Module 1

What is Tourism and Informa5on Technology?

Compiled by:
ARJANELYN A. LOQUIANO
This module belongs to: PAULYN JAYZIELL S. BUHAY
CHERRIE B. MANGILOG
Name:__________________________________________ JOANA MARIE M. TAYAG
Student No.:_____________________________________

Course, Yr. & Sec.:________________________________

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Manag 1- Tourism I
em en t nforma
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LEARN
ING OB
JECTIV
E S
At the
e n d of t
he c ha
pter, th
e stude
nt shou
1.identi ld be a
f ble to:
y key t
erms a
2.descr n
d c on c
ibe the evo epts in
lu inform
3.recog tio n of inf ation t
ormati echnolo
nize th on tech gy;
e types nology
4.expla of info ;
in the rmatio
synerg n techn
ies bet o lo gies re
5.evalu ween t levant
ate the h e t r to tour
strateg a vel ind ism;
destina ic appli ustry a
tions. c a tio ns of in n d in formati
formati on tech
on tech nology
nology ; and
in tour
ism org
anizati
on s
 TOUR 121-
Tourism Info
Managemen rmation
t
6
a. Schedules
1bo. fLo
17cation information
7. Arthur C. C c. Travel revi
ews
larke's predic d. Weather
tion became conditions
Advanced Re a reality 12 ye
search Proje ars later whe
connected to ct Agency (ARPA n network at th
create ____ ) and severa e
_______ - a l universities
a. Computer network of n in U S A were
etworks.
b. Internet
8. Which of c. Mobile ph
the followin one
g listed belo d. World wid
ways and has w connect tr e web
transformed avelers and
how society o rga nization in n
a. Artificial in operates? ew and diffe
telligence
b. Expert syst
ems c. Internet o
9. Which of f Things
the followin d. Social me
g tourism se dia
no tangible p ctor, deal alm
roduct of the ost exclusive
ir own? ly with informa
a. Accommo tion and hav
dation e
b. Attraction
sector c. Airline sect
10. ______ or
_____ are n d . Tra
ow used to su vel agents
p reviously carr pport tasks and
ied out by pe decision-ma
o ple king that we
a. Artificial in re
telligence
b. Expert syst
ems c. Internet o
f Things
d. Social me
dia
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Modul
e 1
What i
s Touri
sm an d I n
formati
on Tec
TOURI hnolo gy?
S M: AN
INFOR
MATIO
The to N-INTE
urism in NSIVE
dustry INDUS
genera thrives TRY
tes larg o
person e volume n in formati
embar s of inf on. The
exchan king on ormati s
ged: iti a trip, sc o n to be p ize of the ind
and pa n e raries, o re s of m ro cessed ustry a
ssenge schedu essage and co lone su
charac r inform les, pa s and p mmun ggests
y m ie ic tha
and to
teristic
s, whic
a tion; b
ut the e n t inform c e s o f inform at e d . For eac t it
urism a h creat t ourism a tion , d e s a tion m h
the dis gencie e a nee industr tinatio ust be
cuss th s. This se d f o r the IT y e x hibits m n a n d prod
e chara ction w applica any oth uct info
cteristi ill first tions u er uniq rmatio
cs that presen s ed by ue
make t t a mo t r a v elers, o
ourism del of t rganiza
Definiti so info ourism tions
on r mation in formati
-intens on flow
ive. s and
Inform
atio
telecom n technolog
munica ycan b
2012.) tions e e defin
quipm ed as “
ent to the app
store, lication
retriev of com
In a bu e, tran puters
siness smit an and
system c o ntext, d m anipula
s. “Inf inform te data
telecom ormati ation t ” (Dain
munica o n system e c h nologie tith,
useful tions n s are com s a r e o
data, t etwork binatio ften re
ypically st ns of h ferred
in orga hat people bu ardwa
r
Intofoarsm
ation
The tra n iz ation se il d and us e , s oftwar
vel and ttings” e t o co e and
(Valicic lle
telecom tou
munica rism industry h and S ct, create, an
provid tion ne is a hea chneid d distrib
es the tworks vy user e. r, 201 ute
inform spannin of IT, a 4 , p . 19)
ation b g the g nd som
ackbon lobe ca e of th
e that r ry travel e large
facilita inform st
Charac tes tou a tion. IT
teristic rism (D , there
s of To utta an fore,
urism S d Bilba
e rv ic o -O s o r
While es io, 201
the ter 2).
transp mprodu
ort attr c tis freque
service action ntly us
. Some and ev ed in th
Gilmor times t e n destina e indus
h e touris ti ons, to try t
experie
e (1999
) ar gue m prod urism c o refer to acc
uct is a a ommo
interac
nces ar
estage
that pr
oducts lso refe n also be des dation
,
tions o d . Furthe a rmeanufac r r e d toexapsear c r ib ed as a
2004.) f travele rmore, t u red,ser nie nceP. in ty p e of
rs, tou experie vices a
rism or nces ar re deliv e and
ganiza e usua eredan
tion an lly co-c d
d settin reated
gs (Pra throug
halad a h
nd R am
aswam
y,
Hetero
genei
ty

Glob
al Perisha
bili
Touris ty
m
 ty ntangib
ili
ty

TOUR 121- Tourism Information Management

The following are some of the characteristics that differentiate tourism from other products,
services and experiences, and which make it so information-intensive,;
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1. Heterogeneity - a typical trip is complex and consists of many component parts,
therefore by nature is heterogeneous.
To research and plan a trip, travelers must interact with many private sector organizations
and public sector agencies. Coordination and cooperation between each of these
organizations, agencies and the consumer are necessary to create the heterogeneous
experience called a “trip”.

2. Intangibility - potential consumers are often unable to see, touch or feel a vacation
or a business trip and its components before they purchase it. Instead, they need detailed
information about the destination or experience to substitute for the lack of tangibility. This
information can be presented via many different media. Travel and destination information,
which was traditionally distributed in the form of brochures, is increasingly in electronic form.
Rich and immersive digital content such as websites, pictures, videos, and virtual reality
allow travelers to “Sample” the trip before making a purchase.
The intangible nature of tourism has brought the IT and tourism industries together to
creatively market the product and make it more tangible.

3. Perishability - if an airline seat is not sold on a given flight, that particular seat can
never be sold again. The seat, or rather the revenue from it, has “perished”. This is true for
almost all products in the tourism industry (e.g. accommodation, attraction, tours,
transportation) and is due to the time-sensitive nature of tourism products.
IT can assist with monitoring inventories and dynamically adjusting prices to maximize load
factors, occupancy and attendance rates. Many computer reservation system (CRSs) in
tourism use revenue management system to assist with the challenges created by product
perishability. Internet booking engines and smartphone apps can also assist suppliers in the
promotion and distribution of “last-minute” deals before they perish.

4. Inseparable - Tourism consumption is inseparable from the production of

experience. Unlike goods, which can be purchased and taken home, there is interaction
between service providers and travelers because the production of the experience happens
simultaneously.
For example, a hotel guest “consumes” a hotel stay as it is being “produced” by service
providers. Information plays an increasingly important role in ensuring that this coproduction
and co-creation of tourism experiences is efficient and of a high quality (Schertler,1994).
One of the greatest challenges facing managers is how to increase the productivity of
service and knowledge workers (Drucker, 1990). IT applications are increasingly being used
to personalize experiences and serve tourists more efficiently, whether it be to check a guest
out of a hotel or to change their flight reservation.

5. Global - By its very nature, the tourism industry is one of the most global industries in
the world. This characteristic is central to it and contributes further to its information intensity.
International travel generates large volumes of information not found in domestic industries.
International travelers need access to border control information such as visa and passport
regulations, custom regulations, arrival or departure taxes, currency control and heath
regulations such as immunization requirements.
For example, travelers from France visiting Peru have higher information needs than
travelers from New York to San Francisco. Both leisure and business travelers are
expanding their horizons and travelling more globally, requiring access to this kind of
information. This geographic dispersion requires data communication networks around the
globe to link countries, tourism organizations and travelers together. Without IT, the tourism
industry would not function as efficiently at the international level.

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In summary, information is lifeblood of the tourism industry. The application of IT to
its operations, therefore, is critical to its growth and success.

Applications of Information Technologies in Tourism

The entire tourism industry has been changed by the use of IT. Research shows that it is
influencing the way travel organizations in all sectors communicate with customers, in the
way they compete, plan their strategies, add value to their products, cost-save and stream
line their operations (Buhalis and Law, 2008).
The following are the different sectors of the tourism industry that have adopted IT at
different rates.

• The aviation sector has been most innovative and heavy user of IT starting early in the
1950s with the implementation of computer reservation systems. These systems evolved
and became known as Global Distribution Systems (GDSs) as they integrated all type of
travel reservations in addition to flights. They became the main tool of travel
intermediaries when booking trips.

• The airline sector has also been a leader in the use of yield management systems to
strategically price airlines’ seats to maximize revenue. IT has facilitated the development
of frequent-flyer programs that require sophisticated database technology and very large
amounts of data. As airlines seek to reduce labor costs and speed passengers through
airports, self check-in terminals in airports have been introduced. Automated call centers
attempt to further reduce labor costs. Use of the Internet for booking flights and IT
applications that allow travelers to use their smartphones for boarding passes, updates
on flight status and other functions are becoming popular, reducing paper usage.

• Travel intermediaries such as travel agents and tour operators have been significantly
affected by technology to the degree that their existence is at stake. In fact, many such
intermediaries have left the market as Internet and other technologies have replaced
them. They have had to adapt to the “disintermediation” caused by the Internet giving
consumers access to the same information and more. Many have done this by
specializing in certain destination or travel products (e.g. cruises) or by obtaining cheaper
rates through their bulk buying power.

• The hospitality sector has, in general, been more reticent to adopt technology, but now
has many specialized systems to support their operations.

- Hotel operations are run by property management systems, which process all
activity relative to guests, rooms, accounting, housekeeping and customer records.
Hotel reservation system are crucial links to customers, and they may be
propertyspecific or designed for multiple properties in a chain or marketing
consortium.
Electronic locking systems, digital room keys, guest room automation, voice
command technology, energy management systems, virtual concierges and self
check-in terminals are also becoming common, particularly in business hotels. A
number of hotels now offer a seamless, fully automated experience where guests
can complete their entire stay without ever speaking to a real person.

- Restaurants’ main use of IT is in the forms of point-of-sale systems, menu

management systems and restaurant management systems.

• Other sector of travel industry, including attractions, entertainment, casinos and

conventions, all have specialized IT systems. Since the arrival of Internet, these smaller
organizations have gained market power as they now are able to access distant
international markets in the same way as large multinationals.
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• Touris
m desti
and ma nation has ve fo
nagem und
ent str
differe
nt stak ategies much value in
includin eholde . IT link incorp
g Inter rs and s toget orating
net, so c a n connec h e r differe IT into
System cial me t with nt sect their m
s (GPS) dia and travele o rs of th arketin
and Ge mobile rs in ne e desti g
ograph techno w and nation
• Travele ic Infor
mation logies d ifferen a nd
rsthem S y s t such as t ways
social m s elves a e ms (GI Global
edia an re gain S). Positio
destina d mob ing mu ning
tions, t ile tech c h benefit
ravel o n o logies f rom IT d
rganiza provid evelop
tions. e ubiqu ments.
itous a In parti
Typolo ccess t cular,
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Inform mation
ation about
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(Clevela mation, how
nd, 198 ever, d
5) . iffers in
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is used m ation is the oth
. A s on not use er thre
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that in gives in pleted
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ate op on is d on to a conInssutm eaedd,. it
receive p o rtunitie u p li c ated an n o ther ab expand
r. s or thr d not lo out a f s as it
eats de st by th avorite
2. Infor pendin e giver hotel, m
other t mation g on th . This in useum
hree re and inf e natu formati or
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ation a
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system can au ubstitu to rent
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s and s h a s tende t r ucture t he
give gu y s tems to nc y to. Tleha su ch as h
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re is re atisonm-e
the sho latively tourism
rt term static. inform
. Static t ation d
Exam o urism oe s n o
tc
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tion, tr g term b and
ans portati u t n ot
on rou in
tes. Sig
n ages a
nd loca
tion
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Manag 1- Tourism I
em en t nforma
Dynamic tion
tourism
inform inform
7 o ation, a- tiinofnor
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w show other p
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ent trip

THE EV
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ussed in ve led to t c omput p s a n d digita d a n , 2012). P aris
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TOUR 121- Tourism Information
Moors
e’s LawManagement

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Networking and The Internet

The next wave of information technologies overlapped with some of developments in

electronic computing. while IBM, Apple and Microsoft laying the foundation of Digital
Revolution, some organization were already thinking about the potential of linking computers
together using networks. In 1970, the science fiction writer Arthur C. Clarke made the
following prediction in the magazine Popular science:
Imagine a console in your office, combining a features of Touch Tone
(pushbutton) telephone and television set, a Xerox machine, and a small
electronic computer. Tuned in to a system of synchronous satellites, this
console will bring the accumulated knowledge of the world to your
fingertips. By punching a few digits, you can verify a check, get the data on
some historical event, or hear an illustrated lecture on any subject you
wish. Or you can hold an electronic conference with any group of people
scattered all over the world, seeing each other as you talk.

Arthur C. Clarke's prediction became a reality 12 years later when network at the Advanced
Research Project Agency (ARPA) and several universities in USA were connected to create
Internet - a network of networks. The internet expanded rapidly in Europe and Australia in
the mid-1980s and to Asia in the late 1980s and early 1990s. The Internet enable a range of
networked services, including email, the WWW and cloud computing.

Ubiquitous Technology

The most recent IT wave relevant to travel and tourism is the rise of mobile and ubiquitous
computing. Many of the technological developments in this field occurred at the same time
as the development of the Internet. As a result, many IT innovations have taken the
advantage of advances in both areas. The history of mobile devices includes developments
in a number of parallel technologies that have converged to create the devices used today.
These include mobile phones, personal digital assistants (PDAs), portable computer,
digital cameras and portable music players. In the early 1990s the miniaturization of
electronics and batteries made pocket-size portable devices possible triggering the new
product category of PDAs. These were small, handheld computers, which allowed users to
read text, send email, schedule appointment and store documents and contacts.
The development of mobile phones and PDAs is significant because the convergence of
these two technologies in 1994 resulted in the first smartphone, the IBM 'Simon'. This was
followed by a period of intense competition between mobile phone manufacturers, computer
makers and electronics companies, eventually leading to the release of the first successful
mass-marker smartphone, the Apple iPhone. In 2007, the proliferation of mobile devices and
apps has created many new benefits for both travel industry and for travelers. Location
aware mobile devices have had an impact on visitor information, marketing, orientation and
interpretation. New innovation in ubiquitous (or portable) devices such as smart watches and
smart glasses have continued to find applications in the travel industry.

Implications of Travel and Tourism

The major trends evident in this historical account information technologies included the
convergence of information technologies and the increasing interoperability of various
platforms. the miniaturization and ubiquity of computer technology together with the
connectivity of the internet has created a new level of functionality and the travel agency has
benefit from this. Advances in fiber optics and wireless telecommunication has led to an
exponential growth in the amount of information being produced and consumed. We a

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increasingly living in a world where physical object are blended with the virtual. Everyday
objects and amenities like lights, heating and cooling, fridges, washing machine and cars are
connected together to create an 'Internet of Things' (loT). Artificial intelligence and expert
systems are now used to support tasks and decision-making that were previously carried
out by people. Social media (facebook, twitter, etc.) has connected travelers and
organization in new and different ways and has transformed how society operates.
The consequences of this hyper-connectivity coupled with the globalization of business
travel are profound. Technological innovations have caused the "collapse of space and
time" (space-time collapse), in that time and space no longer restrict us from connecting
and working. Work can be done at any time and in any place. IT and Internet connect us to
whoever we want. A traveler sitting in Heathrow Airport on their smartphone can make a
booking for a Honolulu hotel, for example, and within microseconds receive a confirmation.
Meeting with others for business (sales meeting and conferences) or pleasure (family
reunion) in different parts of the globe with videoconferencing from a smartphone, tablet or
laptop are now commonplace. Person to person meetings are likely to be less frequent and
yet perhaps more valued.
Travel is also likely to be reduced by the implementation of videoconferencing, meaning that
the travel industry must be alert and innovation to adapt to this trend. For example,
Rosenbluth Travel (sold to American Express in 2003), a business travel agency in the US,
has added teleconferencing to its product offering so that client can compare and choose
between face to face conference and teleconference. If a teleconference is chosen,
Rosenbluth organizes it and sells it as part of their product line.

Strategic Thinking and Information Technology

Thinking strategically about IT applications is critical in today's competitive world. There are
many ways that IT can be used to support the strategic direction of the organization and
support innovation. Some IT applications affect the production of goods and services and
others have more impact on the marketing process.
Cash et al. (1992) provide a model to show how different industries can use IT to improve
both their production and marketing. The model uses a two by two matrix in which the
horizontal axis represents the impact of IT on marketing activities and the vertical axis
represents its impact on the production of goods and services. The authors of the model
place certain industries on the matrix as shown in Fig. 1.1.

The model suggests that industries further along on the horizontal scale will tend to be ones
where: (a) product choice is complex; (b) quick customer decision with confirmations are
essential; and (c) customer tastes and pricing are volatile.
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Industries tend to be high on the vertical scale if: (a) technology is embedded in the product;
(b) production requires a long design process; and (c) time and cost saving are opposible
through automation.
Defence hardware is place high on production impact and low on marketing impact since the
product tends to be highly technical and need little marketing.
High fashion, however, placed high on the marketing impact scale, with moderate impact
production.

An analysis of various travel industry sectors and their use of IT in marketing and production
can position them in matrix relative to other industries. The travel industry sectors place on
the matrix are airline, travel agents, tour operators, hotel and attractions (in bold). Most
sectors are place on the right side of the matrix since IT is heavily used in marketing tourism
products. Various travel sectors are positioned from high to low on the production axis since
the impact of technology varies according to different sectors.

The airline sector is the highest on both dimensions and was placed there in the original
matrix of Cash et al. (1992). Global Distribution Systems, frequent flyer databases and yield
management programs have been heavily used by the airline to distribute and market their
product. IT has also effectively been used in production activities, for example in the design,
operation and maintenance of aircraft, and in luggage handling. Other transportation sectors
such as trains and car rentals are not quit so high on the marketing axis but equally high on
the marketing axis since new technological innovation are constantly introduced to provide
better transportation.

Travel agents, tour operators and other travel intermediaries are perhaps the most
information-intensive of all travel sectors. They deal almost exclusively with information and
have no tangible product of their own. Product choice is complex, quick decisions and
confirmations are often necessary and customer tastes and prices are volatile, placing them
high on the marketing axis. There is also a high impact on production activities since their
product or service is the provision of information.

The accommodation sector is high on both scales, but not as high as the airlines. Computer
reservation systems including guest history system assist in the marketing of hotels. IT's
impact on production, however, is lower. Hotels, traditionally, have not embraced technology
as readily as the airlines, but this is changing. More and more accommodation providers are
installing property management system, electronic locking systems, energy management
systems and guest room technology to make their operations more efficient. The hotel
industry, therefore, has, overtime, moved higher and further to the right of the matrix. See
the case at the end of this chapter about Intercontinental Hotels Group's (IHG) use of IT for
strategic purposes.

The attraction sector is difficult to position since some attraction use technology intensely in
their production (e.g. theme parks) whereas others use it hardly at all (e.g. nature based
attraction). Therefore, it is placed in the middle of production axis. It is also positioned in the
middle of the marketing axis.

The strategic management of IT is a necessary part of the competitive profile of a tourism

organization. It will not bring the organization maximum benefits if simply applied to
operation problem without a systematic approach (Poon, 1993). First and foremost, there
must be a commitment from top management to support the implementation of IT by giving it
adequate resources and creating a corporate structure to maximize its implementation

The following listed below are many ways that enterprises can use IT strategically.

1. Managing value chains: value chains are activity, or series of activities, that create and
build value for destination, intermediaries, suppliers or travelers. This can be done through
the design of product and services or through supply chain management. IT application can
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affect value chains by changing information and distribution channels, and making them
more accessible and transparent, thereby generating more profit.
For example, new IT developments have had substantial impact on the distribution system
over the last 20 years.

2. Managing knowledge: the expert management of information and data resources is

essential for success. Knowledge management system in tourism involved the
sophisticated use of computers to generate information that can be used in decision-making.
Computer technology offers huge potential in this area. Database management system can
store and process millions of costumer records, accounts, product reviews and etc. to
generate knowledge that will guide strategic decision making. The term big data is relevant
here. These are huge datasets that an organizations can mine for information with special
software systems. They can be tapped to answer many questions to assist the organization
in its strategic thrust such as "Who are our high-value customers?" or “What are our
emerging markets?”.

3. Marketing and competitive advantages: the application of IT provides a strong

competitive advantage in the areas of sales and marketing. The use of electronic distribution
channels, social media platform and other innovation connect the supplier with new and
different market. In other operational areas, organization can be early adopters of technology
for competitive advantages. Example are hotels installing self check-in terminals, airlines
offering mobile boarding passes or destination using GPS system to guide the tourists to the
key sites.

4. Service delivery and customer relationship management: because of the unique

characteristics of the tourism experience, knowledge about tourists’ needs, wants and
expectations is important part of effective service delivery. Customer relationship
management (CRM) is a business philosophy that focuses on the consumer and attempts to
create a meaningful relationship with them. This is most effectively done through a large
organization-wide database (containing data on customers, their buying habits and needs)
that helps tourism suppliers to build a relationship with customer by understanding their
needs and providing superior customer service.

5. Strategic listening: part of an organization’s success is based on listening to

employees, customers, suppliers and competitors, and this provides deeper understanding
of how the organization can strategically change and move forward. It can provide more
shared meaning and direction. IT as an excellent toot to assist in the listening process. As
face-toface meetings are not always possible, listening can be done thru teleconference,
smartphone or tablet, or in many other ways. Social media provides new ways to access
market intelligence by monitoring blogs and other online media to understand more about
customer and competitors.

SUMMARY

This chapter has introduced the reader to the basic background of information technology,
its development and evolution over the centuries and its status today. Aspects of computer
hardware and software have been described, giving the reader an understanding of the
scope of this important phenomenon. The chapter has described various models of how
technology is adopted by organizations in general. It goes on to explain the uniqueness of
the tourism industry, its characteristics and size that make it such a heavy user of
information technology. The ways in which technology can be used strategically in tourism is
also discussed. The chapter ends with a schematic diagram explaining the layout of the
book
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 TOUR 121-
Tourism Info
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TOUR 121- Tourism Information Management
database holding 200 million guest
15 of 1profiles.
7 When integrated with others system in the hotel,
the system can analyze customer activities, trends and preference. The technology is more
advanced than most hotels and will process request more rapidly because IHG has
developed its own search technology called BOSS, which will soon be integrated with
Google, providing GPS support and voice search. In the lobby of the hotel, guests can
access airline flight boards and touchscreen PCs to check flight and search for local
amenities.

IHG is also strategically innovating in the area of mobile technologies. it is experiencing a

400% increase in the number of hotel rooms booked with mobile phone and has therefore
created apps for both iPhone and Android. With these apps guests can check availability,
make a reservation, check themselves in, and even unlock their rooms.
Another strategic initiative involves the concierge staff, which now uses iPads to access
information for their guests. This unleashes them from their desks so that they can engage
more dynamically with hotel guests in different parts of the hotel. An application currently
being developed by IHG is the ability for the concierge to create a sightseeing itinerary of the
area where the hotel is located and to transmit this to a guest's mobile devices.

IHG is also innovating strategically with its commitment to cloud computing for many of its
operations. It is building a private clouds environment called Camelot to move its core
customer relationship management (CRM) systems off its mainframes and onto
industrystandard equipment. IHG's loyalty program. Its analysis of current guest activity
information and historical records, and its system for promotional material to individual
guests run on Camelot. IHG is working on also using Camelot for its revenue management
and room yield system that determines room rates. It is using public cloud infrastructure for
application development and testing, and also to host web content accessible for customer
worldwide. It is also evaluating moving key proprietary systems, such as room reservation
software, into the Cloud.
(Adapted from Babcock, C. (2011) Four companies getting real results from cloud
computing. Information Week, 15 January)

Case Study Questions:

1. Evaluate why the volume of reservation from smartphones has increase rapidly.
What future opportunities do smartphone offer to hotels?

2. Download the IHG app on to your smartphone and evaluate its features with IHG's.
Are there any features you would add?

3. Explain how the cloud help IHG with its operation. What are the benefits of cloud
computing compared with having all system stored on local computer hardware?

4. Visit the IHG website and read all about their strategies. Evaluate how IT support
their strategic vision. How else can IHG innovate with technology to support their strategies?
Compare the IT strategies of two other major hotel chains. Which do you think is more
innovative and why? The output will be evaluated using the following criteria:
✓Organization
✓Content
✓Development
✓Grammar and Mechanics
✓Format

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