E-Tourism: Role of ICTs in Strategic Development - Case Study Example

E-Tourism E-Tourism The business strategies, policies, and even structures of different business organizations have rapidly changed as a result of technological advancement and progress. The tourism industry is one that has to evolve to allow certain transformations to take place, so as to stay relevant (Brown, Muchira & Gottlieb 2007). The transformations that have taken place are largely focused on the advancement in technology, where different organizations ensure that they are better placed to reach individuals on a global scale (Beritelli, Bieger & Laesser 2007). Tourism is a global industry, which employs countless individuals and possesses a wide range of stakeholders. This is as compared to other industries present. The relationship that currently exists between tourism and technology has enabled the industry to produce better products and compete more aggressively (Berger, Lehmann & Lehner 2003). This paper will examine how technology has changed the tourism industry, and how advancements allow for these transformations to occur to enable different industries develop. Role of ICTs in strategic development The role that ICT plays in the tourism industry is quite colossal. ICT works to control customer or target market centricity, where customers are given the luxury of identifying or choosing which products to buy and where to go, hence; leading to the globalization process of this industry (Bennet & Lai 2005). The ICT sector has provided the tourism industry with the necessary support tools that allows different suppliers to provide their gifts on a global scale. The tourism quarters that have failed to embrace technological advancement may have a difficult time trying to compete on a global scale, or even control the current highly information-concentrated industry (Benckendorff 2006). Currently, the ICT sector has become a central element of tourism. This implies that researchers and experts are trying to find out and interpret the way forward for both the technological and tourism industries. This may allow both industries to grow, hence; achieve their maximum potential (Beldona, Morrison & O’Leary 2005). The tourism industry is largely benefitting from the ICT sector in terms of reduced costs and an improvement in productivity. As times change, the amount of work that individuals are handling is diminishing at a rather rapid rate (Baloglu & Pekcan 2005). However, the efficiency and productivity levels are increasing as a result of the use of ICT, which people rely on to ensure proper management of data, control of inventory, and even direction of traffic in terms of flow of goods, services, or even people. This has allowed different industries to maintain an exceptional relationship that is geared toward building each other and helping each other develop (Bakos 1998). This was not a possibility over three decades ago. Also, with a growing number of the world’s population being connected through different technological areas, it has become easier to offer instantaneous connectivity, which is accurate, transparent, and efficient for all users (Bakos 1997). Furthermore, ICT has worked to increase the geographical scope of the tourism industry. Through ICT, it is possible for different tourism businesses to tailor their products to suit a larger market audience, providing them with what they need, when they need it (Bai et al. 2004). This allows different organizations to position themselves where different customers can see and access different products. Different tourism organizations are lining their businesses with what is currently desired and trending. It is through ICT that they are able to identify, assess, and evaluate the needs of customers, hence; are able to compete on a global scale. Moreover, ICT functions as a substitute for other costly means of transaction and/or communication (Arlt 2006). It is through ICT that businesses are better placed to deal with the issue of reducing the costs incurred by customers, hence; providing quality services and goods at affordable prices that allow customers to enjoy their products (Alvarez, Martin & Casielles 2007). Electronic presence of businesses Businesses are expanding, and this is not to say that all are keen on expansion in the physical sense. Businesses, through ICTs, are better placed to permeate the tourism industry without necessarily having different locations and addresses for the operations (Allison, Curall, Moss & Stuart 2005). Currently, tourism businesses can advertise, sell, and reach a wider audience through the growth of the technological field. The use of computers in almost every household makes it possible for businesses to sell different products, ensuring that the economic aspect of the business is addressed (Buhalis 1997). Furthermore, customers are even better placed to know about products and services through these means as compared to the old ways. Customer and columnist reviews allow customers to make informed choices on some of the tourism businesses (Alfaro et al. 2005). The electronic presence of businesses is also creating new frontiers when it comes to competition. Technology is making it easier for businesses to compete on a global scale, which makes it easy for them to try and be on a level playing field (Hunt 1995). For the developed and developing markets, ICTs and their presence try to create a level playing field that ensures most of the players get a share of the ever-growing tourism market. Low-income earning families and households are capable of traversing businesses that may have once been inaccessible and finding things that suit their immediate needs (Patton, Auckerman & Shorter 2005). The presence of electronic businesses or e-business makes it easier for both producers and suppliers to reduce the overall cost of producing and supplying products, especially with the incorporation of data management software and programs (Ricci & Werthner 2006). Tourism encompasses a wide range of activities and operations. The incorporation of ICT in this industry allows most individuals to venture out of their normal environment, thus; creating different aspects of the tourism industry (Ricci & Werthner 2002). It is, however, one of the biggest industries in the world, which allows individuals to get employment. Through the advancement in technology, this industry has grown to benefit a large number of individuals from all around the world (Buhalis & Spada 2000). It is this progress that has seen the industry grow, therefore; ensuring that boundaries are broken promoting globalization at a rapid pace. There is a positive aspect in tourism brought on by ICT through some of the competitiveness and the differentiation strategies employed. ICT has helped countless businesses to stay competitive and firm in the face of a changing and rather dynamic tourism market (Buhalis & O’Connor 2005). It is through these advances that the gap in the economic world may begin to be filled, allowing even the smallest players to attain different goals and targets. Case of British Airways Travel planning has been one of the most important uses of the internet ever since its inception. Information exploration and bookings has enabled different organizations and institutions to be at the forefront in ensuring customer satisfaction and fulfillment. Airline industries are looking toward the internet to ensure that their customers get the best out of everything the internet has to offer. This is through travel plans that the industries ensure are up to date, which helps in managing time for its customers (Bai, Hu, Elsworth & Countryman 2004). British Airways is just an example of such an airline industry. E-business is a crucial prerequisite for all the airline’s successful endeavors by effectively preparing for customers, clients, and stakeholders as everyone is now looking toward the internet to ensure that time is managed efficiently and professionally. The internet has been the main domain through which the airline’s business environment is built, guaranteeing that the emerging technologies transform every aspect of the business. Advantages to the company and consumers One of the main opportunities presented through e-business to British Airways is the open business. The company has employees operating its online operations around the clock. Consumers are now able to log in to the airline’s website to confirm and even book travel plans regardless of the time. By ensuring that people are always present to answer and confirm the different requests, consumers have the capacity to determine whether or not it is possible to travel without having to visit the different offices run by the company. At the single touch of a button, people can carry on their day to day activities without having to worry about travel plans as the company takes care of every aspect of the consumer’s needs (Beldona, Morrison & O’Leary 2005). The company now strives to provide its consumers with seamless travelling experiences, despite the slow or sluggish sales they might have experienced as a result of the global financial crisis. The airline company can also demonstrate its competencies by being able to communicate with its consumer base directly. As a competitive strategy, the company is now capable of connecting with other value chains so as to provide its consumers with the ultimate travelling experience. Consumers and distributors can now easily be located through the internet, which allows the company to reduce on certain costs, for example; the distribution costs of certain services and products to the airline. Distribution is now being done online, which focuses on cutting costs of communication and fuel, which may be some of the major areas that all airline companies need to address. When this is done, the process can create a ripple effect that trickles down to the consumers who in turn benefit from lower travel costs. It is possible to create discounts to consumers, especially when a vast majority of them choose to plan their travel through the internet (Beldona, Morrison & O’Leary 2005). Furthermore, British Airways has ensured that the personalization and customization of services is vital to the growth and success of the company. By supplying iPads to the cabin crew present in the company, employees are faced with the task of providing specialized or personal service to the customers using the airlines. It is through the iPads that employees can know of the executive status of the customer, their special desires and/or requests, where they are seated, or even who they might be travelling with. This provides the crew with an avenue to fully utilize their skills to ensure that every travel experience for the customer is satisfactory. Customers can customize their services to suit their different needs, thus; creating their ultimate travel experience (Buhalis & Michopolou 2011). Also, the liaising of the airline company with different catering and hospitality businesses has increased the advantage for the company. By making sure that its customers are well taken care of, increase in sales has been recorded over time. Consumers everywhere around the world love convenience. When the company offers options to its consumers prior to and after their travels, consumers are likely to enjoy travelling more. When travel becomes easier, people are bound to take notice and advertise the services and offer exemplary reviews about the company. This creates an exceptional rapport with the company, which guarantees its place among the top flight airline companies in the world. The ease of connectivity can allow frequent fliers to engage in forums that also provide the company with ideas on where to improve on, and how best to satisfy the needs of its customers (Buhalis & Michopolou 2011). Consumers always feel the need to be appreciated and by providing such an avenue, they tend to feel like more than customers of an airline company. The use of the internet has various advantages to both the industry in question and the consumers of the said products/services. However, it is erroneous not to mention at least one disadvantage brought on by the incorporation of ICT in the airline industry. The lack of trust in some of the functions of the online services restricts some of the consumers from prescribing to the internet and its services. Also, the biggest threat to the industry so far is the threat to the personal security and privacy of the potential customers. When there is the mention of credit card fraud or scams, people tend to disregard the use of the internet to purchase products and/or services, despite the growing assurance by the different organizations involved (Brown, Muchira & Gottlieb 2007). It is a matter of the trust placed on certain aspects of the business that may hinder the growth and success of an airline company such as British Airways. The growing number of internet users worldwide has provided the airline company with an avenue to understand the different needs of the customers, thus; providing all partners with a chance to effectively participate in an ever changing tourism environment. The company works tirelessly to provide insight into the digitalization process of all its operations, which means that; the catering, hospitality, and travel arrangements of all consumers can be met without delays or setbacks. British Airways has always been considered as one of the biggest airline companies in the world, as such, its reputation has set precedent over what it does, and how it fulfills the demands of its consumers. Through liaising with different players in the same field, the company has managed to increase its consumers, eventually guaranteeing its place among the top airline companies in the world. Incorporation of ICT in British Airways The transition from computer reservation systems (CRSs) to Global Distribution Systems (GDSs) became one of the most vital elements that surrounded any airline company. British Airways was no exception. The transition made it possible for this airline, and countless others, to ensure that a continuous link was created between different entities that exist in the tourism industry, and specifically, hotel, travel, and accommodation units in the industry. These systems are vital in creating links between all the intermediaries present in the industry to ensure the smooth sailing of all operations (Brown, Muchira & Gottlieb 2007). They are identified as the backbone that empowers different internet transactions with the airline industry, making it possible to reduce the costs incurred by most companies in their quest to be the top commercial airline in the world. Also, the adoption of data center infrastructure management (DCIM) in 2012 has helped the company to easily manage its data centers. This installation aims to help the organization monitor power and network connections that better manage the company’s workflow. According to the then service manager Keith Bott, the DCIM is vital in the ICT department because it can allow the company to find and allocate space for new servers, manage power, issue work orders, among other functions. Physical assets are monitored through the DCIM, and requests for change can be done faster as a result of this incorporation in the company’s IT department (DCD 2012). By implementing such systems in day to day activities, the company developed strategically to enable it to position itself among the top airline companies in the world. ICT and the internet have aided in the growth and competitiveness of the airline company. Through the websites created by the airline company, distribution is being done directly in a bid to minimize the costs of distribution. As for British Airways, the distribution channels changed from CRSs to GDSs, and finally to eAirline solutions (Buhalis & Michopoulou 2011). Online selling has become something that most commercial airlines are looking to in order to try and reduce marketing costs and the amount of commission that is spent on ticket sales through conventional means. Ticketless travel is one way to look at the contemporary means of travelling, which offers customers of British Airways different solutions to some of their travelling arrangements. The incorporation of e-tickets is a means of phasing out the old ways of paper tickets. For most of the routes used by BA commercial flights, over 70% of them use this contemporary means of ticketing, which come with different advantages to the customer. This mode of ticketing is worthwhile as it provides security to the customers who prefer such means of ticketing. It makes all airline booking activities hassle free, making the travelling experience one to remember from the moment of ticket purchase, to their arrival at different destinations. There are various advantages that come with this form of online ticketing, for example; the company can allow customers to amend their details before the check-in moment, and this form of ticketing is faster than the conventional paper ticketing. According to the company’s website, www.ba.com, the advantages of e-ticketing include; no loss of tickets, no waiting for tickets through the post, faster ticketing, simpler checking-in procedures, and easy to read e-ticket receipts. Strategic development at BA The incorporation of such tools in an airline’s arsenal means that it is equipped to deal with customer relationships at a much higher level. Customer relationship management is a vital instrument in the growth and success of any business. BA has ways of trying to measure the levels of customer satisfaction, which in turn translates to the success of the company. BY recording customer data in the company’s data management system, they could determine which customers prefer travel and how they prefer it. It is through ICT that British Airways knows of how much or what to outsource. The BA website (www.ba.com) is an example of what is managed by the company as it is in-built and managed in-house by the IT department of the company. It is through the IT department at BA that the airline company can boast of increase in sales of over 30% in the UK, and over 80% worldwide, and this was just at the beginning of the ebusiness era (Buhalis & Michopoulou 2011). The company even went ahead to ensure that customers were in a position to handle some of the website’s operations directly. The project was dubbed Customer-Enabled BA, where the customer was the one being enabled, and not the technology itself. IT in the company strives to ensure that customers also reduce the baggage involved in travelling. This is by enabling them to have online shopping experiences that range from travel tours to hotel bookings. This can be done in the comfort of the customer’s home, and all the improvements, adjustments, and queries can be done at the touch of a button. This is probably worth 50% of all of British Airways’ operations, and reducing these cuts back on costs and raises the quality standards significantly (Buhalis & Michopoulou 2011). Ed Garcez, once programme manager from November 1999-August 2004, indicated that the implementation of ICT was to drive and facilitate organizational change. Advancement in technology enables people to be connected on a regular if not continuous basis. Social media is the newest platform to ensure that this is possible. With the growing number of users, it would be imprudent to ignore the tremendous opportunities that exist in this platform. Airline companies are now capitalizing on this, ensuring that they have a page that would otherwise give them the exposure they need. According to the BA Media Centre, in 2014, customers were given a chance to send in messages of ‘thank-you’ to the airline for all it has done. This campaign, through social media enables the company to remain relevant to a large number of customers (BAMC 2014). Also, by creating an avenue for customers to engage while in the airliner is vital to ensuring the satisfaction of customers, especially the younger customers. This falls under in-flight entertainment where the company is tasked with creating the perfect avenue that ensures the social life of its passengers is not disturbed as a result of air travel (Bai, Hu, Elsworth & Countryman 2004). Recommendations Despite the advancement and rise in technology use in the airline industry, there is still much to be done. Security and safety during online transactions needs to be a priority. The fear that fraud may result through some of these transactions reduces the chances of people going to deal in online businesses. Also, the level of airline collaboration is still low. One may argue that the current situation is greater than in the past, but it is not enough. At a time when globalization is the order of the day, there needs to be more interconnections between competitors to ensure that the market is filled with quality services and products, and not just a select few (Beldona, Morrison & O’Leary 2005). This can guarantee some form of cohesion when it comes to the industry as a whole. Hackers also find the incorporation of ICT in airline companies as an opportunity to get into different accounts and cause havoc. As the company reported, the accounts of frequent flyers were hacked (BAMC 2015). This should be an avenue for the company to continuously monitor their accounts to protect the integrity of their customers at all times. The costs of running ICT departments should also be monitored. From 2002-2006, a span of four years, BA has reduced the cost by over 40%, which means that some of the costs incurred could now be transferred to other beneficial projects like the revolutionary check-in project where all processes would be automated. However, there needs to be continuous monitoring of these electronic advancements, especially in this volatile industry. Social media is a platform that gives individuals the avenue to be at one with the airline company. However, it can also be used negatively like in the case where a message was used to indicate that a terror cell was going to do something on 1st June 2015. These should be grounds for investigation, which would cause disruptions in flight and people movement. In conclusion, the impact that ICT has had on the tourism industry is monumental. The growth of different sectors has come as a result of the incorporation of ICT in various industries, for example; the airline and hospitality industries. The implementation of different IT aspects has aided in the growth of the industries with increased competition, which is beneficial to both the companies and the individuals they are meant to serve (Buhalis & Michoupolou 2011). According to International Air Transport Association (IATA), where BA is a member, the mounting layers of security and safety regulations amount to over $7 billion a year, and this is negatively affecting this already volatile industry. 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