chapter 1

Introduction to Tourism and Information Technology

LEARNING OBJECTIVES and organizations are connecting more and in different ways than they ever have in the past. After studying this chapter you should be Increases in international trade agreements, able to: global business activity, telecommunication networks and personal and educational travel ●● define key terms and concepts in infor- are uniting the planet like never before. These mation technology; linkages are being forged and supported essen- ●● describe the evolution of information tially by two of the largest and fastest-growing technology; industries in the world today – tourism and ●● recognize the types of information tech- information technology (IT). nologies relevant to tourism; Tourism connects people today in ways ●● explain the synergies between the travel that would never have been possible decades industry and information technology; and ago. It also contributes significantly to many ●● evaluate the strategic applications of national and regional economies. In 2016, information technology in tourism organ- with 1.24 billion international arrivals gener- izations and destinations. ating US$1220 billion, it was responsible for one in ten jobs worldwide (United Nations INTRODUCTION World Tourism Organization, 2017). Tourism was responsible for 9.8% of the global GDP The world is experiencing some of the most and 6.1% of the world’s export of services in 2015 dramatic social changes in its history. Borders (United Nations World Tourism Organiza- are dissolving and countries, societies, people tion, 2016). Tourism is also a powerful force in

© P.J. Benckendorff, Z. Xiang and P.J. Sheldon 2019. Tourism Information Technology, 3rd Edition (P.J. Benckendorff, Z. Xiang and P.J. Sheldon) 1 TOURISM INFORMATION TECHNOLOGY

arenas other than economics; its transformative industry is a heavy user of IT, and some of the power on cultures and societies, its effect on largest telecommunication networks spanning environments and ecosystems, and its contri- the globe carry travel information. IT, there- bution to climate change – as well as the climate’s fore, provides the information backbone that effect on it – are important issues that must facilitates tourism (Dutta and Bilbao-Osorio, be addressed. The increased connectivity that 2012). tourism creates between and within societies This book is about these two industries and is one of the most important phenomena affect- the synergies between them. It describes how the ing society. This is enhanced greatly by infor- different sectors of the tourism industry are mation technologies. being affected by IT and how they apply IT The IT industry is equally, if not more, to their operations. It also explores in depth significant and powerful. We live in a digital the tourist’s use of IT at all stages of the travel world of laptop computers, smartphones, dig- experience (Loten, 2017). This chapter sets a ital cameras, tablets, Cloud-enabled digital foundation by examining the nature of the IT platforms, and the Internet of Things (IoT). industry, concepts used, its history and evolu- Information technology can be defined as “the tion and the factors affecting IT adoption and application of computers and telecommuni- innovation in tourism. It also presents charac- cations equipment to store, retrieve, transmit teristics of tourism that cause it to be so infor- and manipulate data” (Daintith, 2012). In a mation-intensive. Various typologies of tourism business context, information technologies are information are also discussed. Its synergy with often referred to as information systems. information technology is explained, and ways “Information systems are combinations of hard­ in which the two industries interlock and sup- ware, software and telecommunications net- port each other are discussed. Issues relating to works that people build and use to collect, the strategic management of information and create, and distribute useful data, typically in IT within an organization are also discussed. organizational settings” (Valacich and Schneider, 2014, p. 19). Worldwide IT spending for 2017 is pro- TOURISM: AN INFORMATION- jected to be US$3.5 trillion – three times the size INTENSIVE INDUSTRY of the tourism industry (Loten, 2017). The rapid pace of development in IT is creating The tourism industry thrives on information. millions of electronic connections around the The size of the industry alone suggests that it globe, connecting people, the business commu- generates large volumes of information to be nity, industries and regional and international processed and communicated. For each person communities in new ways, and is substantially embarking on a trip, scores of messages and changing the way that enterprises, custom- pieces of information must be exchanged: ers and governments operate. It is estimated itineraries, schedules, payment information, that in 2017 there were 8.4 billion connected destination and product information and pas- devices in the world, increasing to 20.4 billion senger information; but the tourism industry by 2020 – far exceeding the global population exhibits many other unique characteristics, (van der Meulen, 2017). The travel and tourism which create a need for the IT applications

2 CABI TOURISM TEXTS Chapter 1: Introduction to Tourism and Information Technology used by travelers, organizations and tourism Table 1.1. Characteristics of tourism agencies. This section will first present a model ­services and experiences. of tourism information flows and then discuss Characteristic Description the characteristics that make tourism so information-intensive. Heterogeneity Travel products and services cannot be standardized and vary Characteristics of tourism enormously While the term product is frequently used in the Intangibility Services cannot be industry to refer to accommodation, transport experienced, touched, attractions and even destinations, tourism can felt or sampled before also be described as a type of service. Some- purchase times the tourism product is also referred to Perishability Unsold hotel rooms, as an experience. Pine and Gilmore (1999) aircraft seats and tours argue that products are manufactured, services cannot be stored for are delivered and experiences are staged. Fur- later sale thermore, experiences are usually co-created through the interactions of travelers, tour- Inseparability Production occurs ism organizations and settings (Prahalad and alongside consumption. Ramaswamy, 2004). Typically, most govern- The product or service is ments consider tourism to be part of the service being “consumed” as it is sector rather than the manufacturing sector. delivered These terms are often used interchangeably, Global Tourism includes the but it is important to understand some of the international movement characteristics of services and experiences and of people on a mass scale how they differ from manufactured goods. Some of the characteristics that differ- entiate tourism from other products, services the traveler (Gee et al., 1994). To research and and experiences, and which make it so infor- plan a trip, travelers must interact with many mation-intensive, are its heterogeneity, its private sector organizations and public sec- intangibility, its perishability and its insep- tor agencies. Coordination and cooperation arability. The global scope of the industry between each of these organizations, agencies and the fact that tourism is a service industry and the consumer are necessary to create the also contribute to its information intensity heterogeneous experience called a “trip”. This (Table 1.1). Each of these characteristics will requires efficient, accurate and timely infor- be discussed below. mation flows to piece together the multifa­ A typical trip is complex and consists ceted trip. Information and IT provide crucial of many component parts, and therefore by links between different industry sectors to nature is heterogeneous. The US Standard create a seamless travel experience. If these Industrial Classification System has identified links break down or are too slow, information at least 35 industrial components that serve is not transmitted in a timely manner and the

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industry does not function optimally. The more tourism use revenue management systems to complex and international the trip, the more assist with the challenges created by product information is required. perishability. Internet booking engines and Intangibility is the second characteristic smartphone apps can also assist suppliers in that makes tourism so information-intensive. the promotion and distribution of “last-min- Potential consumers are often unable to see, ute” deals before they “perish”. touch or feel a vacation or a business trip and Tourism consumption is inseparable from its components before they purchase it. Instead, the production of the experience. Unlike goods, they need detailed information about the desti- which can be purchased and taken home, there nation or experience to substitute for the lack of is an interaction between service providers and tangibility. This information can be presented travelers because the production of the expe- via many different media. Travel and destina- rience happens simultaneously. For example, tion information, which was traditionally distrib- a hotel guest “consumes” a hotel stay as it is uted in the form of brochures, is increasingly being “produced” by service providers. Infor- in electronic form. Rich and immersive digi- mation plays an increasingly important role tal content such as websites, pictures, videos in ensuring that this co-production and co- and virtual reality allow travellers to “sample” creation of tourism experiences is efficient and the trip before making a purchase. The intan- of a high quality (Schertler, 1994). One of the gible nature of tourism has brought the IT greatest challenges facing managers is how to and tourism industries together to creatively increase the productivity of service and knowl- market the product and make it more tangi- edge workers (Drucker, 1990). In the past ble. Information also serves to reduce the risk there has often been resistance to automation associated with travel. Social media allows trip in service industries due to a misconception planners to learn from the experiences of other that the quality of the customer’s experience travelers through forums, blogs and reviews. would decline. But changes in lifestyle and Despite these benefits, it is important to note priorities have made time an important com- that some travelers still prefer the challenge of modity. This has led to service expectations of a trip they know little about before departing. a different nature, where speed and personali- The third factor that makes tourism zation are increasingly important. IT applica- information-intensive is its perishability. If tions are increasingly being used to personalize an airline seat is not sold on a given flight, experiences and serve tourists more efficiently, that particular seat can never be sold again. whether it be to check a guest out of a hotel The seat, or rather the revenue from it, has or to change their flight reservation. “perished”. This is true for almost all products By its very nature, the tourism industry is in the tourism industry (e.g. accommodation, one of the most global industries in the world. attractions, tours, transportation) and is due to This characteristic is central to it and contrib- the time-sensitive nature of tourism products. utes further to its information intensity. Inter- IT can assist with monitoring inventories and national travel generates large volumes of dynamically adjusting prices to maximize load information not found in domestic industries. factors, occupancy and attendance rates. Many International travelers need access to border computer reservation systems (CRSs) in control information such as visa and passport

4 CABI TOURISM TEXTS Chapter 1: Introduction to Tourism and Information Technology regulations, customs regulations, arrival or computer reservation systems. These systems departure taxes, currency controls and health evolved and became known as Global Distri- regulations such as immunization requirements. bution Systems (GDSs) as they integrated all In addition, they require information on such types of travel reservations in addition to flights. diverse topics as cultural practices, driving regu- They became the main tool of travel interme- lations and language translations. The nature diaries when booking trips. They are still very of the trip and the characteristics of travelers important today but have needed to adapt to can influence information needs. For exam- new technologies, software environments and ple, travelers from France visiting Peru have mobile applications. They will be discussed in higher information needs than travelers from detail in Chapter 3. The airline sector has also New York to San Francisco. Both leisure and been a leader in the use of yield management business travelers are expanding their horizons systems to strategically price airlines’ seats and traveling more globally, requiring access to maximize revenue. IT has facilitated the to this kind of information. This geographic development of frequent-flyer programs that dispersion requires data communication net- require sophisticated database technology and works around the globe to link countries, tourism very large amounts of data. Airline alliances organizations and travelers together. Without such as One World and Star Alliance have IT, the tourism industry would not function made connectivity and interoperability between as efficiently at the international level. various systems essential. As airlines seek to In summary, information is the lifeblood reduce labor costs and speed passengers through of the tourism industry. The application of airports, self check-in terminals in airports IT to its operations, therefore, is critical to its have been introduced. Automated call cent- growth and success. In the next section some ers attempt to further reduce labor costs. Use of the major applications of IT in tourism are of the Internet for booking flights and IT summarized briefly. applications that allow travelers to use their smartphones for boarding passes, updates on flight status and other functions are becom- Applications of information ing popular, reducing paper usage. Chapters 7 technologies in tourism and 8 explore how airlines, airports and other The entire tourism industry has been changed transportation carriers are using IT. by the use of IT. Research shows that IT is Travel intermediaries such as travel agents influencing the way travel organizations in all and tour operators have been significantly sectors communicate with customers, in the affected by technology to the degree that their way they compete, plan their strategies, add existence is at stake. In fact, many such inter- value to their products, cost-save and stream- mediaries have left the market as Internet and line their operations (Buhalis and Law, 2008). other technologies have replaced them. They Different sectors of the tourism industry have have had to adapt to the “disintermediation” adopted IT at different rates. caused by the Internet giving consumers The aviation sector has been the most access to the same information and more. innovative and heavy user of IT starting early Many have done this by specializing in certain in the 1950s with the implementation of destinations or travel products (e.g. cruises) or

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by obtaining cheaper rates through their bulk considerable challenges in the implementa- buying power. New types of intermediaries tion of these systems, as will be explored in have emerged in the digital world, as will be Chapter 12. explored in Chapter 3. Tourism destinations have found much The hospitality sector has, in general, been value in incorporating IT into their marketing more reticent to adopt technology, but now and management strategies. IT links together has many specialized systems to support their different sectors of the destination and different operations. Hotel operations are run by prop- stakeholders and can connect with travelers erty management systems, which process all in new and different ways including Internet, activity relative to guests, rooms, accounting, social media and mobile technologies such housekeeping and customer records. Hotel as Global Positioning Systems (GPS) and reservation systems are crucial links to cus- Geographic Information Systems (GIS). IT tomers, and they may be property-specific or also has a leveling impact on the power of the designed for multiple properties in a chain different suppliers in destinations, meaning or marketing consortium. Electronic locking that large, monopolistic organizations cannot systems, digital room keys, guest room auto- dominate a destination as they might have mation, voice command technology, energy done in the past. These issues are discussed management systems, virtual concierges and in Chapter 11. self check-in terminals are also becoming com- Travelers themselves are gaining much mon, particularly in business hotels. A number benefit from IT developments. In particular, of hotels now offer a seamless, fully auto- social media and mobile technologies provide mated experience where guests can complete ubiquitous access to information about desti- their entire stay without ever speaking to a real nations, travel organizations and experiences. person. Restaurants’ main use of IT is in the These are discussed in Chapters 5, 6 and 10. forms of point-of-sale systems, menu man- agement systems and restaurant management systems. These will be discussed in Chapter 9. Typologies of information Other sectors of the travel industry, includ- Organizations that have benefited the most ing attractions, entertainment, casinos and from the use of IT are ones that recognize that conventions, all have specialized IT systems. information and data are important assets that These are discussed in Chapter 10. In all of must be carefully managed alongside other these types of travel organizations, the Inter- economic resources of land, labor and capital. net has made significant changes. IT has par- With the recognition of information as a ticularly helped small and medium enterprises fourth resource, organizations must carefully (SMEs), which constitute a large portion of combine information with the other three to this part of the travel industry worldwide. maximize profitability and provide the best Since the arrival of the Internet, these smaller levels of service to travelers. organizations have gained market power as Information, however, differs in numerous they now are able to access distant interna- ways from the other three resources (Cleve- tional markets in the same way as large mul- land, 1985). First, information is not used tinationals. However, SMEs continue to face up or depleted as it is consumed. Instead, it

6 CABI TOURISM TEXTS Chapter 1: Introduction to Tourism and Information Technology expands as it is used. As one traveler gives problems and requires policies and systems to information to another about a favorite hotel, prevent security and privacy breaches. Infor- museum or beach, that information is duplicated mation is a highly prized resource and so care and not lost by the giver. This information must be taken to ensure its security. The care- expansion can create opportunities or threats ful use of passwords and policies must be used depending on the nature of the information and to ensure that traveler information is pro- the receiver. The expansion of factual informa- tected. For example, hotels will not give guest tion serves to enhance an organization’s or a room numbers to casual requests, nor will air- destination’s position as its level of awareness is lines release the personal details of passengers increased. The spreading of subjective informa- on a specific flight. The travel industry cap- tion can create positive or negative impacts tures and stores considerable amounts of per- depending on the perception of the information sonal information, which must be carefully giver. Negative perceptions can, of course, be secured to protect privacy and prevent fraud. damaging, and positive ones can further enhance These are just three of the ways in which an organization’s position. information differs from the other resources. Second, information and information tech- There are numerous others discussed in Cleve- nology can actually be used as a substitute for land (1985), but all point to the fact that com- the other three resources of land, labor and panies must examine information carefully and capital. When these three are in short supply treat it as an important resource. Maximizing or are expensive, the creative application of IT its use for their competitive advantage is an can be used to create value for organizations important challenge to managers operating in and consumers. Telecommuting is an example of this information-intensive industry. Appro- using IT to substitute for land, since organi- priate applications of IT at the strategic level zations whose employees telecommute need have served to increase the success of many no longer rent or purchase so much high- travel organizations, as will be demonstrated priced land in expensive districts. IT can also in this book. be used to substitute for labor in many Tourism information, in addition to being ways. In repetitive, lower-level tasks in travel very voluminous, is very diverse in nature. To organizations, IT can reduce the number of use a theater analogy, information is produced employees needed to perform the task. At by different actors to meet the needs of a wide higher levels of operations, IT can augment range of audiences. These actors and their human resources with decision support sys- information needs include: tems, expert systems and other applications of artificial intelligence. Peer-to-peer networks ●● Travelers: information about destinations, such as Airbnb demonstrate how value can transport, activities, facilities, availabilities, be created for the organization as well as prices, border controls, geography and the consumer without capital investment in climate. infrastructure such as hotel rooms. ●● Intermediaries: information about con- A third characteristic differentiating sumer trends in the market; about des- information from the other three resources is tinations, transport, activities, facilities, its tendency to leak. This can cause security availabilities, prices, border controls,

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geography and climate; and about other real-time systems with the ability to capture branches, suppliers and competitors. changes. Adequate resources and personnel ●● Suppliers: information about the com- to ensure that information is continuously pany, consumer behavior, intermediaries and accurately updated must be part of any and competitors. dynamic information system. ●● Destinations: information about trends in the industry, the size and nature of Trip stages tourism flows, marketing, impacts, poli- Travelers need information at different times cies, planning and development. and different places. Pre-trip information in Information can be static or dynamic. the planning phase of a trip is required at Information can be used, produced or shared the traveler’s home or the prior destination. by travelers prior to, during or after the trip. The type of information required at different Information can be produced by the private times of the trip planning process depends on sector or the public sector or by travelers. Dif- the type of tourist. For example, adventur- ferent types of travel information may require ous or impulsive travelers will need little or different types of information technologies to no pre-trip information, whereas risk-averse process and distribute them, which are dis- travelers and those with long planning times cussed below. will need pre-trip information – both static and dynamic. In general, travelers are leav- Static and dynamic information ing more of their decisions until they are on- site at the destination. This need for on-site Some tourism information does not change information is spawning new applications in very frequently and therefore is relatively static. mobile technologies and smart destinations. Other information changes frequently and is After the tourist returns home, both static extremely dynamic. Examples of static tour- and dynamic information are used. Dynamic ism information that may change in the long post-trip uses of tourism information are term but not in the short term are: product growing as social media and other photo- and descriptions, transportation routes, signage video-sharing platforms proliferate. Table 1.2 and location information. Static information shows these various dynamic and static infor- lends itself to distribution and access using mation media for different trip stages. brochures, signs, guidebooks, print media, tel- evision or other offline media. A large volume of tourism information, however, is dynamic Providers of information and requires digital formats for frequent updates Some tourism information is provided by the and rapid transmission. Examples are product public sector and is more general to the des- availability, schedules, fares and rates, travel tination, and some is provided by the private reviews, weather conditions, snowfalls on ski- sector, which is more specific to a given prod- slopes or surf conditions at beaches. Dynamic uct or brand. The public sector, however, may information changes daily, weekly, monthly provide specific product information, as when and seasonally. Information systems that ena- a public tourism office distributes informa- ble this type of information are usually online, tion on specific attractions or accommodation

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Table 1.2. Types of tourism information channels. Trip stage Static Dynamic Pre-trip Brochures, guidebooks, fax, photos, Phone, email, websites, social videos, some information on media, Internet booking engines, websites Global Distribution Systems In-trip Brochures, guidebooks, signs, maps, Phone, fax, email, websites, social kiosks, TV channels in hotels, some media, mobile apps mobile apps Post-trip Brochures, guidebooks, photos, Blogs, social media, photo and video video sharing, reviews in response to general requests. Furthermore, users could view the content but could not con- some private sector organizations may pro- tribute to it. The growth of social media in the vide more general information on the desti- 2000s led to a proliferation of online platforms nation. They may do this in their advertising that enabled the creation of User Generated to entice consumers to purchase their prod- Content (UGC). This phase of development uct. Other examples are tour operators and has been referred to as Web 2.0 and is charac- hotel concierge desks, which can enhance terized by the rapid expansion of information their customers’ experience by providing gen- produced by third parties – often consumers eral destination information. rather than the producers of tourism experi- Sources of public sector information are gov- ences. This was made possible by the develop- ernment tourist offices at the regional, national or ment of wikis, blogs, social network sites, Really state level. They tend to provide more objective, Simple Syndication (RSS), media-sharing sites unbiased information on both public and private and virtual worlds. The travel industry also tourist facilities. Information contained on third- embraced Web 2.0, with sites such as Wiki- party websites or guidebooks can also be objec- travel, TripAdvisor, Yelp and Urbanspoon hav- tive and unbiased if the author has no affiliations ing a major impact on travel behavior. Current with the product. Information provided by pri- advances in IT are leading to a new phase vate companies tends to be more promotional where information is increasingly being cre- and more specific to their individual products. ated, contextualized and personalized by arti- When the World Wide Web was initially ficially intelligent (AI) machines. developed, much of the travel content was cre- ated by public or private organizations such as destination marketing organizations, gov- THE EVOLUTION ernment authorities and commercial businesses. OF INFORMATION This early phase of the web is now generally TECHNOLOGIES referred to as Web 1.0. Unlike today’s WWW, early websites provided limited interaction. The evolution of information technology Websites were updated by webmasters and has been extremely rapid compared to other

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industries. In fact, Intel famously claimed that In 1970, Intel Corporation invented the if the airline industry had developed as rapidly microprocessor for use in microcomputers. as the computer industry in relation to price Major commercial microcomputers included the and performance, a flight from New York to Apple II and the IBM PC. Greater affordability Paris would today cost about a penny and coupled with new storage media and operating take less than one second ( Jordan, 2012). The systems (such as MS-DOS), and input devices speed and cost of the Internet, smartphones, such as the mouse, made computing both acces- GPSs, laptops and digital cameras are far sible and user-friendly for average users with no removed from the slow, expensive, room- knowledge of programing. In the early 1980s, sized computers of half a century ago. Many both Apple and Microsoft introduced Win- innovations over the decades have led to the dows-based “point and click” Graphical User explosion of applications in IT. Many of these Interfaces (GUIs) to further simplify user developments will be discussed in more detail interactions with computers. Word processing, throughout this book. spreadsheets, desktop publishing and database management software were developed in the late 1970s and early 1980s and have become com- Computers mon applications in travel industry organizations. The first commercially available computer Innovations have continued to result in (UNIVAC I) was unveiled in 1951. IBM soon computers that are smaller and more powerful. In followed with the world’s first mass-produced 1965, Intel co-founder Gordon Moore observed computer, the IBM650. These large comput- that the number of transistors and integrated ers used magnetic tape, magnetic drums, vac- circuits in computers doubled roughly every two uum tubes and punched cards for input, and years. This prediction, known as Moore’s Law, were mostly used for scientific purposes. The has proved to be accurate for over 50 years and aviation industry was a pioneer in the com- can be applied to processor speed, memory, sen- mercial use of these large machines, which sors, data storage capacity, data transmission and played an important role in the development the number and size of pixels in digital cam- of the first airline reservation systems. eras. While many major innovations occurred The invention of the transistor by Bell throughout the 1970s and 1980s, advances since Laboratories eventually led to the develop- 1985 have involved incremental changes in ment of a second generation of computers, hardware consistent with Moore’s Law. Similar which were smaller, faster and more powerful. incremental changes have occurred in the devel- In 1958, two engineers working independently opment of new versions of software. However, invented the integrated circuit (or the com- major advances have been made in network- puter chip). This led to the next generation of ing and mobile technologies, as are discussed computers in 1965, creating even smaller and in the following sections and chapters. faster machines that were more viable for busi- ness. Many travel businesses such as hotels, travel agencies and other tourism enterprises Networking and the Internet used these third-generation computers for The next wave of information technologies their operations. overlapped with some of the developments in

10 CABI TOURISM TEXTS Chapter 1: Introduction to Tourism and Information Technology electronic computing. While IBM, Apple and same time as the development of the Internet. Microsoft were laying the foundations for the As a result, many IT innovations have taken Digital Revolution, some organizations were advantage of advances in both areas. The his- already thinking about the potential of linking tory of mobile devices includes developments computers together using networks. In 1970, in a number of parallel technologies that have the science fiction writer Arthur C. Clarke converged to create the devices used today. made the following prediction in the maga- These include mobile phones, personal digi- zine Popular Science: tal assistants (PDAs), portable computers, digi- tal cameras and portable music players. In the Imagine a console in your office, combining early 1990s the miniaturization of electronics the features of a Touch-Tone (pushbutton) telephone, a television set, a Xerox machine, and batteries made pocket-sized portable devices and a small electronic computer. Tuned possible, triggering the new product category in to a system of synchronous satellites, of PDAs. These were small, handheld com- this console will bring the accumulated puters, which allowed users to read text, send knowledge of the world to your fingertips. By email, schedule appointments and store doc- punching a few digits, you can verify a check, uments and contacts. get the data on some historical event, or hear The development of mobile phones and an illustrated lecture on any subject you wish. PDAs is significant because the convergence of Or you can hold an electronic conference these two technologies in 1994 resulted in the with any group of people scattered all over first smartphone, the IBM ‘Simon’. This was the world, seeing each other as you talk. followed by a period of intense competition Arthur C. Clarke’s prediction became a between mobile phone manufacturers, com- reality 12 years later when networks at the puter makers and electronics companies, even- Advanced Research Projects Agency (ARPA) tually leading to the release of the first successful and several universities in the USA were con- mass-market smartphone, the Apple iPhone, in nected to create the Internet – a network of 2007. The proliferation of mobile devices and networks. The Internet expanded rapidly to apps has created many new benefits for both Europe and Australia in the mid-1980s and the travel industry and for travelers. Location- to Asia in the late 1980s and early 1990s. The aware mobile devices have had an impact on Internet has enabled a range of networked visitor information, marketing, orientation and services, including email, the WWW and interpretation. New innovations in ubiquitous cloud computing. The history and role of (or portable) devices such as smart watches the Internet and social media in tourism is and smart glasses have continued to find appli- explored in more detail in Chapters 4 and 5. cations in the travel industry. We will review these developments and the role of mobile technologies in more detail in Chapter 6. Ubiquitous technologies The most recent IT wave relevant to travel and tourism is the rise of mobile and ubiq- Implications for travel and tourism uitous computing. Many of the technologi- The major trends evident in this historical cal developments in this field occurred at the account of information technologies include

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the convergence of information technologies Travel is also likely to be reduced by the and the increasing interoperability of vari- implementation of videoconferencing, mean- ous platforms. The miniaturization and ubiq- ing that the travel industry must be alert and uity of computer technology together with the innovative to adapt to this trend. For example, connectivity of the Internet has created a new Rosenbluth Travel (sold to American Express level of functionality and the travel industry has in 2003), a business travel agency in the US, benefited from this. Advances in fiber optics has added teleconferencing to its product offer- and wireless telecommunications has led to an ing so that clients can compare and choose exponential growth in the amount of informa- between a face-to-face conference and a telecon- tion being produced and consumed. We are ference. If a teleconference is chosen, Rosen- increasingly living in a world where physical bluth organizes it and sells it as part of their objects are blended with the virtual. Everyday product line. objects and amenities like lights, heating and cooling, fridges, washing machines and cars are connected together to create an ‘Internet STRATEGIC THINKING of Things’ (IoT). Artificial intelligence and AND INFORMATION expert systems are now used to support tasks TECHNOLOGY and decision-making that were previously carried out by people. Social media (Face- Thinking strategically about IT applications book, Twitter, etc.) has connected travelers is critical in today’s competitive world. There and organizations in new and different ways are many ways that IT can be used to support and has transformed how society operates. the strategic direction of the organization and The consequences of this hyper-connectivity support innovation. Some IT applications coupled with the globalization of business and affect the production of goods and services travel are profound. Technological innova- and others have more impact on the mar- tions have caused the “collapse of space and keting process. Cash et al. (1992) provide a time” (space-time collapse), in that time and model to show how different industries can space no longer restrict us from connecting use IT to improve both their production and and working. Work can be done at any time marketing. The model uses a two-by-two and in any place. IT and the Internet connect matrix in which the horizontal axis repre- us to whoever we want whenever we want. sents the impact of IT on marketing activi- A traveler sitting in Heathrow Airport on their ties and the vertical axis represents its impact smartphone can make a booking for a Honolulu on the production of goods and services. The hotel, for example, and within microseconds authors of the model place certain industries receive a confirmation. Meetings with others for on the matrix as shown in Fig. 1.1. business (sales meetings and conferences) or The model suggests that industries fur- pleasure (family reunions) in different parts of ther along on the horizontal scale will tend to the globe with videoconferencing from a smart- be ones where: (a) product choice is complex; phone, tablet or laptop are now commonplace. (b) quick customer decisions with confirma- Person-to-person meetings are likely to be tions are essential; and (c) customer tastes less frequent and yet perhaps more valued. and pricing are volatile. Industries tend to

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Airlines Defence HIGH

Travel agent Banks Hotels Tour operator

Attractions Retailing High PRODUCTION fashion

Paper

Lumber LOW

LOW HIGH

MARKETING

Fig. 1.1. Impact of IT on the production and marketing of different industries. be high on the vertical scale if: (a) technology The airline sector is the highest on both is embedded in the product; (b) production dimensions and was placed there in the origi- requires a long design process; and (c) time nal matrix of Cash et al. (1992). Global Dis- and cost savings are possible through auto- tribution Systems, frequent-flyer databases mation. Defence hardware is placed high and yield management programs have been on production impact and low on marketing heavily used by the airlines to distribute and impact since the product tends to be highly market their product. IT has also effectively technical and needs little marketing. High been used in production activities, for exam- fashion, however, is placed high on the mar- ple in the design, operation and maintenance keting impact scale, with moderate impacts of aircraft, and in luggage handling. Other on production. transportation sectors such as trains and car An analysis of various travel industry rentals are not quite so high on the marketing sectors and their use of IT in marketing and axis but are equally high on the production production can position them on the matrix axis since new technological innovations relative to other industries. The travel indus- are constantly introduced to provide better try sectors placed on the matrix are airlines, transportation. travel agents, tour operators, hotels and Travel agents, tour operators and other attractions (in bold). Most sectors are placed travel intermediaries are perhaps the most on the right side of the matrix since IT is information-intensive of all travel sectors. heavily used in marketing tourism products. They deal almost exclusively with informa- Various travel sectors are positioned from tion and have no tangible product of their high to low on the production axis since the own. Product choice is complex, quick deci- impact of technology varies according to dif- sions and confirmations are often necessary ferent sectors. and customer tastes and prices are volatile,

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placing them high on the marketing axis. There positions in organizations that prioritize the is also a high impact on production activities information function rather than placing a since their product or service is the provision Data Processing Manager on the organizational of information. chart at a lower level. When IT is given this level The accommodation sector is high on both of visibility and resources, its power can truly scales, but not as high as the airlines. Com- be realized. Adequate training of employees to puter reservation systems including guest his- operate the systems is also critical to reaping the tory systems assist in the marketing of hotels. full benefits. The constant evaluation of new IT’s impact on production, however, is lower. technologies to determine their appropriate- Hotels, traditionally, have not embraced tech- ness to the organization’s strategic direction is nology as readily as the airlines, but this is also necessary. This should involve input from changing. More and more accommodation all employees in the organization, who can be providers are installing property management invited to provide feedback on current systems. systems, electronic locking systems, energy Funding IT purchases and keeping systems management systems and guest room technol- updated even when cashflow is tight is rec- ogy to make their operations more efficient. ommended to prevent an organization from The hotel industry, therefore, has, over time, falling behind. moved higher and further to the right of the There are many ways that enterprises matrix. See the case at the end of this chap- can use IT strategically. Some of the strategic ter about the Intercontinental Hotels Group’s applications of IT that will be explored fur- (IHG) use of IT for strategic purposes. ther in subsequent chapters include: The attractions sector is difficult to posi- tion since some attractions use technology 1. Managing value chains: value chains are intensely in their production (e.g. theme parks) activities, or series of activities, that create and whereas others use it hardly at all (e.g. nature- build value for destinations, intermediaries, sup- based attractions). Therefore, it is placed in the pliers or travelers. This can be done through middle of the production axis. It is also posi- the design of products and services or through tioned in the middle of the marketing axis. supply chain management. IT applications can The strategic management of IT is a neces- affect value chains by changing information sary part of the competitive profile of a tourism and distribution channels, and making them organization. It will not bring the organiza- more accessible and transparent, thereby gen- tion maximum benefits if simply applied to erating more profit. For example, new IT operational problems without a systematic developments have had a substantial impact approach (Poon, 1993). First and foremost, on the tourism distribution system over the there must be a commitment from top man- last 20 years. agement to support the implementation of IT 2. Managing knowledge: the expert man- by giving it adequate resources and creating agement of information and data resources is a corporate structure to maximize its imple- essential for success. Knowledge management mentation. Chief Information Officer (CIO), systems in tourism involve the sophisticated Information Technology (IT) Director and use of computers to generate information that Innovation Manager are increasingly common can be used in decision-making. Computer

14 CABI TOURISM TEXTS Chapter 1: Introduction to Tourism and Information Technology technology offers huge potential in this area. 5. Strategic listening: part of an organiza- Database management systems can store and tion’s success is based on listening to employ- process millions of customer records, accounts, ees, customers, suppliers and competitors, product reviews, etc. to generate knowledge and this provides deeper understanding of that will guide strategic decision-making. how the organization can strategically change The term big data is relevant here. These are and move forward. It can provide more shared huge datasets that an organization can mine meaning and direction. IT is an excellent tool to for information with special software systems. assist in that listening process. As face-to-face They can be tapped to answer many questions meetings are not always possible, listening to assist the organization in its strategic thrust can be done by teleconference, smartphone or such as “Who are our high-value customers?” tablet, or in many other ways. Social media or “What are our emerging markets?”. provides new ways to access market intelli- 3. Marketing and competitive advantage: gence by monitoring blogs and other online the application of IT provides a strong com- media to understand more about customers petitive advantage in the areas of sales and and competitors. marketing. The use of electronic distribution channels, social media platforms and other innovations connect the supplier with new CHAPTER OUTLINE and different markets. In other operational areas, organizations can be early adopters of In order to give the reader a clear map, this technology for competitive advantage. Examples book is organized into five main sections as are hotels installing self check-in terminals, shown in Fig. 1.2. The first section entitled airlines offering mobile boarding passes or Understanding Tourism IT includes the first destinations using GPS systems to guide the two chapters. They lay the foundation for the tourists to the key sites. rest of the book by introducing the reader to 4. Service delivery and customer relation- basic IT concepts and to the uniqueness of ship management: because of the unique tourism information systems. In Chapter 2, characteristics of the tourism experience, entitled The Digital Tourism Landscape, the knowledge about tourists’ needs, wants and scope of digital technology and how it is expectations is an important part of effec- influencing tourism is presented. A model of tive service delivery. Customer relationship electronic consumer access to travel informa- management (CRM) is a business philosophy tion is also described in this chapter. that focuses on the consumer and attempts to The second main section of the book create a meaningful relationship with them. relates to The Trip and constitutes the main This is most effectively done through a large part of the text. It is here that we examine organization-wide database (containing data how technology is used and impacts upon on customers, their buying habits and needs) the pre-consumption, consumption and that helps tourism suppliers to build a rela- post-consumption stages of the travel expe- tionship with the customer by understanding rience (Gretzel et al., 2006). Part II is enti- their needs and providing superior customer tled Looking and Booking and examines how service. tourists search for information and book their

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PART I: UNDERSTANDING TOURISM IT CH 1 Introduction to Tourism and IT

CH 2 The Digital Tourism Landscape

THE TRIP

PART II: LOOKING AND BOOKING CH 3 Travel Intermediaries and IT

CH 4 The Internet and the Tourist

CH 5 Social Media and Tourism

PART IV: STAYING AND PLAYING PART III: TRAVELING CH 9 Hospitality Information Systems CH 6 Mobilities and IT

CH 10 Technology Enabled Visitor Experiences CH 7 Aviation and IT Destination Management and CH 11 Smart Destinations CH 8 Surface Transport and IT

PART V: ISSUES AND TRENDS CH 12 Sustainable Tourism and IT

CH 13 The Future of IT and Tourism

Fig. 1.2. Outline of chapters.

trips. Chapter 3 covers the travel distribution the home region to the destination region. process and the various travel intermediar- The first chapter in this part will address the ies that exist today and how they have been very important topic of mobile technologies influenced by IT. Chapter 4 discusses the in the context of tourism. The second chapter Internet and the ways that tourists can use it in this part is devoted to IT and the aviation to enhance their trip. It also covers different industry. IT is used aggressively by most air- types of travel organizations that have a pres- lines in many parts of their operations. The ence on the Internet. Chapter 5 is devoted to final chapter in this part will cover the use social media and its use by the different tour- of IT by other transportation modes, such as ism stakeholders, with a particular focus on rail, road and water transportation carriers. assisting tourists in their information search Part IV, the last in the section entitled and their options in making reservations. The Trip, details how IT influences ‘staying Part III of the book picks up the next and playing’ at the destination. In particular, part of a typical trip, which is the travel from the influence of IT on the hospitality sector is

16 CABI TOURISM TEXTS Chapter 1: Introduction to Tourism and Information Technology discussed in Chapter 9. This includes accom- chapter has described various models of how modation in all its varieties as well as foodser- technology is adopted by organizations in vice operations. Chapter 10 covers the ways general. It goes on to explain the uniqueness that IT affects the tourist experience, such as of the tourism industry, its characteristics and leisure experiences, entertainment and attrac- size that make it such a heavy user of informa- tions. Chapter 11, the last in this section, tion technology. The ways in which technol- is devoted to the use of IT by destinations ogy can be used strategically in tourism is also including destination management systems. discussed. The chapter ends with a schematic The final part of the book, entitledIssues diagram explaining the layout of the book. and Trends, analyzes the most important issues and trends that are influencing the application KEY TERMS of IT to tourism. The first chapter in this sec- tion, Chapter 12, picks up on the increasingly artificial intelligence (AI), big data, convergence, important but less researched theme of sus- destination, dynamic information, experience, tainability and tourism IT. The last chapter expert system, heterogeneity, information systems, (Chapter 13) examines other emerging trends information technology (IT), inseparability, in the future of IT and tourism. These include intangibility, integrated circuit, intermediary, societal, economic and technological trends. Internet, Internet of Things (IoT), interoper- Most chapters in the book have case ability, knowledge management, microcom- studies of tourism applications with questions puter, microprocessor, mobile phones, Moore’s for learners to consider. There will also be spe- Law, perishability, personal digital assistant cial insights based on the work of research- (PDA), product, service, smartphone, space-time ers in the particular area of tourism IT. In collapse, static information, strategic listening, some cases, chapters will also include special supplier, transistor, traveler, ubiquitous com- insights of industry applications. Each chap- puting, Web 1.0, Web 2.0, World Wide Web ter will conclude with important key terms (WWW) and discussion questions. Much information is available from the web on each topic, and so a list of important websites related to the DISCUSSION QUESTIONS chapter topic is included. 1. In your opinion, what are the three most important inventions that have led to the infor- SUMMARY mation technologies we have available today? Provide examples to justify your answer. This chapter has introduced the reader to the 2. Why is tourism such an information-inten- basic background of information technology, sive industry? Explain and give some examples. its development and evolution over the centu- 3. What is the difference between static and ries and its status today. Aspects of computer dynamic tourism information? Give examples hardware and software have been described, of each. giving the reader an understanding of the 4. A hotel manager asks you why she should scope of this important phenomenon. The incorporate more technology into her hotel.

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How would you respond to this question so strategic applications discussed at the end of that the hotel is inspired to invest? the chapter would it fit into? 5. Identify one travel organization in your 6. Which part of the textbook (based on the area that you think has used technology in diagram of the chapters) are you most looking a particularly creative way. Which of the forward to studying? Why?

USEFUL WEBSITES

QR Code Website Description Eye for Travel Industry information about IT http://www.eyefortravel.com/ and travel. Includes sections on mobile technologies, social media and marketing, revenue and data management, and distribution strategies International Federation Website of the only for Tourism and Technology international association on http://www.ifitt.org/ tourism technology. This association also hosts the annual ENTER conference

International Hospitality iHITA is a global association of Information Technology educators and practitioners Association seeking to advance the use of http://hita.camp7.org/ IT in the hospitality industry through education and research

Tnooz News and updates about IT and http://www.tnooz.com/ travel

Travel Technology Initiative TTI coordinates technology and http://www.tti.org/ business projects and works to establish technology standards within the travel industry

18 CABI TOURISM TEXTS Chapter 1: Introduction to Tourism and Information Technology

Case Study: Intercontinental Hotels Group Hotels are often criticized for not using IT as strategically as other industries. There are exceptions to this and one of the world’s largest hotel chains, Intercontinental Hotels Group (IHG), has invested heavily in its strategic use of IT. IHG owns seven large interna- tional hotel chains including Crowne Plaza, Holiday Inn and InterContinental Hotels. It has a total of 4503 hotels and 656,661 rooms, and is strongly committed to the strategic use of IT for its competitive edge. IHG has appointed a Chief Information Officer (CIO) and spends about US$200 million, annually, on IT innovations, or about 1.2% of its revenue. The organization is always looking to IT for new ways to innovate. It is passionate about making hotel guests “the center of our universe” and this is the focus of all the company’s strategic innovations. The company has designated one of its properties as the test bed for new technologies that can help achieve this aim: The Atlanta Crowne Plaza Hotel in Atlanta, Georgia, has a huge customer database holding 200 million guest profiles. When integrated with other systems in the hotel, the system can analyze customer activity, trends and preferences. The technology is more advanced than most hotels and will process requests more rapidly because IHG has developed its own search technology called BOSS, which will soon be integrated with Google, providing GPS support and voice search. In the lobby of the hotel, guests can access airline flight boards and touchscreen PCs to check flights and search for local amenities. IHG is also strategically innovating in the area of mobile technologies. It is experiencing a 400% increase in the number of hotel rooms booked with mobile phones and has therefore created apps for both iPhone and Android. With these apps guests can check availability, make a reservation, check themselves in and even unlock their rooms. Another strategic initiative involves the concierge staff, which now uses iPads to access information for their guests. This unleashes them from their desks so that they can engage more dynamically with hotel guests in different parts of the hotel. An application currently being developed by IHG is the ability for the concierge to create a sightseeing itinerary of the area where the hotel is located and to transmit this to a guest’s mobile device. IHG is also innovating strategically with its commitment to cloud computing for many of its operations. It is building a private cloud environment called Camelot to move its core customer relationship management (CRM) systems off its mainframes and onto industry-standard equipment. IHG's loyalty program, its analysis of current guest activity information and historical records, and its system for sending promotional material to individual guests run on Camelot. IHG is working on also using Camelot for its revenue management and room yield system that determines room rates. It is using public cloud infrastructure for application development and testing, and also to host web content accessible by customers worldwide. It is also evaluating moving key proprietary systems, such as room reservation software, into the Cloud. (Continued )

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Case Study. Continued. (Adapted from Babcock, C. (2011) Four companies getting real results from cloud computing. Information Week, 15 January.) Study questions 1. Evaluate why the volume of reservations from smartphones has increased so rapidly. What future opportunities do smartphones offer to hotels? 2. Download the IHG app on to your smartphone and evaluate its features. Choose ­another app from a competing hotel chain and compare the features with IHG’s. Are there any features you would add? 3. Explain how the Cloud will help IHG with its operations. What are the benefits of cloud computing compared with having all systems stored on local computer hardware? 4. Visit the IHG website and read about their strategies. Evaluate how IT supports their strategic vision. How else can IHG innovate with technology to support their strategies? Compare the IT strategies of two other major hotel chains. Which do you think is most ­innovative and why?

REFERENCES

Babcock, C. (2011) Four companies getting real results from cloud computing. Information Week, 15 January. Buhalis, D. and Law, R. (2008) Progress in information technology and tourism management: 20 years on and 10 years after the Internet – the state of eTourism research. Tourism Management 29(4), 609–623. Cash, J.I., McFarlan, F.W., McKenney, J.L. and Applegate, L.M. (1992) Corporate Information Systems Management: Text and Cases. Irwin, Boston, Massachusetts. Cleveland, H. (1985) The Knowledge Executive: Leadership in an Information Society. Truman Talley Books, New York. Daintith, J. (2012) A Dictionary of Physics. Oxford University Press, Oxford, UK. Drucker, P. (1990) Managing the Non-Profit Organization. HarperCollins, New York. Dutta, S. and Bilbao-Osorio, B. (2012) The Global Information Technology Report 2012: Living in a Hyperconnected World. World Economic Forum and INSEAD, Geneva, Switzerland. Gee, C.Y., Makens, J.C. and Choy, D.J.L. (1994) The Travel Industry, 2nd edn. Van Nostrand Reinhold, New York. Gretzel, U., Fesenmaier, D.R. and O’Leary, J.T. (2006) The transformation of consumer behaviour. In: Buhalis, D. and Costa, C. (eds) Tourism Business Frontiers. Elsevier, Burlington, Massachusetts, pp. 9–18. Jordan, J.M. (2012) Information, Technology and Innovation: Resources for Growth in a Connected World. John Wiley and Sons, New York. Loten, A. (2017) Digital business, software drive IT spending growth. Wall Street Journal. Pine, B.J. and Gilmore, J.H. (1999) The Experience Economy: Work is Theatre and Every Business a Stage. Harvard Business School Press, Boston, Massachusetts. Poon, A. (1993) Tourism, Technology and Competitive Strategies. CAB International, Wallingford, UK. Prahalad, C.K. and Ramaswamy, V. (2004) Co-creation experiences: the next practice in value creation. Journal of Interactive Marketing 18(3), 5–14.

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Schertler, W. (1994) Tourism 2000: an information business. Paper presented at the Proceedings of the International Conference on Information and Communication Technologies in Tourism, Vienna. United Nations World Tourism Organization (2016) Why tourism? Available at: http://www2.unwto. org/en/content/why-tourism/ (accessed 8 June 2018). United Nations World Tourism Organization (2017) UNWTO Tourism Highlights 2017 Edition. UNWTO, Madrid, Spain. Valacich, J.S. and Schneider, C. (2014) Information Systems Today, 6th edn. Prentice-Hall, Englewood Cliffs, New Jersey. van der Meulen, R. (2017) Gartner says 8.4 billion connected “things” will be in use in 2017, up 31 percent from 2016. Gartner Newsroom.

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