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WTOBC: Internet poised to take a quarter of tourism sales

Madrid, Spain – Internet may account for one in every four travel purchases in the main generating markets within the next five years…

Madrid, Spain – Internet may account for one in every four travel purchases in the main generating markets within the next five years, according to a report issued by the World Tourism Organization Business Council (WTO<.>BC).

Growth in online travel sales has been so rapid compared to other products, that it could also represent nearly half of all e-commerce within the next two to three years.

"Those who choose to ignore e-business-or regard it as a peripheral activity-do so at their peril," warns WTOBC Chief Executive Officer Jose Antonio Ferreiro. "Their major competitors will certainly be exploiting the opportunities it presents to enhance their competitiveness."

Use of the internet by the tourism sector has already expanded at a dramatic rate and North America's initial predominance in the number of internet users could be surpassed by the Asia-Pacific region as early as 2003, he adds.

The new report 'E-Business for Tourism: Practical Guidelines for Destinations and Businesses' is a follow up to the successful earlier study 'Marketing Tourism Destinations Online', which was published in late 1999.

Where the first study looked at the development and use of electronic distribution systems and the emergence of Internet, the new report is aimed more at giving practical guidance on how to conduct e-business.

Tourism and the internet are ideal partners. Information packed websites help consumers overcome the problem of making a costly purchase without seeing the product they are buying beforehand.

Companies benefit through being able to provide information and booking facilities at a relatively low cost, and by having easier communication with their suppliers and clients.

But while internet sales currently account for about 15 per cent of travel purchases, at best estimates, the study says: "It seems reasonable to anticipate that internet transactions may account for 20 to 25 per cent of all tourism sales in the main markets over the next four to five years."

Destination management organizations (DMOs), which in the past have tended to be providers of information and have been involved in facilitating relationships between tourists and business, will become more immersed in actual transactions, the WTOBC report predicts.

"Regardless of this changing role, it is crucial that DMOs remain the guardian of their destination's interests and the main promoter of its worth as a place to be visited," Mr. Ferreiro advises.

For small and medium size companies, which make up the vast majority of the tourism enterprises, the growth of the internet is leading them to change at a much faster pace than they have been accustomed to.

To ensure their survival, the greatest challenge will be to focus on finding solutions which match their size and competitive position. With independent hotels, for instance, the flexibility of the web gives a greater opportunity to attract international clients, to enable visitors to customize their own tours, and build an individual client base instead of relying on traditional mass marketing.

Similarly, travel agents must move beyond ticket selling, which is readily available on the web, and look at offering more value added services.

But the study emphasizes that internet booking is not the panacea for all the tourism industry. By retaining the human touch and specializing wisely, smaller offline travel agencies can reach a reasonable level of profitability and minimize the time it takes to customize clients' requirements.

Nevertheless, too many small and medium size tourism companies are still unresponsive to new technology because of fear of the unknown, a lack of focus on growth, or they believe it is already too late to enter. Technology is increasingly more accessible and getting started is only a matter of knowing what you want to achieve.