「互聯網＋」觀光產業發展策略之研究-以探討尼加拉瓜觀光產業網路採用影響因子為例

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(1)國立臺灣師範大學管理學院全球經營與策略研究所碩士論文 Graduate Institute of Global Business and Strategy College of Management National Taiwan Normal University Master Thesis. 「互聯網＋」觀光產業發展策略之研究-以探討尼加拉瓜觀光產業網路採用影響因子為例 Research on Industrial Development Strategy for “Internet Plus” Tourism: A Case Study of Understanding the Factors Affecting Internet Adoption in Nicaragua’s Tourism Industry. 學生姓名: 裴儒亦 Student: Luis Enrique Peralta López. 指導教授: 董澤平博士 Advisor: Dong, Tse-ping Ph.D 中華民國 106 年 5 月 May, 2017.

(2) . Acknowledgment First of all, I thank God for giving me the opportunity to come to Taiwan seven years ago and to be trained academically, in this country I not only obtained a bachelor’s degree, but also now I will obtain a master’s degree. I also thank the Government of Taiwan for the scholarship offered when I was studying the university, if it had not been for the friendship ties between Taiwan and Nicaragua, today I would not have this academic success. I also thank God for the health he has given me all these years away from my country and my family. I thank my mother and father for the undeniable support, who even without being at my side, have advised me and supported me in these years from a distance. I would also like to thank all my faculty professors because they all contributed with a grain of sand to my academic training. Likewise thank Professor Yen-Chun Jim Wu (吳彥濬), for helping me with the idea of the thesis and also for his advice at the beginning of this research. I am also grateful to my advisor, Professor Tse-Ping Dong (董澤平), for his patience, academic support, critical comments and advice during this study. It was a great pleasure to work with Professor Tse-Ping Dong (董澤平). As a result of the support from each teacher, today I am able to finish this research and acquire new knowledge that will help me in my new stage of life.. i .

(3) . Abstract For many developed and developing countries, tourism is not only an important source of foreign exchange, but also a source to create more jobs and attract more foreign investment, thus being a key sector to economic development and reduction of poverty. In the last ten years, Nicaragua has been emerging as a tourist destination and becoming well-known among international tourists, tourism’s business volume has now surpassed that of coffee, meat and seafood, becoming one of the major players in national economy. Nevertheless, this research based on a SWOT analysis found that there are several problems for the development of tourism and its promotion in international markets. They include: low-quality infrastructure, low-quality service, lack of a right marketing strategy, insufficient budget for promoting tourism and lack of diversification. This research reviews the literature about Internet plus and the factors affecting Internet adoption. Many developed and developing countries have been adopting IT technologies (especially the Internet) in the tourism industry for many years, such trend has revolutionized the way people travel by reducing the information asymmetry, improving labor productivity, enhancing resources’ use efficiency, resulting in new business models and creating a more competitive market. On the other hand, such technologies are not commonly used in Nicaragua, this research identifies the factors affecting the adoption of the Internet, including: low level economic development, low Internet penetration, low-level of awareness for new technologies, low level of education, shortage of qualified personnel, low level of digital literacy. This research also provides suggestions for the implementation of the Internet in Nicaragua’s tourism industry. Keywords: Internet plus, eTourism, Nicaragua, Factors affecting Internet adoption, SWOT analysis ii .

(4) . 摘要對許多已開發國家和發展中國家來說，觀光業不僅是重要的外匯來源，也是創造更多就業機會和吸引更多外國投資的來源，因此是經濟發展和脫貧的關鍵產業。在過去十年裡，尼加拉瓜漸漸成為觀光目的地，並提高其在國際旅客中的知名度，觀光業所創造的產值現已超過咖啡、肉類和海鮮，且扮演了國內經濟中的主要角色之一。然而，這項研究基於 SWOT 分析發現，觀光業的發展和在國際市場上的推廣存在幾個問題。其中包括：低品質的基礎設施、低品質的服務、缺乏正確的行銷策略、推廣觀光業的預算不足、缺乏多樣化。這項研究回顧了關於互聯網+的文獻和影響互聯網採用的因素。許多已開發國家和發展中國家多年來一直在觀光業採用資訊通訊技術（特別是互聯網），這種趨勢透過減少訊息不對稱、提高勞動生產率、提高資源使用率，進而改變了人們的旅遊方式、改變了商業模式和創造了更具競爭力的市場。另一方面，這種技術在尼加拉瓜普及率不高，本研究探討出在尼加拉瓜影響互聯網採用的因素，包括：低水平的經濟發展、低互聯網普及率、低科技意識、低教育水平、缺乏技術人才、數位素養水平低。這項研究為尼加拉瓜觀光業使用互聯網技術提供了建議。關鍵詞: 互聯網+，智慧觀光，尼加拉瓜，影響互聯網使用的因素，SWOT 分析 . iii .

(5) . Table of Contents Acknowledgment .................................................................................................................................. i Abstract ................................................................................................................................................ ii 摘要 ..................................................................................................................................................... iii Table of Contents ................................................................................................................................ iv List of Tables ....................................................................................................................................... vi List of Figures .................................................................................................................................... vii Chapter 1 Introduction ......................................................................................................................... 1 1.1 Motivation .................................................................................................................................. 1 1.2 Background ................................................................................................................................ 3 1.3 Research Questions .................................................................................................................... 5 1.4 Research Area ............................................................................................................................ 5 Chapter 2 Literature Review ................................................................................................................ 6 2.1 Internet Plus Introduction........................................................................................................... 6 2.1.1 Characteristics of the Internet Plus ......................................................................................... 8 2.2 Internet + Other Industries ......................................................................................................... 9 2.3 Internet + Tourism .................................................................................................................... 16 2.4 Tourism Development Strategy ................................................................................................ 19 2.4.1 Tourism Development Literature .......................................................................................... 19 2.4.2 Strategy Definition ................................................................................................................ 21 2.5 Factors Affecting Internet Adoption ........................................................................................ 23 Chapter 3 Research Design ................................................................................................................ 26 3.1 Research Methodology ............................................................................................................ 26 3.1.1 Conceptual Framework ......................................................................................................... 26 3.1.2 Research Procedure ............................................................................................................... 28 Chapter 4 Internet + Tourism: Mobile technology’s impact on travel ............................................... 30 4.1 Mobile Technology’s Impacts on Travel .................................................................................. 30 4.2 Transportation Apps ................................................................................................................. 33 4.2.1 Uber (USA) ....................................................................................................................... 33 4.2.2 Didi Chuxing (China)........................................................................................................ 34 4.2.3 BlaBlaCar (France) ........................................................................................................... 34 iv .

(6) . 4.3 Accommodation Apps .............................................................................................................. 35 4.3.1 Airbnb (USA) .................................................................................................................... 35 4.3.2 Couchsurfing (USA) ......................................................................................................... 36 4.3.3 Tujia (China) ..................................................................................................................... 36 4.4 Flight and Hotel Booking ......................................................................................................... 37 4.4.1 Qunar (China) ................................................................................................................... 37 4.4.2 Decolar (Brazil) ................................................................................................................. 37 Chapter 5 Analysis of the Tourism Industry in Nicaragua ................................................................. 38 5.1 Tourism in Nicaragua 1980-1990 ............................................................................................. 38 5.2 Creation of the Law of Incentives for the Tourism Industry .................................................... 39 5.3 Nicaragua’s Main Export Products .......................................................................................... 40 5.4 Nicaragua’s Main Tourist Market ............................................................................................ 43 5.5 Development of Community-Based Tourism in Nicaragua ..................................................... 45 5.6 Nicaragua Tourism Industry’s Achievements .......................................................................... 46 5.7 Tourism in Nicaragua During the Economic Crisis of 2008 .................................................... 47 5.8 Demand for Tourism in Nicaragua ........................................................................................... 48 5.9 Tourist Expenditure in Central America .................................................................................. 50 Chapter 6 Information and Communication Technology Development in Nicaragua ...................... 53 6.1 Internet Penetration in Nicaragua ............................................................................................ 53 6.2 Nicaragua’s Broadband Improvement Plan ............................................................................. 55 6.3 Level of technology awareness by SMEs ................................................................................ 56 6.4 Nicaragua’s Internet User Behavior ......................................................................................... 57 6.5 Nicaragua’s Mobile Market ..................................................................................................... 58 6.6 The Implementation of ICTs in Nicaragua’s Public Transportation System ........................... 58 Chapter 7 Results and Discussion ...................................................................................................... 60 7.1 Nicaragua’s Tourism Industry: SWOT Analysis ...................................................................... 60 7.2 Analysis of the Factors Affecting Internet Adoption in Nicaragua’s Tourism Industry........... 64 7.3 Research Contribution.............................................................................................................. 67 Chapter 8 Conclusion and Suggestions .............................................................................................. 69 8.1 Conclusion ............................................................................................................................... 69 8.2 Suggestions .............................................................................................................................. 72 . v .

(7) . References .......................................................................................................................................... 75 . List of Tables Table 1: Latin America and the Caribbean GDP Growth Forecast ...................................................... 2 Table 2: Internet Plus Definition .......................................................................................................... 7 Table 3: State of the art for Internet Plus in China ............................................................................. 10 Table 4: Literature Review about Internet Plus Tourism ................................................................... 18 Table 5: Tourism Development Literature ......................................................................................... 20 Table 6: Definition of the Term Strategy ........................................................................................... 22 Table 7: Literature Review about Factors Affecting Internet Adoption ............................................. 24 Table 8: Tourism and Main Export Products 1990-2000 ................................................................... 41 Table 9: Total National and Foreign Guests Requesting Accommodation 2005-2013 ...................... 42 Table 10: Tourist Arrivals and Annual Income in Nicaragua 2005-2015 .......................................... 49 Table 11: Profile of Tourists Who Visited Nicaragua in 2015 ........................................................... 49 Table 12: The Travel and Tourism Competitiveness Index 2015: Central America and Caribbean .. 50 Table 13: Nicaragua’s Tourism SWOT Analysis ............................................................................... 63 . vi .

(8) . List of Figures Figure 4: Share of Bookings by Device for Main Travel Categories................................................. 31 Figure 5: Arrivals of International Tourists by Mode of Transport and Main Tourist Markets of Nicaragua 2007 .................................................................................................................................. 44 Figure 6: International Tourist Arrivals to Central American Countries 2008-2009 (%) .................. 48 Figure 7: Income Generated by The Tourism Sector in Central America 2008-2009 (%) ................ 48 Figure 8: Average Daily Expenditure per Tourist in Central America in 2014 .................................. 51 Figure 9: Number of Households with Internet Access by country, .................................................. 54 Figure 10: Factors Affecting Internet Adoption in Nicaragua’s Tourism .......................................... 67 . vii .

(9) . Chapter 1 Introduction 1.1 Motivation Tourism in Nicaragua, despite being the least competitive in the region, tourist arrivals and receipts have been steadily growing, but the biggest challenge of tourism in Nicaragua is to diversify and improve the quality of supply, as well as improve infrastructure resorts and increase tourist expenditure. Average expenditure per tourist in Central America in 2014 was US$128, however according to Nicaragua Tourism Satellite Account published by the Central Bank of Nicaragua (BCN), the average spending by tourists who stayed overnight in Nicaragua decreased from US$41.8 in 2014 to US$41.5 in 2015, although the average length of stay increased from 7.7 days to 8.7 days, the average spend per visit in Nicaragua is well below half the average spending in Central America, which means that tourists are staying longer but consuming less (Banco Central de Nicaragua, 2015). Due to a decline in prices of raw materials and unfavorable weather conditions, it has caused a decline in the value of Nicaragua’s exports, for example, in 2015 exports decreased 7.72% in price and 4.80% in volume compared to 2014, which meant US$212 million less to the country’s economy, even foreign aid has decreased from US$1,409.5 million in 2011 to US$1,106.7 million in 2015. According to the World Bank, Central America will benefit due to a recovery in the economy of the United States and the fall in export prices of oil, and also will help to maintain a level of inflation below 6% (World Bank, 2016a), Table 1 shows a forecast made by the World Bank forecasting that Nicaragua’s economic growth will be one of the best in the region. . 1 .

(10) . Table 1: Latin America and the Caribbean GDP Growth Forecast 2013. 2014. 2015. 2016. 2017. 2018. Argentina. 2.9. 0.5. 2.1. -0.5. 3.1. 3.0. Belize. 1.3. 4.1. 0.9. 0.8. 1.8. 2.2. Bolivia. 6.8. 5.5. 4.8. 3.7. 3.4. 3.4. Brazil. 3.0. 0.1. -3.8. -4.0. -0.2. 0.8. Chile. 4.3. 1.8. 2.1. 1.9. 2.1. 2.3. Colombia. 4.9. 4.4. 3.1. 2.5. 3.0. 3.5. Costa Rica. 3.4. 3.5. 2.8. 3.3. 3.6. 4.0. Dominica. 1.7. 3.4. -4.0. 2.5. 2.0. 2.0. Dominican Republic. 4.8. 7.4. 6.9. 5.0. 4.3. 4.0. Ecuador. 4.6. 3.7. 0.3. -4.0. -4.0. 0.0. El Salvador. 1.8. 2.0. 2.5. 2.2. 2.3. 2.3. Guatemala. 3.7. 4.2. 4.1. 3.5. 3.5. 3.6. Guyana. 5.2. 3.8. 3.0. 4.0. 3.9. 3.8. Haiti. 4.2. 2.8. 1.2. 0.9. 1.9. 2.2. Honduras. 2.8. 3.1. 3.6. 3.4. 3.5. 3.5. Jamaica. 0.5. 0.7. 0.9. 1.5. 2.2. 2.6. Mexico. 1.4. 2.3. 2.5. 2.5. 2.8. 3.0. Nicaragua. 4.5. 4.7. 4.9. 4.4. 4.2. 4.1. Panama. 8.4. 6.2. 5.8. 6.0. 6.1. 6.2. Paraguay. 14.0. 4.7. 3.0. 3.0. 3.2. 3.4. Peru. 5.9. 2.4. 3.3. 3.5. 3.5. 3.2. St. Lucia. -1.9. -0.7. 1.6. 1.5. 2.0. 2.0. St. Vincent and the Grenadines. 2.3. -0.2. 1.8. 2.4. 3.1. 3.1. Trinidad and Tobago. 2.3. -1.0. -2.0. -2.0. 2.0. 2.5. Uruguay. 4.6. 3.2. 1.0. 0.7. 1.6. 2.5. Venezuela, RB. 1.3. -3.9. -5.7. -10.1. -3.4. 1.6. GDP at market prices (2010 US$). Bank (2016a) Source: World In a country where economy relies on agriculture, tourism in Nicaragua has become one of the main foreign exchange for the country, surpassing coffee revenues. Tourism in Nicaragua has a great potential, I believe that with the help of the Internet and digitization could raise its level of competitiveness. There have already been many developed and underdeveloped countries that are embracing Internet technologies, with the help of the Internet are generating new business opportunities, reaching more consumers, providing better value added and improving their services. The Internet has made the world flatter and more democratic by allowing instant access to information; the Internet has created more jobs, has increased standards of living, and has 2 .

(11) . contributed more to real economic growth. It has been claimed that the Internet is the greatest invention since the printing press and the telephone, because the Internet has a greater impact on society as compared to the printing press, the printing press ended handwritten books age and helped on the preservation and dissemination of knowledge. The Internet surpassed the way printing press spread information and communication, allowing people to get mass information in a matter of seconds. It has not been more than 20 years since the World Wide Web was released and we can’t imagine how our lives would be without the Web. We are living in the information age, where everything is digitalized, the Internet is revolutionizing every industry and it is changing all as we knew it before, especially with the introduction of Apple’s first iPhone in 2007, the internet and mobile revolution have a faster and wider spread than any other revolution previously. Before the mobile revolution, the only way to connect to the network was using a computer, now with smartphones (cheaper than a computer) we can connect anytime and anywhere. Before the Internet and mobile revolution, we make phone calls using telephones from home or office, now we can make free calls from our mobile phones connected to the internet, without paying a telephone bill anymore. With the creation of Wi-Fi networks across the country allow many consumers to cut off expensive Internet bills and could lower costs for schools and businesses and help tourists easily find tourist spots, the Internet is benefiting everyone in the society, especially the poor (Kang, 2013). The proliferation of smart phones has helped the development of any kind of application that make our lives more convenient, which has become an important strategy for every business since they can know more about the customer’s behavior through the data generated by the application. Smartphones are overtaking computers in traffic to online stores, accounted for 45.1 percent of web-shopping traffic and computers at 45 percent in the first quarter of 2016. It is projected that this figure will continue to increase, with phones accounting for 60 percent of e-commerce visits by the end of 2017 (Harty, 2016). According to a research made to young people aged 19-26 stated that they prefer TripAdvisor for planning their trips on mobile applications and use Skycanner application for purchasing their flight tickets, they find their ways around cities more easily with GPS, find cheaper tickets on mobile applications, read user comments before making hotel reservations, compare prices among hotels using mobile applications and that mobile applications have a great impact on tourism (Bicen & Sadikoglu, 2016).. 1.2 Background Tourism is undoubtedly a solution to the economic recession in recent years caused by the fall in prices of raw materials (ex, coffee, oil) in Latin America. Tourism industry has become one of the three main export products after fuels and chemicals and ahead of food and automotive in many countries worldwide. On the other hand, in many developing countries as Nicaragua, tourism has 3 .

(12) . become the first export product, which is generating more foreign exchange from year to year, creating more jobs and attracting foreign investment, thus being a key sector to economic development and reduction of poverty in Third world countries (Lickorish, Jefferson, Bodlender, & Jenkins, 1991). According to UNWTO, international tourist arrivals reached to 1,135 million arrivals in 2014 and forecast to increase to about 1,600 million tourists for 2020, furthermore tourism has generated revenues from US$475 billion in 2000 to about US$1,245 billion in 2014. Many developing countries have taken tourism as part of its policy of national economic development; tourism in comparison with the other industries does not suffer from any kind of trade barriers such as the imposition of tariffs or quotas. According to World Travel & Tourism Council, (WTTC), the total contribution of T&T to global GDP was US$7,170 billion (9.8% global GDP) in 2015, and is forecast to rise by 3.5% in 2016, on the other hand in terms of employment including indirect jobs, T&T Industry employment contributed almost about 283 million jobs in 2015, that is 1 in 11 jobs in the world (WTTC, 2016). Central America received 9.6 million tourist arrivals in 2014, which 1,329,663 tourists arrived in Nicaragua, an increase of 8.2% compared to 2013, generating US$445 million of revenues to the national economy. According to WTTC, T&T total contribution to employment, including indirect jobs, was a total of 212,000 jobs in 2014. In relation to tourist arrivals, compared to other Central American countries, Nicaragua is ranked in fifth place behind El Salvador, Guatemala, Panama and Costa Rica, and after Nicaragua followed by Honduras and Belize are the only two countries that did not reach one million of tourists in 2014, it is noteworthy that although El Salvador received 1,345,000 tourists, some 15,000 tourists more than Nicaragua, altogether contributed US$822 million to the country’s economy, almost double the amount than Nicaragua received, also it should be mentioned that Honduras with only about 868,000 tourists in 2014, earned an income of $630 million, a 42% more than Nicaragua received the same year. According to this simple fact we can observe that Nicaragua still lags far behind with the development of tourism, and it is not for lack of natural resources or tourist attractions, neither by its geographical position, therefore the government has the right to establish authorities, institutions and agencies that work efficiently aimed at the developing of the tourism sector, as well as implement new policies and laws that provide attractive incentives to investors, working with other countries to establish new direct air routes to the country and present itself as a country with better attractions and tourist destinations, offering better infrastructure and better services, as well as putting more emphasis on promoting the image of the country, try to correct falsehoods or stereotypes that the international community has about the host country, with the help of travel agencies, media, tourist magazines, marketing programs and embassies in other countries (Britton, 1979). In recent years, due to the growth of international tourism, the Government of Nicaragua has put great importance on tourism, for that reason launched a campaign named “Orgullo de mi país” in 2015, in order to promote tourism in abroad and increase awareness of the culture, gastronomy and tourist destinations, which is expected the arrival of 1.5 million foreign tourists, generating 4 .

(13) . about US$500 million in 2016.. 1.3 Research Question Tourism industry in Nicaragua has become one of the main industries that is generating more foreign exchange year by year. But one of the problem that Nicaragua’s tourism industry is facing is lack of competitiveness and promotion. Nicaragua compering to its neighboring countries provides almost the same tourism products, for example, beach, archeology, colonial cities, diving and Pre-Columbian history, it is also a country relatively cheaper and safer, but it has not been able to get the same amount of income and the same number of international tourist arrivals. One of the main problem is that the Institute of Tourism of Nicaragua has a shoestring budget for the promotion of the country in international markets, however in this digital era there are more tools whose marginal costs are nearly zero, we can see free online courses, people sharing free videos, music, information, people sharing cars, apartments, clothes at a nearly zero marginal cost. There are many developed and developing countries that are making use of these new technologies for their tourism marketing campaign and there are many new Travel Tech startups that are overstating by providing new creative services to customers. On the other hand, the tourism SMEs in Nicaragua hardly use these technologies and they ignore the benefits of the Internet. The purpose of this paper is answer the following questions: 1. What are the strengths, weaknesses, opportunities and threats of Nicaragua’s tourism industry? 2. What are the factors affecting the Internet adoption in Nicaragua’s tourism industry? 3. Does Nicaragua have the resources to implement an ICT plan in tourism industry? 4. If not, how can improve its actual situation?. 1.4 Research Area This study is based on the study of Internet plus tourism and the factors affecting Internet adoption in Nicaragua’s tourism, Internet plus and Internet plus tourism are the theoretical basis for this study. The research is aimed at collecting and analyzing data about the tourism development in Nicaragua, define its strength, weakness, opportunities and threats through a SWOT analysis and evaluate whether Nicaragua has or not the technology and resources to implement Internet plus in tourism industry, finally provide suggestions to improve the current situation. The research area of this study includes the follows: 1. Understand the influence of Internet in tourism. 2. Study the role of tourism development in Nicaragua. 3. Explain the factors affecting the adoption of Internet in Nicaragua’s tourism industry. 4. Explore the problems and shortcomings in the development of tourism in Nicaragua at present through a SWOT analysis, and put forward suggestions to implement the use of Internet plus for the improvement of the tourism’s service quality in Nicaragua. 5 .

(14) . Chapter 2 Literature Review 2.1 Internet Plus Introduction In the Fifth Mobile Internet Expo held in 2012, Analysis International for the first time put forward the idea of “Internet Plus”. This concept was also agreed by the China National People’s Congress and Tencent founder and CEO Ma Huateng. Furthermore, one of the most important proposals presented by Ma Huateng to the National People’s Congress is to adopt “Internet Plus” as a national strategy. Finally, in 2015 the Prime Minister of China, Li Keqiang, announced for the first time in the Report on the Work of the Government to deploy the implementation of the “Internet Plus” strategy. The report points out that the “Internet Plus” action plan for 2015 will provide more space for the integration of the Internet and various traditional industries including medical, education, logistics and finance, and will cultivate more new industries, creating a new growth engine and promote the transformation and upgrading of the economy. According Premier Li Keqiang “Internet Plus plan promise to integrate mobile Internet, cloud computing, Big data, and the Internet of Things with modern manufacturing, to encourage the healthy development of e-commerce, industrial networks, and Internet banking, and to get Internet-based companies to increase their presence in the international market” (Li Keqiang, 2015). What does Internet Plus mean? The Internet overall has changed every traditional industry, bringing new opportunities and new business models, having major impacts in education, retailing, manufacturing, advertisement, health care, tourism and other areas. According with The Internet in China White Papers, “The Internet is the crystallization of human wisdom, it is a significant technological invention of the 20th century and a major symbol of contemporary advanced productive force. The Internet has brought about profound impacts on the world economy, politics, culture and social progress, and promoted the transformation of social production, daily life and information dissemination” (State Council News Office, 2010). The Director of the State Council Research Office of China, Ning Jizhe, explained “We are living in the information age, the Internet age. The Internet is a tool that can be applied to many areas, applied to many fields, it has penetrated to economic, social, people’s livelihoods, military, political and cultural fields, that is the meaning of “Plus”, it can be added to any area”. For example, Internet plus advertisement sector created Google, Internet plus education sector created the most popular free encyclopedia Wikipedia, Internet plus retailing sector created Amazon, Internet plus telecommunication sector created Skype and WhatsApp, Internet plus tourism sector created TripAdvisor, the Internet can unstoppable continue to adding to other industries, that’s the power of the Internet Plus. In the next Table 2 shows the different definitions of Internet Plus.. 6 .

(15) . Table 2: Internet Plus Definition Version Official (百度百科, 2015). Definition “Internet Plus is aimed to deeply integrate Internet innovation achievements into all economic and social fields, propel technical progress, efficiency enhancement and organizational reform, enhance the innovative power and productivity of the real economy, and forms a more extensive new form of economic and social development with the Internet as infrastructure and innovation element.”. Ma Huateng (马化腾等人， “Internet Plus is based on the Internet platform, which enhance 2015) the cross-boundary integration of industries through the use of information and communications technology, propel the transformation and upgrading of industries, besides help uninterruptedly on the creation of new products, new business models and build a new ecological connection.” Alibaba (阿里研究院, 2015) “Internet Plus refers to the proliferation and application process of the Internet-based set of information technology (including mobile Internet, cloud computing, Big data technology, etc.) into all fields of economic and social life.” Robin Li ( 中国新闻网 , “Internet Plus program, I see it as an integration model of the 2015) Internet with other traditional industries. Over the past few years with the increase in the number of China Internet users, internet penetration is now close to 50%. Especially with the rise of mobile Internet, making the Internet able to generate more and more influence in other industries. We are very pleased to see that the Internet in the past couple of years once combined with many industries, it transforms them from rotten industries into something magical. Especially in O2O (online to offline) areas, for example the combination of online and offline.” Lei Jun (中國日報, 2015) “Premier Li Keqiang in the Report on the Work of the Government mentioned “Internet Plus”, which means how to use the Internet technology and the Internet thinking to combine with the real economy, to boost transformation, value-added and efficiency of the real economy.” Source: Extracted from 马化腾、张晓峰與杜军 (2015). . 7 .

(16) . 2.1.1 Characteristics of the Internet Plus According to 马化腾等人（2015）, the Internet Plus has six main characteristics: 1. Cross-boundary Integration, “Plus” itself is a cross-boundary, which means transformation, opening, integration; 2. Innovation-oriented, the Internet has the characteristics of innovation-oriented, using the Internet to change, self-revolution, but also to display a more innovative force; 3. Structure Reformation, information revolution, globalization and the Internet has broken the original social, economic, relationship, geographical and cultural structure, being able to reduce the transaction costs of the whole society, enhancing the operational efficiency and weakening the information asymmetry; 4. Respect for humanity, respect for humanity is the most essential culture of the Internet, because its most fundamental power originates from its respect for humanity, the awe of the user experience, and its concern for human creativity. Therefore, because it represents the integration of the Internet and traditional industries, human-centric product design and manufacturing is another feature of Internet Plus; 5. An open ecosystem platform, an open ecosystem platform is a very important feature of the “Internet Plus”, only through an open ecosystem we can reach integration, because in an open and shared innovation-driven ecosystem can dissolve barriers that restrict innovation and help us to find the similarities with other elements of the outside world; 6. Connecting everything, cross-boundary, integration and innovation all need connection, without connection there is no “Internet Plus”, because connection is the goal of “Internet Plus”. The Internet allows billions of people to interact in P2P social networks, connecting every human being in a global community, this platform turns everyone into a “prosumer”. According to Toffler “prosumers are people who produce some of the goods and services entering their own consumption. They can be found making their own clothes, cooking their own food, rearing their own cars, and hanging their own wallpaper” (Kotler, 1986). Prosumers are eager adopters of Web 2.0 products and services such as blogging, podcasting, video on demand, social networking, mobile communications, virtual realities, and other Internet-based technologies and services (Gerhardt, 2008). Prosumers are influencers; they not only produce and share free information, opinions, entertainment and opened online courses. As a result, their interactions open untapped markets to accelerate adoption of new technologies. Millions of prosumers are employing open-source software to create new learning tools, new forms of entertainment, and new software at a near zero marginal cost (Rifkin, 2014). Such is the case of Wikipedia, “its enormous and ever-expanding entries in a variety of languages could not be created and constantly revised and updated without input from large numbers of unpaid prosumers” (Ritzer, Dean, & Jurgenson, 2012).. 8 .

(17) . The Director of the Cyberspace Administration of China, Lu Wei, highlighted that the Internet is the biggest bright spot of the country’s economic growth, “Because of the sharing of the network, China has more than 700 million Internet users, which is more than twice the number of the entire U.S population, accounting for a quarter of the total number of Internet users. Because of the sharing of the network, China has 1.3 billion mobile phone users, 500 million Weibo users, 500 million WeChat users, more than 20 billion messages per day, the communication is in everywhere at any time. Because of the sharing of the network, China has more than 4 million websites; the Internet has become essential into people’s lives. Because of the sharing of the network, China's e-commerce economy is worth US$581.61 billion in 2015, surging 33.3% from the previous year, the contribution to economic growth rate is more than 10%, and it has already become the largest growth sector of the national economy” (新华网, 2014). McKinsey & Company forecasts “the Internet could add 0.3 to 1.0 percentage points to China’s GDP growth rate from 2013 to 2025. This could fuel some 7 to 22 percent of the incremental GDP growth expected through 2025—and by that point, it could translate into RMB 4 trillion to 14 trillion in annual GDP” (Woetzel et al., 2014).. 2.2 Internet + Other Industries With the development of new technologies, new business and new ecology such as cloud computing, mobile Internet, Big data, Internet of things and artificial intelligence, every industry is taking the Internet as a platform for integration and innovation, therefore enter to the “Internet Plus” rapid development era. “Internet Plus” through breaking the information asymmetry, reduces intermediate links, improve labor productivity, and thereby enhance resources use efficiency. The Internet is reshaping traditional industries and promoting the full integration of information and communication technology with traditional industries. According to 马化腾等人（ 2015 ） , “Internet Plus” is gradually infiltrated from the transmission of information to sales, operations, manufacturing and other industrial chain, and the Internet will be further extended through the Internet of Things sensors, controllers, machines and people connected together, to form a full connection between people and things, things and things, promoting the open integration of the industrial chain. Through the development of “Internet Plus”, public services will be brought to more people in need, providing cross-regional innovation services, and providing a new platform for the realization of public scarce resources such as education and health care.. . 9 .

(18) . Table 3: State of the art for Internet Plus in China Industries or field. Applications. Examples. Internet + Education. Interactive teaching platforms. Tencent classroom (https://ke.qq.com/), Focusteach (http://www.focusteach.com/).. Online classes. Alibaba Taobao Tongxue (https://xue.taobao.com/), Baidu Chuanke (http://www.chuanke.com/), XuetangX (http://www.xuetangx.com/).. Online vocational education. Jike Xueyuan (http://www.jikexueyuan.com/), Maiziedu. platforms. (http://www.maiziedu.com/),. China. MOOC. (http://www.mooc.cn/). Internet + Healthcare. Online health services. Tencent Health (http://health.qq.com/), WeChat Zhihui Yiyuan. (http://www.wechat-oa.com/solution10.html),. Ningbo Cloud Hospital (http://www.nbyyy.com.cn/ch/), Alibaba’s. AliHealth. (www.alijk.com. and. http://healthcare.aliyun.com). Internet + Finance. Online banking. Tencent’s Licaitong (http://qian.qq.com/), Baidu’s Licai (https://8.baidu.com/),. Alibaba’s. Yu’ebao. (https://yebprod.alipay.com). Online and mobile payment. Baidu’s Yifubao. Baifubao. (www.baifubao.com),. Suning’s. (https://paypassport.suning.com/ids/login),. Alibaba’s Alipay (www.alipay.com), Tencent’s Tenpay (https://www.tenpay.com/v3/). P2P lending. Renrendai. (www.renrendai.com),. (https://www.jindanlicai.com/),. Jindai. and. Licai. Chenengdai. (https://www.chenengdai.com/). Crowdfunding. JD Zhongchou (http://z.jd.com), Baidu Zhongchou (https://8.baidu.com/rich),. and. Taobao. Zhongchou. (https://izhongchou.taobao.com). Internet banks. Alibaba’s. MYbank. (www.mybank.cn),. Tencent’s. WeBank (www.webank.com). Internet + Tourism. Travel booking service. Qunar (www.qunar.com), Kuxun (www.kuxun.cn), Ctrip (www.ctrip.com), 17U (www.17u.com).. Internet + Manufacturing. Automobile industry. Baidu to mass produce driverless car (www.forbes.com), Tencent, Hon Hai and Harmony Auto partner in smart cars. (www.forbes.com), and Alibaba and SAIC’s. Internet car project (http://www.reuters.com).. Source: Based on Z. Wang, Chen, Guo, Yu, and Zhou (2016) . 10 .

(19) . 2.2.1 Internet + Education Internet has transformed the education sector to a more powerful way of learning, called e-learning, this new technology “defined as the use of computer network technology, primarily over an intranet or through the Internet, to deliver information and instruction to individuals,” has helped firms not only to reshape the way knowledge is delivered, but also reduced the time knowledge is delivered (Welsh, Wanberg, Brown, & Simmering, 2003; Zhang, Zhao, Zhou, & Nunamaker Jr, 2004). For example, “e-learning classes are not constrained by instructor and classroom capacity, more people can be trained in less time. If 1,000 people need to be trained for five days, but there is only one classroom with a capacity of 20, it will take 50 weeks to deliver the class. However, if delivered through e-learning, the class could theoretically be delivered to everyone in a single week. This capability can also be used to establish a competitive advantage in sales” (Welsh et al., 2003). Close, Humphreys, and Ruttenbug (2000) wrote “The e-Learning sector is just beginning to emerge. Just as the Internet has transformed the retail market, we remain confident that it will also transform the education and knowledge markets.” Indeed, e-learning has replaced traditional teaching and learning methods, through e-learning students can learn new skills at a cheaper cost or even for free, it also provides time flexibility, allowing students to schedule their classes when they want and where they want. Capper (2001) stated that internet bring to the learning sector the following advantages: . Any time. A participant can access the learning program at any time that is convenient.. . Any place. The participants do not have to meet.. . New educational approaches. Many new options and learning strategies become economically feasible through online courses.. . Integration of computers. The online learner has access to a computer, so computer applications can be used without excluding some participants.. Internet plus education which has broken the domestic geographical restrictions, and connected with the world’s high quality education resources, providing new choices for outlying village students in China’s three and four-tier cities. In education, Tencent has established cooperation with a number of educational institutions to set up Tencent classrooms, geared toward primary and secondary schools, universities, vocational education, IT training and other multilevel massive open courses, there are about 7.3 million people a week attending classes（马化腾等人，2015).. 2.2.2 Internet + Healthcare Internet technology has gradually changed the original medical system, and makes possible the connection of information between hospitals to hospitals, doctors to doctors, doctors to patients, improving the efficiency in the use of medical resources. In addition, the “Internet + healthcare” 11 .

(20) . model has provided a more convenient and efficient medical solution for the masses. At present, nearly 100 hospitals across China provide medical services and quick payments on WeChat, there are already more than 1,200 hospitals that support WeChat registration, providing medical services to more than 3 million patients, saving more than 6 million queuing hours for patients, thus improving efficiency and saving the public resources (马化腾等人，2015). In Ningbo northeast China, there is a new technology called “Cloud Hospital”, which is an online virtual hospital, allows well-known specialists to become ordinary patient’s private doctors. In the past, due to the scarcity of high-quality resources, if the patients wanted to register for a medical consultation often needed to wait in line for many hours, now patients will be able to see doctors, buy medicine and make use of medical services without leaving the comfort of their homes. As regards doctor’s application, they can apply through submitting an application to become an online doctor. The online doctor’s service prices are charged according to their qualifications, and according to the patient’s rating. If the patient’s satisfaction drops to a certain level, the online doctor will automatically quit. Over 2,000 patients are currently registered for the on-line service, and is expected to increase in the next few years (Chan, 2015; Wu, 2016). According to Mckinsey & Company, China’s health-care sector is expected to reach US$1 trillion in 2020 (Le Deu, Parekh, Zhang, & Zhou, 2012), so companies are working hard to secure their entrance into the increasingly growing Chinese healthcare market. China’s healthcare market is suffering from an under-supply of doctors, long queuing hours and a wide gap between urban and rural healthcare, Alibaba’s AliHealth main purpose is to provide professional online medical service and leverage technology to overhaul China’s healthcare market (Jourdan, 2015). Alibaba has launched a mobile app named “alijk” that enables users to purchase medicines after uploading photos of their prescriptions, users can also type in or speak to enter detailed information about the medication. The Ali-Health app will send price bids from nearby pharmacies, the user can choose a pharmacy and make payment through Alibaba’s mobile payment system, “AliPay”, then the user only needs to wait for the delivery person to come to their home. This application provides discounts around 20 percent lower than average market prices, helping customers to save up to 50 percent in total spending (Cormack, 2014). “Heal”, a Los Angeles-based company, is a smartphone app similar to the on-demand car service Uber and it has already expanded to California. Launched in 2015, the company has raised US$26.9 million in Series A financing. Using the smartphone app, a patient can call a doctor coming to their door for a flat fee of US$99, the doctor arrives with a medical assistant and all the necessary gadgets for the medical consultation. Doctors are available seven days a week from eight in the morning to eight at night. With this new technology, a patient can save time and energy while provide the physicians a better window into a patient’s health because of the insights a doctor can glean from being in a patient’s home and understanding the environment in which they live, which is very difficult to do in the current system of medicine (Jolly, 2015). 12 .

(21) . 2.2.3 Internet + Finance Internet technologies have brought a new rise of innovation in the financial industry, “Internet + finance”, also known as Fintech, can reduce information asymmetry, reduce financial service costs, and improve financial efficiency. “Fintech is usually applied to the segment of the technology startup scene that is disrupting sectors such as mobile payments, money transfers, loans, fundraising and even asset management” (Munch, 2015). This new technology attempts to provide a more efficient platform for businesses and individuals to invest and borrow money more easily. Providing faster cash flow for small business and families, cheaper and safer payment processes. “While a bank might take six weeks to approve a loan, P2P lending platforms can do it quicker, with lower overheads, and then pass on the lower costs to investors and borrowers” (Mackenzie, 2015). The total amount invested in the global fintech sector tripled from just over US$4 billion in 2013 to more than US$12 billion in 2014 and is expected to hit US$46 billion by 2020, according to a report by Accenture and CB Insights (Skan, Dickerson, & Masood, 2015). According to iResearch statistics show that China’s third-party Internet payment transactions reached 8 trillion RMB an increase of 50.3% in 2014; and expected to reach 22 trillion RMB in 2018 (艾瑞咨询, 2015). There were 1,575 active P2P online lending platforms with a loan balance of more than 100 billion RMB by 2014 (网贷之家研究院, 2015). Another important subindustry that forms part of Fintech is crowdfunding, Belleflamme, Lambert, and Schwienbacher (2014) explained “Crowdfunding refers to using the crowd to obtain ideas, feedback, and solutions to develop corporate activities, collect money for investment from large audiences (the “crowd”), in which each individual provides a very small amount, instead of raising money from a small group of sophisticated investors.” In China crowdfunding companies have reached to 116 in 2014 with a financing amount of more than 900 million RMB, and adding 78 new platforms a year (融 360 金融搜索平台, 2015). The first half of 2015 were established 53 new more crowdfunding platforms in China, reaching a total number of 211, and altogether have successfully raised a total of 4.666 billion RMB (盈灿咨询, 2015). With the development of Internet plus finance, financial enterprises are no longer enterprise-centric and production-centric as in the industrial age, now began to become more consumer-centric, financial services and products are entering into people’s daily lives, for example, the use of direct mobile payment applications as Uber, Didi Chuxing, Paypal and Alipay. According to The Economist (2015), “the Fintech revolution will reshape finance in three fundamental ways: the Fintech disrupters will cut costs and improve the quality of financial services, Investor have clever new ways of assessing risk, the Fintech newcomers will create a more diverse, and hence stable, credit landscape”. Internet plus finance has been benefited from the development of mobile Internet, one of the main characteristics is the convenience to pay without using cash. The use of innovative services of 13 .

(22) . the share economy has also contributed to this development, such as Airbnb and Uber. China’s mobile payment market, so far there are two biggest third-party Internet payments, one is Alibaba’s “Alipay” and the other one is “WeChat pay”, together accounted for nearly 90 percent market share. Booking an air ticket, a hotel accommodation can now be paid through a smartphone, going to a convenient store, supermarket, retail store can be paid by just swiping your mobile phone, in China taking a taxi can be paid using a smartphone transferring the amount directly to the driver’s Alipay account, hospital consultation fee can also be paid through quick pay apps, every transaction can be done without having to take out your wallet, even Alipay can be used to pay the credit card fees.. 2.2.4 Internet + Manufacturing The invention of the modern coal-powered steam engine in 1769 by James Watt provided a platform for the First Industrial Revolution, which brought the mechanization of the textile industry. The steam power brought to the invention of other machines as the steam locomotive, steamboat and steam-powered printing machine, replacing manual labor and reducing transaction times, labor costs and transportation times. The Second Industrial Revolution came with the discovery of oil, electricity, the invention of the telephone, the automobile, the assembly lines and mass production, giving a leap from the steam power to the electrification of factories. Now, the Third Industrial Revolution has come with the advent of computers, the digitization and the internet. According to Rifkin (2014), the Communications Internet combined with the digitized Energy Internet and Logistics Internet, are creating an Internet of Things (IoT) platform for the Third Industrial Revolution. The IoT is connecting everything and everyone through sensors and software, using Big Data and analytics to develop predictive algorithms to increase productivity, improve efficiency, reduce the marginal costs of distributing and producing products to nearly zero. In November 2009, President Obama proposed that U.S. should develop a “re-industrialization” strategy, aimed at reviving industrial sector, and it is a process of renovating the existing industrial facilities and developing new industries, he hopes to restore the U.S. economy and reverse the deficit and trade deficit problems. Afterwards, President Obama launched the Advanced Manufacturing Partnership (AMP) in 2011, which brings together universities, industries, and the federal government to invest in emerging technologies that will help to create more manufacturing jobs by helping U.S. manufacturers improve quality, reduce costs and accelerate product development. Germany also has proposed its own manufacturing plan called “Industry 4.0” in 2012, which creates a “smart factory”, aimed through the integration of Online-to-Offline, real-time monitoring, analysis of end-users, and Internet of Things by helping integrate production, suppliers, business partners and customers, thereby boost the innovation of production, services, and even business model. In response of that, the China’s State Council proposed the Chinese version of German “Industry 4.0”, “Made in China 2025” the national Internet Plus manufacturing plan in 2015. This 14 .

(23) . plan will allow China to take a big step forward in innovation as well as improve its manufacturing efficiency, being able to compete with developed manufacturing countries and help to transform China into a leading manufacturing by the year 2049. Chinese Premier Li Keqiang said “We will implement the Made in China 2025 strategy, seek innovation-driven development, apply smart technologies, strengthen foundations, pursue green development and redouble our efforts to upgrade China from a manufacturer of quantity to one of quality” (Qing & Yao, 2015). In “Made in China 2025” plan nine tasks have been proposed as priorities (国务院, 2015): 1. 2. 3. 4. 5. 6. 7. 8.. Improving national manufacturing innovation. Promoting the deep integration of information technology and industrialization. Strengthening the industrial base. Fostering Chinese brands. Enforcing green manufacturing. Promoting breakthroughs in the development of key sectors. Advancing restructuring of the manufacturing sector. Promoting the development of service-oriented manufacturing and manufacturing-related service industries. 9. Improve the level of internationalization of manufacturing industry.. 10 priority sectors are identified in the “Made in China 2025” plan: 1. New advanced information technology. 2. High-end numerical control machine tools & robotics. 3. Aerospace equipment. 4. Ocean engineering and high-tech ships. 5. Modern rail transport equipment. 6. Energy saving and new energy vehicles. 7. Power equipment. 8. New materials. 9. Biopharma and high performance medical devices. 10. Agricultural machinery. Taking the automotive industry as an example, the three Chinese Internet giants (BAT) have launched smart vehicle plans. Baidu is opening R&D centers in the United States and planning to mass produce driverless electric cars in five years. Baidu’s first commercially available driverless production vehicle is scheduled for launch in China in 2018 (Abkowitz, 2016a). Alibaba established a joint venture with Chinese auto maker SAIC to develop Internet-connected cars, which will use technology (such as cloud computing and big data) to help provide a better driving experience, as well as electronic services such as digital entertainment, e-commerce, maps and communications (Bloomberg, 2016; Spring & Carsten, 2013). Tencent is also attempting to enter into the market of smart cars; Tencent signed an agreement with Foxconn and Harmony Auto to explore opportunities in smart electric vehicles. The coalition would draw on Tencent’s Internet platform, Foxconn’s 15 .

(24) . manufacturing capabilities and Harmony Auto’s dealership network (Y. Wang, 2015b).. 2.3 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 16 .

(25) . 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 17 .

(26) . 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. Abou‐Shouk, Internet adoption by Lim, and agents: A case of Egypt Megicks (2013). Abstract travel “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.”. Dickinson et al. Tourism and the smartphone (2014) app: Capabilities, emerging practice and scope in the travel domain. “This paper analyses how the smartphone mediates tourism travel and the role it might play in more collaborative and dynamic travel decisions to facilitate sustainable travel.”. Guo, Liu, and The embedding convergence of Chai (2014) 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.”. Inversini and Selling rooms online: the use of “This paper aims to focus on the reason why Masiero (2014) social media and online travel hoteliers choose to be present in online travel agents agent (OTA) and social media web sites for sales purposes. It also investigates the technological and human factors related to these two practices.” Standing, The Impact of the Internet in “This article classifies and analyzes the Tang-Taye, and Travel and Tourism: A research wealth of research published in major tourism Boyer (2014) review 2001–2010 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. 18 .

(27) . (2015). information search. searches using social media as a new search behavior from a value perspective.”. Xiang, Wang, Adapting to the Internet: trends O’Leary, and in travelers’ use of the web for Fesenmaier trip planning (2015). “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.”. 朱敏與熊海峰互联网时代旅游的新玩法（2016）. “In the book, the concept of “Internet + Tourism” is first explained in depth, and the triple development of the Internet, data and shared ecosphere is put forward. Then, from the theoretical discussion to the practical case, the author systematically collated the existing “Internet + Tourism” different innovations.”. 李偉與魏翔互联网＋旅游：在线旅游新观 “This book aims to solve the predicament of （2015）察 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.”. 2.4 Tourism Development Strategy 2.4.1 Tourism Development Literature The United Nations Conference on International Travel and Tourism (Rome, 1963) recommended that the term “visitor” (domestic, inbound or outbound) should be divided as “tourist” (or overnight visitor) if his/her trip includes an overnight stay, or as a and “same-day visitor” (or excursionist) otherwise. After that definition was approved, the first United Nations conference on tourism, The International Conference on Travel and Tourism Statistics held by World Tourism Organization (WTO) in Ottawa in June 1991, defined tourism as“The activities of person traveling and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes.” (World Tourism Organization, 1995). Many scholars also have proposed many different definitions about tourism, as described in Table 5.. 19 .

(28) . Table 5: Tourism Development Literature Author. Definition. Jafari (1977). “Tourism is a study of man away from his usual habitat, of the industry which responds to his needs, and of the impacts that both he and the industry have on the host socio-cultural, economic, and physical environments.”. Leiper (1979). “It is the system involving the discretionary travel and temporary stay of persons away from their usual place of residence for one or more nights, excepting tours made for the primary purpose of earning remuneration from points en route. The elements of the system are tourists, generating regions, transit routes, destination regions and a tourist industry.”. Mathieson and Wall (1982). “Tourism is the temporary movement of people to destinations outside their normal places of work and residence, the activities undertaken during their stay in those destinations, and the facilities created to cater to their needs.”. Mcintosh, Goeldner, and Ritchie (1990). “Tourism is the sum of phenomena and relationships arising from the interaction of tourists, business suppliers, host governments and host communities in the process of attracting and hosting these tourists and other visitors.”. Davidson (2005). “Tourism is a social/economic phenomenon that acts both as an engine of economic progress and as a social force. Tourism is much more than an industry. Tourism is more like a ‘sector’ that impacts a wide range of industries. Tourism is not just businesses or governments—it is people.”. Tourism development has been regarded as an important mean to promote national or regional economic development, especially plays an important role in generating large-scale employment opportunities and in revitalizing the national economy. The development of tourism also is related with the following sub-products: (a) tour operators and travel agencies; (b) accommodation sector; (c) passenger transportation, auxiliary services, entertainment and shopping, etc (Raina, 2005). By providing a wide range of tourism products for tourists, thereby will increase tourists’ satisfaction and tourism demand. The biggest function of tourism development is economic efficiency, it can not only promote the development of related industries, but also can promote the improvement of local infrastructure. The successful development of a tourism destination must possess the following six essential ‘A’ factors (Buhalis, 2000): Attractions, Accessibility, Amenities, Available packages, Activities,. 20 .

(29) . Ancillary services. The development of tourism can have a positive impact on the balance of payments, increase foreign exchange, increase infrastructure development, provide employment, increase standard of living, as well as being one of the important strategies to promote the development of urbanization. Tourism development must be based upon ‘10 C’ formula as illustrated in Figure 1:. Figure 1: ‘10 C’ Formula for Tourism Development Source: Raina (2005). 2.4.2 Strategy Definition The term strategy is derived from the Greek word “strategos” (the art of the general), and comes from the Greek words “stratos” (army) and “agein” (lead). The Greek word “stratego” as a verb means “to plan the destruction of one's enemies through effective use of resources”. The Chinese philosopher and military strategist Sun Tzu defined strategy as “the great work of the organization. In situations of life or death, it is the Tao of survival or extinction. Its study cannot be neglected”. For Chandler (1962) in his book “Strategy and Structure” defined strategy as “the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals”. In the definition given by Chandler (1962), we can find out three elements of strategy: (a) the determination of the basic long-term goals and objectives；(b) the adoption of courses of action; (c) the allocation of resources. The definitions about the term strategy provided by various scholars is compiled in the Table 6:. 21 .