E-commerce and Information Technology in Hospitality and Tourism Chapter 1 Overview Copyright 2004 by Zongqing Zhou, PhD Niagara University

1.1 The Growth of the Internet Why the Internet grows so fast: Ability to communicate with one another instantaneously No geographical limitations No time constraints A new area of economic growth

Figure 1.1 Online past-years travelers, 1996-2001

Table 1.1 Worldwide Internet Users by Language Languages Internet Access 2002 (1,000s) World Online Population (%) 2004 Estimated Population (1,000s) English 230 36.5 28.0 European non-English 224 35.5 328 Asian (including Chinese 179 28.3 329 Chinese 68 n/a 170 Total 619 10.8 940

1.2 The Internet and the Hospitality and Tourism Industry Why the Internet and information technology are so important to tourism and hospitality industry: The industry depends on and seeking new means to distribute travel and hospitality products and services Marketing information to consumers Providing comfort and convenience to travelers Usage by travelers planning and booking trips continues to grow at a rapid rate Demand for travel products and services is still growing in spite of the dot com bust Demographically attractive online visitors

1.3 Characteristics of the Internet Peer-to-peer system Interconnected network Has hyperlink capability Open architecture networking The Internet is platform-independent Does not require technical expertise or huge financial clout to be present in the Net.

1.4 The Internet and E-Commerce E-commerce is being integrated into the strategic planning processes of companies Travelers are using the Internet more in their travel planning and reservations Travelers also use the Internet to check prices and/or schedules

1.5 The Internet and Communication Hospitality and tourism is an information-rich industry and its product and service have the following characteristics: Intangible Perishable Emotional-dependent People-oriented Brief Exposure to the services and products

The Internet and Communication (cont.) Because of the intangibility of the product and services, consumers rely on information before they buy Consumers need fast, up-to-date and interactive information Information should be available 24/7 Companies seek the ability to communicate with customers 24/7 for customer service Internet allows companies, big and small, to be on a level-playing field in terms of marketing to the online consumers.

The Internet and Communication Benefits of using the Internet for communications Build up customer relations Develop royalty Through data mining and other online research methods, develop market segmentation and customization Intranet and Extranet streamline an organization’s communication needs and process.

1.6 The Internet and E-Marketing and Information Distribution Marketing is about bringing product information and services to the target consumers in a timely, and accurate fashion The Internet is an ideal medium of doing the above task. The need to devote more resources to capture this growing online travel market With the Internet, target markets can be clearly selected

The Internet and E-marketing and Information Distribution (cont.) Interactivity can be built into the marketing message Push marketing techniques allow companies to send marketing messages to individual consumers based on their predefined preferences. The Internet enables dynamic information distribution and marketing. Information is varied, time sensitive and richer

1.7 The Impact of the Internet on the Hospitality and Tourism Industry Every aspect of the hospitality and tourism industry has been affected by the Internet On the demand side, travelers are increasing relying on the Internet for travel information and reservation On the supply side, third parties such as Expedia, are competing with the traditional travel agents for customers. The traditional suppliers are joining in to market directly to the consumers. The travel agencies are the most affected

1.8 The Internet and Hospitality and Tourism Research Research is an important function of planning in hospitality and tourism Marketing research is “the function which links the consumer, customer, and public to the marketer through information” Both Static and Dynamic information is available on the Internet to be collected and analyzed. Internet research uses different methodologies and techniques that are different from traditional research

1.9 The 21st Century and Beyond The hospitality and tourism industry will be changed by the upcoming new technologies Broadband communication Wireless application Artificial intelligence The future is here already: the convergence of information technologies E-commerce will become part and parcel of every business Issues of cost, ethics, copyright, privacy and security remain to be challenges for the future