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

2. 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

3. Figure 1.1 Online past-years travelers, 1996-2001

4. 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

5. 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

6. 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.

7. 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

8. 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

9. 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.

10. 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.

11. 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

12. 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

13. 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

14. 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

15. 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