Internet + Tourism

In the tourism industry, with the introduction of the first Computer Reservation System (CRS) in 1950s by American Airlines for the travel industry, whereby helped airlines manage and sell their own seats availability, allowing individuals, businesses and travel agents to buy in a single electronic marketplace making the travel industry one of the first industry doing business electronically (Copeland & McKenney, 1988; Smith, Günther, Rao, & Ratlife, 2001). Now airlines use the internet as a main distribution channel for direct sales and customers use the internet to book travel tickets, hotel accommodations, dinning, recreation, car rental, etc. The internet “has become one of the most successful channels used by consumers to research travel options, compare prices and make reservations” (Collins, Buhalis, & Peters, 2003).

The internet used as a source of information has revolutionized the way people travel, resulting in new business models. In the traditional travel industry travelers obtained information about tourism destinations through travel agents, now travelers can use the internet to gather comprehensive and relevant information, compare prices and purchase their own products eliminating a reliance on travel agencies (Lang, 2000). Law, Leung, and Wong (2004) claimed that

“The successful factors for a travel Web site, from a supplier’s perspective, are lower distribution costs, higher revenues, and a larger market share. For travelers, the Internet allows them to communicate directly with tourism suppliers to request information, and to purchase products/services at any time any place”. With the proliferation of the World Wide Web (WWW) in the 1990s, the number of consumers connected to the internet has increased this has made that most tourism organizations such as travel agencies, airlines and hotels have adopted Internet technologies as part of their marketing and communication strategies (Buhalis & Law, 2008). The benefits provided by the Web has allowed that travel companies’ websites offer new value-added services, being online booking the most important value-added service perceived by the customers, followed by price comparison, location map, e-mail contact, search engine and booking forms (Lexhagen, 2004).

The rise of Web 2.0, also referred as Travel 2.0, has brought to customers the ability to interact in a social networking platform and share their experiences, opinions, photos, comments and even rate tourism attractions, on the other hand travelers who have never been to those destinations before can make use of the information supplied by other people through social networking sites on the internet (Saranow, 2004). Social networking has created new types of travel cyber intermediaries “that provides Internet users with the tool to create an online itinerary, share it and e-mail it to friends travelling with them, others can edit it and/or provide feedback, achieve a consensus and finally, enable them make the group booking” (Sigala, 2007). This new phenomenon has brought the development of new business models, where companies can use these communities

to acquire customer data and information for improving business efficiency and performance, as well as interacting with customers to generate and evaluate new ideas, design and test new products (Sigala, 2012). In a study released by Expedia Media Solutions (2013) shows that consumers are spending more time visiting websites to plan their travels, an average of 38 travel sites, starting a full 45 days prior to the actual booking date. On the day of the booking, these travelers visited about 16 websites overall, including nearly five to travel websites.

Millennials are travelling more than other generations. Globally, those travelers aged 18-30 are travelling on average 4.7 times a year for business, compared to 3.6 times among those aged 30-45 and 4.2 times among those aged 46-65. Millennials also travel on average 4.2 times a year for leisure, compared to 2.9 and 3.2 times per year respectively for the older segments. Millennials assign greater importance to personal experiences, more than three in four millennials (78%) would choose to increase their spending on experiences rather than physical things (Eventbrite, 2014), 40 percent of them share a trip on social networks while travelling compared to 34 percent of those aged 31 to 45 and 23 percent of 46 to 65 year olds. And 34 percent of them share information of their trip, compared to 26 percent and 19 percent respectively (Expedia, 2013). According to a study conducted by PhoCusWright reveals that 53 percent of TripAdvisor users said they won’t book a hotel if it has no reviews, 87 percent of travelers after reading the reviews they feel more confident in their decision and 98 percent said they find them to be accurate of the actual experience, 84 percent of travelers agreed that appropriate management responses to bad reviews “improves travelers’ impression of the hotel”. Travel companies need to better use the Internet technologies to capture the attention of this new market.

The Internet technology, especially the mobile internet, has changed the tourists’ travel behavior, this new tendency has given rise to new travel companies, known as Travel Tech Companies. According to CB Insights, Travel technology startups raised more than US$5.4 billion across 348 deals in 2015, which is up 42% over the 2014 full-year total. While San Francisco-based accommodations service Airbnb has raised more than US$3 billion in equity since 2011, China-based online vacation rental services Tujia attracted a US$300 million funding round, China-based mobile flight-booking service “Huoli” and India-based hotel-room booking service Oyo Rooms also generated funding rounds of US$144 million and US$100 million, respectively (CB Insights, 2015).

New startups as the Taiwanese startup, “HelloWings”, which is a search and comparison service for low-cost airline tickets, it claims to offer suggestions and price comparisons much faster than other online services. Its proprietary tech shows full-year, real-time, and tax-included prices, on a simple chart and suggests the cheapest routes. It aimed at short-haul travelers as students and backpackers that want to save money and willing to wait or transfer flight (Tegos, 2016). Besides booking an air ticket and hotel accommodations, another problem that needed to be solved is the question “what do I do once I get there?” that many travelers ask when they are not familiar with

the destination, “Vayable” attempts to provide a solution to that problem. Vayable is a startup established in 2011, the biggest feature is to allow locals to become a tour guide, no matter what is their background, as long as they understand the local culture and customs, locals can join and become an “Insider”. The “Insiders” charge fees to create tailored itineraries and act also as agents helping to book all parts of the trip. Travelers fill out a short survey to gauge their interests and travel style, and then get paired with a Vayable travel guide based in their destination. Travelers pay a US$45 fee for deposit and travel guides charge whatever they think is fair. Vayable drummed up US$2 million in funding, and has expanded to 850 destinations around the world with a roster of 5,000 guides (Zax, 2014). Below Table 4 shows some literature and studies about Internet Plus Tourism.

Table 4: Literature Review about Internet Plus Tourism Author Title of the Research Study Abstract

Abou‐Shouk,

Lim, and

Megicks (2013)

Internet adoption by travel agents: A case of Egypt

“The study explores the Internet adoption of the Egyptian TAs, patterns of usage and perceived benefits and barriers of e-commerce adoption. It is found that the majority of TAs use the Internet to provide TA’s information, find out about customers and competitors.” play in more collaborative and dynamic travel decisions to facilitate sustainable travel.”

Guo, Liu, and Chai (2014)

The embedding convergence of smart cities and tourism internet of things in China: An advance perspective

“This research determines the current status and development potential of smart tourism in China, and offers recommendations for their applications in China.”

“This paper aims to focus on the reason why hoteliers choose to be present in online travel agent (OTA) and social media web sites for sales purposes. It also investigates the technological and human factors related to these two practices.” wealth of research published in major tourism journals over the past 10 years to identify major areas of focus and gaps in the research landscape related to the Internet in tourism.”

Chung and Koo The use of social media in travel “This paper examines the travel information

(2015) information search searches using social media as a new search

“This study describes important changes taking place in the use of the Internet by American travelers. The results point to a number of key trends in travelers’ use of the Internet and suggest that there is a growing

“bifurcation” between traditional online travelers.” the theoretical discussion to the practical case, the author systematically collated the existing traditional tourism by using the internet thinking, and discuss the integration of traditional tourism and Internet. The author also observes the characteristics of custom tourism, platform tourism and social tourism from the angle of industry innovation.”