The Introduction of ICT’s into the Tourism

Industry

A Detailed Study with Focus on Thailand

By

Dr. Kenneth Cosh.

Computer Information Systems, Payap University

Contents

1. Introduction

2. Modern ICT 2.1 Digitisation 2.2 Increasing Interconnectivity 2.3 Miniaturisation 2.4 Key Technologies 2.4.1 The Internet

2.4.2 Mobile Technologies

3. ICT Impact on the Hospitality and Tourism Industry 3.1 Computerised Reservation Systems & Global Distribution Systems 3.2 Key Cross Functional Business Systems 3.3 Customer Relationship Management 3.3.1 Service Quality

3.3.2 Online Service Quality 3.4 The Impact of the Internet 3.5 ICT Impact on Particular Tourism Businesses 3.5.1 ICT Impact on Hotels

3.5.2 ICT Impact on Airlines

3.5.3 ICT Impact on Tour Operators

3.5.4 ICT Impact on Travel Agents 3.6 The Impact on the Tourism Supply Chain 3.6.1 The Relationship between Service Providers and

Travel Agents

3.6.2 Disintermediation of Travel Agents

3.6.3 Reintermediation of Travel Agents

3.6.4 Where does that put Travel Agents?

3.6.5 Travel Agents as Cybermediaries

1

3 3 5 6 7 7 9

11 13 14 17 18 21 24 28 28 30 32 33 34 40 42 43 45 48

4. ICT Adoption 4.1 ICT Adoption by Small and Medium Tourism Enterprises

5. A Case Study of Thailand

5.1 Internet Adoption by Thai Tourism Industry 5.1.1 The Role of Travel Agents in Thailand 5.2 Customer Perceptions

6. Conclusions

7. References

52 56

59 61 62 65

68

71

List of Figures

Figure 1. Enterprise Application Architecture 15

Figure 2. Tourism Industry Supply Chain 35

Figure 3. Porter’s 5 Forces 37

Figure 4. The Technology Adoption Life Cycle 53

Acknowledgements

This work owes much to the excellent work of Dr. Ilian Assenov and his MBA students within the Faculty of Service Industries at Prince of Songkhla University. MBA students who assisted greatly with primary and secondary data collection were Naruemon Pechruttanamunee, Nutjika Saweksup, Sirirat Chobkhay and Suparat Boonthai. Without their efforts this would not have been possible.

1

1. Introduction

The face of the world has been forever changed by the

advent of modern Information and Communication Technologies

(ICT’s). The e-revolution has brought us e-mail, e-business, e-

commerce, e-learning, e-governance and of course e-tourism.

Increasingly more traditionally physical entities are becoming

digitized and moving into the electronic domain. Customer’s desire

for greater interconnectivity, coupled with new capabilities has

driven ICT’s to perform a critical role within modern society. The

effects of this pervasive, ubiquitous ICT introduction are clearly

visible as little has been untouched. Throughout all industries,

business processes have been refined and streamlined, business

models revised and supply chains reorganized. This report focuses

on the effects modern ICT has had on the tourism industry.

The tourism industry consists of a wide range of businesses

engaged in providing travel services for holiday makers and business

travelers. Services include accommodation provision by hotels or

guest houses, travel services by airlines and on site services such as

by tour agencies or car rental agencies. A central player within the

2

industry is the travel agent who acts as a broker between travelers

and service providers, offering advice and booking services. Many

of these business models have been drastically affected by the

introduction of ICT into the tourism industry.

This work begins by introducing some of the ICT which has

appeared over the past few decades, before investigating the effects it

has had within the tourism industry. It investigates specific types of

business analyzing the effects on travel agents, airlines and hotels

and also analyses the way changes within these business models has

revolutionized the whole tourism supply chain. Specifically it will

address the effect of the Internet and related technologies. The final

part of this report reflects on the position in Thailand, a popular

developing world tourism destination, which boasts a relatively

mature tourism industry, while a relatively immature ICT

infrastructure. Consideration is given to how Thai travel industry

organizations have been affected by the emergence of modern ICT.

3

2. Modern ICT

Few can have failed to notice the profound effect modern

ICT has had on society and business. Computers are now

ubiquitous, forming our portal to the rest of the world,

communication takes the form of email, taking over from the

outdated snailmail. Even the most techno phobic laggards have

embraced mobile telephony which facilitates perpetual

communication access no matter where we travel. The wired and

wireless world has swamped the planet ensuring we can stay in close

contact with our loved ones, as well as performing business

transactions 24 hours a day, 7 days a week, wherever we are located.

Whether we resist or embrace modern technology is irrelevant, its

pervasive presence touches our lives. Let’s begin by investigating

some of the technology trends which have led us to the current

situation, and continue to drive the e-revolution[4][70][104].

2.1 Digitisation

Within modern computers and related technology,

everything is stored and transmitted using binary - data is stored in

binary form, and exchanged through binary streams. Binary is at the

4

core of all modern information systems. Digitisation refers to the

process of converting entities to a binary (or digital) form, for

instance converting the letter ‘a’ into a sequence of 1’s and 0’s. The

letters of the alphabet can be encoded into binary, with each letter

represented by a string of binary digits. This is much the same to

how Morse code works – with Morse code base 3 and binary base 2.

Colours can also be represented in binary, as digits representing the

proportion of red, green and blue in the colour – and this means

pictures can be digitised, and then moving pictures are not far

behind. Fortunately for the user, this digitisation is automatically

dealt with by the computer, without the user needing to understand

the process. Users need not see the binary stream as software will

convert it to its intended form.

Because of digitization, industries whose products can be

digitized have noticed a huge change in the value of their product.

The properties of a product change when it becomes digitized.

Essentially if the product can be stored in digital format, it can easily

be copied, shared and moved – without the owner necessarily

knowing. Software, music and film industries have all felt this

effect, as consumers take advantage of their ability to make perfect

copies of songs, movies or software, disregarding the author’s

intellectual property[3][80]. While a travel product, such as a hotel

room or an airline seat, currently can not be digitized, the

5

information about the product can be, and is particularly important

for travel agents. In an information rich industry, like the travel

industry, the information is easily digitized and so copied.

2.2 Increasing Interconnectivity

As well as more things being stored digitally, more

opportunities are emerging through which those things can be

accessed. Improvements in communication standards have lead to

more devices being able to communicate with each other, and as

devices connect to each other networks emerge. More devices are

being designed and built which are network enabled. While

computers and telephones are the ‘traditional’ technologies for

communication, now cars, PDA’s, lifts, fridges, coffee makers, and

all manner of other device is being equipped to join the digital world

[55][143]. Allowing greater connectivity enables people to

communicate in more innovative ways, and also enables companies

to reach more potential customers in more ways [84].

Because of the widespread demand for connection,

governments and organizations have developed the infrastructure

through which people connect. The backbone capacity has

increased, and reaches out to more potential users. The network is

getting faster and more effective. As the communication technology

6

gets faster, more complex entities can be transferred across a

network, with streaming videos now a standard capability for home

computing. For a long while devices needed to be attached

physically to the network through some kind of cabling, but wireless

and mobile technologies facilitate even more flexible connections.

As people can now connect while traveling, this had lead to new

innovations for the tourism industry.

2.3 Miniaturisation

Moore’s Law famously states that the number of transistors

that can be inexpensively placed on an integrated circuit is increasing

exponentially, doubling approximately every two years[90]. While

this law has been interpreted and misinterpreted several ways, it has

held true for some time and it is clear that the same processing power

can be gained from increasingly smaller chips. This observation

leads us to understand the process towards miniaturisation. There is

a trend for the computationally capable devices which can connect to

the network to get smaller, and as they get smaller they become more

transportable. Processing capabilities that would have been housed

in a room a few decades ago are now easily portable. This enables

tourists to take their own electronic devices, from mobile phones to

laptops, with them when they travel.

7

In summary, modern ICT as well as getting quicker, is

featuring ever more focally within people’s lives and its adoption is

having a significant effect on the way society interoperates. These

trends have lead to the development of several key technologies

which have had profound effects on the tourism industry amongst

other industries. Before investigating the effect these ICT’s have had

on the tourism industry in particular, in the next section we examine

some of the key technologies having an impact on the future of

tourism.

2.4 Key Technologies

The development of ICT’s has ventured in many directions,

producing many different types of technology. While not all is

applicable to the tourism industry, some of these technologies have

had a particularly noticeable effect on the tourism industry. In this

section we look at some of the key technologies adopted within the

tourism industry.

2.4.1 The Internet

The development of the World Wide Web and Internet is

perhaps the most significant achievement within the realm of modern

ICT. It is the communications platform upon which many other

8

ICT’s are built, the facilitator of activities such as sending email or

of course web browsing [9]. To begin with the Internet was used to

convey information, with a webmaster creating content and

displaying it on their webpage. Over time the information became

visually more attractive, with colours and pictures enhancing the

browsing experience. More recently, with the advent of Web 2.0, the

web surfing experience has become more interactive, where users are

encouraged to participate in the website, by posting comments,

uploading images, blogging, using wiki’s etc.[107] All of this is

possible because of the underlying structure of Internet.

Through the Internet, the focus of many businesses has

turned to reach and range, extending their potential customer base

throughout the world. With physical location no longer critical to

communication or business transactions, the Internet revolution has

driven many changes in the way the business world operates. The

Internet has been a crucial development for the travel industry.

Afterall, the travel industry is an information rich industry, and much

of that information is now widely available through the World Wide

Web. With the increased interaction of Web 2.0, users are creating

more travel content in the form of travel blogs, or travel forums,

offering a further source of travel information. The information

provided by other travelers in the form of blogs or forum

contributions could be seen as impartial, as they don’t have the

9

ulterior motive of selling a particular travel product. On the other

hand it could be seen as unreliable as there is rarely a peer review or

reference to the writer’s level of experience. Either way, there is

increasing amounts of online information available to guide potential

tourists, which can present a tourism product in a positive or negative

light.

2.4.2 Mobile Technologies

As chips get smaller and more mobile, the opportunity to

travel with technology grows. As many mobile devices now offer

connection to the Internet in some form, there are plenty of new

opportunities for eCommerce and eTourism. While the idea of

offering a broad range of tourism services available everywhere at

anytime is still a vision, it is realistic in the near future [130]. There

are several portable guidance systems available and being tested with

early tourism guide systems using PDA type devices to provide

tourism information to users on location[17][28]. Now many tourists

naturally carry their mobile phones with them, to make use of global

roaming options, and mobile phones have developed to support more

interesting interactions, including Internet connection. It is also not

unusual for travelers (particularly business travelers) to carry laptops

and make use of WIFI hotspots which are now commonly available

in hotels, airports and other tourism locations.

10

Many mobile devices are now equipped with Global

Positioning System (GPS) allowing users to identify their location

precisely. Mobile technologies such as these are particularly useful

when used in conjunction with mapping software to assist lost

travelers [157]. This also allows the traveler to access many

different types of location specific information, including traffic

information, directions and navigation assistance, location based

billing, emergency assistance and advertising of local attractions

[45]. An increased integration of technology by future travelers is

not difficult to predict, particularly the use of technologies that are

portable by the traveler [149].

11

3. ICT Impact on the Hospitality and Tourism

Industry

The hospitality and tourism industry is an information

intensive industry, much of which depends on finding and

developing new means to distribute its products and services and to

build customer relationships [114]. Tourism industry organizations

are constantly searching for new ways to market its products to

customers, while providing comfort and convenience to travelers to

ensure they are satisfied. Customers too are searching for more

information, and new sources of information before purchasing

travel services [156]. The tourist’s need for information is

highlighted by the unique characteristic of tourism product that is its

intangibility, which means, tourists cannot inspect or pre-test the

tourism product prior to the purchase. Therefore, the customers need

information to help them plan and make decisions among the huge

variety of options before going on a trip [18][106]. The recent

evolution of ICT is satisfying both the needs of the tourism industry

and the desires of travelers providing quick, reliable, up-to-date

communication capabilities. In short, ICTs are creating many new

business linkages and opportunities [123].

12

Key ICTs within the tourism industry have evolved

significantly with Computer Reservation Systems (CRS) emerging in

the 1970’s, Global Distribution Systems (GDS) emerging in the

1980’s and the Internet in the 1990’s [42]. In the early years of this

millennium we can add the emergence and use of mobile

technologies, which again are having an impact on the way the

industry operates. The tourism sector is one of the most important

sectors to be influenced by modern ICT, and with every enterprise,

big and small, able to participate the Internet is quickly becoming the

primary channel for communication [6][12][74][150]. Studies show

that as much as 50% of the population in developed countries are

now using the Internet to choose their holiday destination [151].

Because the Internet affords a great deal of interactivity content can

be highly customized and so tailored to a users individual

preferences [100].

In this section we investigate the impact the technologies

introduced in section 2 have had on the hospitality and tourism

sector. We begin by looking at some of the computerized systems

that have been adopted by tourism companies, including the

transition from using Customer Reservation Systems to Global

Distribution Systems. We highlight the importance of Customer

Service to travel industry organizations by reviewing trends in

Customer Relationship Management systems. We investigate the

13

impact of the Internet, and in particular look at the effect on Hotels,

Airlines, Travel Agents and Tour Operators before reviewing

changes in the whole tourism supply chain.

3.1 Computerised Reservation Systems & Global

Distribution Systems

Computerised Reservation Systems (CRS) were initially

used by the airline industry in the 1970’s. CRS began as a simple

database system where airlines managed the inventories of seats on

their flights and then shared access to the database with their

partners. The system then placed terminals in their high volume

agencies to allow the agencies to search for information about

relevant flights and book directly themselves. In this way the airlines

were able to easily manage their inventories, while better facilitating

their distribution channels [35]. As well as airlines, hotels and tour

operators later began to use CRS in the same way.

With emerging network technologies and improved network

infrastructures, CRS evolved into a Global Distribution System

(GDS). GDS integrated the automatic booking systems used in

many different organizations. GDS were developed to offer a

comprehensive range of services for information distribution

throughout the entire industry. Essentially once the database system

14

was in place, increasingly more sophisticated applications could be

made using queries to it. Famous GDS include Sabre, Galileo

International, Amadeus and Worldspan. These systems allow

centralized access to information on travel, lodging and leisure

services. As airlines, and later other producers, realized that by

allowing travel agents to directly purchase their products, they could

extend their sales team directly into the travel agent.

Originally GDS was intended for Business to Business

(B2B) applications, but more recently buyers (both business and end

customer) can search for information and make bookings through

online GDS applications, with yet further applications, such as

service comparisons or itineraries, added on top and now made

available through the Internet [13][38]. Even with the arrival of the

Internet CRS and GDS play a key role in facilitating changes within

the tourism industry as now the focus has turned to Business to

Customer (B2C) applications [22][102].

3.2 Key Cross Functional Business Systems

Sawhney and Zabin presented an overview of the major

enterprise applications and their interrelationships, highlighting key

systems such as ERP (Enterprise Resource Planning), SCM (Supply

Chain Management) and CRM (Customer Relationship

15

Management)[129]. With increasing connectivity, both internally

amongst employees and externally with suppliers, customers and

partners, these systems have been intertwined to provide an

infrastructure on which to operate a supply chain. The

interrelationships between the systems are highlighted in figure

1[104].

Figure 1. Enterprise Application Architecture

Enterprise Resource Planning Internal Business Processes

Supply Chain Management Sourcing, Procurement

Customer Relationship Management Marketing, Sales, Service

Know

ledg

e M

an

ag

em

ent

Collaboration, Decision Support

Part

ner

Rela

tio

nship

Mngt.

Selling, Distribution

Suppliers

Customers

Part

ners

Em

plo

yee

s

16

At the center of Enterprise-wide applications appears

Enterprise Resource Planning systems (ERP). ERP forms the

backbone of an organisation’s systems integrating and automating

many internal business processes, focusing on managing a variety of

business resources[62][83][103]. These include personnel resources,

financial assets or physical assets, such as a hotel room, or airplane.

Indeed it is an ERP type system for managing the airplane seat

resource which evolved into CRS and GDS. Similar systems are

used by large hotel chains, although ERP systems are mostly

prevalent in manufacturing type businesses. ERP systems can

manage all business resources, so could be used for effectively

managing human resources. Because of this ERP systems need to

interact intensively with all other business systems. Internal

organization systems include Employee based systems to support

collaboration, knowledge management or support decision making,

often using an Intranet to share and disseminate knowledge [94].

The vertical axis of the figure displays a mini supply chain

with the relationship with suppliers at one end, and the relationship

with customers at the other. The systems of CRM and SCM

therefore interact as they manage both the supplier-customer and

customer-supplier relationships. While all of the systems highlighted

in Figure 1 are important for the success of a business today, for

tourism related companies, dealing with customers stands out as the

17

most important. It is easier than ever for customers to compare and

switch service providers, making customer relationships a valuable

asset[62]. Therefore a system that can assist with managing the

relationships with customers becomes a more valuable asset, and so

it is worth specifically investigating both CRM and e-CRM systems

and their role within travel related organizations, especially as the

travel industry continues to evolve with greater demand for online

booking personalization and customer self-service[35]. PRM

systems are also critical for managing relationships with resellers and

intermediaries such as Travel Agents. PRM systems are therefore

also incorporated into CRS and GDS systems and are highly related

to CRM.

3.3 Customer Relationship Management

CRM systems revolve around 2 related objectives, first to

provide the organization and all customer-facing employees with a

single, complete view of each customer at every point of contact in

all channels. Second to provide customers with a single complete

view of the company[134]. The earliest CRM systems used within

the tourism industry have already been discussed in the context of

Computer Reservation Systems (CRS) and Global Distribution

Systems (GDS). Computer Reservation Systems positioned the

travel agent as the customer of the hotel, airline or tour operator, and

18

built a relationship with them, allowing them quick access to up to

date information, and the ability to make and confirm reservations.

As GDS become a B2C system operating through the

internet the focus on customer service increases, as now the customer

is the end user directly. The original Global Distribution System

objective was to distribute a company’s products such as a hotel

room or airline seat, to as broad an audience as possible in the most

cost-effective means possible. More recently the GDS has

repositioned itself to become a marketing and service provider for

suppliers providing links between end users and suppliers – thus

filling the CRM role previously introduced [126].

3.3.1 Service Quality

Central to the concept of creating a good customer

relationship is the idea of providing a quality service, after all

satisfying customers needs works towards building a

relationship[110]. A Quality Service is not simply concerned with

satisfying customers’ needs, instead it can be considered as a

function of 5 gaps in expectations [111][60]. First there could be a

gap between the consumer’s requirements and the supplier’s

perception of it. Second a gap between the management’s perception

of the consumer’s needs and the service quality specified. Thirdly a

19

gap between the specified service quality and the actual delivered

service quality. Fourth a gap between the delivered service quality

and the advertised service quality. Finally between the customer’s

perception of service quality received and the standard expected.

Any of these gaps can cause customer dissatisfaction with

service quality, or if treated well could lead to customers being

delighted with a better than expected service. These gaps are

particularly noticeable within the tourism industry, where the agent

selling the tourism product may be very remote from the service

provider. In order to exceed the expectations of their customers,

companies must develop reliable systems to provide accurate

information, train staff to complete all processes correctly and

motivate staff to perform all aspects of their jobs correctly the first

time, every time, and in a courteous manner[32].

As satisfaction is based on perceptions and expectations,

thoroughly understanding it is complex. The expectations are

particularly difficult to comprehend as the service offered is often

intangible, arrangements are complex and human interaction is

inherently variable. Therefore each individual customer will have

their own personal definitions of good customer service, and their

definition will change over time as they gain more experience with a

product or service. A good customer oriented organization will

20

focus their attention on continually exceeding the expectations of

their customers[53].

Service quality is important as it has a strong link to

customer loyalty [137], and loyal customers can in return result in

large reductions in marketing, advertising and overhead costs. Loyal

customers are likely to re-purchase and also promote the product or

service to their friends and family[144]. Customer service can also

have a major effect on initial purchases, especially in a industry such

as tourism, where often the customer’s purchasing decision is based

on the service offered by their travel agent [10][122]. Indeed for

many tourism related industries, customer service quality is even

more critical than product quality.

Numerous authors have presented service quality

management programs, and practical frameworks to guide tourism

companies in improving their service quality [57][60][86][76].

Advice is centered around ensuring good quality service encounters,

particularly from front line people. Being reliable, having good

communication skills and being empathetic to the customers needs

are also crucial to developing high quality service levels. Modern

ICT has had a few impacts on customer service level improvements

through CRM systems, in the form of process management and

refinement. Larger changes are noticeable as some of the

21

traditionally face-to-face interactions move to an online environment.

Here the importance of good customer service becomes particularly

relevant again. While organizations may already have excellent face

to face customer service, when their customer contact extends to an

electronic environment, customer service needs to be reconsidered.

3.3.2 Online Service Quality

As customer service moves online new challenges arise

when trying to ensure high service quality levels, as online customer

service is not the same as offline customer service[138]. There are 2

perspectives on online service quality. First, there is a concern that

an online environment may raise customer’s expectations about the

service, which then leads to a gap between the expected and the

delivered customer service level. Faceless commerce such as this

may then lead to lower customer loyalty [132]. Alternatively, online

services afford customers better capabilities, such as the ability to

better sort and group information, for instance finding the hotels

closest to the airport, and then sorting them by price, or grouping

hotels based on their quality rating. This additional information may

help the customer make better choices which leads to them receiving

higher satisfaction.

22

Using online services such as a website could be seen as self

service without the need for interaction with employees[37]. In this

scenario the most vital part of the site is the user interface, as this

then assumes the responsibilities of human to human customer

service [52]. Often the design of the website provides the first

impression of the organization and the functionality offered within a

website acts as an interface between the customer and business.

Assuming the website has attracted the customer’s interest,

the customer may wish to begin an online conversation. Online

conversations are not the same as face-to-face or telephone

conversations[72]. When communicating using a telephone, tone of

voice can often play a significant role in how customers and staff

interact, as staff can judge a customer’s stress level from the tone of

their voice and determine how to respond appropriately. In turn the

calm friendly tone of an employee can provide assurance to the

customer. In person contact adds body language to the repertoire of

additional communication mediums that an employee can use to

interpret and then respond appropriately. Employees inexperienced

in online dialog might not realize the importance of these factors and

this can have an impact on the interpretation of the service level by

the customer. As many customers don’t like talking through a

computer, so customer service in online interactions is even more

23

important [112]. While automated systems may be less prone to

error, customers may not appreciate generic responses [44].

Again, several authors have suggested important aspects of

online customer service, always beginning with speed. In an offline

environment customers mostly receive a response immediately, so a

sense of urgency needs to be installed for online service. 24 hours is

the advised cut off point for responses, after all the customer can

easily ask a competitor for a quicker response [58]. Answers still

need to be accurate though, and a quick wrong answer is much worse

than a right answer later. Along with accuracy, answers should be

complete, otherwise customers will need to extend their dialog, or

ask their question a second time. Taking to the next level, answers

should attempt to answer questions that customers may have, but are

yet to ask, so if there is more information that can be given then do

so [120]. These pieces of advice can be combined into 5 P’s of

online customer service; Promptness, Politeness, Personal approach,

Professionalism and Promotional [49][72][78][92][93].

CRM is vital to organizations operating within the tourism

industry, but the challenges of providing high quality service have

evolved along with the adoption of ICT’s. Organisations who take

pride in their face-to-face customer service, need to evolve their

methods to maintain their standards in an online environment. This

24

is particularly true for service providing companies who are using

online channels to target their customers directly. Consider a hotel

who offers excellent service to customers upon their arrival, yet fails

to respond promptly and politely to emails received through their

website. In this case the gap between specified service quality and

delivered quality is large, and while unintentional could go unnoticed

for an extended period of time. Therefore, thoroughly utilizing the

CRM systems which have been developed can lead to large benefits

for tourism related organizations.

3.4 The Impact of the Internet

The Internet has transformed modern tourism and amongst

other things has stimulated changes in customer’s information

searching behavior [13]. The Internet supports a wide variety of

different tools and functions such as electronic mail and electronic

commerce that can be used for communication or sharing data

among tourism enterprises. The Internet serves for both distribution

of information and also for reservation and the sale of services

online. It can be accessed by anyone at anytime, and can reach more

potential customers than any other distribution channels. Through

the Internet the power of GDS and CRS can be further shared with

the end user, allowing more flexibility and customization of travel

products by the individual traveler. Online technologies have

25

significantly impacted communications, transactions and

relationships between tourism industry operators and with the

customer [50][131][133].

The move online has facilitated businesses to create web

portals which can act as a comprehensive Destination Management

System, providing comprehensive information and services not

previously available. As well as providing information, these portals

include booking and transaction facilities becoming the new medium

for interactions previously carried out elsewhere [42]. Particularly

noticeable is the affordance of direct communication between

customers and suppliers, which has a major impact on the role of

traditional intermediaries and the emergence of e-intermediaries.

Traditionally travel agents have acted as intermediaries between

tourism product producers and their customers.

The effect the Internet has had on traditional tourism

business models has been emphasized by the massive growth in

popularity of this medium. The number of internet users world wide

is growing. Internet users are also spending money online, with a

forecasted annual 94 billion US dollars in online booking revenues

from the US travel market by 2009 [27][77]. Users in the US are

particularly comfortable with spending their money online, while

users in Europe often search for information online but make

26

bookings offline[89]. The driving forces behind this revolution are

customers’ insistence on convenience, ease of use, customer service

and accurate information[67]. New capabilities are reshaping the

way the tourism industry operates.

The advantages the Internet offers the tourism industry

include individual access, cost reductions and low cost marketing

and sales opportunities. The Internet also presents organizations

with the unique opportunity to make travel expertise available in the

world at any time for anyone who has access to the Internet

[95][106] [154][156]. Users are able to gain access to information

easily either by typing in the direct Uniform Resource Locator

(URL) or by using a search engine, which enables individuals to find

travel firms even without knowing the name of their company [139].

The Internet also offers the opportunity to develop closer

relationships with customers enabling the better implementation of

Customer Relationship Management (CRM) programs to enhance

the opportunities for interaction[23].

Over the past few years there has been a perceived second

generation of the internet dubbed Web 2.0, indicating a significant

evolution in the web. The 2nd version doesn’t refer to any updated

software or technology, just a different perception on how users

interact with it. While the original model of the web consisted of

27

webmasters producing content that was then read by site visitors, in

web 2.0 the visitors experience is much more interactive as visitors

are allowed and encouraged to produce content and participate in

web based communities [107]. Within the travel industry this allows

travelers to produce content which other travelers can use to make

travel decisions, thus producing a further threat to travel agents as

there could be less demand for their advisory role. Several different

types of site have emerged, some intending to act as online travel

agents, while others inadvertently enter the travel agent market.

TripAdvisor is an example of a web 2.0 online travel agent

allowing users to plan their trips online, while encouraging users to

participate in forums sharing their experiences and giving advice to

fellow travelers. Sites such as wikitravel allow a community to

create content about certain destinations to be used to help make

tourism decisions, while not providing users the opportunity to make

bookings online. The more users who use wiki sites, the better the

reliability and quality of the content produced[33]. Other sites such

as travel blogging sites aren’t intended as online travel agents and

also don’t intend to produce travel guide information. However they

still act as a substitute for an online travel agent as users share their

experiences[136].

28

Travel agents are not the only tourism business to be affected

by the features of web 2.0. For tourism producers, the importance of

excellent customer service, and providing a quality experience for

customers, is even more critical as it is easier than ever before for

dissatisfied guests to share their bad experiences, or preferably

pleased guests to provide free promotion for a product or service.

Web 2.0 means companies are no longer in sole control of their

message[43].

3.5 ICT Impact on Particular Tourism Businesses

Having introduced some of the key ICT’s that have been

developed over the past few decades, attention is now turned to how

these ICT’s have impacted on particular tourism business models.

First the tourism producers are investigated, and then the

intermediary business model used by travel agents is assessed. After

looking at individual business models, the interrelationships between

these business models is evaluated, focusing on the whole tourism

supply chain.

3.5.1 ICT Impact on Hotels

ICT was first used by hotels to assist with inventory and

asset management and control. This extended to integrate hotel

29

operations with marketing functions, while providing tools for

market research, partnership building and improving customer

service[20]. Given the inventory management systems installed,

reservations systems were easily added to a GDS. Consumers

increasingly expect IT facilities in rooms, and often access to the

Internet through the telephone lines or more often through wireless

access points. Internet services are now a standard feature in many

hotels. For hotels offering business and conference facilities, in

order to stay competitive they need to offer state of the art

technology solutions including modern presentation equipment and

increasingly virtual conferencing and teleconferencing systems. For

early adopters ICT such as this was a means to achieve competitive

advantage, now it is used as standard practice.

Internet Based travel distribution intermediaries such as

Hotels.com, Travelocity and priceline.com have revolutionized the

way customers can book their hotels. Companies such as Expedia

are now highly valued and have established themselves well as a

means for customers to purchase rooms online [26]. Hotels too have

attempted to adopt electronic distributions channels, by developing

their own electronic distribution channels and websites, which in turn

reduces their intermediary costs [126]. Many hotel chains are now

mixing their own direct sales with other marketing efforts to reach

their market. While companies such as Marriott can boast 75% of

30

online bookings being direct through their own website, for smaller

hoteliers with lower world wide recognition the need for

intermediaries is still strong [26][135].

3.5.2 ICT Impact on Airlines

The Airline Industry has for a long time been early adopters

of technology, with a long history of technological innovation,

certainly compared to other tourism related businesses[19]. The

airline industry is also often described as an oligopoly or even a

natural monopoly[14][152]. Because of this many strategic alliances

have been formed, which have in turn invested heavily in modern

technology. So a comprehensive use of modern ICT’s can be found

within the airline industry. Communication, such as surface air

communication, is essential to the safe operations of airlines, and

technology has also been used for other tasks such as navigation.

It was the airlines who pioneered the use of CRS and GDS to

manage their sales through their supply chain. While sales through

travel agents were traditionally the largest share of the airline ticket

market, these sales soon were conducted through CRS and later

GDS. Most airlines also operate their own direct sales activities,

through call centers and self branded websites, aimed at bypassing

the traditional travel agent intermediary[68]. As the use of internet

31

technologies grew, the direct access to customers through this

channel became a more significant opportunity for airlines reluctant

to continue paying commissions to travel agents.

CRS/GDS was only the first step towards developing direct

relationships with customers. Now all customer facing employees

have complete access to a passengers itinerary, from booking clerks

to the check-in counter to the boarding gate [81]. As well as using

ICT to develop relationships with their customers, similar

technologies have been utilized for developing relationships with

alliance partners – showing the relationship between CRM systems

and PRM systems. Airlines sharing alliance partnerships use e-

marketplaces to unite and manage their procurement activities[147].

The airline industry has also invested heavily in technology

to improve customer service, through improvements in in-flight

entertainment systems. Airlines invested $1.8 billion on in-flight

entertainment in 1998 to introduce new ways of keeping their

customers entertained during flights[1]. This reflects a shift from

transactional marketing to relationship marketing. As airlines

traditionally offer similar services, i.e. transportation, competitors

have attempted to add technology related value added services to

their core product[85][119].

32

3.5.3 ICT Impact on Tour Operators

Tour operators are key players in the package holiday

business, as they function as industry wholesalers. They also

vertically integrate both backwards into the charter airline and

accommodation sectors and forwards into the travel agent sector

[121][65]. Over recent years many tour operators have undergone

major system enhancements or complete replacement of systems,

particularly distribution systems[64]. By splitting the elements of a

tour into individual data entries to be stored in a relational database,

tour operators were able to offer much more flexible and individual

packages to their customers. Tour Operators have then made their

offerings available through websites and email contact, making ICT

important for distribution [148].

Some tour operators have further introduced ICT’s to assist

with improving their customer’s experiences. Real time, on-site

destination recommendations can be made to customers by using

artificial intelligence and having previously captured their

preferences [101]. Intelligent software agents can also be used to

find travel alternatives and choose the option most likely to satisfy

the traveler with minimal involvement [24][97][155]. Using a

semantic web and related web services, optimized travel plans can be

developed more quickly[63].

33

3.5.4 ICT Impact on Travel Agents

Traditionally Travel Agents have acted as intermediaries

between customers and travel industry organizations such as hotels,

airlines or tour operators. Many choose to use travel agents as a

“search and book” service for their travels. They act as an advisor,

and a consolidator, packaging different travel components together

and marketing them as a single seamless product. Some government

tourism organizations are also intermediaries distributing information

and brochures for tourism suppliers in their region. The primary role

in all of these cases is to facilitate the information exchange and

importantly the purchasing process [106]. To this end, tourism

suppliers, including airlines, car-rental agencies, hotels, tour

operators and more, must provide all the important information to

these intermediaries and infomediaries in an appropriate format to

support the sales process.

In order to differentiate themselves, many companies have

begun using the internet as a new distribution channel for their travel

products. This corresponds to market demand as the majority of

travel shoppers begin planning their trips through an online travel

website[99]. In responding to the new demand for online travel

services, travel agents have encountered a variety of problems. The

biggest difficulty encountered by Internet based travel agents is that

34

of perceived insecurity concerning financial transactions. While the

transaction may be completely secure, customers are afraid to enter

their personal data and credit card numbers in order to complete a

purchase [108]. A further problem encountered is insufficient

internet infrastructure for some potential customers. While this is

gradually being addressed, the lack of social interaction also causes

some disadvantages. Some customers need to contact directly with

their provider for them to feel comfortable with the transaction.

Success in the cyber world, is dependent not only on having

great high technology skills and experiences, but also on the ability

to market at website and attract prospects to it. Hospitality and

tourism companies have adopted websites to take full advantage of

the practical and creative uses of the internet. Websites are used as

means of communication, marketing, information distribution and

selling products. The aim being to reach customers first, then

educate them, and finally to sell to them. The first priority for travel

agents is therefore to identify the specialties of their organization in

terms of abilities, ideas and concepts [79].

3.6 The Impact on the Tourism Supply Chain

While the introduction of modern ICT’s has impacted on the

way individual firms operate, it has also had a big effect on how the

35

tourism industry operates as a whole, and how the firms within it

interoperate. One significant effect is that sales commissions paid by

airlines have decreased significantly since they introduced alternative

channels to their customers, and this change amongst others has had

a major effect on the relationships between organizations within the

tourism supply chain. First let’s have a look at the supply chain as it

exists in the tourism industry today, as shown in figure 2 [61].

Figure 2. Tourism Industry Supply Chain, adapted from [61]

Customer

Distributors

Material Suppliers

Service Providers

GDS/CRS

Supplier Reservation

Centers & Ticket Offices

Supplier Websites

Internet Travel Agents

Con- solidators

Brick & Mortar Travel Agents

36

The supply chain shows how a variety of industry players

interoperate to provide and distribute tourism products. The material

suppliers produce key materials needed by the service providers.

Examples of this include food producers who provide food for

airlines or hotels, or the physical tickets and boarding passes used by

airlines [39]. Service providers include all the companies offering

tourism products, such as airlines, car rental agencies, tour operators

or hotels. These companies can then sell their products through their

own internal distribution channels, or through external distributors.

The internal channels include a companies ticket offices, or websites.

External channels are normally organized through a Global

Distribution Channel or Customer Reservation Service. Travel

agents (both online and offline) then sell the tourism products,

leaving the customer with several channels available through which

to purchase their tourism requirements.

The tourism supply chain has of course evolved over the past

few decades as industry players have adapted the way they do

business and interoperate. The introduction of ICT’s by some of

these organizations has been a driving force for changes in the

supply chain, indeed from the model displayed here, it can be seen

that supplier websites offers an alternative channel bypassing travel

agents. This process of removing the travel agent role, known as

disintermediation, has been discussed at length as a major change

37

within the tourism industry [2][7][25]. In order to fully understand

these changes, it is worth investigating the forces driving

organization strategy within the supply chain, and to do that Porters

five forces provides insight [115][116][117].

Figure 3. Porter’s 5 Forces

Porter’s 5 Forces can be used to qualitatively assess a

marketplace – in our case it can be used to assess the strength of each

of the key business models that exist within the supply chain. As the

Bargaining Power of Suppliers

Bargaining Power of

Customers

Threat of Substitutes

Threat of New Entrants

Competitive Rivalry

38

business models gain and lose power, the interrelationships between

them also change[82]. The Threat of Substitutes concerns whether a

substitute product or service exists which customers could be

tempted to use as an alternative. For instance, when a traveler could

travel by train rather than airplane. The strength of this threat

depends on how well the current product is differentiated, and how

well the substitute product matches the needs of the customer, as

well as switching costs involved.

The Threat of New Entries concerns how feasible it is for

more competitors to enter the marketplace. Various things can affect

the likelihood of new entrants emerging, for instance the capital

requirements for set up costs, any learning curve advantages,

government policy or access to distribution channels. If we consider

traditional brick and mortar travel agents, the capital requirements

are high, and access to distribution channels limited, compared to

online travel agents where start up costs are minimal and access to

distribution channels universal.

The Bargaining Power of Suppliers and Bargaining Power

of Customers cover the balance of power in a supplier/customer

relationship, each with reciprocal effects to the other. The

Bargaining Power of Suppliers depends much on the level of

differentiation of the supplier’s products - unique products can

39

demand a higher price. A supplier’s switching costs, relative to the

customers switching costs, can also increase power in the form of

fear that a customer may use an alternative. For airlines operating in

a natural monopoly, the customer switching costs could be

substantial. The role of the GDS within the tourism industry became

increasingly more powerful as utilizing an alternative distribution

channel became increasingly more expensive. Another important

factor in this power relationship comes from the potential to forward

or backward integrate. Travel agents are generally unable to

backward integrate to their suppliers (i.e. a Travel Agent is not able

to start offering flights or rooms in their own hotel). On the other

hand, airlines and hotel chains, particularly with the affordances of

the Internet, are able to forward integrate and develop their own

distribution channels as alternatives to using a travel agent. This

supports the idea that the balance of power lies in the producers

favour.

Finally Competitive Rivalry concerns the intensity of

competition within the market, often influenced by the number and

diversity of competitors. In a saturated market, many players will

lose power, unless they can differentiate their product offering from

their competitors. One popular means of differentiation is through

the integration of ICT’s, which could be as simple as adding a new

40

online distribution channel, or by setting up an electronic booking

system.

It is natural for organizations to want to increase their power

in their relationships with suppliers, customers and competitors and

Porter’s framework can be used to identify opportunities for this,

threats and highlight potential strategies. If organizations, or certain

business models, can establish a means to radically affect their

strength relative to organizations around them, then the supply chain

can be revolutionized. With the introduction of ICT’s, and the

ability for airlines and hotels to directly target their customers

through the Internet, the tourism supply chain was drastically altered.

3.6.1 The Relationship between Service Providers and Travel

Agents

The introduction of ICTs has led to alternative perspectives

on the future role of intermediaries in electronic marketplaces, i.e.

the role of the travel agent. From one perspective the modern ICT

infrastructure allows the creation of extended global enterprises,

where companies such as airlines have the ability to vertically

integrate and directly target their end customers [54][69]. From an

alternative perspective, the ICTs have afforded complex

interconnections between the firms operating within a supply chain,

41

and thus the creation of virtual corporations or networked

organizations [124]. Here each organization focuses on their core

competencies, be it operating planes and flight schedules or

distributing the product, but the boundary between the organization

roles is blurred as ICTs enable closer communications. These

differing perspectives have been attributed to differing effects within

the tourism supply chain.

From one perspective intermediaries add a significant cost to

the value chain, which results in higher final prices [8]. Because of

this some organizations feel pressure to bypass the intermediaries

and internalize the value added functions they perform. This is

demonstrated when an airline opens a web portal to their services

which can offer the consumer better prices than through a traditional

travel agents. The distribution role is still being performed, but now

by the service provider. This has happened while airlines are under

particular pressure to reduce costs, due to global rises in fuel costs.

When the service provider can offer more competitive prices, and the

network facilitates direct transactions, then consumers should prefer

to purchase from the service provider.

42

3.6.2 Disintermediation of Travel Agents

This argument has been observed and presented as the

disintermediation of travel agents, and inevitable progression to a

stage where the role of travel agents is no longer required. Indeed

the risk of disintermediation is related to the ease with which

technology can be used to replace the role of an intermediary in a

virtual space. The travel agents role includes transaction processing

(ticketing), and supplying raw unprocessed product information.

These roles can be easily replaced by technology, which can then

easily be managed by the service provider [11][105]. This follows

the reasoning of earlier predictions that suggested transaction

processing and information provision would be the intermediary

functions most easily replaced by technology – a feature that has

already been seen in the Banking industry [16][73].

Airlines have recently made moves which demonstrate their

threat to the Travel Agent’s transaction role. Airlines have capped or

reduced Travel Agent commissions, while making greater efforts in

direct sales. The introduction of electronic tickets also negates the

need for a physically based transactions. Some travel agents have

then compounded this threat by focusing on recommending and

selling preferred suppliers products, due to better commissions

available. This effort then compromises the perceived independence

43

of the Travel Agent. However, not all evidence is pointing towards

the end of Travel Agents.

3.6.3 Reintermediation of Travel Agents

An alternative perspective suggests that the introduction of

ICT’s has opened opportunities for the re-intermediation of travel

agents, i.e. has created further intermediary possibilities.

Opportunities exist for the travel agent of the future to be a network

information broker. Research has suggested that eticketing has

actually reduced the importance of the ticket, with the ability to

create personalized packages becoming more important [87]. While

modern ICT’s offer the ability to capture, store and process

information, without a semantic web it can’t yet analyse the

semantics of that information, certainly not to the same level as a

human expert. This means that human intermediaries are still needed

to assess the quality and reliability of information found online. If

Travel Agents position themselves appropriately and strategically to

deal with the threats posed by modern ICT, then there are still huge

prospects for increased income [114].

To see the potential for an intermediary role within the

tourism industry, it is worth reviewing an alternative view of the

44

intermediary function. Intermediaries often carry out the following

tasks[128];

• Search and Evaluation

• Needs Assessment and Product Matching

• Customer Risk Management

• Product Distribution

• Product Information Dissemination

• Purchase Influence

• Provision of Customer Information

• Producer Risk Management

• Transaction Economies of Scale

• Integration of Consumer and Producer Needs

While part of this function can be easily taken over by

modern technology, there are still several functions which are

difficult to perform using ICTs. For instance Needs Assessment and

Product Matching; Travel Agents often discuss with their customers

different options before advising them on the most suitable products.

While some customers may have a clear understanding of their

needs, others look to Travel Agents for suggestions. The Travel

Agent provides a neutral aggregation service which can be seen to

reduce a customer’s risks. Noticeably intermediaries also leverage

45

the producers risk, so there is some incentive for producers to

maintain intermediaries.

3.6.4 Where does that put Travel Agents?

A travel agent can be seen as a retailer of travel services,

whose income actually comes directly from suppliers (airlines,

hotels, tour operators etc.) and other intermediaries in the form of

commissions. In many ways travel agents have been agents of the

tourism industry product suppliers. Commissions vary from business

to business, but traditionally when using GDS for example Travel

agents would receive around 10% for airline or lodging reservations

[30]. Typically tourists contact travels agencies during the planning

process for a trip. The nature of this encounter, and as such the

intermediary service provided by the travel agent, varies greatly

depending on the needs of the tourist. Some tourists are well

prepared, having definite plans and only requiring the agent to make

the necessary bookings. Others may simply have the desire for a

holiday, needing assistance in selecting and then booking a

destination, the travel provider, the accommodation and activities.

The outcomes of these encounters has effects in different phases of

the travel experience[32].

46

Travel agencies had an almost exclusive lock on travel

knowledge before the advent of the Internet. They had sole access to

up-to-date transportation information and they had the

documentation needed to make intelligent travel decisions, including

information on hotels, cruises, visa information etc. Some travel

agencies installed computer terminals in the 1970’s, even before

other small businesses in other industries began to use them[79].

Airlines then granted travel agencies CRS access, allowing them to

gather information and process reservations more efficiently. GDS

later provided similar effective mechanisms for a wider range of the

tourism products[18].

Many traditional ‘brick and mortar’ travel agencies are now

reinventing themselves [126]. The airline commissions have been

reduced or even eliminated, forcing travel agencies to cut costs, often

turning to the Internet to achieve this. By turning to the Internet the

physical limitations of brick and mortar operations are removed,

allowing an expanded potential market of end users[127]. Travel

agents are making further use of computer capabilities by creating

inventory systems of accurate information, as well as establishing

databases of customers for use with CRM. Products from diverse

suppliers are combined to create packages, such as by combining

golf and hotels to create golfing holidays. Successful intermediaries

have benefited from creating attractive packages for different clients.

47

Here we see the role of the travel agent becoming more of a trusted

counsel for travelers, using their greater knowledge of the travel

market to present the ideal option to their customers[32].

As the industry evolves it appears that travel agents may play

4 key roles in the future. First acting as an information broker,

passing information between guests and suppliers. Secondly,

processing transactions by booking rooms or flights and then

transferring money. Thirdly, to provide advice to customers, specific

to their requirements. Finally, providing value added services by

integrating a wider variety of travel products[41][142].

This reflects a need for travel agents to redefine their role

within the value chain, to position themselves as infomediaries rather

than intermediaries [95]. As the infomediary product, i.e.

information, is easily copied, and redistributed, Travel agents must

devise a new business model which can still add value to a travelers

experience in order to survive[29]. There are several options for this

including, providing travel advice, enhancing customer satisfaction

and bundling hotel bookings with other services. To succeed travel

agents must provide their customers with personal service and

support, as well as developing a deep understanding of their target

customer’s preferences in order to best satisfy them.

48

Travel agents need to reposition themselves and those that

don’t will not survive. Customers are becoming more sophisticated,

demanding personalized packages for more exotic and specialized

holidays, and so finding a niche is an important option. Travel

Agents will need to increasingly become agents of the people who

are traveling, rather than agents of the service providers [105].

When considering a new position, Travel Agents need to remember

that intermediaries will only survive while they continue to add

value. Relationships are also important, as has been discussed in

terms of CRM, but one of the key strengths a travel agent has is the

deep knowledge of what it takes to satisfy their customers, this is a

strength which can and should be leveraged [98]. Travel Agents also

need to use their experience to structure information appropriately, in

a way that is more usable than the information generally available on

the internet.

3.6.5 Travel Agents as Cybermediaries

A further threat to or opportunity for existing brick and

mortar travel agents is the emergence of online travel agents, the so

called cybermediary business model. Some cybermediaries represent

the evolution of traditional travel agents to become click and brick

travel agents, some are the virtual existence of a GDS, and yet more

are new players who have entered the marketplace. The opportunity

49

for cybermediation exists in markets where product/service bundling

opportunities exist, where the market is fragmented with many

different sellers and buyers, markets with low barriers to entry and

where there is a scope for establishing novel price discovery

mechanisms [51]. These features appear to well describe the Travel

Agent business.

There is clear evidence that customers are turning to the

Internet and there is demand for online travel agents [5]. While

customers are not always prepared to complete their purchase online,

they are increasingly being reassured by the security of online

transactions, particularly in America [89]. There is clear growth in

the online travel market [27][77]. The number of customers making

online purchases of travel products has grown rapidly in recent years.

Taking the US as an example, 29 percent of US travelers make all

their travel arrangements on the Internet, and 52 percent of all

travelers purchase more than half of their travel online [36]. Almost

one third of the US citizens were planning to increase their online

travel purchases over the following year and 17 percent of all online

purchases in the country were travel-related [47]. The majority of

online travel shoppers start travel planning at an online travel website

because of the one-stop shopping convenience, while 73 percent of

respondents who purchased travel online researched travel at a

50

general site, but then went to a specific company's site to book travel,

attributing their decision to lower prices and special deals [99].

While online travel agents appreciate increasing traffic

levels, it is important that customers not only use the Internet for

information search, but to make bookings or purchases too.

Research shows that in spite of the advantages that e-Tourism offers,

many travelers remain reluctant online buyers. Several factors are

highlighted as reasons for this reluctance; navigation difficulties,

reluctance to rely on machines rather than people, fears that mistakes

are easy to make and difficult to correct, lack of personal approach

and most importantly concerns about security and safety when

providing personal and credit card information

[18][67][71][118][139].

Online marketing managers are responsible for persuading

customers to make online purchases, i.e. to convert clicks to sales.

Ensuring adequate security should be the first priority, but further

issues include price, product information and availability, help desk

and support. Once these features are available, designing and

developing an attractive and efficient website is crucial to attract

customers [79][156]. Having designed the website, the next phase is

to raise its profile on the web through search engine optimization and

persuading other organizations to link back to the site. Finally when

51

traffic to the website is established, the task turns to converting clicks

to sales. Failures here are often due to misunderstanding a

customer’s demands, and the misconception that the priorities of

online presence are better marketing and cost savings, rather than

providing better customer service [139].

The role and functions of a cybermediary are therefore in

some ways different to a traditional intermediary. To succeed as a

cybermediary a travel agent must add excellent web skills and

knowledge to their destination knowledge and array of tourism

products. Despite the move to new media, both cybermediaries and

intermediaries should have the same focus on providing excellent

customer service if they are to succeed. There is a growing demand

for cybermediaries, but to be certain of generating sales online travel

agents must nurture their visitors so that they become customers too.

52

4. ICT Adoption

Technology adoption concerns the introduction of new

technologies into a company or industry. Decisions about

technology adoption are critical to the success of a business. These

decisions include choosing which technologies to use, and

importantly the timing of technology adoption. Choose the wrong

technology and using it before it has been thoroughly tested may

result in a company finding themselves with an expensive mistake,

while adopting a technology too late could result in losing a lot of

ground on competitors. For technology producers the rate at which

their product is purchased is crucial to their success, and studies have

illustrated that there are different types of personalities that affect the

purchase timing. Fig 4 shows the technology adoption lifecycle

created by [91][125].

53

Figure 4. The Technology Adoption Lifecycle

There are 5 different types of technology user identifies in

the chart;

I: Innovators

EA: Early Adopters

EM: Early Majority

LM: Late Majority

L: Laggards

Time

Sales

I EA

EM LM

L

The Chasm

54

When new technology is invented, the first types of people

to purchase and use it are the innovators, people who love

technology for the sake of having technology. They are prepared to

purchase new technology without having any real use for it and then

will search for an innovative way of using it. The next group of

users are called early adopters. These are more respected than

Innovators, as there will be a good reason why they start using new

technology and it is often the early adopters who other users will turn

to for purchasing advice. The majority of users will purchase

technology after the early adopters have tested the new technology

and demonstrated its usefulness. This majority will include most

businesses making prudent investment decisions and is often split

into early majority and late majority. The final group of users are the

laggards, the technophobes who will avoid using technology as long

as possible.

In between the early adopters and early majority there is a

crucial phase called the chasm. During the chasm, technology

product sales drop off. This happens before the majority of users

start buying, i.e. before the early adopters can persuade others to buy

the technology. Therefore, getting past the chasm is particularly

important for high-tech companies [91]. If a superior competitive or

substitute product is launched during the chasm, there is a chance

55

that the majority in the mass market will chose the alternative

product.

From the perspective of the user, such as one of the business

models existing in the tourism supply chain, there is a choice of what

type of user to be. Either a technology based company that

innovatively uses new technologies, or a company that waits until the

technology is well tested before adopting it. There are advantages

and disadvantages to both being and early mover and being a late

mover. Early mover advantage can be gained by adopting new

technology quickly, as then internal knowledge and capabilities grow

through experience. In the case of technology like the internet, early

movers were able to establish their position in the new marketplace

before their competitors. There is an inherent risk to that strategy

too, as newer technology is normally more expensive and untested.

Late mover advantage comes in the form of investments only being

made in tried and tested technologies, an investment that is often

carries less financial risk and is a more prudent decision.

As there can be advantages and disadvantages to bother early

and late mover strategies, there is no guarantee of greater success for

either strategy. The superior option will vary from technology to

technology, for different business models and in different

competitive environments. This makes technology adoption timing a

56

difficult and yet crucial decision, a decision that could make an

organization a strongly differentiated market leader, or could

financially cripple it. In order to make better strategic decisions,

knowledge is essential, so gaining technological knowledge and

experience can be valuable for organizations.

4.1 ICT Adoption by Small and Medium Tourism

Enterprises

There can be many factors that go into a company’s ICT

investment decisions, but as investments can be costly, the size of a

company can affect it’s ability to introduce modern technology.

Several surveys have found that large companies have been much

quicker to embrace the potential of modern ICTs, while smaller

companies are slower to adopt new technologies [15][146]. The

principal factors driving small business ICT adoption are commercial

considerations and potential returns, rather than other factors such as

government incentives for example. In countries with readily

available ICT solutions, such as India, the adoption by Small and

Medium Tourism Enterprises (SMTE) is still relatively low [6]. In

countries, such as Greece, with relatively poorer IT skills and low

technology awareness adoption rates lag even further behind their

neighbours [21].

57

Several studies have shown that larger organizations, such as

airlines, have adopted technology much more readily than smaller

organizations. Of the SMTE business models, then service providers

such as spas and restaurants have a much lower adoption than

organizations like travel agents [102]. In contrast studies indicate

that the size of a hotel doesn’t affect its likelihood to adopt new

technology, rather the age of the hotel is a factor, with newer hotels

more likely to go online [56]. Conflicting results have been found

when considering the location of the organization, with some studies

reporting that urban locations with existing ICT infrastructure leads

to a higher uptake, while others report that remote little known

destinations are turning to ICT to develop their profile [59][102].

This suggests that there are other factors driving ICT adoption.

Lack of IT skills and experience have been shown to have a

strong correlation with lack of IT adoption. Companies that have

employees who have had IT training and experience are more likely

to adopt modern ICTs. The benefits that can be gained from using

ICTs once the investments have been made are also less likely to be

limited when companies have appropriate IT skills and training

[48][66][88][145]. As well as level of education, a secondary factor

contributing to adoption resistance is a lack of incentive to change

business models when the returns are unclear [146]. This is the case

for travel agents who are resistant to the threats of disintermediation.

58

A further contributing factor is the cost associated with using new

technologies – costs both in terms of finances and time, with online

activities for example being perceived as complicated and

unwieldy[106].

The Internet is now not considered a new technology, but

many SMTEs are still yet to develop a web presence. The potential

benefits to SMTEs of using modern ICTs such as the Internet have

been covered by many writers. Benefits include transaction cost

reductions [153], improved efficiency [59] and opportunities for

better communication with customers, which can then lead to

improved customer service. Therefore, in order to stimulate the

adoption of ICTs by SMTEs, governments and local authorities need

to first create an awareness of the potential benefits that SMTEs

could gain, and second provide training for employees. To increase

awareness and improve IT skills, organizations have to provide easy,

affordable access to modern technology. For SMTEs with limited

budgets this is a challenge, particularly when the benefits aren’t

immediately received.

59

5. A Case Study of Thailand

Thailand is a South East Asian holiday destination popular

for its beaches and its cultural heritage locations. According to the

Tourism Authority of Thailand, the number of tourists visiting has

been increasing rapidly, with 15 million visitors in 2006. Thailand

also recently boasted two of the top five voted city destinations in the

world, in Bangkok and Chiang Mai [141]. Thailand has a diverse

array of attractions to offer its visitors, with world wide reputations

in several markets. Chiang Mai offers a cultural experience, with

temples and jungles, Phuket is a world class beach resort with

beautiful tropical islands, while Pattaya offers an alternative holiday

with a lively nightlife. The capital Bangkok has a eclectic mix

including nightlife and temples, but also acts as a hub for both the

rest of Thailand and South East Asia.

Thailand is an emerging market and while in many, more

developed, countries the tourist service providers, such as hotels,

airlines and car rental agencies, have aggressively taken advantage of

the direct link to customers provided by the internet, forcing

intermediaries to reconsider their business model. In Thailand, the

use of ICTs is still relatively immature and there appears to be less

60

incentive for travel agents to modify a currently successful business

model. However, recent national developments within the IT sector

suggests new investment incentives and creates an interesting

position for the Thai tourist industry, an industry which accounts for

6% of the Thai economy.

In 2002 Thailand established the Ministry of Information and

Communication Technology, with the mission of developing and

supporting comprehensive electronic processes for government,

commerce, industry, business and education [96]. This ministry is

responsible for driving national projects to improve Thailand’s ICT

infrastructure through egovernance projects and also with tourism

related projects such as the development of an interactive map of

Chiang Mai. Given this scenario, Thailand presents itself as a

relevant case study illustrating how the use of ICTs within a

developing country’s tourism industry could evolve the industry

itself.

In this section the use of ICT’s within Thailand’s tourism

industry is evaluated. First the internet adoption rate and quality of

online activities by various business models within the Thai tourism

industry is summarised, before focus is turned on the Travel Agent

business model. Here the critical customer relationship management

activities are reported. Next the focus shifts towards the tourists

61

visiting Thailand with a review of how they currently use the internet

to book their trips and concerns they have regarding the Internet.

5.1 Internet Adoption by Thailand’s Tourism Industry

Currently there are around 11,000 travel businesses

registered with the Thai tourism authorities, including hotels,

airlines, nationwide car rental agencies and of course travel agents,

both traditional and online. Of these businesses currently only 13%

have a web presence [34], and many of these are simply placed in

directories or free hosting sites, rather than on their own specific

domain. This reflects a very low adoption rate amongst SMTEs in

Thailand. A sample of those websites were assessed in terms of

Information Provision, Product and Service Range, Design and

Functionality, Trust and Safety and E-Business Service. These

criteria were derived from several previous related surveys used to

assess the quality of websites [31][40][75][92].

The survey of Thai travel agents was conducted by a focus

group of online travel business professionals having previously

assessed the websites of some globally recognized leaders to gather

appropriate measures. While the approach included both a

qualitative and quantitative assessment, the results for each were

comparable and not very positive. The results from this survey

62

indicated that airlines and car rental agencies performed best, while

traditional travel agents and hotels were the worst performers. These

business models rarely scored above average. The report

summarised the main weaknesses as insufficient information, poor

navigation, lack of security, unclear booking functions and no special

features [34]. Other research has supported this assessment, with

sites found to rarely display rates or fares, resulting in many visitors

just searching for information rather than booking online [46].

Given the low adoption rates, and then poor performance by

those who have adopted the Internet in Thailand, the reasons behind

this have also been investigated. The principal reasons are lack of

knowledge and even fear of e-commerce, no web design capabilities

and a feeling that the internet channel is already overpopulated while

their existing channels and focus are already time consuming enough

[34].

5.1.1 The Role of Travel Agents in Thailand.

The tourism industry in Asia still mostly relies on wholesaler

agencies (i.e. through travel agents rather than direct purchases)

because they provide effective and reliable B2B and B2C channels

[95]. Currently the majority of bookings are still made through

traditional travel agencies and travel agents in Thailand are only just

63

starting to use the Internet for communication. The lack of adoption

is due mostly to expensive technology and inexperienced staff [140].

Few agencies have access to the Internet from their desks, while

most prefer to user the telephone to confirm bookings. Low Internet

and Credit Card penetration within Asia have created obstacles,

hampering the growth and development of e-travel services.

Airlines and hotels, however are well aware of their costs

associated to distribution, and have been applying pressure to reduce

the commissions paid out. Support in the form of content and

functionality is therefore supplied as more travel businesses are

encouraged to go online [109]. As highlighted in the previous

section, those travel agents who have gone online rarely perform

well in terms of website quality. Online Travel Agents who are

solely dedicated to their online customers performed much better

than traditional travel agents who are not as focused on their online

activities.

Having highlighted the importance of customer relationships

and the new challenges of developing them online, further

assessment of travel agents performance in terms of online customer

service has been conducted [34]. At the heart of CRM systems is

communication, and modern ICTs offer many innovative means of

maintaining contact with customers. The key means of electronic

64

communication is e-mail, as it has the unobtrusive properties of snail

mail, while affording speedy answers to questions.

Building online relationships is arguably much more difficult

than providing offline service, as online services tend to be less

personalised and many people are reluctant to communicate through

computers [112][132][138]. As previously illustrated, auxiliary

signals such as body language or tone of voice are lost, opening up

the possibilities of semantic ambiguity. These problems are

amplified when communication is through a second language, such

as by a Thai native responding in English. While email is a valuable

tool for building and maintaining customer relationships, it has to be

used effectively to be successful and poor use can have disastrous

effects. Previous studies highlight that poor email response can lead

to not only losing guests, but can result in the guest choosing a

different destination entirely [78]. Common problems include late

answers, or no answers at all, insufficient information and not

following standard email protocol. Providing the wrong or

incomplete information can also lead to lost customers [92][93].

Minimal efforts to improve email practice can lead to immediate

competitive advantages.

In order to measure how effectively organizations use email

to communicate with their customers, several metrics have been

65

proposed. Good emails can be measured in terms of Promptness,

Politeness, Professionalism, Promotional and Personal Approach.

In other words, emails should be replied to within 24 hours with a

polite and professional response which promotes the travel agency,

while treating the customer with the same personal service which

they would normally use in face to face contact [72]. Out of 5,970

travel agents listed by the Thai tourism authority, less than half have

a listed email address – 2,258. A recent ‘mystery guest’ survey

contacted all of these email addresses, and the findings were not very

promising [34].

Firstly, only 7% of travel agents even responded to the

enquiry, with the replies being on average 2-3 days after the enquiry.

The responses that were received were just average when evaluated

using the 5 P’s metric, but again, those travel agents using branded

emails (indicating their own domain) fared much better than those

using free email accounts. These results indicate that tourism

businesses in Thailand, and specifically Travel Agents, are not

optimally using the capabilities of the Internet.

5.2 Customer Perceptions

Rather than simply dismissing the online performance of

Thai Travel Businesses, it is prudent to investigate the specific needs

66

of tourists when visiting Thailand. An extensive survey of

international tourists visiting the Thai resort island of Phuket

investigated their use of the Internet during trip planning. The results

indicated that the majority of visitors (87%) used the Internet to

search for information in some way, while much fewer actually

contacted an online agent or purchased through an online agent [5].

Breaking the different components of a holiday down, the travelers

preferred to use a travel agent in their home country to book their

flight, hotel and insurance, while destination based travel agents

were responsible for package tours, car rental and excursions.

However these bookings were generally made once the tourist

arrived in Phuket, with tourists choosing a travel agents by chance

without influence from the Internet. However, the Internet was used

as an alternative when booking flights or hotels. This indicates that

the Internet currently plays a small role for Travel Agents in Phuket,

as reflected in the assessment of online travel agent websites. The

question remains as to whether the lack of adoption of online activity

by Phuket based travel agents is due to the lack of demand or

whether the lack of demand is caused by poor service provision.

The survey indicated the reasons behind the lack of online

purchases revolved around security concerns and a preference for

dealing with real people, with the feeling that both were performed

better in a face-to-face scenario rather than online. The flexibility of

67

booking through a traditional travel agent was also proffered as a

reason. The perceived benefits of the Internet were Time saving,

Convenience and Low Price, but clearly these properties were not as

high priority as customer service and security [5]. Advances are

being made in online purchase security, and it is a matter of time

until users are persuaded that it is safe to make online purchases.

Online travel agents are therefore advised to use standardized

security systems, rather than their own bespoke systems.

The research points towards a strong demand for online

information, even if users aren’t yet willing to complete purchases

online, they are searching for information. 75% of those surveyed

believed it was better to find the information directly from Thai

websites rather than websites in their home country, although only

14% would feel more secure about making the purchase through the

Thai website. This indicates a demand for an infomediary role by

Thai online travel agents, but establishing a way to finance this role

becomes the challenge.

68

6. Conclusions

Modern ICTs are continually being developed and new

innovative means of communicating through technology will carry

on being developed in coming decades. Many technologies that are

considered modern ICTs are now well established with advances

such as mobile telephony and the Internet nearly globally accessible.

Modern ICTs such as these have had major effects on many business

models existing in many different industries, with few surviving

unaffected by their adoption. There is no evidence to suggest that

these trends will not continue for the foreseeable future.

One industry that has been affected by the introduction of the

Internet and related communication technologies is the tourism

industry and within the tourism industry, the business model feeling

the biggest effect is that of the intermediary – the travel agent.

Traditionally the travel agent has acted as an intermediary between

tourism product producers, such as airlines and hotels, but now

modern communication technologies afford these businesses the

ability to directly communicate with their customers, bypassing the

traditional travel agent. This has resulted in much discussion about

the ‘disintermediation’ of the tourism industry.

69

As well as being a threat to the traditional travel agent

model, the Internet can also be seen as an opportunity, with the

potential for cybermediation, so long as travel agents can establish a

value adding and so revenue generating business model. Either way,

evidence points towards necessary evolution within the travel agent

business model. There has also been evolution for tourism product

producers as airlines seek ways to cut their distribution costs by

connecting directly with their customers. All business models should

be aware of the potential effects of modern ICT.

In Thailand, the online performance of travel agents has been

weak, with low adoption rates, and for those who have built a web

presence, disappointing results. The key reasons behind these

findings centre around a lack of IT skills and knowledge within the

industry, both in terms of a lack of appreciation of the potential of

ICT, as well as a lack of skills to produce a quality web presence. As

Thai travel agents are focused on providing walk in services,

arranging local tourism services, the general perception is that there

is no real threat to this business, and so no real need to adapt their

business model. Without the skills needed to operate online,

developing an online presence is a low priority for most Thai travel

agents.

70

This scenario means that Thai travel agents miss out on

potentially greater revenues that could be gained by offering a

complete tourism product to foreign visitors, including flights and

accommodation. While Thai travel agents are best equipped to

provide destination information, it is home country travel agents who

receive much of the commission available for doing so. In order to

change the inertia within Thai travel agents, attention needs first to

be turned to education, with ICT training programs needed.

71

7. References

[1] Alamdari, F. (1999). Airline In-Flight Entertainment: The Passengers’ Perspective. Journal of Air Transport Management, Volume 5, Issue 4, pp 203-209.

[2] Alamdari, F. (2002). Regional development in airlines and travel agents relationships. The Journal of Air Transport Management 8, pp339-348

[3] Alexander, P. (2002). Peer to Peer File Sharing: The Case of the Music Recording Industry, Review of Industrial Organisation, Volume 20, No. 2, Springer Netherlands.

[4] Applegate, L., Austin, R. & McFarlan, W. (2003). Corporate Information Strategy and Management, Text and Cases. 6th Edition. McGraw Hill.

[5] Assenov, I. & Cosh, K. (2007). Who Can Sell the Destination?

The Demand for Online Travel Services by Inbound

Tourists. APac-CHRIE & Asia Pacific Tourism Association Joint Conference, Beijing.

[6] Badnjevic, J. and Padukova, L. (2006). ICT Awareness in Small Enterprises in the Indian Tourism Branch. Retrieved on January 5th, 2007, from http://www.ituniv.se/~berma/ITU/Supervising%20Master%20Thesis_files/ICT%20awareness.pdf

[7] Bédard, F, (2002). “Travel agencies in the era of e-commerce”. Marketing Papers. World Tourism Organization 2002. Madrid, pp. 67-86.

[8] Benjamin, R. & Wigand, R. (1995). Electronic Markets and

Virtual Value Chains on the Information Highway. Sloan Management Review. Winter, 62-72.

72

[9] Berners-Lee, T. & Fischetti, M. (1999). Weaving the Web:

Origins and Future of the World Wide Web. Orion Business, Britain.

[10] Besterfield, D, Besterfield, C, Besterfield, G, & Besterfield M. (2003). Total quality management. United States of America: Pearson Education.

[11] Bloch, M. & Segev, A. (1996). The Impact of Electronic Commerce on the Travel Industry, The Fisher Centre for Information Technology and Management, University of California, California.

[12] Bojnec, S. & Kribel, Z. (2005). Information and Communication Technology in Tourism. University of Primorska; Slovenia. Retrieved on November 21st, 2006, from http://www2.fm-kp.si/zalozba/ISBN/961-6486-71-3/445-454.pdf

[13] Boonthai, S. (2006). Quality of Travel Business Websites in

Thailand. Master degree Dissertation: Prince of Songkla University.

[14] Brander, J. & Zhang, A. (1993). Dynamic Oligopoly Behaviour in the Airline Industry. International Journal of Industrial Organisation, Issue 3, p 407-435.

[15] Braun, P. (2002). Networking Tourism SMEs: E-commerce and

E-marketing issues in Regional Australia. Information technology & tourism, 5, 13-23.

[16] Brenner, W., Kolbe, L. & Hamm, V. (1997). The Net: Extinction or Renaissance for Intermediaries – An Analysis

of Core Competencies in the Book Business, Proceedings of the 1997 European Conference on Informattion Systems.

73

[17] Brown, B. & Chalmers, M. (2003). Tourism and Mobile

Technology. Proceedings of 8th European Conference on Computer Supported Cooperative Work, Helsinki, p 335-354.

[18] Buhalis, D. (2000). Tourism in an Era of Information Technology. In Faulkner, B., Moscardo, G., & Laws, E. (Eds.), Tourism in the 21st Century: Lessons from Experience (pp. 163-197). London: Continuum.

[19] Buhalis, D. (2003). eAirlines: Strategic and tactical use of ICTs in the airline industry. Information and Management, Volume 41, Issue 7.

[20] Buhalis, D. (2003). E-tourism, Information Technology for Strategic Tourism Management. London: Pearson Education.

[21] Buhalis, D. & Deimezi, O. (2003a). Information Technology Penetration and E-commerce Developments in Greece, With a Focus on Small and Medium-sized Enterprises. Routledge, 13(4), 309-324. Retrieved on March 1st, 2007, from http://web.ebscohost.com/ehost/pdf?vid=5&hid=104&sid=30c71fca-6d2f-4cfd-ac3d-02f00204cf49%40sessionmgr7

[22] Buhalis, D. & Deimezi, O. (2003b). E-tourism Developments in Greece: Information technologies adoption for the strategic management of the Greek tourism industry. Tourism and hospitality research, 5(2), 103-130. Retrieved on March 1st, 2007, from http://web.ebscohost.com/ehost/pdf?vid=12&hid=6&sid=6ff6fd36-d4b2-4ade-8586-aa956283bdec%40sessionmgr8

[23] Buhalis, D., & Licata, M. C. (2002). The future eTourism intermediaries, Journal of Tourism Management, 23, 207-220.

74

[24] Camacho, D., Borrajo, D. & Molina, J. (2001). Intelligent Travel Planning: a multi-agent planning system to solve

Web problems in the e-Tourism domain. Autonomous Agents and Multi-agent systems, 4, 387-392.

[25] Campbell, J. (2003). Selecting a Travel Management Company. BTOnline.com, May 2003.

[26] Carroll, B. & Siguaw, J. (2003). Evolution in Electronic Distribution: Effects on Hotels and Intermediaries. CHR Reports, 3(5), 6-20.

[27] Carter, R. (2005). Making the most of ICT based opportunities for developing tourism in destinations. Retrieved on October 14, 2006, from http://r0.unctad.org/ecommerce/event_docs/etour2005/presentations/carter_s1.ppt

[28] Cheverst, K., Davis, N., Mitchell, K., Friday, A. & Efstratiou, C. (2000). Developing a Context Aware Electronic Tourist Guide: Some Issues and Experiences. Proceedings of SIGCHI conference on human factors in computer systems, p17-24, The Hague.

[29] Ching-biu Tse, A. (2003). Disintermediation of travel agencies in the hotel industry. Hospitality Management, 22, 453-460.

[30] Chon, K., & Raymond, S. (2000). Travel and tourism; partners in hospitality. Welcome to hospitality. United States of America: Thomson Learning.

[31] Chung, T., & Law, R. (2003). Developing a performance indicator for hotel websites. Journal of Hospitality Management, 22, 119-125.

[32] Cliff, A., & Ryan, C. (2002). The tourist experience. London: Book crsft.

75

[33] Constantinides, E. & Fountain, S. (2008). Web 2.0: Conceptual

Foundations and Marketing Issues. Journal of Direct, Data and Digital Marketing, 9, p231-244.

[34] Cosh, K. & Assenov, I. (2007). Reviewing the Use of Online Services by the Tourism Industry in an Emerging Market:

The case of Thailand. In Information and Communication Technologies in Tourism, Springer.

[35] Curtin, D., Foley, K., Sen, K & Morin, C. (1998). Information technology. United States of America: The Mcgraw-hill.

[36] Cyberatlas. (2003). World and regional overview. Retrieved 13 October, 2006, from http://www.etcnewmedia.com/review/default.asp?SectionID=10&OverviewID=4

[37] Dabholkar, P. A. (2000) Handbook of Services Marketing. New York: Sage.

[38] Das, S. (2005). Global Distribution Systems in Present Times [Online]. Retrieved February 12, 2006 from http://www.hotel-online.com/ News/ PR2002_4th /Oct02_GDS.html.

[39] Davies, T. & Cahill, S. (2000). Environmental Implications of the Tourism Industry. Discussion Paper 00-14 Resources for the future.

[40] Doolin, B., Burgess, L., & Cooper, J. (2002). Evaluating the use of the web for tourism marketing: a case study from New Zealand. Journal of Tourism Management, 23, 557-561.

[41] Dube, L., & Renaghan, L. M. (2000). Marketing your hotel to and through intermediaries. Cornell Hotel and Restaurant Administration Quarterly, 41(1), .73-83.

76

[42] E-Business (2003). The European e- Business Market Watch Sector Report; E-business, Usage of ICT & e-business report no.13 II/ July 2003, European Commission Entreprise Directorate General. Retrieved on November 22nd, 2006, from www.ebusiness-watch.org/resources/tourism/SR13-II_Tourism.pdf

[43] Eikelmann, S., Hajj, J. & Peterson, M. (2008). Opinion Piece: Web 2.0: Profiting from the Threat. Journal of Direct, Data and Digital Marketing Practice, 9, p293-295.

[44] Elliott, C. (2005). A new emphasis on customer service. Retrieved April 16, 2006 from http://travel2.nytimes.com/2005/12/18/travel/18prac.html?ex=1139634000&en=208bdff0d8e3edae&ei=5070

[45] Eriksson, O. (2002). Location Based Destination Information for the Mobile Tourist. Information and Communication Technologies in Tourism, Springer.

[46] Esichaikul, R. & Esichaikul, V. (2005). Electronic Destination Management for E-Tourism: Case Study of Thailand. Presented and the 15th Inter-University Conference on Hospitality and Tourism Education, Thailand.

[47] Forrester (2004). Growth of e-commerce and online sales. Retrieved February 2, 2006 from http://www.bangkokpost.net/MidYear2000/11ecommerce.html

[48] Forth, J. & Mason, G. (2004). Information and Communication Technology (ICT) Adoption and Utilisation, Skill

Constraints and Firm-Level Performance: Evidence from

UK Benchmarking Surveys. National Institute of Economic and Social Research, London, Discussion Paper.

77

[49] Frey, S., Schegg, R., & Murphy, J. (2002). E-mail customer service in the Swiss hotel industry. Tourism and Hospitality Research. 4(3), 198-212.

[50] Galloway, L, Mochrie, R & Deakins, D (2004). ICT-enabled collectivity as a positive rural business strategy, International Journal of Entrepreneurial Behaviour and Research, vol. 10, no. 4, pp. 247-59.

[51] Giaglis, G., Klein, S. & O’Keefe, R. (2001). The Role of Intermediaries in Electronic Marketplaces: Developing a

Contingency Model. Information Systems Journal.

[52] Gronroos, C., Heinonen, F., Isoniemi, K. & Lindholm, M. (2000). The net offer model: a case example from the virtual marketspace, Management Decision 38(4), 243-252.

[53] Hadi, Abdul. (1999). The importance of customer service. Retrieved February 23, 2006 from http://www.pakistaneconomist.com/issue1999/issue30/fandm2.htm

[54] Harasim, L. (1993). Global Networks: Computers and International Communication. Cambridge: MIT Press.

[55] Herper, M. (2001). Smart Kitchens A Long Way Off, Forbes Home Networking, 21/12/2001.

[56] Hoontrakul, P. and Sahadev, S. (2004). ICT Adoption Propensity In The Hotel Industry: An Empirical Study. Retrieved on December 3rd, 2006, from http://www.pongsak.hoontrakul.com/papers/041212%20ICT%20Adoptation%20Propensity%20in%20the%20Hotel%20Industry%20by%20Pongsak%20Hoontrakul%20n%20Sunil%20Sahadev.pdf

78

[57] Horovitz, J. and Cudenne-Poon, C. (1990). Putting service quality into Gear. Service Industries Journal, 10(2), 249-265.

[58] Housley, S. (2005). What is an Acceptable Response? Retrieved March 20, 2006 from http://www.frugalmarketing.com/dtb/acceptable-response.shtml

[59] Hung, W.T., Lin, CH.P., Shang, J.K., Wang, F.CH., Kou, N.F. (2007). ICT Adoption and Hotel Performance: The case of Taiwan. Proceeding of CAUTHE 2007 Conference, Febuary 11th-14th, 2007, Australia.

[60] Johns, N. (1993). Quality management in the hospitality industry. International journal of contemporary hospitality management. 5(1), 10-15

[61] Kabbaj, M. Y. (2003). Strategic and Policy Prospects for Semantic Web Services Adoption in US Online Travel

Industry. Masters Thesis, M.I.T.

[62] Kalakota, R. & Robinson, M., E-Business 2.0: Roadmap for Success. Reading, MA: Addison-Wesley, 2001.

[63] Kanellopoulos, D., Panagopoulos, A. & Psillakis, Z. (2004). Multimedia Applications in Tourism: The Case of Travel

Plans. The Journal of the College of Tourism and Hotel Management, 4, 146-156.

[64] Kärcher, K. (1996). Re-Engineering the Package Holiday Business. Information and Communication Technologies in Tourism. Springer-Verlag, Wien, pp221-234.

[65] Kärcher, K. & Williams, H. (1995). Industrial Change in the Outgoing Tour Operator Business in Britain and Germany:

The emergence of electronic market systems. In: Working

79

Paper No. IMHSG/CCEM.23. Institut fur Wirtschaftsinformatick, Hochschule St. Gallen.

[66] Kheamthong, S., Roberts, L., Whitelaw P. (2006). Development of a Conceptual Framework for the Adoption and Diffusion

of Internet and Web Technologies in Hotel Marketing: A

Study of Hotels in Thailand and Australia. Proceeding of CAUTHE 2006 Conference, February 6th-9th, 2006, Australia.

[67] Kim, W. G., Ma, X., & Kim, D. J. (2004). Determinants of Chinese hotel customers’ e-satisfaction and purchase intentions. Journal of Tourism Management, 27(5), 890-900

[68] Klein, S. (2002). Web Impact of the Distribution Structure for

Flight Tickets. Proceedings of Information and Communication Technology in Tourism 2002, Springer.

[69] Konsynski, B. & Karimi, J. (1993). On the Design of Global Information Systems. Globalisation, technology and competition: The fusion of computers and telecommunications in the 1990s pp 81-108. Boston, Harvard Business School Press.

[70] Laudon, K. & Laudon, J. (2007). Management Information Systems, Managing the Digital Firm, 10th Edition. Pearson.

[71] Law, R., & Leung, R. (2001). A study of airlines’ reservation services on the Internet. Journal of Travel Research, 39(2), 202-211.

[72] Lehnert, G. W. (2002). Light on the web: essentials to make the network for you. United States of America: Addison Wesley Longman.

[73] Lenz, M. (1996). IMTAS: Intelligent Multimedia Travel Agent

System, Proceedings of the 3rd International Conference on

80

Information and Communications Technologies in Tourism, Springer Verlag, Vienna.

[74] Liikanen E. (1999). Tourism in the Information Society. Proceeding of the Conference on Tourism in the Information Society, The European Commission, November 12th, 1999, Belgium.

[75] Limayem, A., Hiller, M., & Vogel, D. (2003). Sophistication of Online Tourism Websites in Hong Kong: an Exploratory Study. Americas Conference on Information Systems, Tampa: USA.

[76] Lockwood, A., Baker, M., & Ghillyer, A. (1996). Quality Management in hospitality. Great Britain: Redwood Books, Trowbridge, Wiltshire.

[77] Marcussen, C. (2001). Internet Sales of Travel and Tourism Services in the European Market 1998-2000: A Method of Tracking Trends by Focusing on Major Online Markets. Information Technology & Tourism, 4, 3-44.

[78] Matzler, K., Pechlaner, H., Abfalter, D &Wolf, M. (2003). Determinants of response to customer e-mail enquiries to hotels: evidence from Austria. Tourism Management, 26, 249-259.

[79] Maurer, E. (2003). Internet for the Retail Travel Industry. New York: Delmar.

[80] McCourt, T. & Burkart, P. (2003). When Creators, Corporations and Consumers Collide: Napster and the Development of On-line Music Distribution. Media, Culture and Society,

Vol 25, No. 3. Sage Publications.

81

[81] McFarlan, W. (2002). Tale of Two Airlines in the Information Age: or why the spirit of King George III is Alive and Well! Havard Business School Case 302-128.

[82] McGahan, A. (2004). How Industries Evolve - Principles for Achieving and Sustaining Superior Performance. Harvard Business School Press, Boston, 2004

[83] Mello, A. (2002). 4 Trends Shaping ERP. Tech Update, ZDNet.com.

[84] Messerschmitt, D. (1999). Network Applications: A Guide to the New Computer Infrastructure. Morgan Kaufmann Publishers, San Francisco.

[85] Meyer, A., Blümelhuber, C. (2000), Relationship marketing success through investments in services, in Hennig-Thurau, T., Hansen, U. (Eds),Relationship Marketing: Gaining

Competitive Advantage Through Customer Satisfaction and

Customer Retention, Springer, New York, NY, .

[86] Millan, A. and Esteban, A. (2003). Development of a multiple-item scale for measuring customer satisfaction in travel agencies services. Tourism management, 25, 533-546.

[87] Milne, S. (1996). Tourism Marketing and Computer

Reservations Systems in the Pacific. Tourism in the Pacific: Issues and Cases, International Thomson Business Press, London.

[88] Mistilis, N., Agnes,P., & Presbury, R. (2004). The Strategic Use of Information and Communication Technology in

Marketing and Distribution: A Preliminary Investigation of

Sydney Hotels. Journal of Hospitality and Tourism Management, 11(1), 42-55.

82

[89] Morrison, A., Jing, S., O’Leary, J., & Cai, L. (2001). Predicting Usage of the Internet for Travel Bookings: An Exploratory study. Information Technology & Tourism, 4, 15-30.

[90] Moore, G.(1965). Cramming More Components onto Integrated

Circuits, Electronics Magazine. 19 April 1965.

[91] Moore, G. (1991). Crossing the Chasm: Marketing and Selling

High-Tech Products to Mainstream Customers. Harper Business Essentials, US.

[92] Murphy, J., Olaru, D., Schegg, R., & Frey, S. (2003). The Bandwagon effect: Swiss Hotels’ Web-site and E-mail Management. Cornell Hotel and Restaurant Administration Quarterly. Cornell University. 71-87.

[93] Murphy, J., Tan, I. (2003). Journey to nowhere? E-mail customer service by travel agencies in Singapore. Tourism management, 24, 543-550.

[94] Murray, G. (1999). Making Connections with Enterprise Knowledge Portals. White Paper, Computer World.

[95] Nadkarni, S. M., & Peng, C. T. L. (2001). The Relevance of Travel Agencies in the Era of E-Commerce and Globalization [Online]. Retrieved February 17, 2006 from http://www.mca.org.mo/it-cong/articles/2001/the_relevance_of_travel_agencies_in_ the_era_of_e-commerce_and_globalisation.pdf.

[96] Nasingkun, K. (2003). How Thailand Should Utilise Information Technology. http://www.cicc.or.jp

83

[97] Nduma, D., Collins, J. & Nwana, H. (1998). Towards Desktop Personal Travel Agents. BT Technology Journal, 16(3), 69-78.

[98] Near, D. (1997). Travelweek. July, p17.

[99] Neilsen, J. (2005). E-Tourism websites preferred to traditional travel agents. Retrieved January 5, 2006 from http://www.etourismnewsletter.com/.

[100] Newhagen, J. & Rafaeli, S. (1996). Why Communication Researchers Should Study the Internet: A Dialogue. Journal of Computer-Mediated Communication, vol1, issue 4, 1996.

[101] Nguyen, Q., Cavada, D. & Ricci, F. (2004). On-tour Interactive Travel Recommendations. In Proceedings of Information and Communication Technologies in Tourism, 2004, Enter 2004, Springer, 259-270.

[102] Nodder, C., Mason, D., Ateljevic, J., & Milne, S. (2000). ICT Adoption and Use in New Zealand’s Small and Medium Tourism Enterprises: A Cross Sectoral Perspective. Retrieved on December 22nd, 2006, from www.tri.org.nz/NZTRI/Documents/ICTSME.pdf

[103] Norris, G., Hurley, J., Hartley, K., Dunleavy, J. & Balls, J. (2000). EBusiness and ERP: Transforming the Enterprise. John Wiley & Sons, New York.

[104] O’Brien, J. (2004). Management Information Systems, Managing Information Technology in the Business Enterprise. 6th Edition. McGraw Hill.

[105] O’Brien, P. (1998). Electronic Commerce, The Internet and Travel Cybermediaries. Australasian Journal of Information Systems, Volume 6, No. 1.

84

[106] O’Connor, P. (1999). Electronic Information Distribution in Tourism and Hospitality. United Kingdom: CABI.

[107] O’Reilly, T. (2005). What is Web 2.0? Design Patterns and

Business Models for the Next Generation of Software. O’Reilly. Retrieved on 21st January 2008, from http://www.oreillynet.com/pub/a/oreilly/tim/news/2005/09/30/what-is-web-20.html.

[108] Özturan, M., & Roney, S. A. (2003). Internet use amongst travel agencies: an exploratory study. Journal of Tourism Management, 25, 259-266.

[109] Pacific Asia Travel Association (PATA), (2005). Asia- Pacific Travel set for more growth in 2005. Retrieved March 18, 2006 from http://www.pata.org/ patasite/fileadmin/news_pata/18_TSA_Watch_Jun_Eng.pdf

[110] Palmer, A. (2001). Principles of services marketing. England: McGraw-Hill Publishing.

[111] Parasuraman, A., Zeithaml, V.A. and Berry, L. (1985). A conceptual model of service quality and its implications for future research. Journal of marketing, 49, 41-50.

[112] Peacock, M. (1995) Change:Unravelling the process. Information Technology in the hospitality industry.

England: Redwood Books.

[113] Picozzi, L. (2005). Understand Online Customer Service. http://www.score.org

[114] Poon A. (1993). Tourism, Technology and Competitive Strategies. Oxon: CAB International.

[115] Porter, M.E. (1979) How competitive forces shape strategy, Harvard Business Review, March/April 1979.

85

[116] Porter, M.E. (1980) Competitive Strategy, The Free Press, New York, 1980.

[117] Porter, M.E. (1985) Competitive Advantage, The Free Press, New York, 1985.

[118] Rao, S. S. (2000). E-Commerce: The medium is the mart, New Library World, 101(2), 53-59.

[119] Rapp, R. () Customer Relationship Marketing in the Airline

Industry, Relationship Marketing: Gaining Competitive Advantage Through Customer Satisfaction and Customer Retention, Springer.

[120] Ray, Ramon. (2004). Online Customer Service BONUS Tips Retrieved January 19, 2006 from http://www.smallbiztechnology.com/smallbizarticles/ onlinecustomerserviceBonus.shtml

[121] Renshaw, M. (1994). Consequences of Integration in UK Tour Operating. Tourism Management, 15(4) pp 243-245.

[122] Rice, S. & Todd, G. (2005). A guide to becoming a travel professional. United States of America: Delmar Learning.

[123] Ridoutt, P. (2003). Issue Concerning The Role Of Information And Communication Technology (ICT’s) In Developing Sustainable Tourism. Retrieved on October 10th, 2006, from http://www.onecaribbean.org/information/documentdoenload.php?rowid=3636

[124] Rockart, J. & Morton, S. (1993). Networked forms of organization. The corporation of the 1990s, New York: Oxford University Press.

[125] Rogers, E. (2003). Diffusion of Innovations, 5th Edition. Free Press, New York.

86

[126] Ruzic, D. & Medic, M. (2003). Electronic Distribution in Tourism and Hospitality Industry: an Evolutional Review. Faculty of Economics, University of J.J. Strossmayer Osijek, 1-7.

[127] Ryan, P. & Hoontrakul, P. (2004). Value enhancement in the Thai Tourism industry-Implications of the online travel

business. Retrieved April 11, 2006 from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=48846

4

[128] Sarkar, M., Butler, B. & Steinfield, C. (1995) Intermediaries and Cybermediaries: A Continuing Role for Mediating

Players in the Electronic Marketplace. Journal of Computer Mediated Communication, Vol.1, No. 3.

[129] Sawhney, M. & Zabin, J. (2001). The Seven Steps to Nirvana: Strategic Insights into eBusiness Transformation. McGraw Hill Companies.

[130] Schmidt-Belz, B., Laamanen, H., Poslad, S. & Zipf, A. (2003). Location Based Mobile Tourist Services – First User

Experiences. Enter 2003, International Congress on Tourism and Communications Technologies, Helsinki.

[131] Sharma, P, Carson, D & DeLacy, T (2000), National online tourism policy initiatives for Australia, Journal of Travel Research, vol. 39, no. 2, pp. 157-62.

[132] Shankar, V., Smith, A., Rangaswamy, A. (2002). Customer satisfaction and loyalty in online and offline environments. Retrieved March 22, 2006 from http://e-commerce.mit.edu/papers/ERF/ERF218.pdf

[133] Sheldon, P. (1998), Tourism information technology, CABI Publishing, New York.

87

[134] Siebel Systems, (2001). Communications Leader Becomes Customer-Focused E-Business, Siebel.com, March 2001.

[135] Sidron, J. (2003, February 24). Marriott.com Posts Sales Record. Travel Weekly.

[136] Stephens, T. (2007). Defining Your Value in a Web 2.0 World,

Trademark 2.0. Lulu. ISBN 0615156886.

[137] Taylor, D. & Terhune, A. (2001). Doing E-business: Strategies for thriving in an electronic marketplace. United States of America: Wiley & Sons.

[138] Teal, K. (2005). Online worlds and offline worlds - what are some customer service differences. Retrieved February 18, 2006 from http://www.netspoke.com

[139] Todd, G., & Rice, S. (2005). A Guide to becoming a Travel Professional. Clifton Park, NJ: Delmar.

[140] Tourism Australia. (2005). Thailand: How consumers purchase travel. Retrieved January, 16, 2006 from http://www.tourism.australia.com/content/ Thaland/profiles_2005/Thailand_purchasing_05.pdf

[141] Travel + Leisure, (2006). Florence Named World’s Best City. Travel + Leisure Magazine, August, 2006.

[142] Tsai, H.., Huang, L., & Lin, C. (2004). Emerging e-commerce development model for Taiwanese travel agencies. Tourism Management, 26, 787-796.

[143] Van Laerhoven, K., Schmidt, A. & Gellersen, H. (2002). Pin&Play: Networking Objects through Pins. Proceedings of Ubicomp 2002.

88

[144] Van Riel, A., Semeijin, J., & Pauwels, P. (2004). Online Travel Service Quality: the Role of Pre-Transaction Services. Total Quality Management,15(4), 475-493.

[145] Van Hoof, H.b., & Combrink, T.E. (1982). U.S. Lodging Managers and the Internet. Cornell Hotel and Restaurant Administration Quarterly, 39(2), 46-54.

[146] Vickery G., Sakai K., Lee I., & Sim H. (2004). ICT, E-Business and SMES. Retrieved on November 10th, 2006, from www.oecd.org/dataoecd/6/9/31919255.pdf

[147] Wagner, C., Huber, B., Sweeney, E. & Smyth, A. (2005). B2B e-Marketplaces in the Airline Industry: Process Drivers and

Performance Indicators. International Journal of Logistics Research and Applications, Volume 8, Issue 4, pp 283-297.

[148] Wanhill, S. (1998). Tourism: principles and practice. London: Longman Publishing.

[149] Watson, R., Akselsen, S., Monod, E. & Pitt, L. (2004). The Open Tourism Consortium: Laying the Foundations for the

Future of Tourism. European Management Journal, Volume 22, Issue 3, pp315-326.

[150] Werthner, H. & Klein, S. (1999). Information Technology and Tourism: A Challenging Relationship. Austria: Springer.

[151] Werthner, H. & Klein, S. (1999). ICT and the changing landscape of global tourism distribution. Routledge, 9(4), 256-262. Retrieved on March 1st, 2007, from http://www.geog.psu.edu/courses/geog497b/Readings/Werthner&Klein_Tourism.pdf

[152] White, L. (1979). Economies of Scale and the question of ‘natural monopoly’ in the airline industry. Journal of Air Law and Commerce. Vol 44, No. 3, pp 545-573.

89

[153] Wolf, S. (2001). Determinants and Impacts of ICT use for African SMEs: Implications for Rural South Africa. Retrieved on October 6th, 2006, from www.tips.org.za/files/Annual%20report%202001.pdf

[154] Yang, J., Flynn, J., & Anderson, K. (2002). E-Business Application in the Hospitality Industry: A Case Study, Communication of the International Information

Management Association, 3 (1), 1-14.

[155] Yim, H., Ahn, H., Kim, J. & Park, S. (2004). Agent-Based Adaptive Travel Planning System in Peak Seasons. Expert Systems with Applications, 27(2), 211-222.

[156] Zhou, Z. (2004). E-Commerce and Information Technology in Hospitality and Tourism. Clifton Park, NY: Delmar.

[157] Zipf, A., & Malaka, R. (2001). Developing Location Based Services for Tourism. The Service Providers’ View. Information and Communication Technologies in Tourism, Springer Computer Science.