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Entrepreneurial Networks in the Italian eTourism


Elisa Molinaroli

Dr Dimitrios Buhalis

Entrepreneurial networks in Tourism

In the near future, the destination and its range of attractions and activities are likely to remain the core product, the focus of tourists’ motivation and experiences (Buhalis and Laws, 2001). This requires emphasising local differences and sources of unique value (Jackson and Murphy, 2002). Increasingly, the tourist service economy will depend on the capacity of companies to, collaborate, adapt to market changes and provide personalised information and services (CeltTa, 2001). By moving towards “complementarity” and interaction, each activity can gain from the other. Destinations will be able to increase value by enabling revenue increases (Amitt & Zott, 2001) and constant innovation and maintenance of their attractiveness.

Entrepreneurial networks have been defined as networks of economic “actors” and entrepreneurial activities aimed at creating new resources or combining existing resources in new ways to develop new products and service new customers (Hitt, Ireland, R.D., Camp, S.M. and Sexton, 2001). In the tourism industry intra-industry networks can be developed among clusters of firms that are more alike than others, i.e. similarity of products and services (Gulati, Nohria, & Zaheer, 2000). More importantly vertical networks of complimentary services, such as hospitality with transportation and leisure organisations are critical for the creation and delivery of the tourism product.

The co-ordination of all these activities and services is of paramount importance for the performance of the destination and for customer satisfaction. Franchising, consortia, code-sharing airlines are already examples of co-operation among several actors of the tourism value chain (Buhalis & Laws, 2001). Within the accommodation sector for example, organisational networks could tie together hotels, bed and breakfast, campsites, which would constitute “strategic blocks”. This will facilitate e-commerce activities throughout the network and increase the quality of services, time to market, market enlargement through multi-channel distribution, product customisation and cost reduction (European Commission DG Enterprise, 2001).

Technology tools for tourism entrepreneurial networks

The Internet is changing the structure of the industry enabling all players to participate in the e-marketplace. This underlines the far-reaching implications of the Internet and new e-tools on the structure and management of tourism enterprises. The technological changes in the sector not only condition the evolution of customer behaviour and demands, but they also generate important changes in the production and planning strategies of tourism enterprises (Horrillo, 2001).

Tourist experiences happen in relatively small geographical areas or destination “clusters”. Each micro-area supports tourist experiences and satisfies customer needs and hence value is created. It is evident that the needs of the customer cover an entire performance bundle, which consists of the services supplied by many different (local) industry operators, mainly SMTEs (Osti &Pechlaner, 2001).

Destination regions can create their competitiveness by extending the integration of tools for electronic intermediaries, Destination Marketing Organisations (DMOs), end-consumers and tourism suppliers. This is achieved through speed, globalisation, differentiation, personalisation, enhanced products, market reach, innovation and collaboration across the entire tourism value chain at the destination (Barnes and Hunt, 2001). Therefore the needs for co-ordination of entrepreneurial networks in tourism can increase their competitiveness. An “organic” technological infrastructure that enables customers to link directly to suppliers and increase collaboration among providers of tourism products and services could be developed in the Italian tourism sector.

Italy as a country has never implemented a Destination Management System (DMS) and lacks a common technological infrastructure able to bridge supply and demand at the destination level. Decentralisation, lack of a strong decision making power at a central level and fragmentation of the tourism industry constitute the main barriers to the adoption of such systems in Italy. These factors are driving the trend towards generic platforms, based on open standards, independent from applications (F.E.T.I.S.H., 2002). The move is towards “distributed networks” and a more fluid, agile and innovative form of collaborative commerce empowered and enabled by new collaborative web tools and technologies, such as interoperability, standards, and XML (Pollock, 2001).

This exploratory study is divided into two sections. The aim of the first phase of the research was to examine the Italian tourism sector, both offline and online, by identifying all the major players that have a web presence and are involved with domestic and inbound tourism. The focus is on how potential tourists, use the Internet to look for information on the destination products and services and who wish to make a reservation are able to reach individual suppliers, both SMTEs and larger enterprises. This is of particular interest, since a DMS or an infrastructure does not support tourism enterprises, which is able to aggregate them.

Extensive web research identified providers of tourism products and services at the destination who have developed e-commerce activities with end-consumers. These were then clustered according to the 6As model (Buhalis, 1997), which identifies the six most important categories in the tourism value chain: Attractions, Activities, Accessibility, Amenities, Ancillary Services and Available Services. Further research was conducted through structured questionnaires emailed to 185 SMTEs, who have developed basic e-commerce activities. This aimed to examine how the technology infrastructures available to SMTEs belonging to the main sectors of the tourism value chain were effective in reaching the end-consumer through collaboration with other partners/operators.

Entrepreneurial Networks in the Italian eTourism

Results from the web research suggest that the Italian online travel sector is very active and key players come from a wide range of sectors, both inside and outside the travel industry. The main stakeholders in the Italian tourism sector have achieved an online presence and there are linkages amongst them.

Domestic and international tourists, researching travel information on the Internet or trying to make a reservation online are able to reach suppliers at the destination, in particular SMTEs. The research demonstrated that the Italian tourism sector is less centralised and integrated than a DMS-based destination. It is dominated by a vast number of large, small and medium sized enterprises most of which have already developed an online presence. However, due to the low propensity of Italians to buy online, both larger enterprises and SMTEs have developed only basic e-commerce activities and still rely heavily on intermediaries to reach their end consumers. The role of new e-intermediaries such as: the main generic portals, that offer tourism products via the web by exploiting their commercial and brand image potential; travel portals; as well as regional and local tourist portals supported by the private sector is becoming quite important for Italian tourism.

Findings from the questionnaires suggest that SMTEs are visible on the Internet and regularly interact with consumers. The Internet represents a powerful channel for the promotion and provision of information for both larger enterprises and SMTEs in the Italian e-marketplace. As is evident from the web research and questionnaires, e- commerce activities are mainly limited to the accommodation sector, which has developed portals, that give visibility to different types of products and services in highly developed tourist destinations. SMTEs are still making very limited use of Internet technology to increase the level of co-operation with other partners/operators, lack inter-organisational links, thus preventing increased co-operation among other operators. The telephone is still the main means of communication. Results show that the use of email is growing, while the extranet and intranets are present only in one case. Email is used as a tool for communicating with other suppliers and operators, e.g. restaurants, car rentals, and intermediaries. This suggests that small operators want to provide a better service to customers and gradually adopt IT tools. These results seem to confirm research carried out by ISTAT that in 2001 on the use of IT among small and medium enterprises of all sectors.

Interviews demonstrated the Internet and web-based tools have penetrated all aspects of the business process of large enterprises. It is evident that large Italian enterprises have realised that data interoperability exchange is a fundamental requirement to allow faster and more effective market and management dynamics (Harmonise, 2002). Larger enterprises have the technology infrastructure in place and are working towards the development of common platforms, mainly for B2B activities. From interviews with experts in the field, it emerged that travel intermediaries seek to increase collaboration with smaller operators at the destination. This will enable them to offer more customised products and assist travellers arriving at the destination or those wishing to experience a particular type of niche tourism.

Tourism organisations in Italy are looking at changing trends in technology. According to the various operators, technologies can undoubtedly offer a quicker and more effective communication tool between consumers and suppliers as well as with agencies. Each sector is currently working towards the integration and standardisation of information, which will interact with any device. Alitalia is very proactive towards new technologies, as it believes in UMTS, Wifi and wireless solutions for targeting business travellers. Alitalia has completed a technological platform, which can be accessed via the Internet, mobile phones or other devices. In all other sectors, it is evident that operators are very sceptical about how soon Italian travellers, in particular, will make use of new wireless devices such as mobile phones, PDA and digital television to interact with tourism products and purchase products and services. This demonstrates that although most services target international incoming travelers, technological developments are paced according to the IT adaptation at the national level.


In light of the fact that Italy lacks a common infrastructure, namely a Destination Management System to bridge supply and demand, this research sees the creation of “entrepreneurial networks” among tourism enterprises at a local level as a fundamental instrument. They are expected to support the Italian tourism sector to disseminate important information; attain more visibility on both domestic and especially international markets; linking the local product to the real and potential demand; improve management of all activities in general (Jacucci, La Micela & Roberti, 2002).

Little research has so far been conducted on the Italian tourism sector to try to identify a viable solution to DMS implementation to co-ordinate and manage the fragmented supply at the destination and improve communication and collaboration in tourism to create value for consumers.

Results from web research, questionnaires and interviews, indicated that in the Italian travel market, representatives of all players involved in the sector value chain are, already represented to a certain extent on the Internet. However, neither larger enterprises, nor the majority of SMTEs participate in sophisticated and highly interactive e-commerce activities. This is mainly due to the nature of domestic travellers, which account for most of the tourism presence in the Italy. The low propensity of Italians to buying online is mainly due to cultural and technological factors as well as due to the high concentration of travel agencies across the country.

On one hand the strong dependence of online firms on the offline channels for booking confirmations and payments seems to benefit mainly domestic tourists. On the other hand it represents a barrier to potential incoming tourists trying to reserve tourist products over the Internet. For the majority of self-contained SMTEs, the low interactivity with customers online means less opportunities to attract incoming tourists, who may wish to pre-book a series of services and activities online, directly with suppliers at the destination. As emerged from the study, the majority of foreign arrivals in Italy originate from the US, Germany, UK and France. These are countries with a high Internet usage and developed e-commerce activities. Also, the self-packaging segment in Italy has increased from 62% in 1998 to 64.3% in 2002 (Trademark Italia, 2002) along with the growth of domestic short breaks and holidays.

There is an opportunity for providers of tourism products and services to transform even domestic short breaks into “complete travel experiences” by supporting collaboration among suppliers of complementary services. This can develop a “supply community” or a network of inter-dependent suppliers who share the objective to satisfy the diverse and complex needs of customers (Pollock, 2002) and to add value to their travel experience.

However, this research demonstrates that only large Italian tourism enterprises have started to implement web technology to support e-business activities and develop a more integrated infrastructure that permits greater flexibility, quick updating of information and the possibility to increase electronic communication with other partners. Although SMTEs managers are aware of the advantages that increased co-operation could bring to their competitiveness and to the attractiveness of the destination, issues related to the under-developed technological infrastructure that favours B2B communication need to be addressed.

If you require full reference list or further information on this research, you can contact

Elisa Molinaroli

Elisa Molinaroli holds an Msc in eTourism from the University of Surrey, United Kingdom and Dr Dimitrios Buhalis is a course leader of the only MSc in eTourism and Director of the Centre for eTourism Research, University of Surrey, United Kingdom.

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