information and communication technologies in tourism...hapag-lloyd, britannia, jetair, corsair 100...

Information and

Communication

Technologiesin

Tourism

2 © copyright IFITTICT in Tourism

ICTs in Tour Operators and Travel agencies

� ICT Usage by Tour Operators

� Case Study Tour Operators

� ICT Usage by Travel Agencies

� Case Study Bistro

� Case Study WebMAIL

� Further Collection of Travel Agency Case Studies


Tour Operators

� Tour operator functions

� Purchase and assemble a large number ofcomponents produced by the principals, and sellthese as packaged products

� Set up packages at a single price, which are standardised & repetitive

� Provide a one stop shop for travellers

� Achieve immense discounts by bargaining power

� Have a good market access, well known brandsand take over financial risk


Tour Operators

CustomerTravel

agencyTransport

Accommo-

dationServices

Tour operator

Ribbers 1994


Tour Operators

� Tour operator market position

� In Europe, in 1992 one third of total travel expenditures fell into the package category

� In Germany and in the UK roughly half of all holidays sold were packaged

� In specific destinations the percentage of packaged holidays is not that high (in Tyrol, Austria, nearly 70% of the tourists are “direct” bookers)

� TOs experience a fierce competition and have a rather limited control over the quality of the product


Tour Operators - Examples

� Large/mass operators

� TUI (www.tui.com)

� Thomas Cook (www.thomascook.de)

� Kuoni (www.kuoni.com)

� Small/specialist operators

� IGLU www.iglu.com

� Complete Skier (www.complete-skier.com)


TUI – Touristik Union International

TUI63.000 employees

19.300 million revenue

Travel agenciesTUI Reise-Center, TV Travel Shop

ScanHoliday, Budget Travel

Austravel, Thomson

3.300 agencies

AirlinesHapag-Lloyd, Britannia, Jetair, Corsair

100 airplanes

AccommodationsGrand Resort Hotels, Grecotels,

iberotel, Robinson, Solymar

300 hotels

Tour operators1-2-Fly, airtours, berge&meer, Ferien.de

Fox-Tours, l‘tur, touropa, Wolters Reisen

80 tour operators


ICT and Tour Operators

� In the early 1980ies, tour operators started to capitalise on ICTs

� ICT enables TOs to

� Enhance productivity

� Improve their holiday-capacity management

� Reduce the labour cost of telephone operators

� Reduce transaction costs

� Provide a better service to both agencies and consumers


ICT and Tour Operators

� ICT usage by tour operators

� TOs established electronic links with travel agencies

� To reduce their information handling costs

� To increase the speed of information transfer and retrieval

� As own systems or part of CRS/GDS

� TOs utilised market intelligence data arising from the systems

� Yield management & dynamic pricing

� Dynamic packaging

� The systems help monitor the booking progressand productivity of travel agencies


Internet and Tour Operators

� Tour operators use the Internet to

� Alter elements of the marketing mix according to market conditions

� Attract niche markets (skiing, diving, etc.)

� Develop differentiated products

� Promote distressed inventory at the last minute

� Expand operations globally

� Reduce the costs involved in brochure printing & distribution

� Replace traditional brochures by individualised virtual brochures

� Better understand the needs of their clients


TUI – Touristik Union International


Thomas Cook


Role of ICT for Tour Operators

� ICTs

� Determine the competitiveness of tour operators

� Change business practices & roles in the future distribution channels

� Lower entrance barriers to tour operator business

� Will lead to partial disintermediation of tour operators

� Alter the industry structure

� Challenge the leadership and power of major tour operators

� Require innovative and visionary management


Critical Issues for Tour Operators

� Tour operators have to

� Adopt innovative practices

� Establish interactive platforms for partners and consumers

� Adopt a multi-channel strategy

� Support the promotion and trade of tourism products on the Internet, mobile devices & digital television

� Personalise the experience for every user regardless of the channel used

� Target product & value added services to their customers based on individual preferences

� Support dynamic packaging


Case Study – Tour Operators

Namibia Tourism Board syndicates customized Facebook app for tour operators

http://www.tnooz.com/article/namibia-tourism-board-syndicates-customized-facebook-app-for-tour-operators/

http://www.immersionjourneys.com/

From the tour operator’s perspective, the Namibia

Tourism Board’s app has a

customizable section where

the tour operator can showcase its own Namibia

itineraries


Case Study – Tour Operators

Groupon takes tour operator route in France and Germany, OTA next

http://www.tnooz.com/article/groupon-takes-tour-operator-route-in-france-and-germany-ota-next/

http://groupon.co.uk/

Groupon says it is establishing itself as an

online travel agency as the

next logical step for it in

Europe.


ICTs in Tour Operators and Travel Agencies








Travel Agencies

� The role of Travel Agencies

� Act as a distributor, broker or retailer on behalf of the suppliers

� Act as advisers for consumers

� Sell individual products, packages or customisedproducts

� Carry limited financial risk

� Do not purchase tourism products in advance

� Reserve products and issue travel documents only

� Income is generated on the basis of commissions

� Leading to supplier / tour operator / system binding

� Are part of the international electronic distribution network constituted by the CRS/GDS


Travel Agencies and their Relationships

Travel agencies Customers

DMOs/DMSs

Hotels

and other suppliers

Tour operators

CRSs/GDSs


ICT and Travel Agencies


� Facilitates up-to-date schedules, prices and product availability

� Provides an effective reservation mechanism through the proliferation of CRSs and GDSs

� Enables agencies to build complicated travel itineraries

� Improves communication with consumers

� Supports agencies to track activity of clients through CRM systems and personalise service

� Enables integration of ‘front & back office’ procedures

� Facilitates strategic management & marketingfunctions of travel agencies



� CRS/GDS

� Support wide range of travel agency functions in front, mid and back office

� Use of CRSs/GDSs increased travel agency productivity

� In Germany travel agents introducing the German START system could lower their traditional communication costs by 22%, while increasing their turnover by 17%

� Linking to a specific distribution channel creates dependencies

� Offer & price comparison systems

� Global, multi-supplier offer and price comparison

� Bistro, Tourmanager, etc.



� Videotext systems

� 97% of UK leisure travel agents use mainly videotext systems

� Tools for connecting with tour operators’ databases and reservation systems

� Relatively inexpensive

� Require little staff training & expertise

� Disadvantages

� Reservation process is time consuming

� No integration between ‘front and back office’


Internet and Travel Agencies

� Travel agencies use the Internet to

� Develop an Internet presence

� Develop specialised sites for their distinctive markets

� Based on CRS/GDS functionality

� Interact with clientele, partners and stakeholders via websites & email

� Communicate with consumers worldwide

� Personalise interaction with consumers

� Develop cost-efficient communication mechanisms

� Develop a brand name

� Trade through other interfaces

� e.g. www.travel.telegraph.co.uk


Travel Agency Online Presence


Travel Agency Online Presence

Migration


Virtual Travel Agencies

Phocuswright 2003

Leading European online travel agencies


eBookers.com


Expedia


Travelocity


Travel agencies

Developments and trends

Bargaining power

of suppliers

� Commission capping

� Direct selling

� New suppliers (e.g. no-frill airlines) and products (dynamic packages)

� Concentration and new business models

Bargaining power

of customers

� More flexibility

� High knowledge & demand

� New communication channels

� Direct access to suppliers

� Market transparency & price sensitivity

Threat of

new entrants

� Low entrance barriers

� Standardised technology

� Low costs

� New distribution channels (supermarkets, call centers)

Threat of

substitute products

� Virtual travel agencies

� New online platforms

� Auctions

� Power shopping

� Mobile services

� eTicketing

Competitive rivalry

between travel agencies

� Concentration

� Specialisation

� New distribution channels

� Online platforms

� Auctions

� Generation of value-added services

� Recommendation

� Dynamic packaging

� New information & communication channels

� eCommunities

� Online platforms of destinations and suppliers


Concentration and specialisation

Organisation size

Product focus

Niche Broad

Large

Small

Global players

Niche marketeers

Few survivors


Importance of new distribution channels

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Critical Issues for Travel Agencies

� Provide added value and value for money and time

� Design high quality personalised travel arrangements

� Take advantage of on-line tools and improve service

� Intelligent agents, intelligent search & recommendersystems, dynamic packaging

� Make maximal use of information & reservation capabilities of the Internet

� Use a wide range of media to communicate with customers

� Websites, email, SMS, mobile services, interactive TV

� Manage price & product transparency

� Choose the right technological platform & suppliers

� Integrate Internet technology with legacy systems

� Compete with ICT-based newcomers such as Expedia or Travelocity


Bistro

� Travel Agency Advisory System

� Access to extensive information on tourism offers

� Catalogue information of tour operators

� Additional destination or hotel information

� Intelligent search mechanism

� Fuzzy logic technology to provide alternative offers

� Individual sales management

� Offer and price comparison

� Multi-supplier offer and price comparison

� Online booking functionality

� Integrated access to GDS functionality

� Support of major GDSs (Amadeus, Sabre, …)


Bistro Functionality

� Evaluation and calculation of� Last-minute offers

� Package holidays

� Flights

� Hotel offers

� Detailed travel information� Tour operator’s description

� Additional information� Photos

� Slideshows

� 360° panoramic shots



� Information on the country and region

� Satellite and aerial images

� Impression of the hotel’s

surroundings



� Geo-referencing� Geo-referenced information enables exact localisation of

hotels, beaches and sights of interest at the destination

� Enables enquiries about the surrounding area of a hotel


Internet Booking Engine

Integration of complete

functionality and

information into travel

agency website

� Fuzzy search

� Sales management

� Connection to GDS


Internet Booking Engine

Statistics and sales analysis


Information Flow

Tour operator

database

Tour operator

Data entry PrintingTravel

catalogues

Bistro

TravelTainment

database

GDS

Travel agencyTravel agency

Data entry

Availability check

and booking

Offer & price

comparison

Searching

and booking


WebMAIL

� The WebMAIL information network

� Multi-supplier, web-based B2B platform for the distribution and management of sales-relatedinformation

� WebMAIL library

� Suppliers post messages or offers

� Headlines, description, attachments

� Travel agencies search for relevant information

� By supplier, information type, destination, date, …

� WebMAIL alert

� Daily email comprised of headlines from approved suppliers


The WebMAIL System


WebMAIL Alert


WebMAIL Library Search


WebMAIL Suppliers‘ View


WebMAIL

� WebMAIL – an Evaluation

� Launched Sept 2002 in Australia

� Currently by 3940 (96%) agencies

� 120+ suppliers lodged over 4000 product offer notices

� 1000+ unique visits from travel agents per day

� Hitwise ranked www.afta.com.au no 7 in Australia in the travel agency sector, no 5 in business & finance

� SMEs benefit by increasing their presence


Case Study – Online Travel Agencies

China travel search portal Qunar speaks about the past, present and future

http://www.tnooz.com/article/china-

travel-search-portal-qunar-speaks-about-

the-past-present-and-future/

http://www.qunar.com

China’s travel company Qunar has become one of the country’s leading online travel search providers.

The company’s move into mobile has resonated users with more than 34 million downloads of its app so far.



Over the Great Wall: eLong looks west to secure content deal with ArrivalGuides

http://www.tnooz.com/eLong-partners

-with-ArrivalGuides-for-travel-content

www.elong.com

http://www.arrivalguides.com

Expedia-owned Chinese OTA eLong is partnering with ArrivalGuides, a Europe-based destination content specialist, in a bid to overhaul and improve the site’s destination information.



InnHand brings mobile, web and Facebook reservation system for B&Bs, guest houses, villas

http://www.tnooz.com/TLabs-InnHand-mobile-web-Facebook-reservation-system-for-Bed-Breakfast-inns-guest-houses-villas

http://www.innhand.com/

Although there are quite a number of players providing reservation engines In the bed and breakfast (B&B) sector, InnHand provide reservation package only targeted towards B&B properties



CheapAir unveils semantic search for booking flights with natural language queries

http://www.tnooz.com/article/cheapair-unveils-semantic-

search-for-booking-flights-with-natural-language-queries/

http://www.cheapair.com/

To make travel search more intelligent, CheapAir.com has begun beta-testing Easy Search, a semantic search tool that allows users to pose natural language flight queries instead of choosing parameters in forms, drop-down menus, and calendars.



Kayak fears bad UEX on mobile

http://www.tnooz.com/article/one-app-to-rule-them-all-kayak-fears-bad-uex-on-mobile-so-brings-third-party-sites-within-app/

One of the ongoing problems travel search sites have found when developing their mobile apps is that they have to send the user off to the supplier website to complete the booking.

However, many suppliers are not optimized for mobile bookings.

information and communication technologies in tourism...hapag-lloyd, britannia, jetair, corsair 100...

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