in

India. This was a large increase from the 2.65 million seen just 13 years

earlier in 2000. The largest source market for visitors to India was the

United States, followed by the United Kingdom. Outbound travel from India

is also on the rise: approximately 860 thousand Indian nationals traveled to

65
the U.S. in 201

66
 Chapter 6

Adventure Tourism

Adventure travelers often seek unique or new travel destinations and activities.

It is often believed that a percentage of this sector is willing to accept limited

tourism infrastructure with the promise of an exceptional, authentic experience.

Given their penchant for exploring new destinations and seeking new

experiences they are frequently coveted by emerging destinations at the early

stages of tourism development and also in more mature destinations that have

protected and/or developed appropriate product.

Although adventure tourism is recognized as an important, growing tourism

segment, primary research to quantify the size and scope of this market in the

U.S. or internationally (Schneider 2006) has been lacking. For this reason,

George Washington University, along with its partners, the Adventure Travel

Trade Association (ATTA) and Xola Consulting, sought to better understand the

adventure traveler. This study‘s focus area was limited to three major markets:

Europe, Latin Americaand North America, which comprise 70% of overall

international departures, according to the UNWTO.

The study focused on previous (actual) and anticipated (intended) travel

behavior, as well as psychographic and demographic information. This report

provides a detailed examination of adventure travelers in these three areas,

including: number of travelers, spending, and a snapshot of predicted future

trends. The information in this report may provide guidance for destination
67
management organizations and firms involved in marketing as well as product

development. It may be especially useful to destination management

68
organizations or state/regional tourism offices seeking to build or enhance their

adventure offerings or adventure tourism operators seeking to understand their

target market.

Methodology

This study of the adventure travel market was conducted in late 2009.

Adventure travel is an inherently subjective activity: what is adventure to

one person may not be to another. Therefore, for the purpose of this study, a

broad definition of adventure tourism was adopted: any domestic or

international trip that includes at least two of the following three aspects:

physical activity, interaction with nature and cultural learning or exchange.

Respondents were provided with a list of possible activities. They were

asked to choose what activities they had participated in. These activities

were categorized into either hard or soft adventure activities or ―other‖

tourism activities. This use of this classification system is based on

previously established research in this field. This categorization has its

foundation in academic literature and has been confirmed by previous

surveys of consumers.

Utilizing an on-line survey instrument, zoomerang.com, the survey was sent

to a representative sample of residents. The survey was completed by 855

respondents in six countries, in the following three regions: Europe, North

America and Latin America, representing about 73% of global expenditures

69
or 68.7% of international departures (UNWTO, 2009). Respondents choice

of activity were separated as ―hard‖ or ―soft‖ adventure building.

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Adventure Travel Expenditures

Adventure travel is resilient and is trending upwards even in difficult

economic times;

Adventure is expanding into a broader range of activities;

The ―soft‖ adventurer spends the most per trip, (excluding airfare);

The value of the global adventure market is $89billion;

All adventure travelers spend significant amounts of money on

equipment & apparel pre-trip.

Behaviors, Psychographics and Demographics

Adventure travelers are equally likely to be single or married, and male

or female. The majority are between 35-47 years old. Industry followers

familiar with research from the Adventure Travel Trade Association may

expect a higher percentage of baby boomer travelers. However, this

study reflects not only consumers of tours but adventure travelers in

general; it includes people who organize their own trips and therefore

more likely to be younger with more time to plan.

After ―local newspapers,‖ the most widely read publication by adventure

travelers in North America was People Magazine, followed by National

Geographic.

Compared to ―other travelers,‖ adventure travelers place importance on

71
exploring new places and meeting and engaging with local cultures

while on vacation; this confirms earlier research by ATTA which found

that travelers were craving more cultural interaction on trips (ATTA,

2006).

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 Compared to other forms of pre-trip research, the majority of adventure

travelers (35%) conduct research online, but they also consult friends

and family.

Profile of Respondents

Who are adventure travelers? They are fairly evenly split male to female,

even within in category of ―hard‖ adventure sports. Soft adventurers skew

slightly more female, but not as much as other types of travelers who are

predominantly female (62.3%). The average age of an adventure traveler is

35 (again, this may seem low from the perspective of adventure travel tour

operators, however, this number reflects the overall adventure traveler, not

just consumers of tours), slightly younger than the ―other‖ traveler who is on

average 42.Adventure travelers are more likely to be single or married; less

than 10% are divorced or separated. They are also more highly educated

than other types of travelers, with 70% of hard adventures having

postsecondary education and 63% of soft adventurers having post-secondary

education. 47% of other travelers have a two year degree or higher.

Considering these demographic trends, it is unsurprising that adventure

travelers also have higher levels of household income.

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Figure no. 6

74
Interestingly, while many hard adventure travelers clearly view international

travel as important (75% have valid passports), among soft adventure

travelers, only 56.5% have valid passports. From this we can theorize that

among soft adventurers, many are engaging in activities domestically. The

table below shows the percentage of adventure travelers who hold valid

passports.

Size of Adventure Market

In the past, the definition of what constitutes an adventure trip or adventure

travel has been ill-defined; with influential and respectable entities

disagreeing on what to include or exclude in the definition. This study‘s

definition is based on past literature that classified specific activities into

two segments: hard adventure and soft adventure. In certain instances, they

have been combined in ―all adventure.‖

The central question is — how many people are taking adventure trips?

Applying a strict definition based on activities done while on vacation,

allows an answer to this question to emerge.

Hard Adventure

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Hard adventure includes trekking, climbing (mountain, rock and ice) and

caving. These activities are high risk and require a high level of specialized

skill. Unsurprisingly, these represented small percentages of the population

but still uncovered a sizable market. The trend over the past three years

76
indicates that the number of hard adventure trips has held steady, at around

2% of the population. However, respondents in Latin America and Europe

indicated that they intended to take a hard adventure trip for their next

vacation. In North America, the trend was opposite, and the percent of

people expressing the intention to take a hard adventure vacation dipped

slightly.

Soft Adventure

The number of soft adventure departures represents a substantial percentage

of trips worldwide. Interestingly, compared to North Americans and

Europeans, Latin Americans are taking the most adventure trips at 35% of

total outbound travelers. On average, 25% of international trips taken from

all three regions are soft adventure trips. Soft adventurers are an important

market for destinations, gear companies and tour operators. They are more

likely to try different activities and destinations than hard adventurers. They

are also more likely to respond to targeted marketing.

In all three regions — Latin America, North America and Europe — soft

adventure increased steadily over the traveler‘s past three trips and

continued to do so with future travel intentions. Around 43% of Europeans

indicated that for their next vacation they would take a soft adventure trips.

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 Adventure Activities (Risk/Satisfaction)

Adventure, by definition, involves an element of risk. Past literature on

adventure travel has suggested that location can be an indicator of adventure

based on the perceived or real riskiness involved in that place. However, this

survey finds that the perceived level of risk associated with the activity

performed while on vacation is much more significant to travelers.

Adventure travelers rated the level of risk associated with their activities

higher than other types of tourists, but did not extend this assessment of risk

to their destinations. Perhaps adventure travelers are aware of the safety of

their activities but less sensitive to destination safety; this is an area for

further research.

Implications for Marketers

Findings indicate that adventure travel is diffusing in the market. More

people, who in the past chose to engage in other types of travel, are

indicating that on their next trip they will be more adventurous in their

activity and destination choice. Product developers and marketers should

capitalize on these dreamers and create soft options to ease them into the

world of adventure travel. This will mean catering to their trip length and

expectations at the destination. Marketers should also appeal more to

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mainstream travelers, and advertise or generate editorial coverage in

publications such as People Magazine.

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Adventure travelers are early adopters: they are more likely to go to a new

destination or try new products before most people. But they still take their

cues from sources such as magazines, tour operators or even social media

blogs and networks. However, messages need to be specific and speak to

what this market is truly seeking: meaningful connections with the place and

authenticity. These messages can be placed where travelers least expect

them — at their yoga studios and their organic supermarkets.

One example comes from Thai tourism, which has disseminated tourism

brochures throughout many Thai restaurants in the U.S. Destinations and

operators may consider putting more effort into press FAM trips. Reading

story in a magazine or newspaper produces higher engagement than

traditional advertising print media. Online ads can be targeted more

effectively, however some research (eMarketer.com) suggests that online

users are beginning to ignore them, so choose the forum carefully.

Figure no. 7
As for seasoned adventure travelers, they are passionate about and dedicated

to this mode of travel. They are always searching for new destinations and

value online reviews or comments (even by strangers) and the opinions of

80
friends and family. They often use official websites. Destinations and

81
operators should invest in understanding keywords and optimizing their sites

for searches in the key engines. Ensuring that a website is findable in all

languages that travelers may be searching in is an important consideration.

Segmentation

There are many ways to segment the adventure travel market. Recognizing

increasing specialization in the tourism industry along with the shared values

of adventure travelers, many industry players have moved to a

psychographic segmentation approach. This means organizing adventure

travelers by their specialized interests such as kayakers or birdwatchers.

From there, specific marketing tactics can be developed with the addition of

demographic segmentation. From a demographic perspective, there are two

main categories of adventure travelers:

The younger generations, GenY (people aged between 18 and 30) and

GenX (people aged between 31 and 44). These people have often

traveled throughout their youth, studied abroad during college and are

adept at navigating the Internet to find good deals and new destinations.

This segment can further be broken down into two groups that are of

interest to the adventure tourism industry:

High disposable income, time poor.This group is already in the

workforce and has a limited amount of vacation time each year. They

will seek to fill as much as possible into their vacation time, often

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splurging on what they view as once in-a-lifetime opportunities, such as

hiking Mt. Kilimanjaro. This group is more likely to book through a tour

83
operator. They are mostly likely reached through social media —

destinations and companies should monitor the online conversations

taking place around their brands to capitalize on this trend.

Smaller budget, extensive time.This group engages with the

communities and places they go. Many young people take the

opportunity to travel for an extensive period of time after two or three

years in the workforce. With low budgets and big dreams, they travel

deeply in the communities they visit. Seeking authentic experiences,

they are more likely to go trekking or take long train journeys, such as

the cross-Siberian railway. Budget and value will be the key selling

points for this group, although sustainability/responsibility plays a

surprisingly high role in decision-making.

The ―baby boomer‖ (people aged between 45 and 64) adventure traveler

is frequently awakening (or re-awakening) to the adventure travel

experience later in life. Many find themselves with extra time and money

as their children have moved from the house or they enter retirement

with good health and a curiosity to do things they couldn‘t during their

working years. They have large budgets and value adventures combined

with a cultural experience. They also book through tour operators and

ma take two to three international trips a year. Increasingly, they are

bringing grandchildren along. This group is inspired by their reading

material, television series (Survivor, Amazing Race) and especially

stories from friends and families. Offering something unique and

difficult to attain will be key with this group. ―Experience‖ and

―authenticity‖ are keywords/concepts that resonate with this group.

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 Conclusion

The findings of this study support the notion that adventure travelers

represent a significant, growing market. This research indicates that the

value of the global adventure market is $89 billion. Adventure tourism does

not appear to be a trend specific to any one geographic area, as the results

indicate similar findings in North America, Europe and Latin America,

where increasingly, travelers continue to explore deeper into communities

and seek to connect with nature. Even in the midst of growth, we found

some adventure travelers do not hold valid passports and are not necessarily

traveling farther from home to get an adventure experience.

Various trends around adventure tourism are positive: more people intend to

take adventure trips and these people intend to spend more than they have on

their previous vacation. Adventure travelers are specialty travelers and thus

spend more than the average traveler on a trip.

Destinations and marketers should position their marketing and branding to

attract this growing and lucrative segment. Product development and

branding should speak to their desire to have natural, cultural and active

experiences, and to engage more deeply with local communities.

We encourage marketers to also focus on the ―Other Travel‖ market, which

is moving towards more adventurous travel. They may return to the same

countries that they have previously visited on a less adventurous vacation,

but this time try more adventurous activities (safaris, visiting cultural sites).

This market offers tour operators the opportunity to re-position themselves

85
to the market. Engage in niche marketing or develop cross marketing

86
between tour operators, specifically targeting past clients. This also speaks

to the opportunity for adventure operators to partner with mass tourism

outlets such as resorts, hotels, cruise lines to offer smaller day trips to entice

travelers with something interesting and outside the bubble. Key

characteristics for this group will be shorter trips, perception of safety, and

unusual opportunities.

Interestingly, over the course of their past three trips, respondents have

participated in the same type of activities on their vacations. They indicate

that they intend and desire to become more adventurous, but it remains to be

seen if they will in fact select a more adventurous option when it comes time

to planning their next vacation. This presents an opportunity to marketers to

capitalize on these travel aspirations. This study illustrates that the adventure

market is sizable, at 26% of the traveling population. In addition to revealing

the actual size of this market, this study calls into question the often,

generally accepted industry profile of the adventure traveler. A common

assertion from within the adventure industry is that the typical adventure

traveler today is likely to be over 50, with a secure income and desire to

explore and experience new places. Based on this research and others,

however, we find the average adventure traveler age might be closer to 40,

and although these people engage in adventure activities, they might not be

paying tour operators and guides for their experiences, and hence not

recognized, or served as an important market segment by the industry.

Adventure travel operators and destinations may use this information to

consider domestic and regional market potential. During the current

economic situation, the cost of an international flight may make travel cost

87
prohibitive to some people, thus domestic or regional, closer to home

adventure travel may provide an attractive alternative for many and also

provide as an introduction to an experience they may want to try abroad in

the future.

Destinations may wish to also consider how the adventure traveler is

defined. People who engage in a broad variety of activities consider

themselves to be adventure travelers even if they are not participating in

adventure activities each day of their trip. For many countries, the size of

this market is probably more significant than currently estimated.

Overall, this piece of research provides further insight into the size and

shape of the adventure travel industry. The findings support the notion that

the adventure travel market constitutes an important, contributive, growing

niche within the economic powerhouse that is travel and tourism.

Adventure tourism involves visiting a region almost unaffected by human

impact, with specific features for engaging in risky sports that require

physical effort relatively high performance and greater risk taking.

Adventure travel is associated with that tourists could discover new things.

Therefore, they did travel the world to be so large that it knows the existence

of other people, to discover continents, peoples. In a journey the tourist

knows he is willing to maximum responsiveness, has around strangers, new

places and begin to analyze, observe everything to teach and protect, so

travel is a form of knowledge, complicity and transparency. It is a method of

self-recovery, reconciliation and restoration, learning and accumulation.

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 Chapter 7

Internet Usage, Online Travel Industry In India, Key Success Factors

When Applying E-Commerce To Travel Industry

Internet Usage In India

Scenario Of Online Travel Industry In India

Key Success Factors When Applying E-Commerce To The Travel

Industry

Traveler‘s Trip Planning Behavior

The Future Of E-Commerce In Travel

The Effect Of E-Commerce In Travel

E-Commerce In Airline Business

E-Commerce‘s Impact On The Travel Agency Industry

Information Technology In The Tourism And Travel Industry

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 Chapter 7

Internet Usage, Online Travel Industry In India, Key Success Factors

When Applying E-Commerce To Travel Industry

Internet Usage In India

The latest round of I-Cube, a research conducted by IAMAI and IMRB

International in June 2013, indicates that the Internet usage in India has gone up

with more and more Internet Users using the Internet on a regular basis. In

June2013, India had 190 Million Internet Users. Of this 130 Million belonged to

Urban India and the rest 60 Million were from Rural India. In October, the

number of internet users reached 205 Million and is estimated to reach 213

Million by December 2013. The number of internet users in urban India is 137

Million in October 2013 and is estimated to touch 141 Million by December

2013. In Rural India, there are 68 Million Internet users in October 2013 and

will reach 72 Million by December 2013. Mobile Internet, too, has garnered a

huge base among the Active Internet Users. In India, there were 91 Million

users accessing the Internet on Mobile devices in June. In Urban India, there

were 70.2 Million Mobile Internet users in June 2013. This number rose to 85

Million in October and is estimated grow by 47% and reach 103 Million by

December 2013. Rural India is not that far behind in this regard with a base of

21 Million Mobile Internet Users in June 2013. It reached 25 Million in October

90
2013 and will touch 27 Million by December 2013.

91
Purpose Of The Internet Access In Urban India

Of all the Active Internet Users surveyed, it has emerged that for close to 90%

of the respondents the prime use of Internet is Online Communication and under

this e-mail communication commands the lion‘s share of 78%. Social use the

Internet for Entertainment. Apart from Networking continues to be the rage with

75% of the users engaging in it actively. 69% now listening to songs and

watching videos online, sizeable numbers are downloading mobile VAS. Online

shopping has also picked up in a big way. Every second active internet user

claims to have bought something or the other over the Internet.

Figure no. 8

Purpose Of The Internet Access In Rural India

For the Rural Active Internet User, Entertainment is observed to be the main

purpose of Internet access and a huge 84% of them have used it primarily for

92
entertainment. Majority of the users like to access Music/ Videos/ Photos and

Movies for Entertainment. This is followed by downloads of various Mobile

Value Added Services as a source of entertainment. Online Communication is

93
observed to be the second most important purpose of accessing internet for

Rural India. Within the Online Communication category, E-mail continues to be

the most important reason for using the Internet with 43% using it. Number of

users engaging in text chat has also gone up significantly compared to last year

and is used by 22% of them. Compared to last year, the awareness levels of

Online Services and Social Networking is observed to be higher in 2013. The

usage also subsequently has increased over 2012 with 62% and 52% of them

having used Online Services and Social Networking respectively. Further, over

half of the rural population is observed accessing Internet for social networking

purpose. Also, maintaining last year‘s trend, most of the users are seen availing

online services related to job search on the Internet. This is followed by online

news. Although the awareness of e-commerce is moderate, we do not see much

usage primarily because of lack of knowledge. Although a low overall share,

Railway Ticket Booking is the most performed activity when it comes to Online

Shopping, which has also seen a significant growth over the last year. With a

very low awareness level, Online Transaction is still an area about which the

population needs to be educated. Thus, even though there is awareness, there is

a pressing need to educate and inform the user of the benefits of the internet

services to drive growth in internet usage

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 Figure no. 9

Scenario Of Online Travel Industry In India

The report begins with an introduction to the e-commerce market in India and

offers information regarding the market size and growth. It also gives a break-up

of the revenue for the e-commerce market. It goes on to explain the market

structure of the e-commerce market and also provides an overview of the factors

which drive this market. In the market overview section the structure of the

online travel market is explained. Market size, growth and the break-up of the

revenue generated is also provided for the online travel market. Increasing share

of online travel market as well as the prevailing commission structure has been

highlighted. Porter's five forces analysis gives an overall picture of the online

travel industry and helps to understand the major influencers. The business

model explains the role of global distribution systems and their role in the online

travel industry. This section also explains the various incentives provided by the

OTA's to attract more customers and the operational edge OTAs have over the
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traditional tour operators. Drivers include factors such as proliferation of the

96
internet, especially broadband, which has increased online traffic considerably.

Rising disposable income has also acted as a driver for online travel portals.

Indian railways online portal has proved to be extremely efficient and user

friendly, instilling confidence among people to book tickets online. Other

drivers identified include rise in low cost airlines, which has paved a way to

travel by air for the large middle class segment in India thus increasing traffic to

these online portals. Secure payment mechanisms have given people the desired

confidence to carry out transactions online. On the other hand tremendous rise

in medical tourism has led to influx of foreign travelers to India which again

gives rise to increased traffic. Challenges identified include stiff competition

coupled with low margin and high operating costs which has caused profit

margins to shrink. In addition, limited awareness about portals adds to the woes.

Trends identified are emergence of value added services among various OTAs

including discount vouchers to woo customers and gather a large market share.

Emergence of corporate packages is another trend identified. Many OTAs are

following a hybrid model constituting online and offline stores to penetrate the

market even further. OTAs are also moving towards better technology so as to

cater to the increased traffic and offer a user-friendly experience to its clients.

They are also becoming more responsible and addressing customer queries and

complaints swiftly through social media interfaces. It has been identified that

OTAs are also a means of information verification and cross checking among

customers. One more trend identified includes an increase in PE/VC

investments in this sector.

97
Figure no. 10

98
 Key Success Factors When Applying E-Commerce To The

Travel Industry

As the Internet has developed, more and more consumers can now find travel

information or even purchase travel through the Internet due to its convenience

and capacity for huge information, and this has led to many traditional travel

agencies introducing e-commerce. The companies can combine technology and

the characteristics of the travel industry well, and can make the best of the

Internet and handle their relationship with consumers precisely, effectively

enhancing the advantage of competition. However, travel agencies face large-

scale key success factors when developing e-commerce for the travel industry,

which means the agencies can‘t focus on the important things, and this can

cause disorder and inefficiency. Therefore, these key success factors should be

classified in a proper way and an index of these factors should be established

according to their importance. These can be referred to when a company draws

up a plan, helping the company allocate their resources rationally, enabling them

to meet their consumers‘ demands efficiently and increase profits. Nine key

success factors for e-commerce in the travel industry, including enterprise

culture, e-commerce team, increasing customer value, internal processes,

information appliance, product planning, supplier system, website content

planning, and physical and virtual channels.

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The Effect Of E-Commerce In Travel

Travel e-commerce is a new method of commercial enterprises, which

practically Involves publishing, electronic data transfer, online ordering,

electronic accounts and online payment services which are related to tourism

enterprises. This kind of e-commerce has brought tremendous changes to

nations in the 21st century, and has since turned a new growth point of tourism

economy in key nations.

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Travel e-commerce application is the continuity process of logistics, customer

succession and information run in tourism-related industries, in which all

attendants have a different focus in relation to business investment and access

gain. It is also an area of e-commerce that mainly enhances internal and external

connectivity of travel associates by advanced information technology. This

equally means within different tourism establishments, suppliers and tourists, an

effective communication and purchases could be augment. Interestingly at the

same moment, the internal processes of the enterprises and knowledge

distribution could also be bolstering. Tourism e-commerce has got back in shape

after ten years of continual development, however it has seriously affected the

traditional tourism enterprises especially in the developed world, but today not

many of the traditional merchants have realized the need for internet marketing

while a high percentage still pays attention to offline advertisement modes, such

as newspaper and distribution of travel brochure to various target groups which

require a high expenditure, which has been a difficulty to the firm‘s good sales

performances. With the lack of network understanding many of the traditional

travel companies still prefer managing internal business with the usage of

manual measurement, even though a couple of the agencies recognize the

importance of network usage, it is quite preferable to many of these companies

to stay in the primary stage with limitation to easy data processing and report

processing which does not near advantages of network.

E-Commerce In Airline Business

101
In the business world, airlines could be the biggest winner of the Internet, or e-

commerce, with or without the involvement of a ―government.‖ This is due to

102
the nature of airline business and its cost structure. An airline‘s costs usually

consist of two parts: direct operating costs and indirect operating costs. Direct

operating costs — such as aircraft, fuel, and salaries — make up about 60% of

the total cost, and indirect operating costs — such as distribution costs — about

40%. Direct operating costs are more or less ―fixed‖ and there is not much an

airline can do to cut them down. So most airlines would focus their cost-saving

efforts on reducing indirect costs. It is in this aspect that e-commerce could

potentially play an important role. A major part of an airline‘s indirect cost is its

distribution cost, and it has the following components:

Reservation system cost

Sales offices (stations) cost

Advertising and sales promotion cost

Agent fees and commissions

Ticketing fees

Traditionally, airlines pay 3-25% commissions to travel agents who sell their

tickets, in addition to spending a huge amount of money and resources on

selling and issuing tickets of their own. To reduce distribution costs, airlines

would have to turn to e-commerce, or e-distribution channels, to limit the

number of their sales offices and to reduce their dependency on Computer

Reservation Systems (CRS) and sales agents. At least in the USA, big airlines

have already been doing that. They have set up on-line sales networks, and

almost every airline‘s web site offers on-line booking functionality. Some

airlines jointly set up on-line booking sites to offer B-B, B-C, and other travel-

103
related services.

104
Travel websites (such as Priceline) and Internet booking engines (such as

Expedia) also offer convenient on-line bookings.

Airlines sell their product at different prices. The same seat in the same airplane

can fetch different prices depending on when and where it is sold. Generally

speaking, the earlier you buy a ticket, the cheaper it is. Moreover, airline seats

are time-sensitive and perishable—seats that are not sold at time of departure

become ―spoiled‘.‘ On the other hand, seats sold too early at discount prices

may dilute revenue. In order to prevent late-coming high-yielding passengers

from buying low-fare tickets, airlines impose conditions or ―limits‖ on different

low-fare tickets depending on a number of factors, including:

Length of stay—for example, whether or not there is a Saturday-night

stay.

Advance purchase, or how early the ticket is purchased. Usually a

fourteen-day advance purchase is required in order to get a discount

ticket.

Frequent Flyer Membership status—if you fly a certain airline

frequently, you receive certain special treatment including getting free

tickets.

Alliance/Code share deals—more and more airlines have entered

―alliances‖ or are sharing their inventory over certain routes to reduce or

avoid competition.

Point of sale (POS)—the price of an air ticket differs depending on

where you purchase it.

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Group price—groups usually get a discount.

106
 Booking agents‘ special offers—certain travel agents get special offers

from the airline & sell these tickets at a lower price to the passengers.

These conditions change from season to season and from market to market, as

air traffic demands fluctuate from time to time and from market to market. The

fact is most airlines do not have the technology to handle all these ―conditions‖

fast enough to accommodate Internet bookings. As said earlier, airline inventory

is time-sensitive and quantity-limited. If the airline sells them too cheaply, it

loses revenue; if the fares are too high, they may remain unsold when the plane

departs. Without knowing when to sell a ticket at what price under what

conditions, an airline cannot price the tickets on line correctly.

In order to fully realize the benefit of e-commerce and to avoid the potential

revenue dilution, airlines are turning for help to new tools such as revenue

management systems and Internet distribution systems. Revenue management is

also called revenue optimization or yield management. It uses computerized

system to analyze historical booking trends and current bookings to forecast

passenger traffic demand for each flight and each market segment. In other

words, it forecasts passengers‘ willingness to pay at each price level. Based on

the forecast and given fares of the booking class, it recommends an optimal

number of seats to be allocated to each booking class in order to maximize

revenue.

Many airlines are using revenue management systems for such a purpose. But to

transmit the recommendations of the revenue management systems on-line

requires an automatic distribution mechanism. Such a mechanism should

instantly determine the flights, itineraries, prices, and number of seats to put on

the web, as well as to monitor market/competitive activities. Only under these

107
circumstances would the airline be able to dynamically, optimally and

proactively price all seats in response to requests that may come at any second.

Only in this way can Internet bookings prevent revenue dilution and

tremendously save distribution costs and transaction costs, as well as generate

customer satisfaction.

Admittedly, e-commerce has the potential to change consumer behavior or

customer culture, and to bring about a commercial revolution at least in the

airline industry. But at the moment, e-commerce brings greater benefits to the

consumers than to the airlines, which explains why many airlines are reluctant

to take their business on-line. Other industries may differ from the airline

industry, and their e-commerce practitioners may not have to deal with as many

complicated factors. But it is safe to say that any industry will have its own

problems, and that the promise of the Internet is almost always mixed with

certain risks. We cannot expect e-commerce to grow as fast as the Internet age

seems to promise.

One of the risks of e-commerce is that it increases the chance of making wrong

decisions. If something goes wrong, the damage would be huge and swift. This

destructive power of technology, yet to be emphasized, has been learned by

some companies at high cost. Another risk is the impact it may have on the

existing organizations and business patterns. Once e-commerce is implemented,

the airline would have to change its business procedures, even its organizational

structures, accordingly. These changes could be painful.

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E-Commerce’s Impact On The Travel Agency Industry

The travel agency industry‘s response to E-commerce offers insight into how

other mature industries populated with small businesses will react to E-

commerce developments. In particular, industries that can complete transactions

electronically and are served by numerous small outlets share two key

characteristics of the travel agency industry. One possible example of a similar

industry would be the insurance industry.

E-commerce combined with new communication technologies, changing market

demographics, and ongoing travel industry developments, is reducing the need

for intermediaries in the distribution of travel services. E-commerce enables

travel providers to directly transact business with millions of individual travelers

who are increasingly more experienced at using the Internet and other new

communication technologies.

The traditional travel agency industry still accounts for the majority of total

travel sales. Airlines continue to acknowledge this fact that most of their ticket

revenues are generated through the travel agency channel.

In addition to distributing travel services, travel agencies provide other value-

added services such as making travel recommendations, managing corporate

travel accounts, and in general, aiding customers with a variety of issues related

to the purchase of travel services. These services are providing an increasingly

important source of fee-based revenue to offset declining airline commission

revenues. However, technology advances have begun reducing travel agencies

exclusive role in providing many of these value-added services. Online

corporate travel management programs are now duplicating services previously

109
provided by travel agencies. Similarly, the Internet‘s information exchange

110
capabilities give travelers wide access to travel recommendations, reviews,

travel guides, and even interactive multi-media promotions of travel

destinations. One key question for these agencies to consider is whether the cost

of website development and advertising is a onetime investment, or if these

costs will remain a significant and ongoing cost of conducting business online.

With the huge amount of information on the Internet, search has become

increasingly important in traveler‘s use of internet for travel planning. Online

search engines provide the means for travelers to access travel products in a

comprehensive way. E-commerce is bringing new business opportunities to the

global travel and tourism industry. Tourism-related institutions and Internet

companies are joining to tap the potential market created by e-commerce. This

paper is an historical analysis of penetration of e-commerce in the travel and

tourism industry. The analysis identifies a number of consistent customer

experience across different channels, among airlines, and involving both

international and domestic travel in emerging economies with limited internet

access. It is argued, from this analysis, that there area number of emerging new

technologies such as mobile devices and global positioning systems which need

to be taken into account and effects systematically assessed. The paper

concludes that a major challenge facing the industry is to assess the impact of

these technologies on different aspects of the travel industry and to find out how

much value-added services they actually provide to consumers.

Information Technology In The Tourism And Travel Industry

111
Information is the key element in the tourism industry. Tourists want to know in

advance about the attractions and the facilities of a particular destination. The

112
tourist also wants to know other related information of his/her visit to make the

same safe, secured and enjoyable. As a result, dissemination of information on

travel and tourism-related products and services are highly important. Using of

information technology to create trust between tourists and entrepreneurs,

developing e-commerce capacity, marketing, and promoting the authorities to be

the e-marketplace for tourism is the need. The most important benefit associated

with the new technologies is the supply of information. The role of ICT in

tourism industry cannot be underestimated and it is a crucial driving force in the

current information driven society.

Information technology has introduced e-commerce through the development of

the Internet and the World Wide Web. These developments have impacted both

consumer and industry behaviors in the areas of travel and tourism. Consumers

have more options regarding vacation and budget planning. 95 per cent of web

users have searched the Internet to gather travel related information. 93 per cent

visited destination web sites and nearly one half used e-mail to gather travel-

related information. Almost three- fourths of online travel buyers used search

engines prior to making their purchases. In addition to the Internet, technology

gadgets such as GPS 's, mobile phones, smart phones and hand-held devices

have improved consumers' tourism and travel experiences. Information

accessibility regarding travel, destination, bookings, payments, hotels,

attractions, and the quality of maps are areas for improvement.

Information and Communication Technologies (ICT) have affected the travel

and tourism industry for at least 50 years, particularly in the areas of automation

and networking of distribution channels. Local travel agents that used the global

113
distribution system have adjusted marketing strategies and expanded services in

114
order to realize increased competitive advantage. Local tourism business

comprehension and utilization of the Internet has permitted increased visibility

in additional market segments. Businesses have increased services globally by

registering with online travel agents, online advertising agents, and inter-

organizational reservation systems. In addition, many businesses have

developed websites which offer planning, booking and payment services online

for added consumer convenience. Businesses that have not made use of the

Internet cannot compete and therefore they must grasp the opportunity before

they are out-competed by those that have.

Information technology has played a central role in the growth and improvement

of the travel and tourism industry. The lasting effects of technology are

improved information accessibility, a higher level of competition, and a larger

market of consumers and businesses around the globe. During the pre-

computerized time, the role of the travel agent was to advise clients on travel

destinations and to act as an intermediary in the complicated process of

arranging travel bookings. Even as late as the early 1990's, consumers booked

cruise travel and tourism through travel agents as many companies did not offer

direct bookings. There were two waves of information technology that have had

a major impact on the industry. The first of these is the development of the

direct reservation systems, such as the American Airlines SABRE system. The

second is the development of online sales channels via the Internet. Tourism still

remains the major strength of every developed and also developing nations

based on the number of employees in the sector, because without tourism sector

it would have been impossible for all other important sectors to play a key role

in the everyday development of the global market. The hotel and airline
115
industries are the ones who cannot survive without the use of e-commerce in

developed nation especially because online access makes it easy for them to

deliver quickly to various customers than sticking just to the conventional

method which is only person to person mode of business since the world of

today has tremendously expanded through the medium of electronic commerce

and still growing to every continents of the planet.

E-business is the use of information and communications technologies in all

activities of a firm both internally and in relation to its outside partners. The

tourism industry consists of many companies dabbling in various activities,

ranging from tour operators to cafes and restaurants. The companies include

SMEs and the types of enterprises that comprise the tourism industry are: (1)

tour operators (2) travel agents (3) tourist guide services (4) airlines (5)

transportation (6) restaurants and cafes (7) hotels and guesthouses (8) museums

and historical sites and buildings (9) nature reserve services (10) tourism

education and training institutions; (11) local tourist offices. Within the

discourse on the information society and the e-economy, ICTs are seen as major

tools with the potential to fundamentally change business behavior and company

strategies. The Internet has provided a new business environment in which

virtual business can be conducted. The adoption of ICT in the tourism industry

can provide detailed up-to-date information on the availability and prices of

products and booking which could also contribute to increased sales volume and

profits.

116
Competition

Examples of companies competing in the distribution of travel services

include:

Traditional Travel Agencies – American Express, Carlson, Independent

Agencies.

In-house Corporate Travel Office – Corporations booking their own

travel

Online Travel Agencies – Travelocity, Expedia.

Consolidators and wholesalers – Priceline, Hotwire, Cheap Tickets
Travel service provider direct sales – Airlines, Hotels, Auto Rental Companies

Agency Services By Travel Category

117
Figure no. 15

118
While online travel sites have certain advantages in providing these services,

characteristics that may help traditional agencies differentiate from online travel

agencies include:

Travel agent‘s personal knowledge and expertise;

Face-to-face customer service during trip planning;

Personally monitoring & notifying customers of price or schedule

changes;

Personal follow-up after travel is completed; and

Personal Relationship.

Online Travel Services

The Internet and new technologies have provided online travel agencies the

tools to duplicate the five ―R‘s‖ of service provided by offline travel agencies.

119
Figure no. 16

120
Online Travel Agencies

Online travel agencies such as Make My Trip, Clear Trip, Yatra, Trip Advisor,

Travelocity and Kayak, use mobile advertising to:

Drive sales of vacations packages, flights and car rentals

Drive traffic to mobile destinations such as mobile web sites and

applications Promote specific destinations and drive visits through

coupons and special deals

Increase brand awareness and engagement

Online travel agencies are leveraging mobile advertising to drive consumers to

their mobile destinations, as this is where the sales process begins.

According to Forrester, 20 percentof business travelers and 16 percentof leisure

travelers looked up flightschedules using their mobile devices in the past year.

The opportunity to target these travel-minded consumers with advertising is

immense.

Display and search advertising creative with special deals and offers are proving

to be most effective, helping online travel agencies acquire and retain

customers.

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The Mobile Opportunity For Travel

Targeted mobile display, search and text ads are helping travel companies such

as Continental Airlines, MGM Grand, Walt Disney World, and Expedia build

brand awareness and turn purchase intent into sales with their target audience.

Targeted mobile display, search and text ads are helping travel companies such

as Continental Airlines, MGM Grand, Walt Disney World, and Expedia build

brand awareness and turn purchase intent into sales with their target audience.

Figure no. 17
With 65 percentof all mobile Internet users making airline, hotel or car rental
purchases in the past six months, it is clear that there is an important intersection of
mobile and travel.

Mobile is both media (to promote advertising messages) and a channel to sell

and transact. Consumers are using their mobile devices to stay connected using

various media services:

Mobile web – Consumers are using the mobile sites of travel companies to plan
122
their trips and enhance their travel experience. Travel companies such as

airlines, car rental companies, tour services and travel agencies should consider

123
having mobile commerce-enabled sites as an additional revenue stream.

For example, STA Travel, a global travel specialist for students and young

people, used mobile advertising on the mobile web to promote flights to its key

global destinations. The ads drove consumers to STA Travel‘s mobile site.

In addition, 20 percent of mobile consumers are using the mobile Internet

regularly and if they have a smartphone – for example, a phone running

Microsoft Windows Mobile, BlackBerry, iPhone and Android – this number

increases to more than 85 percent.

Search – Consumers are using their mobile devices for local search with

increased frequency. When consumers search for information, travel companies

need to ensure they are present at the time of the consumer‘s expressed need;

that is, at the top of the search results.

Applications –There are numerous application stores with hundreds of

thousands of applications generating billions of application downloads.

HotelsByMe, for example, launched iPhone and Android applications that use

the mobile device‘s geolocation services to help travelers find nearby hotels.

The applications sort the list by distance from the user‘s current location and

plot the hotel location on an integrated map.

Users can also access more than 44,000 hotel properties worldwide, search by

city or landmark and also view photos of the hotel. Coupons can be included

within applications, driving consumers to redeem special offers.

Chapter 9

12
4
Customer Acquisition Channels For Hotels

There was once a time when hotel marketing focused on brochures, newspaper

listings, magazine ads, banners, and lots of printed paper. Things have changed,

and print media is less effective at driving new bookings as it once was. Today,

it can be hard for hoteliers to learn how to acquire new guests aside from turning

on a flickering ‗vacancy‘ light in the window.

This problem is exacerbated as guests move away from more traditional

hospitality customer acquisition channels, in favor of more accessible digital

channels. In this whitepaper, we will explore the primary acquisition channels

used today by the most successful hoteliers and hotel marketers around the

world.

12
5
Figure no. 19

12
6
Digital vs. Traditional

Traditionally, hoteliers have used non-digital customer acquisition channels, like

print advertisements, to build brand awareness and find new guests. This form

of marketing is becoming less effective with each year. In the first half of 2012,

the Newspaper Association of America reported that newspapers lost $798

million in print advertising, while gaining only $32 million in digital

advertising. That means for every $25 they lost in print ad revenue, they gained

only $1 in digital ad revenue. This shows that advertising with newspapers—

digital or in print—fails to produce.

TV is not in as bad of shape—it gained 4.5% in ad revenue in 2012 compared to

2011—but even it is dwarfed by the rise in online ad spending, which grew

21.7% from 2011, outpacing TV spending by over 17%.

Radio, magazines and other mediums are now dwarfed by digital online

marketing in terms of ad spend. eMarketer predicts that by 2016, $62 billion

will be spent on digital advertising ($39.5b in 2012) compared to only $32

billion in all of print advertising ($35b today—that‘s a loss of 8.5% over four

years).

One can only conclude that productive customer acquisition channels are almost

exclusively digital, and the disparity between traditional and digital channels

where guests are concerned will only increase. Therefore, though there are other

customer acquisition marketing channels that are possible to consider, such as

12
7
walk-in customers, billboards, magazines, newsletters and so on, we will focus

12
8
primarily on digital marketing channels and hospitality exclusive channels that

offer digital marketing.

3rd Party Resellers - OTA – Online Travel Agency

OTAs are consumer-facing web interfaces for travel bookings many are familiar

with due to their far-reaching advertisement campaigns. OTAs include Orbitz,

Expedia, Priceline, Travelocity, Make My Trip, Clear Trip, Yatra and others.

OTAs were created to give travelers the ability to book their own travel plans

without need of traditional travel agencies. OTAs communicate with many

Global Distribution Systems (GDSs) in order to process reservations, but they

also use their own proprietary software.

OTAs typically drive a great percentage of online reservations to hotels, but

they claim a substantial chunk of each transaction—upwards of 25-30%. They

can help sell a hotel‘s vacant inventory, but the cost of this partnership can

cause a hotel to lose an undesirable portion of its profits. Hotel owners usually

prefer that guests book travel directly through their own booking engines instead

of OTAs, and then list their room inventory with OTAs and GDSs when they

expect it to otherwise go unsold.

Guests are increasingly booking travel directly from hotel websites, due to the

attractive user experience of trip planning using search engines like Google, and

due to the billboard effect—a phenomenon whereby guests discover hotels

through OTAs, then in the course of doing independent research using search

12
9
engines, book travel directly from the hotel website.

13
0
It will be important for hotels to partner with OTAs for the foreseeable future

due to their popularity. Many guests prefer to purchase package deals, including

airfare, car rentals and accommodations, which is the benefit of using an OTA,

since it communicates directly with GDSs. However, it is becoming increasingly

important to have an alternative direct booking option for guests who prefer to

book directly with the hotel.

PROS:

Hotels can sell more inventory that would otherwise go unsold.

It is easy to list inventory with an OTA with minimal up-front costs.

CONS:

OTAs take a significant commission on each room sold.

Some OTAs will not accept inventory unless the hotel meets its price

requirements, thus forcing hotels to sell their rooms for cheaper than

they want to—on top of the commission the OTA takes.

It requires substantial back-end infrastructure to communicate with

OTAs. This usually necessitates hiring an external 3rd party Central

Reservation Systems (CRS) to own the hotel‘s conversion engine. It can

be done by manual submission that necessitates a lengthy verification

process.

GDS

131 120
There are four major GDSs in the world today: Worldspan, Amadeus, Galileo,

and Sabre, and many other minor ones. GDSs are used to make reservations for

multiple airlines, hotels, car rentals, and other vendors. The airline industry first

created GDSs to save time on manually inputting and processing flight

reservation data. GDSs are today used by various entities, including airlines,

120
132
travel agencies, OTAs, car rentals, hotels and more to manage and process

reservations.

GDSs run on legacy systems, meaning that they are powered by outdated code

and methods. This is a large problem for the travel industry for many reasons.

Old code can only run on old hardware, which is becoming hard to repair and

replace. Those who knew how to repair and adapt legacy systems retired or

forgot how to use them, and the information was lost with them.

For these reasons, it is important to own or use a CRS powered by updated

technology. The best solution is to use a SaaS CRS that is updated over time as

technology advances, to prevent future incompatibilities and system failures.

Today, GDSs are still used in one way or another by airlines, hotels, and OTAs

all over the world. For the time being, it is still important to integrate an

independent hotel CRS with GDSs in order to benefit from the additional

transactions they provide.

PROS:

Listing inventory with a GDS can ensure your rooms are seen by

resellers around the world.

CONS:

As with OTAs, sometimes hotels have to lower their prices to be

accepted by the GDS.

133
GDSs are built on legacy systems and may not be compatible with

modern CRSs and IBEs.

GDSs take a commission from each sale.

134
 Not all CRSs and booking engines can integrate with GDSs.

Website

A hotel website is the heart and soul of the direct channel. It is the destination to

which all other marketing activities funnel traffic, and acts as a ―conversion

engine‖. Hoteliers need a web presence that serves as a digital representation of

their property that guests can use to make inquiries and book rooms. It can be

relatively inexpensive to publish a simple hotel website. However, technology

evolves quickly, faster than any other industry, and websites published

yesterday are out of date tomorrow. For example, websites published five years

ago—and never kept up-to-date—currently can‘t support mobile and social

visitors and interactions.

It can be an expensive, tedious and time-consuming process for hoteliers to stay

on top of web technologies as they emerge, and keep their digital marketing up-

to-date. It is possible to find services that do this for the hotelier, each with its

own range of fees.

135
Online Reservation Capture (Internet Booking Engines, or

IBEs)

Many smaller hotels opt to have a simple contact form on their website. When a

reservation inquiry comes in, they open their email, record the information, and

process the credit card. This is a manual process that works best for small

properties with a handful of rooms. For larger hotels, they need a more robust,

automated booking engine that can deliver updated availability to guests when

they make web queries.

Additionally, it is often impossible for hoteliers to list their excess inventory on

OTAs or with the GDS on their own. Thus, it is often necessary for hoteliers to

purchase or subscribe to a 3rd-party reservation system, or CRS. Hoteliers have

a plethora of options, however, many CRSs take a commission fee for every

transaction that passes through their CRS.

Search Engine Optimization (SEO)

Search engines will continue to be a valuable source of traffic and online

reservations for some time. Having a solid SEO plan in place allows a hotel‘s

website to convert at peak performance. However, since search engine

algorithms are volatile, changing daily, implementing any SEO strategy can be

risky.

136
For example, implementing an SEO strategy popular five years ago could cost a

hotel its search engine ranking, causing it to be penalized by Google. Some of

what was once acceptable SEO is no longer acceptable by Google. A business

137
could become completely invisible on search engines if it contracts

unscrupulous or ill-informed SEO agencies.

While having a prominent listing on Google can be incredibly lucrative, it can

take an enormous amount of research and effort to keep a website up-to-date

with Google‘s SEO best practices.

Social Media

The goal of social media is to point guests and fans to a direct marketing

channel in order to capture their online reservation. It is very hard to do social

media correctly. More often than not, hoteliers will create their social media

profiles, speak to an empty room for a few weeks, and then give up.

In order to use social media correctly, hoteliers and hotel marketers need to

invest time and passion into the network before it will ever bear fruit. This time

can be costly and exhausting, and may not deliver results for weeks, months or

even years.

Search Engine Marketing (SEM) and Pay Per Click Ads (PPC)

Traditional billboard, newspaper and magazine advertisements have been

superseded by web advertising. SEM and PPC advertising accounts for the

majority of all advertising revenue generated in the world today—Google

138
advertising alone has made more money each year than all print advertising

combined since 2007.

139
Anyone can start an SEM or PPC campaign, but the learning curve to execute

such a strategy effectively can be steep. It is very easy to quickly waste a year‘s

marketing budget in a month, if one does not take care. It takes good intuition

and experience to choose the right advertising targets, place the correct bids and

manage a monthly budget.

For these reasons and more, many hotels hire agencies to perform SEM and PPC

services for them. This compounds costs, levying the cost of the campaigns and

the agency fee upon the hotel. It can be very difficult to see positive return on

investment (ROI) concerning paid online advertising.

Email

Online deal services like Groupon, Living Social and Amazon Local have

millions of subscribers who are looking for good deals. Joining one of the

services and offering their members a substantial discount is a quick way to fill

empty inventory.

One drawback of using deal services is that many of them won‘t accept a

proposed deal unless the hotel offers a significant discount--so significant that

the hotel might not make much money. However, the brand exposure is a great

opportunity for a hotel to snag repeat customers and future online bookings. The

risks and rewards need to be weighed heavily before embarking on this strategy.

PROS:
140 130
 It can be cost effective to pick one or two direct marketing activities and

excel at them.

CONS:

It can be expensive and tedious to try to excel at all direct marketing

activities, and very challenging for all of them to pay off.

Unless the hotel has purchased a digital marketing subscription, the

hotel‘s online marketing will age quickly as soon as it is purchased.

It is challenging to be successful with the direct channel without

significant investment in one or more digital marketing strategies.

141 130
 Chapter 10

Data Analysis & Findings

Critical Success Factors that make e-commerce business profitable in

the travel industry related organizations (In order of Importance)
(All type of organizations)
N Mean Std.
Deviation

A11c. Competitive pricing 33 4.85 .364

A2. Technological infrastructure that supports the dynamic

33 4.82 .392
business demand

A11b. Prompt customer service 33 4.79 .415

A9a. Products that are of most interest / most importance to travel

related organizations to increase business performance - a) Flight
33 4.67 .479
+ Hotels

A1. Commitment (Commitment and support from top management

33 4.64 .603
in term of strategy and implementation)

A11a. Differentiated products & services - a) Exciting holiday

33 4.55 .617
itinerary
A10c. Deal sites 33 4.52 .712

A4. Promotions to drive incremental business 33 4.48 .619

A3. Online media marketing budgets 33 4.48 .619

A7. Multi-Channel Marketing 33 4.45 .666

A9c. Flight + Hotels + Car Rental + holiday package 33 4.33 1.137

A9b. Flight + Hotels + Car Rental 33 4.33 .990

A8. Partnership/Alliance to expand the product offering 33 4.30 .728

A10b. Tourism sites 33 4.27 .839

A5. Customer purchase patterns and tailor products according to

33 4.12 .820
14
2
the purchase patterns

A10a. Widen the travel product distribution system - a) E-Tailing

33 4.09 .765
sites

A10d. Tour operators brochures & websites 33 4.03 .883

A6. Customer retention through customer loyalty 33 3.97 1.015

Competitive pricing is the most important success factor that creates product

differentiation. Pricing plays a very important role in creating competitive edge

14
3
for the organizations products. Prices are to be set that captures the value of the

product. The right way to set prices involves capturing the value that customers

place on a product by ―thinking like a customer. Understand that customers have

different pricing needs. In virtually every facet of business (product

development, marketing, distribution), companies develop strategies based on

the truism that customers differ from each other. However, when it comes to

pricing, many companies behave as though their customers are identical by

setting just one price for each product. The key to developing a comprehensive

pricing strategy involves embracing (and profiting from) the fact that customers‘

pricing needs differ in three primary ways: pricing plans, product preferences,

and product valuations. The travel industry, like many others, relies on

advertising to promote its products and services. Price is usually a major

consideration when consumers are buying travel or planning their holidays. This

means that close attention is paid to any price representations made in

advertisements, whether they appear on the television, in a brochure or

newspaper or on a website. Advertising correctly represents the product for sale,

including its price and any inclusions or exclusions. It applies equally to all

types of travel—from a five-star luxury holiday to a budget backpacker travel

package. This enables consumers to make informed purchasing decisions when

making travel arrangements and purchasing a holiday, including the choice of

upgrades, airfares, duration of the trip, any tours, transfers or other inclusions,

fees, charges, terms and conditions—and the total price.

14
4
Things to consider when setting your pricing strategy

How unique is your business? The more unique your tourism product

the more flexibility you will have to decide your pricing.

What value added services do you provide inclusive of the experience?

What market do you want to attract and what positioning in the market

do you want to establish?

For most tourism businesses setting prices will be more market based –

that is, what do competitors with similar products and services charge

within your market? Be careful however, you must be aware of your

own financial position (debt levels, cash flow etc) before you can decide

whether you should compete in this way. Ideally being competitive is

not price driven, it‘s product driven

Pricing Components

Your pricing strategy may be made up of the following components:

Rack Rates

All tourism businesses should have a rack rate – this is your ―full rate‖ before

any discounts are applied and typically is what is provided to wholesalers and

printed on brochures for the season ahead. For activity and attraction operators

their full rate is more likely to be charged all the time without any day to day
14
5
discounting, however accommodation operators – particularly those in the

middle of the market will be changing pricing almost daily for the month or 2

months ahead to fill gaps.

14
6
Seasonal Pricing

Using a mix of pricing throughout the year to cover low, high, and shoulder

seasons is a standard way for tourism businesses to cater for differing levels of

demand due to the time of year. Typically these will be the same date periods

each year but may also apply for school holiday dates and for local events where

the dates vary each year.

Last Minute Pricing

A common method for accommodation suppliers to fill those last minute gaps in

inventory availability, last minute pricing is basically discounting daily prices

according to forward bookings and promoted on last minute booking websites.

Common Pricing Types

Per Person pricing: A set price per person e.g Adult and Children

prices. Commonly used by activity/attraction and transport operators or

backpacker accommodation and camp sites. Options may include an adult,

child and senior citizen price.

Per Unit pricing: – A set price for 1 unit of the product e.g. Price per night, this

is the standard way to price accommodation, usually the advertised price is for 2

people so if the accommodation fits more than 2 guests it can have a mix of the

per person pricing with extra adult and extra child rates.

147
Single or double occupancy – common for B&B‘s there is a single rate and a

double rate (which is not double that of the single rate).

14
8
Discounting

While discounting has it‘s place, and often unavoidable in a competitive market

such as tourism, be very wary about continually discounting your prices to

stimulate demand – it can become a rocky road to reducing profitability or even

missing that vital break-even point. Be selective with last minute pricing deals –

don‘t make every day reduced, just select those where you really do need extra

bookings. Consider adding conditions to a discounted price like a minimum

stay or number of travellers in the booking. While a booking is better than no

booking at all, customers do become used to a certain price level and you

therefore run the risk of not only making it hard for you to charge your normal

rack rates, but it will also devalue your product – remember perception is

everything in tourism!

Package Deals

Developing packages with complimentary tourism partners in your area or with

value added components is a good way to stimulate demand without having to

discount. Strike up deals with local businesses to provide a full package and

share business with each other – you should be able to get their products or

services at a ―net‖ rate so the package pricing is better than if they had

purchased each component separately. Packaging can also be used to target

niche markets effectively e.g golf weekend, food and wine tours, pampering

packages etc.

14
9
Commissions

Many bookings will come via some sort of third party who will charge you a

commission such as a retail travel agent, wholesaler, inbound tour operator or

online travel agent (OTA).

Many tourism operators are tempted to add the value of the commission on to

the pricing for these providers but this should actually be considered in the

setting of your rack rates anyway – if you have different pricing across different

distribution channels it just confuses both travellers and can jeopardise industry

relationships, so keep it simple.

Air Travel Demand Elasticities

At the present time, the airline industry faces many cost pressures. The industry

has made remarkable achievements in improving its efficiency. But cost

pressures continue, from record high fuel prices to unjustified increases in

charges from monopolistic airports, to further taxes imposed by governments.

Higher costs inevitably lead to higher prices for airline passengers. Therefore, it

is crucial that reliable and appropriate estimates are available to assess how

higher prices impact on the level of demand for air travel. This impact will, of

course, differ according to the level and location at which prices are changed.

This report provides groundbreaking new research into the sensitivity of air

travel demand to changes in air travel prices and incomes. It provides clear

guidelines for the appropriate use of demand elasticities and robust and reliable

15
0
estimates of their value. Air transport provides economic benefits not just for its

passengers and cargo shippers, but also for the wider economy by connecting

151
businesses and individuals to global markets. Modern, just-in-time, global

supply chains and multinational businesses are made possible by global airline

networks. Yet governments often fail to recognise this and continue to

implement air transport policies that are not in the best interests of the aviation

industry and the wider economy. Monopolistic airports that raise charges but do

not improve the services they offer will see passengers quickly shift elsewhere.

Governments that impose new taxes on the industry are taking advantage of less

sensitive movements in demand at the national level to raise revenues at the

industry‘s expense.

The elasticity of air travel demand varies according to the coverage and location

of the market in which prices are changed and the importance of the air travel

price within the overall cost of travel. The appropriate elasticity to use will

depend on the type of question being asked. What is the price that is being

changed (e.g. an individual airline ticket price or prices within the market as a

whole)? What is the unit of demand that is being assessed (e.g. demand for an

individual airline or demand for total air travel)? Examining the traffic impact of

a price increase on a given route requires a different elasticity than when

examining the impact of an across-the-board price increase on all routes in a

country or region. Passengers are becoming increasingly sensitive to price, led

by the boom in low cost travel, the transparency brought by the Internet and the

intense competition on deregulated markets. But, passengers are also becoming

less sensitive to price, as increasingly lower air travel prices, in real terms mean

that the air travel price itself becomes a smaller and less important part of the

total cost of a typical journey.

15
2
Information Technologies And Tourism Demand

"The key to success lies in the quick identification of consumer needs and in

reaching potential clients with comprehensive, personalised and up-to-date

information". The rapid growth of both the volume and the quality requirements

of contemporary travellers, require powerful ITs for the administration of the

expanding traffic. Tourists become sophisticated and more demanding,

requesting high quality products and value for their money. Thus, destinations

and principals need new methods to serve the new types of demand. The usage

of ITs in the industry is driven by both the development of the size and

complexity of tourism demand, as well as by the rapid expansion and

sophistication of new tourism products, which address mini-market segments.

Increasingly, new, experienced, sophisticated, demanding travellers seek

information about more exotic destinations and authentic experiences, as well as

require to interact with suppliers in order to satisfy their specific needs and

153 140
wishes. The contemporary/connected consumer "is far less willing to wait or put

up with delays, to the point where patience is a disappearing virtue".

In order to satisfy tourism demand and survive in the long term there is no

choice but to incorporate technology and enhance the interactivity with the

marketplace. Increasingly, ITs enable travellers to access reliable and accurate

information as well as to undertake reservations in a fraction of time, cost and

inconvenience required by conventional methods. ITs improve the service

quality and contribute to higher guest/traveller satisfaction. Customer

satisfaction depends highly on the accuracy and comprehensiveness of specific

information on destinations' accessibility, facilities, attractions and activities.

This is because the gap between consumers‘ expectations and perceived

experiences is smaller and thus, unpleasant surprises from the destination or

principals are minimized. In addition, several other ITs facilitated factors

enhance consumer satisfaction, namely: consumers have more information and

enjoy a greater choice; a reduction of the bureaucracy and paper-work

effectively frees time for customer service; customising the product and

establishing ―one-to-one‖ marketing by using intelligence collected by loyalty

schemes (e.g. dietary requirements, product preferences); providing new

services, (e.g. as in-flight or in-room entertainment and information channels);

facilitating operational tasks (e.g. in-room TV checkout) ; personalised services

(e.g. telephone operator acknowledges guest by his name); and finally better

integration of departments and functions of organisations towards better service.

Computer Reservation Systems (CRSs) and increasingly Internet providers

satisfy the needs of consumer for convenient access to transparent and easy to
154
compare information. They cover the entire variety of choices of travel, lodging

and leisure services, destinations, holiday packages, as well as display the actual

prices and availability of such services. These services also provide immediate

confirmation and speedy documentation of reservations, allowing a greater

degree of flexibility and enabling prospective travellers to book at the "last

minute". Experienced travellers are therefore empowered by information and

booking systems and increase their personal efficiency by creating tailor-made

products independently. ITs also assist principals to understand consumer needs

through marketing research and loyalty/partnership schemes. Improved access

to information covering all aspects of tourist activities provides the framework

for offering personalised services at price levels comparable to those of standard

packages.

The revolutionary developments in ITs, which have been experienced through

the proliferation of the Internet and the World Wide Web since 1995, illustrate

that consumers increasingly rely on the Internet for travel information. They

utilise commercial and non-commercial Internet sites for planning, searching,

purchasing and amending their travel. Non-tourism organisations tend to seize

the emergent opportunity by utilising the ITs tools. This is already the case with

major ITs providers, (e.g. Microsoft developed Expedia, an electronic travel

agency) to satisfy tourism demand.

155
Products that are of most important to the travel related

organizations to expand business: Flight & Hotels

Travel related organizations place utmost importance by providing flight and

hotels as key products to the consumers. Flight and hotels are key terms search

searched in the search engines. An airline usually connects with the computer

reservation systems of the hotels and displays the inventory on the airline sites.

This gives the consumer an option to book air and accommodation through the

airline website. The intermediaries like tour operators, travel agents, and online

travel agents provide the consumers not only with just flight and hotels but also

car rental and holiday packages. The integration between airline and hotels is

straightforward. Airlines before tying up with hotels discuss the % of

commission per room night, which the airlines will receive through the referrals.

Tracking mechanisms are implemented in order to track every hotel booking

which is brought through the airline website.

Prompt Customer service is of vital importance to all organizations in the

travel and tourism sector. Excellent customer service results in a high level of

satisfaction and encourages customers to return and to recommend the

organization to others. Many organizations in the travel and tourism sector offer

the same or similar products and services, and it is often the quality of the

customer service, which distinguishes one from another. Travel and tourism

organizations realize that consistently high standards of customer service will

156
ensure customer loyalty and improve business performance. This unit introduces

learners to the principles of customer service as they apply to travel and tourism.

The skills needed by an employee of a travel and tourism organisation are

developed in this unit. Aspects such as personal presentation, teamwork and

communication skills are all exceptionally important to the provision of

excellent service. Travel and tourism organisations are in the business of

providing information and selling products and services, and learners will have

the opportunity to develop and demonstrate these skills with customers in real or

simulated situations across different industries within the sector. Meeting the

specific needs of different customer types will be dealt with to ensure that all

learners appreciate the importance of treating customers as individuals. The

knowledge that learners gain from this unit will help to prepare them for

offering excellent customer service within any travel and tourism organisation.

Customer service is important because you must ensure that customers are so

pleased with doing business with you, they will keep returning to you. You have

to keep your customers away from your competitors. It costs five times as much

to win a new customer as it does to keep an existing one. Dissatisfied customers

tell others of their bad experiences and those people will avoid using your

organisation. Your organisation needs to be able to compete on value rather than

just price, i.e. customers are prepared to pay more for your product or service.

Your organisation needs to be secure and able to develop, and so do you. You

want the buzz you get out of providing excellent customer service. Some

organisations (for example, tour operators) integrate services vertically and

horizontally. This gives them control over each level of the products they
157
market but leads to an underlying consistency in customer service across that

integrated group. People operating small private companies may have a niche

market and know many of their clients as regular customers, which helps give a

more personal style of customer service. Large organisations may depend more

upon systems to help provide customer service but, with the right approach and

by selecting and training staff who have a real desire to provide excellent care to

their customers, such organisations can also provide a personal style of service.

Factors which will have an impact on overall business

performance as a result of the structuring of e-commerce

business in the travel industry related organizations (In order of

Importance) (All type of travel related organization)

N Mean Std.
Deviation

B9. Customer friendly website for consumers to easily locate

33 5.00 .000
and book tr

B6. Competitive pricing 33 4.73 .517

B4. Differentiated products & services from competition 33 4.73 .452

B5. Advance Technological infrastructure to meet the

33 4.70 .529
dynamic consumer demands

B2. Prompt response to customers' problems, suggestions,

33 4.67 .540
and complaints.

B3. Customer Loyalty & satisfaction 33 4.61 .659

B7. Efficient deals/packages/inventory distribution system 33 4.48 .566

B1. Customer-tailored marketing via customer profiling 33 4.33 .736

158
B8. Human resources skill set pertaining to travel industry 33 4.21 .781

Most important factor which will have an impact on the over all business

performance as a result of the structuring of e-commerce business in the travel

related organizations is seamless booking experience through a customer

friendly website.

159
Methods & practices to structure the e-commerce business in the

travel industry related organizations (In order of Importance)

(All type of travel related organization)

N Mean Std.
Deviation

C1. Customer friendly website for consumers to easily

33 4.97 .174
locate and book travel related products

C5. Advance Technological infrastructure to meet the

dynamic consumer demands & fasten business 33 4.88 .415

operations

C2. Regular updating the website with latest and correct

33 4.82 .392
information for consumers to make informed decision

C3. Prompt response to customers' problems,

33 4.79 .485
suggestions, and complaints.

C16. Multi-Channel Marketing 33 4.70 .529

C4. Investment in tablet and smart phone apps 33 4.70 .637

C11. Consistent Promotion design tailored according to

33 4.61 .496
the consumer purchase patterns

C8. Business alliance with white label products e.g.

33 4.48 .667
hotels, flights, cab, insurance, holiday package

C14. Improve Process efficiency - The time taken to

33 4.48 .566
quote the offering & price

C15. Engage with exciting content on social media to

encourage engagement between travel products and
33 4.42 .663
consumers

C9. Informed reports for forecasting and decision

33 4.39 .659
making

C6. Analytical tools to track consumer behavior &

33 4.36 .653
transactions

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0
C7. Consistent offline and e-media advertising without
33 4.27 1.153
any blackout periods

C12. Innovative payment gateway features to enhance

33 4.27 .719
consumer experience & increase business performance

C10. Interactive feedback between customer and

33 4.27 .674
business

C13. Improve Process efficiency - streamline the time to

33 4.18 .727
develop a custom itinerary

161
Travel websites have to be regularly updated with latest deals, products,

services, promotions, and policies. One of the most common issues found with

websites is ―Build it and Forget it‖ syndrome. In simple terms, it‘s the website

that you build today and do not change a thing for the next few years. This

disease in websites is as prevalent as the common cold is in humans. It‘s cause

is simple: it‘s ―old web‖ thinking in a ―new web‖ world. In the old web (say

mid-1990‘s to early 2000,) the idea was simply to copy and paste the content

from your company‘s brochure into your website and then you were set. At that

point, you were fine to leave it for the next few years and many businesses did

just that. The new web is all about content, but not just any content… fresh

content. In the new web, the websites that get the most traffic are those where

the content is constantly changing, being added to, and improved. Users want

and expect to see or learn something new each time they visit your website and

they view those websites that do so as more valuable. Think about it, you

actually give them a reason to return!

Travel goes mobile: The Travel & Tourism sector has been one of the most

enthusiastic adopters of mobile technology. We see airlines issuing mobile

16
2
boarding passes; using mobile messaging as a CRM tool to keep passengers

informed about delays and cancellations; giving iPads to in-flight staff to enable

them to conduct appraisals 35,000 ft. off the ground; and of course creating

easy-to-use apps to enable passengers to book flights on the go.

Train and bus operators deploying mobile ticketing solutions to improve

efficiency for them, and the ticket-buying experience for their customers.

Tourist destinations producing mobile City Guides, often deploying Augmented

Reality to help travellers find their way around a strange city. And travel agents

producing companion apps to help their customers plan their holiday before they

leave, and make the most of it when they arrive at their destination.

Add to that the plethora of hotel- and tax-booking apps, underground maps and

bus and train timetable services, and it‘s clear that the Travel & Tourism sector

is ahead of the game when it comes to mobile marketing.

Since travelers invest so much more time using apps than mobile websites, it's

no surprise that the majority of purchases and bookings coming through mobile

devices occur in apps rather than mobile websites. In 2012, a full 20% of

smartphone owners used their device to book air travel or make a hotel

reservation, and 80% of these transactions were made with an app. Again, these

numbers are certain to rise as the market penetration of mobile devices increases

while barriers to mobile transactions continue to fall away.

Beyond the standalone benefit of increasing market access, mobile apps allow

travel businesses to target a very attractive type of audience: impulse buyers.

With the increasing number of travelers using their mobile devices, there are

outstanding opportunities for the travel industry predicated on the real time

16
3
ability to connect and interact with consumers at any time or place. The portable

16
4
media landscape of mobile offers a powerful medium to deliver content to

inform, influence and transact.

The opportunities are unlimited, from empowering mobile travelers to

improving travel efficiency and building ancillary revenues. Mobile offers the

traveling consumer the ability to research products and services, make instant

reservations, change bookings and check-in/check-out on the go. Through push

marketing, it provides rich opportunities to get consumers to respond to offers

engage in signups and buy on the spot. You can communicate information or

alerts, send coupons, offer distressed inventory, make timely offers and last

minute deals, up sell and cross sell ancillary products and services.

Airlines are leading the way by upgrading their mobile Web experience from

being mainly information driven to providing the ability to book and purchase

flights, join the standby list and upgrade seating. Hospitality brands are diving in

to the space with SMS call to action campaigns for promotions on discounts for

rooms, dining, amenities, etc. and creative concepts like a mobile concierge for

groups. On the operations side, booking confirmations can be cost effectively

and conveniently sent by text message, there‘s the ability for paperless ticketing

and creative means to improve customer feedback.

As more competitors move into the space, mobile is becoming a key

differentiator. In the continual quest to generate loyalty by delivering supreme

levels of customer service and create product differentiation, travel marketers

are looking to the channel to engage with customers at all stages of the

consumer buying cycle. The innovative use of mobile technology offers the

ability to differentiate a company in a highly competitive market. Keeping up

16
5
with customers on the go with messages on the move gives you the opportunity

for a unique one-on-one relation-ship with your target customer.

Multi-Channel Marketing:

Facebook Marketing For Tourism Organizations

Facebook offers travel brands the ability to identify prospective travelers,

communicate directly with users, engage with advocates and create branded

experiences through advertisements and custom-developed Facebook

applications. Facebook is the most powerful social media channel for travel

marketers because of the platform‘s flexibility and ability to drive awareness,

empower brand advocates and push consumers further into the travel purchasing

process.

Furthermore, Facebook users are passionate about sharing their travel

experiences. In 2012, Facebook reviewed the top stories people shared to their

Facebook timelines and discovered that the top story being shared by users was

travel experiences. 42% of stories shared to users Facebook timelines were

travel experiences, more than double that of the next category. In the evolving

digital marketing landscape, it is clear that consumers want to share their travels

with others and tourism marketers need to tap into this consumer behavior to

generate awareness, inspiration and visitation.

Facebook marketing goals

16
6
Brand awareness

Inspire visitation

Consumer engagement

Build brand advocates

Drive website referrals

167
 Generate visitor leads

What Facebook Products Are Available

The heart of the Facebook marketing platform is Facebook Pages. Your

Facebook Page is your brand‘s storefront and where you will be able to

showcase your destination‘s most important news on your time line. Within

your Facebook page, you can brand your profile in name and images, select a

vanity URL, list your business details and link to your website. Facebook Pages

also allow you to list upcoming events, map your location and feature photo and

video galleries. Your Page is where you will generate connections and long-term

relationships with your brand advocates (residents and past visitors) and attract

potential visitors. Building a Facebook Page is simple, quick and free.

Facebook Ads are a paid advertising solution used to attract new fans, amplify

your message and expand the reach of your brand. Facebook Ads allow you to

hyper-target your audience based on a wide variety of triggers such as location,

demographics, interests and much more. Facebook advertising units include

Traditional Ads for brand awareness and to drive traffic to the website, page

post ads to promote Facebook page, sponsored stories to highlight users

connections with your Page and Promoted Posts to showcase your Page posts.

To incentivize users, generate conversions and expand co-op marketing,

Facebook Offers allow Facebook Pages to provide offers such as hotel deals that

can be redeemed online or in person. Custom Audiences is the newest

advertising targeting available and allows marketers to upload an existing

168 160
database of emails or phone numbers to target users.

169 160
Facebook Ads are a cost effective approach for generating awareness,

engagement and connections with users for your destination.

To develop more engaging brand experiences, tourism marketers can develop or

install Facebook Page Apps that will be located on a Facebook Page. Facebook

Page Apps are available from third party application developers or can be

custom developed to deliver highly engaging interactions. Popular Facebook

Page Apps for destination pages include sign up form for newsletters and

vacation guides, contests and sweepstakes, co-op programs and integration with

other social media channels. While some third party applications are available

for free, customized Page apps will require a web development investment.

Beyond Page apps Facebook provides Facebook Connect, Social Plugins,

Facebook Login and Open Graph as free tools for brands to develop

personalized website and application experiences.

Seasonal Campaign Strategy

Seasonal Facebook campaigns are an excellent way to drive awareness,

engagement and visitation inspiration during pre-peak or need periods. By

increasing your Facebook Ads budgets and timing it with unique and innovative

campaigns your organization can make sure to differentiate itself and gain the

attention of travelers planning their next trip or vacation. To further incentivize

your audience and build your following, think about layering in a contest,

giveaway or sweepstakes.

Create a unique, experiential and one-of-a-kind offer that cannot be had

anywhere else to peak the most interest. When running a Facebook campaign

170
always be sure to collect email addresses and require entrants to like your

Facebook Page in order to create opportunities to drive engagement and web

traffic in the future.

Search Engine Use For Travel Planning

Search engines have become one of the primary tools for travel planning and, as

such, have become an important part of the Internet marketing strategy of

destination organizations. Recently, it has been demonstrated that because of the

dynamic relationships among the search engine providers, the tourism industry

and travellers, it is essential that destination-marketing organizations have a

substantial understanding of how search engines are used within the travel

planning process. Search engine marketing is emerging as one of the most

171
important components of an overall Internet marketing program. With the

growth of information on all facets of the tourism experience, general search

engines such as Google and Yahoo! have become the ―Hubble‖ of the Internet

galaxy, enabling travellers to navigate through this space so as to find

information that might be useful in the travel planning process.

172
173
Measuring The Value Of Email Marketing For The Travel

Industry

Email is a cultural and marketing phenomenon. In its relatively short lifetime,

email has become so wide-spread and so often used that it has firmly been

established as an integral part of a multi-channel marketing scheme surpassing

other channels in almost every dimension – volume, frequency, and ease of

execution just to name a few. As a marketing channel, email is often

underutilized, a last minute tactic to communicate a message because of the low

cost, speed and convenience of getting something into market. However, peer

deeper and you‘ll see that the medium has matured. Email is a vital link between

marketer and consumer that can provide companies with rich information about

their products and services. Email extends well beyond the boundaries of opens

and clicks, and must be optimized and measured as an important part of the

overall media mix. The receipt of permission-based email makes travel

consumers more likely to do business with a travel company, according to the

research. More than half of respondents have a favorable opinion of the travel

companies that send them email because of the communications they receive

and feel more loyal towards companies and products. Travel reflected better

loyalty than other categories in the study, with 63% of recipients of permission-

based email from travel companies more likely to buy from companies that send

them email. The travel industry was one of the first industries to enter the e-

commerce arena and therefore travel consumers have a high comfort level in

regards to multi-channel email and web marketing activities. With consumers

today more receptive to email opt-ins and more adept at Internet search, they are

accustomed to great deals and a number of options.

174
Figure no. 20

175
 Figure no. 21

Promotions Designed According To The Consumers Purchase

Patterns

Tourism organizations plan promotions to let customers know about their

products and services. To encourage customers to purchase more.To launch a

new product, service or special offer. Sales-Promotion tools are samples,

coupons, packages, patronage rewards, premiums, point-of-purchase, displays,

contests, sweepstakes, and games. Promotion is the communications part of

marketing. It is the way we tell the world our product. Promotion provides

consumers with information and knowledge in an informative and persuasive

manner. This, we hope, will sooner or later result in sales of our services or

products. The information and knowledge can be communicated using one or

more of the five promotional techniques - advertising, personal selling, sales

promotion, merchandising, and public relations. Taken together, these

176
techniques are referred to as the promotional mix.

177
The ultimate purpose of promotion is to modify behavior through

communication. This requires helping customers at the various buying process

stages so they eventually purchase or repurchase a particular service. Promotion

achieves this by informing, persuading, and reminding - the three principal goals

of promotion. Promotions usually fit into one of these categories; they are either

informative, persuasive, or reminders.

Informative promotions work best with new services or products (early

product-life-cycle stages) and with customers in early buying process stages

(need awareness and information search). These types of promotions tend to

communicate data or ideas about the key features of services.

Factors Affecting The Promotional Mix

Choosing a promotional program for a coming period requires very careful

research and planning. The stage of customers‘ decision processes and product

life cycle stages affect the promotional campaign decisions. However, there are

178
Factors that are detrimental to the growth of the e-commerce

business in the travel industry related organizations (All type of

travel related organization)

N Mean Std.
Deviation

D3. Lack of Advance Technological infrastructure to meet

33 4.73 .517
the dynamic consumer demands

D4. Slow time to market then competition 33 4.67 .645

D5. Brand lacks loyalty & satisfaction 33 4.64 .549

D6. Brand lacks consumer preference 33 4.61 .659

D2. Non Differentiated products & services from

33 4.52 .795
competition

D1.a Flight + Hotels 33 4.48 .834

D1c Flight + Hotels + Car Rental + holiday package 33 4.36 1.194

D1b Flight + Hotels + Car Rental 33 4.21 1.053

D7. Delay in payments of suppliers/partners leading to

33 4.15 1.034
suspension of business deals and advertising campaigns

Most important factor that is Detrimental to the growth of e-commerce

business is Lack of Advanced Technology Infrastructure and Least

important is Delay in payment of supplier

It is important that travel related organizations focus on proactive

approach rather than a reactive approach for e.g. price competition is a

major factor in travel industry. There is always a chance of price war. If

a competitor has dropped their price it is critical that other competitors

match the price. The systems should be capable enough to match the
179
price real time so that competition is unable to capture the entire share of

demand and consumers are provided with multiple options.

Time to market is the total amount of time it takes to develop and get a

product into the marketplace.

18
0
Why does time-to-market matter? How well a company does is often not

just related to how good its products are but how quickly they are gotten

to the market. Beating the competition to the markets by just a few

months can have a dramatic impact on the success of a new product. One

of the biggest benefits from reaching the marketplace first, is acquiring a

larger market share. once a company has an edge, it will often keep it.

Has any company really overtaken Sony for their Walkman products?

On the other side, IBM was a big part of the development of the personal

computer market, and then lost much of its market share to other

manufacturers.

One good reason for having a fast time to market is to allow a company

to start later on designs than the competition for a similar product. This

can allow for more feasibility studies and for the use of the latest

technology. Also a product that takes 3 years to design will almost

certainly have old technology by the time it is being sold. Quicker design

time means more up to date technology.

How does this relate to quality and cost? A quicker time to market

usually means lower development costs. But if a product is rushed to

market before it is ready, the quality may suffer and the customers will

not be willing to pay as much for it. As companies feel an increased need

to bring products to market faster, the need to get it right the first time is

becoming greater. This is causing more emphasis on design technique

and tools.

What causes slow time to markets?

181
 Lack of thorough customer research

18
2
  Poor execution of design; wasting of resources

 Too many projects being worked on at the same time;

lack of focus

 An unorganized design approach

 Unempowered design team

 Not fully equipped systems

 Lack of strategy

How are time-to-markets being improved?

 Strong market research

 Focused product definition

 Management support

 Systematic design of products/services

 Equipped systems

 Systematic implementation approach

Product differentiation (or simply differentiation) is the process of

distinguishing a product or service from others, to make it more attractive to a

particular target market. This involves differentiating it from competitors'

products as well as a firm's own products. Among the travel products

183
organizations place utmost importance on flights and hotels as a key product

differentiator.

18
4
TESTS FOR SIGNIFICANCE (T-Test)

T-Test (Critical Success Factors that make e-commerce business

profitable in the travel industry related organizations)

Type of N Mea Std. Std.

Organization n
Deviati Error
on Mean

A1. Commitment (Commitment Hotels/Airlines 11 4.45 .820 .247

and support from top management
Agents/Tour
in term of strategy and
Op/Search
22 4.73 .456 .097
implementation)
Engines/GDS

Hotels/Airlines 11 4.73 .467 .141

A2. Technological infrastructure
that supports the dynamic business Agents/Tour
demand Op/Search
22 4.86 .351 .075
Engines/GDS

Hotels/Airlines 11 4.36 .809 .244

A3. Online media marketing Agents/Tour

budgets Op/Search
22 4.55 .510 .109
Engines/GDS

Hotels/Airlines 11 4.45 .688 .207

A4. Promotions to drive Agents/Tour

incremental business Op/Search
22 4.50 .598 .127
Engines/GDS

Hotels/Airlines 11 4.00 .894 .270

A5. Customer purchase patterns
and tailor products according to the Agents/Tour
purchase patterns Op/Search
22 4.18 .795 .169
Engines/GDS

Hotels/Airlines 11 4.00 .632 .191

A6. Customer retention through Agents/Tour

customer loyalty Op/Search
22 3.95 1.174 .250

185
 Engines/GDS

Hotels/Airlines 11 4.45 .820 .247

A7. Multi-Channel Marketing Agents/Tour

Op/Search
22 4.45 .596 .127
Engines/GDS

Hotels/Airlines 11 4.18 .874 .263

A8. Partnership/Alliance to expand Agents/Tour

the product offering Op/Search
22 4.36 .658 .140
Engines/GDS

18
6
A9a. Products that are of most Hotels/Airlines 11 4.64 .505 .152
interest / most importance to travel
related organizations to increase
business performance - a) Flight + Agents/Tour
Hotels Op/Search 22 4.68 .477 .102
Engines/GDS

Hotels/Airlines 11 4.00 1.095 .330

A9b. Flight + Hotels + Car Rental Agents/Tour

Op/Search 22 4.50 .913 .195

Engines/GDS

Hotels/Airlines 11 4.09 1.221 .368

A9c. Flight + Hotels + Car Rental Agents/Tour

+ holiday package Op/Search 22 4.45 1.101 .235

Engines/GDS

Hotels/Airlines 11 4.18 .751 .226

A10a. Widen the travel product
distribution system - a) E-Tailing Agents/Tour
sites
Op/Search 22 4.05 .785 .167
Engines/GDS

Hotels/Airlines 11 4.18 .982 .296

A10b. Tourism sites Agents/Tour

Op/Search 22 4.32 .780 .166

Engines/GDS

Hotels/Airlines 11 4.73 .647 .195

A10c. Deal sites Agents/Tour

Op/Search 22 4.41 .734 .157

Engines/GDS

Hotels/Airlines 11 3.82 .982 .296

A10d. Tour operators brochures & Agents/Tour

websites
Op/Search 22 4.14 .834 .178
Engines/GDS

Hotels/Airlines 11 4.45 .688 .207

A11a. Differentiated products &

187
services - a) Exciting holiday Agents/Tour
itinerary
Op/Search 22 4.59 .590 .126
Engines/GDS

Hotels/Airlines 11 4.64 .505 .152

A11b. Prompt customer service Agents/Tour

Op/Search 22 4.86 .351 .075

Engines/GDS
Hotels/Airlines 11 4.91 .302 .091

Agents/Tour
A11c. Competitive pricing Op/Search
22 4.82 .395 .084
Engines/GDS

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8
Definition of (t-test)

It can be used to determine if two sets of data are significantly different from

each other. Tests for statistical significance are used to address the question:

what is the probability that what we think is a relationship between two

variables is really just a chance occurrence? Tests for statistical significance tell

us what the probability is that the relationship we think we have found is due

only to random chance. They tell us what the probability is that we would be

making an error if we assume that we have found that a relationship exists. The

test statistic in the t-test is known as the t-statistic. The t-test looks at the t-

statistic, t-distribution and degrees of freedom to determine a p value

(probability) that can be used to determine whether the population means differ.

The t-test is one of a number of hypothesis tests.

Analysis

Travel agents, tour operators, meta search engines, global distribution

systems (GDS) perceive that commitment from the top management play

a crucial role in making the e-commerce business profitable as compared

to airlines and hotels

Travel agents, tour operators, meta search engines, global distribution

systems (GDS) perceive that technology is one of the key factors of

competitiveness as far as tourist markets and strategic tourism

management are concerned. Various high tech information and

18
9
communication technologies are in use in the tourism sector around the

world. They are used for tourism product development, marketing,

19
0
distribution and training of tourism sector personnel. These technologies

are so indispensable in order to find out and satisfy the ever-changing

demands for tourism products.

Travel agents, tour operators, meta search engines, global distribution

systems (GDS) perceive that Flight+Hotels+Carrentals+holiday

packages are products that are of most interest and importance as

compared to airlines & hotels.

Hotels and carriers place higher importance to deal sites as compared to

travel agents, tour operators, meta search engines, global distribution

system for distribution of travel products. Anyone in retail marketing

knows that coupons, deals, and rebates are indispensable tools to both

acquire first-time customers and retain existing ones. This fact accounts

for why deal sites have existed for so long and continue to have legs

under almost any economic circumstance. Since the early days of the

Internet, retailers could get their offers posted to all kinds of deal sites

without much difficulty (or the need for a professional media buyer).

With the advent of affiliates, many retailers didn't even need to post their

offers – their affiliates would do it for them or even develop whole deal

sites filled with nothing more than affiliate links. One of the most

apparent benefits is the affordable offers that these websites provide.

Everyone wants to get a way to preserve a few money on the products

that they may need or just want. Individuals may think that these offers

may be too deferential to be real, but in all reality these offers are

actually genuine. When searching for items on these websites, an

individual could find terrific presents for friends and close relatives. If

191 180
someone has a big family but does not necessarily have the disposable

income to buy presents for everyone, these websites can be extremely

beneficial. Gifts could be bought way in advance and put away for future

use. When surfing around through these websites, products can be

discovered that someone may not have even known about. Items can be

discovered that someone may not have seen or observed about in years.

Arriving across products like these can be extremely interesting.

Travel agents, tour operators, meta search engines, global distribution

systems place higher importance to tour operators brochures and

websites for distribution of travel products as compared to airlines and

hotels

Travel agents, tour operators, meta search engines, global distribution

systems place higher importance to prompt customer service as

compared to airlines and hotels. Thomascook.com the e-division of the

established high street agent captures customer data through online

registrations, sales and click streams. These data are used to extend

personalisation across a number of communication channels. On the site

users can register for email updates and are asked for a range of

information including contact details, date of birth, preferred holiday

activity and composition of travel party. With the customer‘s data held

on a database the information captured online is used by

Thomascook.com to improve the level of service offered by the call

centre staff. By accessing the customer‘s profile the call centre is able to

prioritize that customer and possibly explore up sell and cross sell

opportunities. Customer service is of vital importance to all

192
 organisations in the travel and tourism sector. Excellent customer service

results in a high level of satisfaction and encourages customers to return

and to recommend the organisation to others.

T-Test (Methods & practices to structure the e-commerce

business in the travel industry related organizations

Type of N Mean Std. Std. Error

Organization Mean
Deviatio
n

C1. Customer friendly Hotels/Airlines 11 4.91 .302 .091

website for consumers to
Agents/Tour
easily locate and book
Op/Search
22 5.00 .000 .000
travel related products
Engines/GDS

C2. Regular updating the Hotels/Airlines 11 4.82 .405 .122

website with latest and
correct information for Agents/Tour
consumers to make Op/Search 22 4.82 .395 .084
Engines/GDS
informed decision

C3. Prompt response to Hotels/Airlines 11 4.55 .522 .157

customers' problems,
Agents/Tour
suggestions, and
Op/Search
22 4.91 .426 .091
complaints.
Engines/GDS

Hotels/Airlines 11 4.55 .820 .247

C4. Investment in tablet Agents/Tour

and smart phone apps Op/Search
22 4.77 .528 .113
Engines/GDS

C5. Advance Hotels/Airlines 11 4.91 .302 .091

193
Technological
infrastructure to meet the
dynamic consumer Agents/Tour
demands & fasten Op/Search
22 4.86 .468 .100
Engines/GDS
business operations

Hotels/Airlines 11 4.27 .647

C6. Analytical tools to .195
track consumer behavior
Agents/Tour
& transactions
Op/Search
22 4.41 .666 .142
Engines/GDS

194
C7. Consistent offline Hotels/Airlines 11 4.55 .522 .157
and e-media advertising
Agents/Tour
without any blackout
Op/Search
22 4.14 1.356 .289
periods Engines/GDS

C8. Business alliance Hotels/Airlines 11 4.55 .688 .207

with white label products
Agents/Tour
e.g. hotels, flights, cab,
Op/Search 22 4.45 .671 .143
insurance, holiday Engines/GDS
package

Hotels/Airlines 11 4.64 .505 .152

C9. Informed reports for
forecasting and decision Agents/Tour
making
Op/Search 22 4.27 .703 .150
Engines/GDS

Hotels/Airlines 11 4.09 .701 .211

C10. Interactive
feedback between Agents/Tour
customer and business Op/Search
22 4.36 .658 .140
Engines/GDS

C11. Consistent Hotels/Airlines 11 4.55 .522 .157

Promotion design
tailored according to the Agents/Tour
consumer purchase Op/Search 22 4.64 .492 .105
Engines/GDS
patterns

C12. Innovative Hotels/Airlines 11 4.09 .831 .251

payment gateway
features to enhance
consumer experience & Agents/Tour
increase business Op/Search
22 4.36 .658 .140
Engines/GDS
performance

C13. Improve Process Hotels/Airlines 11 3.91 .701 .211

195
efficiency - streamline Agents/Tour
the time to develop a Op/Search
22 4.32 .716 .153
custom itinerary Engines/GDS

C14. Improve Process Hotels/Airlines 11 4.36 .505 .152

efficiency - The time
Agents/Tour
taken to quote the
Op/Search
22 4.55 .596 .127
offering & price
Engines/GDS

C15. Engage with Hotels/Airlines 11 4.45 .688 .207

196
exciting content on
social media to
Agents/Tour
encourage engagement
Op/Search
between travel products 22 4.41 .666 .142
Engines/GDS
and consumers
Hotels/Airlines 11 4.64 .674 .203

C16. Multi-Channel Agents/Tour

Marketing Op/Search
22 4.73 .456 .097
Engines/GDS

C11. Consistent Promotion design tailored

-.490 31 .627
according to the consumer purchase patterns

C12. Innovative payment gateway features

to enhance consumer experience & increase
-1.028 31 .312
business performance

C13. Improve Process efficiency -

streamline the time to develop a custom -1.558 31 .129

itinerary

C14. Improve Process efficiency - The time

-.867 31 .393
taken to quote the offering & price

C15. Engage with exciting content on social

media to encourage engagement between .183 31 .856

travel products and consumers

C16. Multi-Channel Marketing -.459 31 .649

Travel agents, tour operators, travel meta search engines, global

distribution systems place high importance on updating the websites

regularly and making the websites consumer friendly in order to find

travel products and book easily.

197
 Travel agents, tour operators, travel meta search engines, global

distribution systems place high importance on prompt response to

consumer complaints.

Travel agents, tour operators, travel meta search engines, global

distribution systems place high importance on implementing mobile

technology for travel industry. Smartphone- and tablet-based searches

for hotel rooms and airline tickets are growing in the double- and triple-

digits in major markets. Travel companies have realized they need to

invest a great deal more in mobile apps and cloud services, and try to

out-innovate their competition on mobile. The rapid adoption rate of

mobile devices is driving a myriad of changes in how travelers access

information and plan their trips. And how the travel industry responds to

198
those needs. Mobile technology is also allowing people to book travel

closer to their trip start date and their destination.

Airlines and hotels place higher importance on integrated advertising

(offline and online advertising) as compared to travel agents, tour

operators, meta search engines and global distribution systems. The

conversion rate improves as a result of integrated advertising. The brand

image gets amplified across both offline and online advertising channels.

Integrated advertising results in reaching out to a wider audience base

and bring new customers to experience the travel products. Consistent

advertising amplifies brands promise of providing value to the

consumers by constant innovation in products and services that meet

consumer‘s needs. There‘s been much discussion on the strategies

between traditional marketing and digital marketing – mostly regarding

how effective one is over the other. The former practice consisted mostly

of dividing concentrations on online and offline strategies, but experts

now consider that melding the two together can reap better benefits, as

long as both campaigns are focused on a central message. Each

advertiser sells to a different segment of consumers, and each medium is

targeting a different audience. We characterize the competitive

equilibrium in the advertising markets and evaluate the implications of

targeting. An increase in targeting leads to an increase in the total

number of consumer-product matches, and hence in the social value of

advertising. We distinguish offline and online media by their targeting

ability: low versus high. As consumers‘ relative exposure to online

media increases, the revenues of offline media decrease, even though the

199
price of advertising might increase. he Internet has allowed many

advertisers to address a targeted audience beyond the reach of traditional

media. In fact, it has been argued that the distinguishing feature of

Internetadvertising is its ability to convey information to a targeted

audience. In particular, targeting improves the quality of the match

between the consumer and the advertisement message, and enables

smaller businesses to access advertising markets from which they were

previously excluded.

Airlines and hotels place higher importance on informed reports for

business forecasting and decision-making as compared to travel agents,

tour operators, meta search engines and global distribution systems.

Informed reports helps in forecasting demand and creates dynamic and

systematic process that can be re-used. Forecasting based on informed

reports helps business predict future results. In many business situations,

there is a need to maximize revenue by selling a limited amount of a

product. For example, in selling seats for a flight, the number of seats is

fixed, they can be sold until the departure time, thereafter they simply

perish; given the fixed inventory of seats, airlines need to forecast

demand in order to set prices accordingly. Forecasting demand in

passenger airlines is a challenging task, because the knowledge about the

customers‘ preferences is limited, and many demand drivers does not

follow a regular repeating pattern. Forecasting future demand in the

lodging industry is crucial because it leads to an efficient planning for,

and decision making to all the departments, and most importantly it is

one of the drivers of pricing. The accuracy of the forecast is essential

20
0
 because the forecast is the main driver of the pricing/room allocation

decisions; inaccurate forecasts or predictions will diminish the hotel's

revenues and profit margin. In fact, a 10% improvement in forecasting

accuracy translates into a 1.5 to 3% increase in revenue

T-Test (Factors that are detrimental to the growth of the e-

commerce business in the travel industry related organizations)

Type of N Mean Std. Std.

Organization Error
Deviation
Mean

Hotels/Airlines 11 4.45 .688 .207

D1.a Flight + Hotels Agents/Tour

Op/Search 22 4.50 .913 .195

Engines/GDS

Hotels/Airlines 11 4.18 .874 .263

D1b Flight + Hotels + Car Agents/Tour

Rental
Op/Search 22 4.23 1.152 .246
Engines/GDS

Hotels/Airlines 11 4.09 1.221 .368

D1c Flight + Hotels + Car Agents/Tour

Rental + holiday package
Op/Search 22 4.50 1.185 .253
Engines/GDS

Hotels/Airlines 11 4.36 .674 .203

D2. Non Differentiated
products & services from Agents/Tour
competition
Op/Search 22 4.59 .854 .182
Engines/GDS

D3. Lack of Advance Hotels/Airlines 11 4.55 .522 .157

Technological infrastructure to
Agents/Tour
meet the dynamic consumer
Op/Search 22 4.82 .501 .107

201
demands Engines/GDS

Hotels/Airlines 11 4.73 .467 .141

D4. Slow time to market than Agents/Tour

competition
Op/Search 22 4.64 .727 .155
Engines/GDS

D5. Brand lacks loyalty Hotels/Airlines 11 4.55 .522 .157

20
2
&satisfaction Agents/Tour
Op/Search
22 4.68 .568 .121
Engines/GDS

Hotels/Airlines 11 4.36 .809 .244

D6. Brand lacks consumer Agents/Tour

preference Op/Search
22 4.73 .550 .117
Engines/GDS

D7. Delay in payments of Hotels/Airlines 11 4.00 1.000 .302

suppliers/partners leading to
Agents/Tour
suspension of business deals
Op/Search 22 4.23 1.066 .227
and advertising campaigns
Engines/GDS

Travel agents, tour operators, travel meta search engines, GDS perceive

that it is important for travel related organizations to provide a wide

range of travel solutions not just selective travel solutions. Travel agents,

tour operators, travel meta search engines, GDS place high importance

on providing flights, hotels, car rental and holiday package to the

203
consumers to book on a single platform when the consumers visit.

Consumers need not go to different travel service provider platforms to

book different travel products. Multiple products under one roof invites

new customers and enhances brand image and hence brand preference

which ultimately leads to brand satisfaction and loyalty.

Travel agents, tour operators, travel meta search engines, GDS place

high importance that lack of advance technological infrastructure may be

detrimental for business growth as business would demand enhancement

in technology. Travel industry is highly dependent on technology as the

products are built with the help of technology. Technology trends in the

travel industry are complex – they involve cutting-edge content

aggregation, distribution, user engagement, intelligent agents, mobile

payments and more. Some new technologies are designed to improve the

user experience, others to contribute to business performance and service

delivery. But all innovations must work within the context of a rapidly

evolving technology environment in which consumers are changing the

way they interact with devices and suppliers can deliver new capability

faster and cheaper than ever before.

Travel agents, tour operators, travel meta search engines, GDS place

high importance that lack of brand preference in the consumers mind can

be detrimental for business growth. Most companies are running

programs that can estimate customer satisfaction levels and provide

more customer-oriented products and services. Because customer

satisfaction is a post hoc evaluation of consumption experience, it has

been regarded as a fundamental determinant of long-term consumer

204 190
 behavior. Brands with a strong hold on consumer minds can capitalize

on that hold through brand extension. The new products get traction in

the market, at least in theory, on the strength of the brand name. A weak

brand name that lacks this hold on consumer minds cannot lend strength

to a new product to capture market share.

Organizations who own inventory to be sold through

intermediaries and their own websites (hotels, airlines)

Critical Success Factors that make e-commerce business

profitable in the travel industry related organizations (in order

of importance)

Descriptive Statistics

N Mean Std.
Deviation

A11c. Competitive pricing 11 4.91 .302

A10c. Deal sites 11 4.73 .647

A2. Technological infrastructure that supports the dynamic

11 4.73 .467
business demand

A11b. Prompt customer service 11 4.64 .505

A9a. Products that are of most interest / most importance to

travel related organizations to increase business performance -
11 4.64 .505
a) Flight + Hotels

A4. Promotions to drive incremental business 11 4.45 .688

A11a. Differentiated products & services - a) Exciting holiday

11 4.45 .688
itinerary

A7. Multi-Channel Marketing 11 4.45 .820

20
5
A1. Commitment (Commitment and support from top
11 4.45 .820
management in term of strategy and implementation)

A3. Online media marketing budgets 11 4.36 .809

A10b. Tourism sites 11 4.18 .982

A8. Partnership/Alliance to expand the product offering 11 4.18 .874

A10a. Widen the travel product distribution system - a) E-

11 4.18 .751
Tailing sites

A9c. Flight + Hotels + Car Rental + holiday package 11 4.09 1.221

20
6
A6. Customer retention through customer loyalty 11 4.00 .632

A5. Customer purchase patterns and tailor products according to

11 4.00 .894
the purchase patterns

A9b. Flight + Hotels + Car Rental 11 4.00 1.095

A10d. Tour operators brochures & websites 11 3.82 .982

Valid N (listwise) 11

Hotels and airlines perceive the following as key success factors that makes e-

commerce business profitable in order of importance.

Competitive pricing

Deal sites as an important distribution tool

Information technology

Booking of Flight and hotels as two independent product

Promotions to drive incremental business

Multi-channel marketing to create product and brand awareness

Factors that will have an impact on overall business

performance as a result of the structuring of e-commerce

business in the travel industry related organizations (in order of

importance)

Descriptive Statistics

N Mean Std.
Deviation

20
7
B9. Customer friendly website for consumers to easily
11 5.00 .000
locate and book tr

B6. Competitive pricing 11 4.64 .505

B2. Prompt response to customers' problems, suggestions,

11 4.64 .505
and complaints.

B4. Differentiated products & services from competition 11 4.55 .522

20
8
 B5. Advance Technological infrastructure to meet the
11 4.45 .688
dynamic consumer demands

B7. Efficient deals/packages/inventory distribution system 11 4.36 .674

B1. Customer-tailored marketing via customer profiling 11 4.27 .786

B3. Customer Loyalty & satisfaction 11 4.27 .786

B8. Human resources skill set pertaining to travel industry 11 4.18 .874

Valid N (listwise) 11

Hotels and airlines perceive the following as key factors that will have an

impact on overall business performance in order of importance.

Customer friendly website which will create a superior booking

experience

Differentiated products and services from what competition offers

Efficient deals/packages that can be offered to the b2b and b2c markets

Tailor marketing communications based on consumer preferences

Methods & practices to structure the e-commerce business in the

travel industry related organizations (in order of importance)

Descriptive Statistics

N Mean Std. Deviation

C5. Advance Technological infrastructure to

meet the dynamic consumer demands & fasten
11 4.91 .302
business operations

20
9
C1. Customer friendly website for consumers to
11 4.91 .302
easily locate and book travel related products

C2. Regular updating the website with latest

and correct information for consumers to make
11 4.82 .405
informed decision

C9. Informed reports for forecasting and

11 4.64 .505
decision making

C16. Multi-Channel Marketing 11 4.64 .674

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0
C8. Business alliance with white label products

e.g. hotels, flights, cab, insurance, holiday 11 4.55 .688

package

C7. Consistent offline and e-media advertising

11 4.55 .522
without any blackout periods

C4. Investment in tablet and smart phone apps 11 4.55 .820

C3. Prompt response to customers' problems,

11 4.55 .522
suggestions, and complaints.

C11. Consistent Promotion design tailored

11 4.55 .522
according to the consumer purchase patterns

C15. Engage with exciting content on social

media to encourage engagement between travel
11 4.45 .688
products and consumers

C14. Improve Process efficiency - The time

11 4.36 .505
taken to quote the offering & price

C6. Analytical tools to track consumer behavior

11 4.27 .647
& transactions

C10. Interactive feedback between customer

11 4.09 .701
and business

C12. Innovative payment gateway features to

enhance consumer experience & increase 11 4.09 .831

business performance

C13. Improve Process efficiency - streamline

11 3.91 .701
the time to develop a custom itinerary

Valid N (listwise) 11

Hotels and airlines perceive the following methods and practices required to

structure the e-commerce business in order of importance.

Advance technologies (mobile and web)

211
Customer friendly websites which creates superior booking experience

Regular updates on the websites to increase the ranking in search

engines results

Alliance partnerships to widen the product offering to the consumers

Consistent offline and online advertising for retention and new customer

acquisition

212
 Prompt response to consumers complaints and improvise brands

reputation

Consistent promotion design based on consumption patterns

Improve process efficiency – time taken to develop the product and offer

the same in the market

Analytics to track the traffic, consumer behavior and transactions.

Derive trends.

Online travel agents, tour operators, traditional travel agents, travel meta search

engines, Global Distribution Systems perceive the following as key success

factors that makes e-commerce business profitable in order of importance.

Prompt customer service

Advance technology

Competitive pricing

Commitment from top management in terms of strategy and

implementation

213
 Factors that will have an impact on overall business

performance as a result of the structuring of e-commerce

business in the travel industry related organizations (in order of

importance)

Descriptive Statistics

N Mean Std. Deviation

B9. Customer friendly website for consumers to easily locate and book tr 22 5.00 .000

B4. Differentiated products & services from competition 22 4.82 .395

B5. Advance Technological infrastructure to meet the dynamic consumer

demands 22 4.82 .395

B6. Competitive pricing 22 4.77 .528

B3. Customer Loyalty & satisfaction 22 4.77 .528

B2. Prompt response to customers' problems, suggestions, and complaints. 22 4.68 .568

B7. Efficient deals/packages/inventory distribution system 22 4.55 .510

B1. Customer-tailored marketing via customer profiling 22 4.36 .727

B8. Human resources skill set pertaining to travel industry 22 4.23 .752

Valid N (listwise) 22

Online travel agents, tour operators, traditional travel agents, travel meta search

engines, Global Distribution Systems perceive the following as key factors that

will have an impact on overall business performance in order of importance.

Customer friendly websites which creates superior booking experience

Differentiated products & services from competition

Advance technology infrastructure

Competitive pricing

214
 Factors that are detrimental to the growth of the e-commerce

business in the travel industry related organizations (in order of

importance)

Descriptive Statistics

N Mean Std. Deviation

D3. Lack of Advance Technological infrastructure to meet the

dynamic consumer demands 22 4.82 .501

D6. Brand lacks consumer preference 22 4.73 .550

D5. Brand lacks loyalty & satisfaction 22 4.68 .568

D4. Slow time to market than competition 22 4.64 .727

D2. Non Differentiated products & services from competition 22 4.59 .854

D1c Flight + Hotels + Car Rental + holiday package 22 4.50 1.185

D1.a Flight + Hotels 22 4.50 .913

D7. Delay in payments of suppliers/partners leading to suspension

of business deals and advertising campaigns 22 4.23 1.066

D1b Flight + Hotels + Car Rental 22 4.23 1.152

Valid N (listwise) 22

215
Online travel agents, tour operators, traditional travel agents, travel meta search

engines, Global Distribution Systems perceive the following factors are

detrimental to the growth of the e-commerce in order of importance

Lack of advance technological infrastructure

Brand lacks satisfaction and loyalty

Slow time to market of a product then competition. A common

assumption is that Time To Market matters most for first-of-a-kind

products, but actually the leader often has the luxury of time, while the

clock is clearly running for the followers.

Lack of product and service differentiation from competition

Non-competitive pricing for flight, hotels, car rental and holiday package

as a product range offering to consumers.

Delay in payment to the suppliers can lead to suspension of business

deals and advertising campaigns. It weakens your organisation because it

harms your reputation, damages your supply sources and strains your

relations with suppliers, late payment is often taken as an indication that

the buyer is in difficulties. If you create this impression with your

suppliers you may find that their terms worsen. The way

purchasing/sales relationship is managed is important to the profit

margins. A commitment to prompt payment can be a powerful aid to

better buying; it will certainly produce closer, more co-operative

partnerships between the firm and suppliers. Delay in payment of

commission slabs to the travel agents result in either removing the

inventory from the OTA/B2B websites or retail travel agents stop

216
inclusion of the flight/hotel inventory in their

217
 Chapter 11

Conclusion

Tourism is backbone of country's economy. Due to increment on people income, more

and more people are travelling and they are using various channels to purchase their

holiday, some are still using traditional ways buying tourism with the travel agents,

tour operators, hotels etc and some are using electronic way to book and buy tourism

product. Even many travel and tour companies are adapting e-commerce to boom their

business, they are moving from traditional ways to e-business ways to grasp markets

as people are using internet and other online software more often. E-commerce is the

new way for promoting and selling tourism products through web.It is not easy to

adapt e-commerce at once from traditional way, investment on information

technologies costs huge amount and further it need skill human resources. After the

adaption of e-commerce in business, it has to face many challenges; one of the main

challenges is to attract traditional buyers who prefer buying products from travel

agencies rather than booking through web. To lure these customers, awareness

towards e-commerce is necessary; website should be user friendly, informative,

should have very rich contents, if possible they should provide virtual tour of the

destination. There are several benefits as well as barriers for adaption of e-commerce

in travel and tourism, benefits are low operating costs, interaction with customers,

customer can choose products using internet, fast and speed in service, easy to find

new business partners, can communicate with customers during holidays in case of

any problems etc however key barriers for adopting e-commerce is huge investment,

consumer's loyalty, lack of human skill resources, government policies about e-

21
8
commerce, customer confidence etc. Due to e-commerce in travel and tourism,

219
behaviour of consumer is changed, they are less loyal toward the company and it's

easy for them to change the company in few seconds. To retain customer, companies

have to provide excellent services and offer loyalty programs to customers. While

going through the above literature have found many things in common. It has been

found that companies have to consider various things while adopting e-commerce

although it is beneficial for them as it reduces costs, save time, their brand presence

worldwide etc however they admired that companies can lose personal touch with

customers and their loyalty as it is very easy to switch companies due to variety of

choices offered to customers. E-Commerce has provided great advantages for both

demanders (consumers) and suppliers (businesses) of economic activities. With E-

commerce, consumers can search and compare a variety of products and services in

the global market, and then place their orders conveniently anytime and anywhere

without geographic limitations. This simplifies the buying process and provides more

selections to consumers than traditional businesses are able to. The Internet serves as a

new communication and distribution channel for travelers and suppliers of travel

services and products. Commercial websites have many attributes with different roles

and functions in company‘s marketing efforts. The websites with appropriate set of

attributes can influence satisfaction, affect consumers‘ online shopping behavior and

play a positive role in creating demand. Proper use of the attributes can increase

online transactions and repurchase intention judgments, not only consumers‘ current

purchases but also future purchase intentions. Therefore, it is important for companies

to better understand how online consumers evaluate these attributes and what makes

them remain on the websites. In contemporary travel agencies and tour operators

business, the Internet has shown to be a profitable medium of tourism promotion and

sales. The Internet represents an interesting and useful distribution channel for

22
0
collecting clients and it provides the ability to identify their desires. Promotional

visualization of tourism services and products through multimedia technology leaves

greater impression on potential customer than standard brochures, catalogues and

leaflets. Overbooking has become almost impossible because all communication

problems that may cause it are removed. The Internet allows the improvement of

travel agencies and tour operators by speeding up communication and providing all

the necessary information. Product distribution and services of agencies do not depend

on the quantity of printed catalogues anymore and information about them can reach

millions of the Internet users. The Internet provides selling services of travel agencies

on demand. As technology is evolving faster than ever before, it has made most

travellers around the world much more technology-savvy than in the past. The internet

has revolutionized the tourism industry more than any other factor in the last few

decades. Also, as more people are connected to each other, with access to the vast

pool of information available online, an increasing number of travelers are seeking

information via the internet prior to making any travel decisions. Hence, it has become

important for the tourism industry to adapt and uplift its practices and skills of the

workforce within in to meet changing customer behavior. Challenges to the expansion

of technology take-up by tourism businesses. The biggest challenge imposed upon the

tourism industry in adopting technology is the lack of accurate education of the ‗right‘

technology that is suitable for their business. There is a very big gap between the

tourism industry and the technology industry. Some organizations have been able to

tap into this gap and have turned into Online Travel Agents (OTA). However, it is not

every tourism business needs to become an OTA to successfully utilize technology. It

is more important to understand each business‘s competitive edge and adopt the

related technology in order to strengthen their competencies.

221
 Chapter 12

Suggestion & Recommendation

Recommend that adaption of e-commerce is very fruitful to tour and travel

companies however along with adaption of e-commerce, companies have to

focus on changing behavior of customer as well, what customer expects while

booking and buying through the web. What will be customer perception using e-

commerce in travel and tourism? Research on customer perception, customer

exception, level of customer satisfaction, compensation in case of bad services,

secured online payment system etc. should be deeply researched while adapting

e-commerce in travel and tourism. In this competitive environment, business

decision makers need to know some guidelines for developing their e-commerce

presences. Understanding what is important to users is essential in

differentiating its website from the competitors‘, creating a more compelling e-

commerce experience, thereby potentially boosting profits. Client engagement

— both acquisition and retention — is the key to success in the travel industry.

Whether a boutique travel agency or large tour operator, travel industry

companies need to ensure they attain the right volumes of business by

consistently finding and retaining new clients. As disintermediation and

intensifying competition continue to commoditise travel packages and shrink

margins, both client acquisition and retention have become critical competitive

advantages. Yet how can travel industry companies communicate and engage

with large numbers of both prospective and existing clients in a way that is not

22
2
only personal and relevant enough to produce the right results, but is also cost-

effective? The answer is multichannel marketing.

22
3
Delivering on the promise of Customer Relationship Management, multichannel

marketing is intelligent, data-driven marketing in the online environment. As

more and more travel industry companies are discovering, multichannel

marketing is the key to winning more business and strengthening client

relationships through personalized, relevant communication. Multichannel

marketing means more sales by enabling you to continuously profile prospects

and find out more about them — what their changing travel likes, needs and

preferences are — multichannel marketing will help you:

Identify promotions and special offers that will appeal to the largest

number of clients;

Ensure promotions are always relevant — targeted at the right prospects;

Ensure promotions are delivered to each chosen prospect at the most

opportune time and in the preferred manner (web, mobile or email).

Multichannel marketing means strengthened client relationships

By enabling you to personalize your client communication, request feedback

and record client responses, multichannel marketing will help you:

Capitalize on client relationships by consistently anticipating their

specific needs;

Exploit the growing preference for self-service by presenting the right

value offering to each individual client at the right time;

22
4
Eliminate the frustration and cost caused by irrelevant messages sent at

inappropriate times.

22
5
Multichannel marketing means cost-efficient communication - By enabling

you to automate and schedule your client communication multichannel

marketing will help reduce the administrative burden and costs of regular or

routine communication tasks like monthly newsletters; take maximum

advantage of last minute specials by sending out personalised, high speed, high

volume messages to large, diverse audiences (bulk emails or SMS).

Two key areas for growth is predicted with regards to utilizing tourism

technology in the tourism industry correctly. The first area is the marketing of

the tourism destinations, products and services. Selling tourism products and

services online has changed from being just ―price-conscious‖ to being ―an

inspiration‖ to the viewer to travel. As the online user absorbs information from a

variety of sources, it is usually the site or information source that can best

stimulate the viewer to travel that will be remembered by the user. Digital

Marketing, Search Engine Marketing, Mobile and Location Based Marketing,

and a variety of other channels exist today for reaching the potential traveller.

However, it is the appeal of the content, combined with the right pricing that

will ultimately attract the user to your business. The second area is the

infrastructure of the organization, which determines the readiness to respond to

customer requirements. As more travelers are expect personalized products and

services to meet their demands, it is important for tourism businesses to have

tools that can store and monitor information in order to meet the individual

needs of their clients. The better you know your customer, the more likely you

will retain them for a longer period of time. Customer relationship management

and other fundamental information management systems are essential for

businesses to scale-up.
22
6
Annexure 1 - Bibliography

Chong, Sandy, Electronic Commerce Adoption By Small- And Medium-Sized

Enterprises In Australia: An Empirical Study Of Influencing Factors. Curtin

University of Technology, GPO Box U1987 Perth, Western Australia. 6845,

Australia, chongs@cbs.curtin.edu.au

AmitBasu and Steve Muylle. How to Plan E-Business Initiatives in Established

Companies.Mit Sloan Management Review, Fall 2007, Vol.49 No. 1

AlkaRaghunath&MurliDharPanga. Problem and Prospects of

Ecommerce.Medicaps Institute of Techno Management Indore, Volume 2,

Issue–1, 2013

MairajSalim, The Impact Of E-Commerce On Business Value In Service

Organisations, Aligarh Muslim University Aligarh (India), 2002.

KittipongLaosethakul, Critical Success Factors For E-Commerce In Thailand: A

Multiple Case Study, M.S., University Of Alabama In Huntsville, December 16,

2005

Andryce M. Zurick, E-Business Planning And Decision-Making Processes,

Capella University, September 2007

Lee, Sang Myung, Determinants of e-business model performance, ProQuest

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Dissertations and Theses, 2005

22
8
Hassan M. Selim, Critical Factors Classification for Firm Adoption of E-

Commerce, College of Business & Economics, United Arab Emirates

University, Al Ain, United Arab Emirat

Gaurav Seth, Analyzing the Effects of Social Media on the Hospitality Industry,

University of Nevada, Las Vegas

Shahanur Islam, E-Business – A Tool to Enhance Tourism Industry: A Study on

Bangladesh, ASA University Bangladesh, Vol. 6 No. 1

Hsu-Kuan Jonathan Liu and Liwen Chen, The perception of travel agents in

Taiwan regarding travel website and training needs for adopting E-commerce,

African Journal of Business Management Vol.5 (26), pp. 10811-10820.

Mustafa Öz, A research to evaluate the airline companies‘ websites via a

consumer oriented approach, African Journal of Business Management Vol.

6(14), pp. 4880-4900

Mamaghani, Farrokh International Journal of Management , Vol. 26, No. 3

22
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Annexure 2 – Webliography

www.google.com

www.wikipedia.com

www.tnooz.com

www.emarketer.com

www.questia.com

www.pioneerjournal.in

www.buuteeq.com

www.tourism.gov.in

www.gidb.org

www.statista.com

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