Success Factors of E-Commerce in Tourism Industry - Essay Example

?E-Tourism By Table of Contents Introduction In the past few years, we have seen a large number of developments in all the areas of life. These rapid developments and advancements in the field of information and communication technologies (ICTs) have provided considerable support for the establishment of an arrangement of organizations that divide with the larger suppliers and producers the tasks of product and service planning, design, suppliers’ and retailers’ communications, production, goods delivery and packaging, customer advertisement and marketing, and a number of other tasks that were in the past were disconnected, otherwise, concerted in a particular large firm. Similar to all other industries and firms the emergence of internet technologies such as e-commerce and e-business have revolutionized the service sector In this scenario, tourism and travel industry is one of the most important services sector that has been transformed by the Internet. The use of the Internet in this sector has given birth to e-tourism. In this scenario, e-tourism deals with offering tourism and travel related services and products over the internet. Additionally, modern IT based tools and technologies play a significant role in connecting the tourism chain creating a large number of advantages for all stakeholders involved in this business and, eventually, to the end user. In this scenario, the electronic commerce (e-commerce) can catalyze the tasks that are performed in the tourism sector. In addition, the e-tourism sector can modernize a number of ways of creating and maintaining the tourism business (Scavarda et al., 2001; Tremblay, 1998). This paper presents a detailed analysis of this latest emerging trend. The basic purpose of this research is to analyze different aspects of e-tourism. This paper also discusses the latest developments in this area. Literature Review E-tourism industry has developed as a Frontline area of information technology. Many scholars and academics have conducted researches related to e- tourism industry as this industry is growing rapidly and more and more people get interested in studying this sector narrowly. Some of the researchers have highlighted the positive aspects of e-tourism; its success factors and development and some have emphasized on the challenges and weaknesses that are being faced by e-tourism industry. Developments in E-tourism In their research article, (Connell & Reynolds, 1999) discuss that there is a change in the entire system of operations of a tourism company with the emergence and implementation of new technologies. Additionally, due to the lively progress in using the information and communication technology, there is a big change in the arrangement and procedures in the tourism industry. These modifications are clear in a way that now the tourism organizations interconnect and interact with their customers and how they bring about the task of their distribution. These progresses provide a chance for inventive tourism industry to enhance their comparative position in the global marketplace. In addition, e-commerce and ICTs are playing a major role in exploiting the internal competence and efficiency of tourism organizations. E-tourism has transformed the entire business process, the whole value chain and the relationships of travel and tourism industry with the interested parties (Connell & Reynolds, 1999; Scavarda et al., 2001). In other words, it can be said that e-tourism will progressively govern the effectiveness of the organization (Schoefer, 2003). The research shows the travel and tourism sector is believed to be a significant element of today’s financial system. A survey carried out a well known firm known as World Travel & Tourism Council (www.wttc.travel) revealed that almost 13% of the international GDP is derived from tourism and travel sector. On the other hand, tourism and travel sector has appeared as a major functional area in the b2c (business to commerce) e-commerce, for the reason that it corresponds to more than 50% of the entire b2c earnings. One of the most important reasons for their growth can be that the indescribable and brief nature of tourism and travel sector products and services makes them perfect to be distributed and promoted through the internet. In fact, this modern system has been adopted by a large number of airlines for instance economical airlines Ryanair or EasyJet have already adopted this modern trend and they heavily depend on their web based systems with the purpose of attracting customers and selling tickets (Doring et al., 2008; Buhalis & Law, 2008; Schrier et al., 2010). Without a doubt, the travel and tourism sector is already known for a significant element of e-commerce, but there is still need for lots of improvements. When tourism and travel related products and services are offered on the Internet then the capability to carry out various activities like that searching and analyzing desired information become absolutely critical for websites. On the other hand, a large number of people feel it inappropriate to arrange a vacation or trip over the internet for the reason that they face a wide variety of problems while accessing the desired information from these websites. Some of the problems can include unintelligible interfaces, technological issues and inadequate support from search engines. In fact, it can also be the cause why there is not an adequate fact of electronic markets causing invariably to subordinate search expenses (Doring et al., 2008; Buhalis & Law, 2008; Schrier et al., 2010). In their research article, (Marcussen, 2009) discuss various used facts regarding the usage of e-tourism. According to their statistics in the past few years the volume of internet based travel sales has increased by more than 17% as compared to previous years. In fact, it has reached up to 58.4 billion dollars in the European market. In this scenario, the UK is considered for more than 30% part of the European e-tourism market. However, the smaller markets include Greece, Italy, Spain and Portugal travel markets. This is the evidence that e-tourism in developing fast as a conventionaldeliverytool. Inaugurating the presence of internet and e-commerce strategies in the tourism industry will gradually make this industry more competitive (Marcussen, 2009). According to a recent report presented by (United Nations, 2011), an encouraging impression of ICTs on the tourism industry in emerging nations is determined by the progress of the ICT with other numerous factors like that the advancement of the infrastructure, education level and structuring the dimensions and the satisfactory legal structure for e- tourism development at domestic, provincial and limited level (United Nations, 2011). In the same way, (Werthner & Ricci, 2004) also discuss some the important aspects associated with e-tourism. According to their point of view, there is an increasing trend of e-commerce in travel and tourism industries in spite the economic issues in the world. E-tourism industry is conducting business to business and business to consumer dealings as well. The tourism industry is a business oriented; the travel companies are executing several techniques to satisfy the needs of the customers via the web and other value engendering approaches such as value abstraction, value detention, value addition and value creation (Werthner & Ricci, 2004). Despite the fact that the nature and senses of e-tourism are more complex than traditional e-commerce, however it can facilitate the tourism and travel sector to build and maintain a straightforward and well-organized communication arrangement with the customer. This kind of relationships comes under the ecommerce trend known as business to customer. In this e-commerce trend business transactions are performed between business and customers directly. (Laudon & Laudon, 1999, p.25). In fact, it is believed that both the e-tourism and ecommerce are closely related to each other for the reason that the consumer (such as end users as well as middle firms) is more often than not distant from the areas where products are really developed, as well as in some cases quick delivery is vital. With the use of latest technologies the impact of geographic distance can be minimized as well as expenditures can be decreased. The research has shown that in the tourism and travel sector, the use of e-commerce creates a large number of new chances to build up and to put into practice modern and effective techniques for operations management, for instance revenue management, for the reason that increasingly latest data and information are typically easier to attain. Though, the trend of e-tourism is very attractive for the business organizations but it is not suitable for all kinds of businesses for the reason that in order to establish e-tourism set up, people have to be trained and educated in an attempt to allow them to work in a much more complicated and unpredictable setting. With the advancements of technologies, geographic distance and remote communications are no longer a serious challenge for the business organizations that are planning to enter into tourism businesses (Scavarda et al., 2001; Tremblay, 1998) Moreover, the distribution of information and communication technologies and e-commerce in the tourism industry is still in the development stage and everyday there are emerging some latest trends. As with the passage of time more and more technologies and tools are being adopted and implemented in different areas of tourism. In this scenario, a large number of researches on e-tourism demonstrate that an effective growth of the tourism industry has been supported by the modern information and communication technologies. On the other hand, the majority of researches carried out in this sector particularly take into consideration the technical aspects of developments. Furthermore, the use of e-commerce and the internet transmission is immensely different for different nations and it also depends on organizational size (Werthner & Ricci, 2004; Buhalis & Law, 2008). Success factors of e-commerce in tourism industry Without a doubt, e-tourism is a vast area that covers a wide variety of aspects, which can be either technical or theoretical. Additionally, there are many factors that have played their role in the success of e-tourism. In this scenario, various authors such as (Kim, 2004; Schrier et al., 2010) outline the benefits that lead to the success of e-tourism industry. In addition, the researchers show a number of benefits including easy access to a ton of information about products and services offered in tourism, convenience of the website visitors, better information providence, constructing new markets, wide range of choice given and the most promising factor according to research is the interactive relation with the customers that enhances the customer services. Moreover, these factors incline the image of tourism companies in the eye of the customers. Without a doubt, e-tourism saves a lot of time and provides customized and specialized products that are designed in compliance with the customers’ varying needs and requirements which make the process easier. In view of the fact that online tourism allows the customers to directly interact with the web site or company so this direct interaction with the customers also causes a decrease in the cost of operations and not much human resources are needed to enter into a new market or survive in the existing market (Schrier et al., 2010; Kim, 2004). Challenges faced by E-tourism industry Without a doubt, the emergence of e-tourism has brought a large number of benefits and opportunities for both the customers and the businesses. However, at the same time there are several challenges that are being faced by the e-tourism. Up till now, a large number of researches have been conducted with the particular purpose of identifying the areas where e-tourism industry is lacking. Several researchers and scholars suggest that the e-tourism industry should put into practice two significant features for carrying out an effective e-commerce that are secure system of e-commerce and user-friendly website or storefront (these features have also been discussed in the above section). In this scenario, the implementation of security practice does not only mean to establish measures to secure the system of e-tourism industry, on the other hand, it means providing security to the users as well that prevents any unauthorized access to their data and user friendly website is to ensure the convenience of the customers. At the side of these factors there are also a number of other aspects that are significant for the success of e-tourism industry. Some of the important factors can include the support of the top management, customer acceptance and support, and IT substructure. However, these are customers who judge and decide about the quality of e-tourism websites by taking into consideration the content richness and convenience in using the content (Kim, 2004; Law & Bai, 2008; Doring et al., 2008). In addition, there is a difference between a web site visitor and a potential customer. So it requires a lot of hard work from the business organization and is believed to be a serious challenge for the e-tourism sector to convert the visitors of the websites into the buyers of the product. In their research article, (Law & Bai, 2008) discuss two major kinds of people who use to go through the travel websites; they are the purchasers and searchers. According to the authors, purchasers are the people who are actually willing to purchase the products or services offered by the travel companies on their websites on the other hand the searchers are the people who only visit the website to get the required information. However, an e-tourism company can easily convert a visitor into a potential customer by brining improvements to the web quality and content, by making the website more attractive, implementing convenience in the usability and to make easy terms of payment to the customers and by providing them rich content. Hence, this is a challenge for the small and medium sized travel agencies to make their websites in this way but they can do this by implementing the e-commerce strategies (Law & Bai, 2008; Kim, 2004). Moreover, the barriers faced by the tourism industry to adapt the e-commerce strategies can include the lack of knowledge about the technology, heavy coat as initial outlay, lack of cognizance, lack of assurance about the success by adopting e-commerce and cost of maintaining the system. In addition, other hurdles include lack of capable human capitals, inadequate e-commerce groundwork and small market size of e-commerce in tourism (Law & Bai, 2008; Kim, 2004). Furthermore, the majority of organizations does not frequently accept and adopt innovative tools and technologies for a range of reasons. In fact, in many cases accepting a change does not make sense and is not well-determined in accordance with their needs and requirements, such changes are adopted to try to enhance the brand image, style, imitation, interest, uniqueness and bandwagon. This is most of the times revealed in the tourism industry and apparent obstacles to successful execution of technologies of the internet (Kim, 2004; Heung, 2003). In addition, the trust factor is another most important factor that hinders the successful adoption and acceptance of e-tourism business. In this scenario, organizations’ attempts to address problems of trust and confidence makes small and medium tourism companies weaker than large companies and they are exposed to the issues related to verification, data security and privacy (Buhalis & Law, 2008). Recommendations In the above section we have discussed a number of problems that hinder the successful adoption and acceptance of e-tourism. Many researchers have presented a number of recommendations to deal with these issues. In their research article, (Wolfea et al., 2004) present various recommendations to improve the effectiveness of e-tourism business. According to their viewpoints, organizations can catch the attention of the majority of customers by delivering custom-made service via email, modified websites that are constructed by taking into consideration specific needs of the customers. In this scenario, the author mainly talks about gaining the trust and loyalty of the customers towards the website of the company. According to their viewpoint one of the key challenges that organizations face in this area is regarding trust and confidence and the organizations should work hard to find the ways that could improve these features. In addition, e-tourism business should provide an authentic email address along with their telephone number on the website. In fact, they should make available online chat facility to improve communication with their customers. Hence, the customers can use the contact information or can have online chat when they want to get more information about any product or service offered. In the same way, in order to attract more and more customers, the storefront should allow the customers to have a virtual trip of the place to which the customer wants to go. This virtual tour facility can be implemented any 3D tool such as Second Life (Cho et al., 2002). According to (Cho et al., 2002) the facility of virtual trip can attract a large number of customers as it provides the images of the destination, details of the hotels where they are willing to go, spend their vacation and enjoy. In addition, the organizations should pay particular attention to web site development. They should keep in mind all the usability and security related aspects while implementing e-tourism business. They should focus on securing customers’ information and privacy. The web sites should be easy to use and explore and should provide the necessary information at the same place. Conclusion In the past few years, the implementations of modern tools and applications supported by information and communication technologies have revolutionized all the fields of life from entertainment to shopping and education and learning. Now these innovative technologies are being used in every walk of life. In the same way, these technologies have also extended into the service areas and as a result of this expansion a latest trend e-tourism emerged. Basically, e-tourism and e-commerce are interrelated concepts since business tasks related to purchasing and shopping for tourism products and services come under the area of e-commerce. This paper has discussed different aspects associated with e-tourism. The paper has shown that e-tourism is being greatly accepted in the majority of nations. Hence, this industry is playing a significant role in the economy of those nations. However, there are serious issues involved in the way of successful implementation and acceptance of this trend. This paper has discussed some of the important issues that organizations face while implementing e-tourism business. This paper has also presented recommendations to deal with these issues. References Buhalis, D. & Law, R., 2008. Progress in informationtechnology and tourism management: 20years on and 10yearsafter the Internet—The state of eTourism research. Tourism Management, 29(4), pp.609-23. Cho, Y.-H., Wang, Y. & Fesenmaier, D.R., 2002. Searching for experiences: the Web-based virtual tour in tourism marketing. Journal of Travel & Tourism Marketing, 12(4), pp.1-17. Connell, J. & Reynolds, P., 1999. 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