Tourism Channels and Travel Management - Essay Example

Ecommerce is known to be revolutionising the way in which consumers access products and services and perhaps more importantly the means by which distribution channels have traditionally been conducted. The sophistication, immediacy and supposed cost efficiency of the World Wide Web and mobile technology as a means of reaching and catering to consumers and distributors would at face value, seem to augur well for all concerned. Our studies of the tourism distribution network will reveal the much as many threats as it does opportunities. This paper therefore analyses trends and potential technological applications of tourism. It then outlines what is seen as the future for tourism network. This paper also explains on what is considered as the most likely changes to the prevailing network and the players that stand the risk of becoming obsolete. Zhou, (2004, p. 49) E-commerce has the capacity to change the nature of products, their processes, change industries and companies and even affect competition itself. E Commerce can be defined as; selling and buying of goods or services using electronic media. This means that the key players in the distribution channel simply carry out all the required transactions online. Egger and Buhalis, (2008, p. 112) For example, the internet has seen an increase of volume of goods and services being bought and sold. E-commerce includes transfer of money using electronic means, E-marketing, inventory management, online marketing and many others. Fesenmaier, (2006, p. 35) E-commerce is the trade of services and products by means of computer networks or the internet. It follows the basic principles of traditional commerce but in this case, buyers and sellers swap commodities through the internet for money. In ecommerce sellers and consumers of products transact business over networked computerized processes. This has offered maximum convenience to buyers and sellers alike. Buyers in this form of business get the opportunity to compare prices, quality and other factors before deciding to undertake the transaction. The buyer gets advantages of saving on physical transport costs and he/she can a product even from far place on a click of the mouse. Tourism is known to be one of largest industries across the universe. It is also known to be the internet’s natural partner. The tourism industry is currently renowned to have embraced online marketing and distribution of products and services. The industry is growing at a skyrocketing pace both in developed and developing nations. Up to date technologies are being deployed even to the most interior places that are tourist attraction centres. (WTO, 2002) An analysis of tourism trends show that the tourism industry has been contributing approximately 12% of the world’s Gross Domestic Product. Statistics from the world trade organisation shows that the industry by the year 2007 was employing approximately two hundred million across the globe. Research clearly shows that from the nineteen fifties to the year, nineteen ninety nine, the numbers of international tourists increased tremendously. Zhou, (2004, p. 50) This is to approximately twenty five million from approximately six hundred and fifty thousand tourists. Current research shows that in each day, more than two million people visit different nations per day as compared to sixty nine thousand tourists in nineteen fifties. This clearly indicates that the tourism industry has grown in heaps and bounds. The year two thousand saw the tourism industry grow by approximately seven point five percent. Zhou, (2004, p. 48) The internet is known to have had a very strong impact on augmenting the growth in the tourism industry. It is also attributed to the overall restructuring of the distribution channels within the industry. Developed nations are known to have embraced the use of the internet in the tourism industry faster than developing nations. Research shows that in the year 1999, e commerce sales accrued to approximately sixty five billion U.S dollars. Tesone, (2005, p. 50) Most of the internet transactions of these internet transactions encompassed transport, travel and hotel reservations. The tourism industry has been ranked as one of the top most industries that are quickly adopting the use of the internet in virtually all its transactions. This is according to research carried out by UNCTAD or the United Nations Conference on Trade and Development. Fesenmaier, (2006, p. 40) In fact most of the key players assert that one has to be online to make a sale. The tourism industry’s value chain has been known to have so many intermediaries. These include marketers, tourism travel agents and information handlers among others. Each of the intermediaries was known to take a commission and in the long run, very little would remain for the final destination. This is where the product or service is finally consumed. Fesenmaier, (2006, p. 40) Research has also shown that tourism has a distinguishable feature that has played a great role in propelling it towards e-commerce. This is the fact that tourism is no more than simple information at the point of sale. E commerce in tourism or ecommerce is characterised by customers seeking for more information about the best places to visit, the kind of recreational facilities in the places, booking tickets and reservations etc. One of the competitive factors in the industry is customer service and price. The internet has been known to provide quality information to customers as far as the two features are concerned. This is considering the fact that through internet, customers get instant information about prices and best destinations to visit. This allows them to compare different places across the globe at the click of a button. Egger and Buhalis, (2008, p. 112) Research shows that apart from the current technological applications in tourism industry, there is still great potential of incorporating more up to date strategies. This includes incorporation of geographic information systems. Current research shows that research GIS has been used in many other disciplines. Zhou, (2004, p. 69) These include environmental issues, urban planning, forestry and even geography. Geographic information systems are quite reliable in the overall display of large quantities of data. This would come in quite handy in the tourism industry considering the fact that the industry highly depends on resources that are natural in nature. Tesone, (2005, p. 55) Geographic information systems can be used in overall planning in the tourism industry. Most of the tourism destinations across the globe are usually characterised by landscape features. They are in fact the most attraction features that tourists are always looking out for. They could be historic sites, natural parks and coastal beaches. Sheldon, (1997, p. 25) Further analysis shows that there is very little information concerning the suitability of sites, sources or origin of visitors, travel motivation and expenditure patterns for visitors. These features can be best illustrated through the use of up to date technology such as geographic information system. Zhou, (2004, p. 77) This would enable tourists to easily view the sites online. This would help in marketing different places online rather than trying to explain to the tourists how the natural features on the site look like. This is quite imperative as it would help tourists to choose the exact places that they wish to visit. Sheldon, (1997, p. 25) In the long run, disappointments on the part of tourists would be minimised and the industry would experience more growth. The tourism network continues to grow narrow and narrow as time goes on. The industry has in the past been characterised by virtually all the major players in the distribution network. They include suppliers, wholesalers, travel agents, tour operators among others. Maurer, (2003, p. 132) These are normally involved in the distribution of goods and services. As time goes on, the distribution network will continue to grow shorter and shorter as some of the players are removed from the channel. There are high chances that the distribution network will remain with suppliers and customers. Fesenmaier, (2006, p. 41) This is where suppliers directly access or market and distribute products to final consumers. The internet is known to undermine essential structures on which traditional tourism distribution channels are based. This will definitely result in a new channel of distribution for the industry. The new distribution channel is bound to be virtual and short in nature. Egger and Buhalis, (2008, p. 102) Electronic commerce will continue to put pressure on available elements in the distribution channel. This will result in the key players in the tourism distribution channel moving from the physical to a marketplace that is virtual in nature. This simply means that it is not physical in nature. Tesone, (2005, p. 58) In the course of shifting, key players will come to the realisation that not all of them can operate online due to the nature of the virtual marketplace. This will result in some of them like inbound and outbound tour operators being rendered obsolete. As the tourism industry continues to incorporate e-commerce, there are various changes that are expected to occur on the industry’s distribution channel. Fesenmaier, (2006, p. 42) The traditional tourism distribution channel is characterised by push forces. This is whereby a supplier or manufacturer tailors products and services, packages them and ensures that intermediaries go out to look for customers or consumers. This in essence gives intermediaries a lot of work to do such as marketing and availing essential information to travellers or tourists. With the incorporation of e-commerce the forces are bound to change from push to pull. This is whereby customers are pulled by forces towards suppliers in the market. This makes suppliers to ensure that their services and products are quite appealing to the customers. The implementation of e-tourism forces suppliers to ensure that their Company websites are attractive and easy for customers to use. This also means that DMOs that are small can compete in the same market with bigger and prominent DMOs. Through the use of innovative websites, small destinations have an equal chance of accessing international tourists across the globe. The use of e-commerce results in creation of one market where all suppliers show their products and services. Zhou, (2004, p. 79) Research has shown that in as much as e-commerce has so many glamorous advantages, it also poses threats to the distribution channel. Initially, the tourism distribution channel was composed of so many intermediaries. They include travel agents, tour operators, retailers and suppliers. There are usually those who carry out marketing of tourism products and services to customers. Initially marketing was carried out by many intermediaries who would market tourism products and destinations through the use of diverse mechanisms. These mechanisms included televisions, billboards and even brochures. In some cases, marketers had to be physically sent to other nations to market a nation’s tourism products and services. Fesenmaier, (2006, p. 43) The incorporation of internet or e-commerce has the potential of rendering such marketers to be obsolete. Electronic commerce in the tourism industry has the potential to deconstruct and disintermediate the current distribution channel. In this case, the value chain will tend to move closer towards DMOs or the suppliers and consumers in the market. This is considering the fact that only one online marketer can be used to market a DMO and tourism products to various nations. The distribution channel in the tourism industry has started being adversely affected since nearly all suppliers have websites that tourists easily access on their personal computer via internet. This has continued to render marketers to be quite obsolete or irrelevant in the distribution channel. Tesone, (2005, p. 60) Travel agents in the tourism industry also doubled up as marketers in the tourism industry. Travel agents have the responsibility of helping tourists or travellers with information concerning travel arrangements that are best suited for them. Majority of travel agents receive payments on behalf of suppliers. They simply receipt the cash and are later on given their commission. Technology has improved and tourists or travellers can pay online through various money transfer facilities such as western union and PayPal etc Zhou, (2004, p. 80) Their task is usually to give travellers any possible advice concerning the best hotel accommodation that they can access, information about renting of cars while on tour and even weather conditions in destination areas. They also offer international travellers essential information on certificates of vaccination, exchange rates in destination countries and relevant documents such as passports and visas. Maurer, (2003, p. 132) It is quite essential to note that one supplier could employ several travel agents who would move within and without the nation marketing the destination. This was carried out physically through one on one or face to face marketing. Travel agents used brochures with all the above information that would be given to travellers or tourists. According to Tesone, (2005), with the onset of e-commerce all these travel agents are threatened of being rendered obsolete. This is considering the fact that one person can talk to thousands of tourists online. This is through chatting and email among other strategies. Furthermore DMOs compile all the above information on a Company website and customers easily access the information from anywhere and anytime. Tesone, (2005, p. 49) This is a big threat to jobs of travel agents since e-commerce is in one way or the other rendering them obsolete. This is considering the fact that suppliers or owners of DMOs are doing the task by themselves online. Suppliers are doing this so as to improve their profit margins in tough economic times. Tour operators are also known to plan for holidays for travellers or tourists. As suppliers implement ecommerce, they start tailoring various holiday packages that tourists can choose from. Fesenmaier, (2006, p. 39) In fact suppliers who are incorporating e-tourism link with various stakeholders or providers of other essential services such as restaurants, airlines, hotels and create wonderful packages for tourists to choose from. This basically means that the work of tour operators is in one way or the other being rendered obsolete. Sheldon, (1997, p. 25) In conclusion, the tourism industry is one of the most lucrative industries in the twenty first century. This industry is quickly incorporating ecommerce in the overall distribution of products and services. The internet is known to have had a very strong impact on augmenting the growth in the tourism industry. It is also attributed to the overall restructuring of the distribution channels within the industry. Developed nations are known to have embraced the use of the internet in the tourism industry faster than developing nations. The tourism industry has gone through remarkable changes since the 1950s. This is from travel agents physically marketing in different markets and to e-tourism where customers easily find all required information in a website. Initially marketing was carried out by many intermediaries who would market tourism products and destinations through the use of diverse mechanisms. These mechanisms included televisions, billboards and even brochures. In some cases, marketers had to be physically sent to other nations to market a nation’s tourism products and services. Potential technological applications in the tourism industry include geographical information system. In as much as the internet seems to bring with it so many advantages, a closer look shows that it is bound to do more harm than good on the traditional tourism distribution channel. Majority of suppliers will definitely carry out responsibilities of travel agents and tour operators. This will automatically render the two key players in the industry obsolete. Read More