The intense competition between corporations, due to globalisation, has influenced every industry in the world. The tourism and hospitality sectors are facing a similar intense competition between various companies and countries. The success of modern tourism organisation depends upon the successful implementation of the latest technology in their operations. Many states are also implementing modern technology into various tourist destinations to provide a better experience to tourist. The information technology has changed multiple aspects of tourism sectors including the use of internet in reservation systems, mobile communications, computer programs and much more. The latest technology benefits customers by providing them a constant and streamlining hassle-free experience from booking to checkout. These technological modifications have augmented the growth of tourism industry. This report will focus on analysing the influence of information technology over the tourism sector. Further, the report will evaluate positive and negative factors of technology in the tourism industry.
The travel and tourism industry is significantly more substantial regarding revenues; it is one of the largest sectors regarding global economic contribution. As per Statista 2017, the tourism industry contributed more than US$7.61 trillion in 2016 financial year, and the income was more than US$1.22 trillion. In case of Australia, the tourism industry makes about 3 percent of the country’s GDP, and it contributed more than AU$47.5 billion. Till June 2017, travels has spent a record of AU$40.6 billion in the tourism industry of Australia; this number has increased by 7 percent. The Australian travel corporations have welcomed more than 8.5 million foreign travelers till June 2017; the number of travels has grown by 8.9 percent in Australia (Tourism Australia 2017). The tourism industry is proliferating with the introduction of modern technology; the internet has changed the method of travel for peoples. Modern travel organisations are under constant pressure from competitors to update their facilities with advanced technology for successful development (Deery and Jago 2009).
The information technology is the implementation and examination of various systems which include computers and telecommunications, for storing, recovering and distribution information. As per Buhalis and Law (2008), this field contains design, support, and management of database systems which collect the data from various users; such data use by computer specialist and experts into forming multiple strategies. Information technology has changed the method of data collection sources and marketing strategies for corporations. Organisations use IT procedures to collect the data of from their targeted customers, and their marketing strategies are also customised according to their consumer’s requirement. These companies use social media sites, data collection centers, artificial intelligence algorithms and other internet services to collect such data and implement their strategies. The tourism industry also uses a similar procedure for reaching targeted customers
Modern technology influence the method of business operations in every industry, the market has to change its operation according to the latest technology. Though the ages, the progress of technology has developed the tourism industry. The implementation of computer technology can be divided into three main parts which include operations, guest facilities, and management information (Smith n.d.). Following are few examples of a most recent technology which assists in the growth of tourism sector.
The development of web and internet-based serviced has influenced every industry in the world; the internet has also modified the process of traveling. According to Litvin, Goldsmith and Pan (2008), use of web-based services has affected all three essential part of tourism series which include operational, guest facilities and administrative information. The internet is an interactive medium, which benefits customers by diminishing the traditional one-way communication with travel agencies. Tourism companies use the internet to provide their customers various services such as reservation, checkout, payment, verification and much more. Many traveling experts use online websites, blog or social media sites to provide necessary information regarding traveling which can be used by customers to improve their experience. Organisations collected data through multiple websites and social media networks, which assist them in researching analysing the purchasing and traveling behaviour of their customers (Leung and Buhalis 2009).
The cutting age development in the latest technology such as location services, Geo-tagging, and online mapping is enabled through mobile services. Eriksson and Strandvik (2008) depicted that these services offer various benefit to the travelers at their particular tourist destination. The personal assistance is another latest technology which is evolving with time to assist travelers in their journeys by providing quick services such as language translation, currency convert, online searches and much more. The travelers can have a smooth and safe traveling experience by using these facilities, and they also benefit them by providing an excellent offer and resourceful deals regarding traveling.
The internet websites have dominated the reservation procedure. As per the study of Travel Weekly (2012), more than 80 percent of the traveling booking happened through online portals. The customers can book flight tickets, train tickets, bus tickets, and hotel reservation through online websites. It has become mandatory for tourism corporations to provide their services through online sites. Many new online sites have dominated the traveling industry such as Orbitz, Expedia, MakeMyTrip, and Thomas Cook. Even the government department is providing their tourism services online, for example, customers can check travel destination, check ticket prices, and book ticket through online portals of governments.
The popularity of social media websites has grown significantly in past decade; more than 2.46 billion people use social media sites. As per Xiang and Gretzel (2010), these websites are the primary source for traveling sites to collect the information of peoples. People use social media sites to follow their favorite holiday destinations, share their traveling interest with friends & family and also collect necessary data regarding traveling agencies. Therefore, Tourism Corporation prefers to market their products over social media sites to reach a broader and interested audience. Travel agencies can use the data collected through social media sites into forming new strategies for their marketing plan. Social media also benefit corporation in interacting with their audience; the customers can file their quarries and get instant feedback through online portals of the firms.
Modern organisations implement the data of IT into their marketing strategies to target specific demographic. The companies collect data of various customers based on their age, gender, interest, preferences, and financial position to specifically target a group for advertisement. According to Middleton et al. (2009), the place for marketing has changed with time; Tourism corporations use social media websites and other online platforms to market their products. This strategy assists them to reach a broader audience who is also interested in their products and services. Online marketing includes advertisement through electronic posters, videos, online directory entries and much more.
The primary reasons for the growth of tourism industry are the implementation of IT strategies by traveling corporations. Following are some examples of the advantage of using IT in the tourism sector.
The primary benefit of technology in every sector is that it assists in simplifying the procedures. In case of the tourism sector, customers and corporations use technology to make their process more comfortable. As per Hjalager (2010), people can use online websites or smartphones to collect the necessary data for their traveling requirements and book their tickets. Booking tickets and making reservations has become more comfortable as well due to the implementation of technology. Banks also offer the facility to their user to make payment online through their portals, which reduces the lines in the banks.
The implementation of information technology has profoundly affected the business procedure of tourism corporations. According to Pesonen and Horster (2012), the popularity of vertical portals has redefined the process of travel agencies; most of the customers use these portals for last minute reservations or flight bookings. Large organisations such as British Airways have implemented e-commerce applications for their customers which allow them to access their reservations systems directly. Therefore, customers can do flight searches and choose between various options provided by the corporations, and finally, the users can make a purchasing decision. The internet offers high-quality information to users in a shorter period, and it allows enterprises to provide their services 24*7 for 365 days.
Every aspect of tourism sector has been influenced by the implementation of information technology which assists in the growth of the business. Information technology assists in the progress of large corporations as well as small business. Usually, large companies such as Expedia or MakeMyTrip target their services to a broader audience which require them to provide their packages at various price points. To offer their services at lower prices, these corporations contract with small firms which provide low-cost facility to travelers. Online websites listed the booking of small hotels to attract such customers which did not prefer to invest heavily in their travel; therefore, technology is beneficial for both small and large businesses (Xiang, Magnini and Fesenmaier 2015).
Modern organisations use information technology to collect and analyse the data of their customers to understand their traveling preferences. According to Dwyer et al. (2009), the traveling corporations accumulate the data from social media websites and other online sources to research their preferences. The customer’s information includes details such as web searches, liked pages, followed destination and most shared locations. The corporations hire professionals to conduct research upon the customer’s data and prepare strategies according to their requirements.
The latest technology such as artificial intelligence or machine learning can be used by corporations to predict the future need of their customers. For example, by online searches and social media data of a person, the travel agencies can customise their package according to him. The financial position, family details and marital status of a person also assist travel agencies in prepare tailored holiday packages, which encourage customers into buying such deal.
The traveling corporations receive various advantages by implementing information technology in their business, but it has numerous disadvantages as well. Following are few examples of shortcomings of information technology in traveling sector.
The use of information technology assists online services such as Expedia and Thomas Cook to reach a broader audience. Most people use online services which negatively affect the business of offline corporations. In recent times, the growth of travel agencies depends upon the number of online services provided by them. Thomas, Shaw and Page (2011) provided that most of the small business has to accept the terms and conditions of large online companies to remain in business. The small traveling agencies did not have resources to implement information technology into their business which makes it easier for large companies to apply their conditions upon them. The technology has swiftly changed the procedure of tourism businesses; therefore, many of the small agencies are out of work because the customers use online services.
The implementation and usage of information technology for research and marketing purposes require significant expenditure by the corporations. The technical parts needed in the utilization of information technology, such as computer hardware, software, programs, and servers, are considerably high in cost. As per Murphy (2013), the rates of the computer have reduced in the past few years but latest technology, such as machine learning, top processing computer, and artificial intelligence, has significantly high prices. Therefore, most of the small businesses are not able to implement latest information technology into their procedures, and only large corporations with high capital are taking advantage of information technology.
For effective implementation and usage of information technology in business, the corporations are required to hire an employee with specific technical knowledge. As per Nahvi (2014), the business owners did not know the utilization of modern technology; they are expected to learn the software or hire the people who are professionals. The organisations have to pay high salaries to the information technology experts which increase the expenditure of business.
The corporation which implement information technology in their business procedure is vulnerable towards the risks of cyber attracts. Hackers and cybercriminals attack over the data of traveling companies, to collect information regarding their customers. For example, in February 2017, Association of British Travel Agents online accounts were hacked by cybercriminals. The company reported that more than 43 thousand accounts were affected by the attack which leaked personal data, passwords and contact details of their users (Morley 2017).
For augmenting the growth of tourism industry, the corporations can efficiently implement information technology in their business procedure. Before establishing an IT structure, it is necessary that the companies must analyse their requirement and then prepare a plan for efficiently use IT in their business. The government should assist small businesses in the proper implementation of IT because they do not have resources to implement that by themselves. The progress of small travel agencies can increase the growth of national income of a country.
Conclusion
In conclusion, IT has a significant role in the augmented growth of tourism sector. The traveling corporations use the latest technology to improve their business processes and the experience of their customers. The enterprises use global distribution system, computer relationship management, flight tracking software, social media profiles, mobile applications and many other technologies to improve their process. The benefit of using IT in business includes simple procedures, faster growth, a better understanding of customer’s requirements and much more. Implementation of IT has numerous shortcomings as well such as high cost, loss of small firms business and other security threats. For efficient use of IT in the tourism sector, the corporation should analyse their requirement before implementing the latest technology. The government should support to small traveling firms by providing the most recent technology because they benefit the countries national income and it will assist in the growth of tourism sector.
References
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