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As the realities of an increasingly networked world were confronted, it became apparent that the so-called information revolution has probably matured. While the Internet has proven to contain a cornucopia of information, it also has become a medium of business (Eastin, 2002). eCommerce has myriad direct and indirect, internal and external effects on individuals and organisations. It has removed the traditional barriers to commerce: time, distance and the physical. The tourism industry’s advantage over most of the other sectors of eCommerce is that the consumer goes and collects the product at the point of production. Hence, there is no need to deliver products; a task that confront serious logistical problems that have been a main cause of customer dissatisfaction (WTBC, 2001). However, several issues have been identified as obstacles towards the full exploitation of tourism’s eCommerce full potential.
- increase security of transmissions;
- ensure credibility of information;
- secure intellectual property and copyright issues;
- enhance bandwidth and reduce speed limitations;
- reduce user confusion and dissatisfaction;
- provide adequately trained specialists;
- develop equal access for smaller and larger partners;
- establish pricing structures for distribution of information and reservations;
- enhance the standardisation of information and reservation procedures (Buhalis, 1998).
Benefits of technologies and Internet use
Apart from near universal reach, online technologies for the tourism industry are responsible for increased efficiencies in communications with customers, improvements in research, marketing, financial transactions, and enterprise management. Moreover, important implications can be found on communications and transactions between the different parts of the industry, the industry and its regulators and facilitators, and even different consumers for comprehensive state-of-the-industry overviews (Sheldon; 1997). Particularly, the Internet has stimulated fundamental changes in the operation and distribution of the tourism industry (Buhalis. 2000b). The Internet had a significant effect in tourism’s product distribution, as it has been a shake up in distribution channels. Direct links to the customers, bypassing intermediaries and Global Distribution Systems (GDSs) are some of the profound advantages (O’Connor and Frew, 2000). Therefore, the potential of the Internet is appealing to many sectors of the industry, which are keen to build relationships with customers, cut costs in the supply chain, easier distribution of their product and gather customer information, and they see this new media as a way to facilitate that (Main, 2002).
Internet and SMEs
In several studies it is revealed that small/independent tourism and hospitality operations are being marginalised from the mainstream tourism industry (Evans and Peacock, 1999). This is due to their inability to participate in the transformation of best practices or due to their reluctance to utilise information technologies (Main, 2002). As Evans, Bohrer and Richards (2000), state that small tourism firms are lost in the electronic marketplace. It has been suggested however; that the Internet provides a comparative advantage for smaller suppliers, due to its global character reach, therefore giving them representation in the electronic marketplace (Anckar, Walden, 2001). The commercial viability or visibility of the Internet, enabling 24 hours a day, seven days a week, 365 day yearly access to customers worldwide, is particularly suited to small businesses, at a minimal cost (Buhalis and Main, 1998).
However, SMEs do suffer from a variety of limitations. First, many are family- owned and owner-managed. As a result, they are typically characterised by a lack of both strategic vision and professional management expertise. Many managers of this type are unaware of the wide range of possibilities offered by the Internet, as they primarily service domestic market and the majority of their clients either book directly or through the traditional intermediaries (O’Connor, 2002). Moreover, SMEs are less likely to use technology-based systems. They have limited resources and are particular weak in terms of marketing knowledge and ability (Evans, Bohrer and Richards, 2000). Many barriers still inhibit SMEs from fully capitalising on ICT and the Internet. Of these barriers four stand out as especially important:
- lacking financial resources;
- lacking IT knowledge/experience;
- resistant to change; and
- peripheral location (Ankar and Walden, 2001).
Moreover, not only do they tend to be unaware of the techniques and tools available, but also their efforts tend to be uncoordinated, inconsistent and ill-targeted, resulting in low effectiveness (Baruchelli et al., 2002). However, because of the importance of tourism to both economy and regional development, both national governments and EU feel it necessary to help SMEs to actively promote both themselves and their regions (O’Connor, 2002).
It is nowadays clear to the whole of tourism industry that the Internet is having an impact. Although, the Internet represents important opportunities for independent suppliers, and particularly small and medium-sized enterprises, they are finding it increasingly difficult to cope with the increasingly complex and challenging environment. Implementing effective and viable ICT strategies and solutions is indeed hampered by structural weaknesses. The complexity of the industry and the failure of traditional systems to service the distribution need for the majority of industry players have driven the development of an alternative type of tourism distribution system. Destination Management System is considered instrumental for SMTEs and is regarded as “a complementary distribution channel and strategic tool to re-establish equity in the allocation of power and profit margins between distribution partners.” (Buhalis, 1996).
Rania Deimezi is eMarketing Executive of Travel Media Applications.
She holds an BSc on International Hospitality and Tourism Management and an MSc in eTourism both from the University of Surrey, UK.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
