Developments in Digital Business

Guest Lecture on E-Tourism

Lecture outline

Role of ICT

E-Tourism Definitions Outcomes

Characteristics of Tourism

History of ICT in tourism

Benefits of E-Tourism to Tunisia

Issues with E-Tourism

Role of ICT

ICTs are now critical for strategic management of organizations as they allow:

Expansion into new markets Empowering of employees Lowering of costs Enhancing distribution

Business is now conducted at speed of thought ICTs great for time poor but cash rich consumers

Increasing Speed of Uptake of Technology

35 years for radio to reach 50 million 13 years for television to reach 50 million 5 years for internet to reach 50 million 1 year for ipods to reach 50 million 6 months for facebook to reach 100 million

E-tourism is the digitization of all the processes andvalue chains in the tourism, travel, hospitality andcatering industries that enable organizations tomaximize their efficiency and effectiveness.

Definition

E-tourism Includes All Business Functions

E-commerce and E-marketing

E-finance and E-accounting

E-HRM

E-Procurement

E-Strategy

E-Planning

E-Management

Outcomes of E-tourism

It revolutionizes all business processes, the entire value chain as well asthe strategic relationships of tourism organizations with all their stakeholders

One stop-shop of travel giving all wider options to select the tourismproduct and to pay online

Outcomes of E-tourism(Cont.)

E-tourism increasingly determines the competitiveness of the organizationand therefore it is critical for the competitiveness of the industry in thelonger term.

Characteristics of E-Tourism

Easy access on the tourism products to world wide audience

Systematic approach to selling products

Automatic inventory control

Controlled payment system

Less risk of errors

Increased benefits to all stakeholders

Better liaison with all service providers, ie: Airlines, Hotels, Travel Agents and Tour Operators, Car rentals, Insurance agents, and all tourism activity representatives.

Problems with Traditional Approach

Small operators totally dependent onconditions set by large companies inthe supply chain

Often too small to participate inopportunities

Pricing and other conditions lockeddown for up to 2 years

Very limited ability to access themarket directly

Outcomes of E-tourism

“e-Business requires a customer-centric viewand a shift away from mass production tomass customization and from selling torelationship-building.”

)

Drivers for e-Business in Tourism

Economic necessity Rapid advancements in technology

Reduced cost Ease of access

Rising consumer expectations Time poor Overcame fears regarding security

History of ICTs in Tourism

Central Reservation Systems (CRSs)

Introduced by airlines in 1960s Hotels then came onboard Dominated the industry

Airline computer reservations systems emerged tobecome global distribution systems (GDSs)

Incorporated a wide range of services andproducts for the entire industry Examples included Amadeus, Sabre & Galileo Owners charged commissions and participationfees Transaction costs too high for small operators

History (Count.)

Until mid 1990s, over half the world’s electronictransactions were in tourism

Largely airlines

Destination management systems (DMS) thenemerged

Information on locally available attractionsand products

Useful for helping to overcome seasonalityproblems by spreading and balancing tourismdemand

History (Count.)

For many years, industry based on: Traditional supply chain Brochures Free-sale allocation Telex confirmations

Telex to fax to email

Access to funds internationally –replace travelers cheques

Changed travel behavior

As SME dominated, ICT had slower uptake

Uptake pushed by consumers

Suppliers

Manufacturers

Distributors

Retailers

Customers

(Supply Chain Management Systems)

(Inventory Management Systems)

(Efficient Customer Response Systems)

Transporters

Alternative Direct

Channel (e.g. The Web)

E-Business and Industry Value Chains

26,2

63,6

10,3

43,6

2000 2012

Africa’s International Tourist Inflow and Revenue

Tourist Inflow

Revenue from Inflow(in USD Million)

Number of International

Tourists (million)

Revenue from Tourism

(US$ billion)

$26.48

$40.00

$52.91

$65.11

$75.78

$84.96

$93.65

0

10

20

30

40

50

60

70

80

90

100

2010 2011 2012 2013 2014 2015 2016

Online Travel Sales in BRIC, by Country 2010-2016 (billions)

Russia

Brazil

India

China

Benefits of ICTs for Tourism in Tunisia

Allow small businesses to compete internationally

Dispose of unwanted inventory Eg: wotif.com and lastminute.com These systems pose problems as well

Consumers are now able to design their own packagesalong with online assistance of online agents to cater formore destination

Benefits of ICTs for Tourism in Tunisia (Cont.)

Changed the structure of the industryMany intermediaries will be reduced therefore reducing the price of travel

Internet great for brand enforcement, enlargementand expansion. E-marketing can be extensively used topromote Tunisia as a preferred tourism destination.

Can set price in real time to help manage demand

Benefits of ICTs for Tourism in Tunisia (Cont.) Sophisticated yield management to maximise profits

Initially only airlines Then hotels Now open to smaller tour operators & travel agencies

Underpin strategic alliances for airlines

Sophisticated ICTs allow organisations to predict and target consumer needs

Differentiate product for different consumer groups Foster relationship management & marketing

Loyalty programs

Benefits of ICTs for Tourism in Tunisia (Cont.)

E-marketing can be used as a low-cost tool.ICT can help Tunisia sell directly to the world market, which will boost the Tourism based economy of the country.ICT can also be used as a better solution for Destination Management programmes.Travellers forum can be used as a means to increase the Tourism Inflow.

Overcoming the Market Reach issue

The world is now a Global Village reachable at a clickInternet has made it possible for people all around the world to be reachable, both:

1. As provider2. As customer

Previously thought impossible targets are now reachable just by opening a website.

An overview of the supply chain of e-tourism

• General attributes of a tourism product:

1. Flight online

2. Hotels online

3. Transfers online

4. Excursions online

5. Travel Insurance online

6. Car Rental online

7. Other activities online

How it can be used on a B2B platform

• Requirement for B2B platform

1. Detailed and clear information

2. Secure database capture

3. A proper agreement, which will encourage prospective Business partner

4. Appropriate payment structure

5. Constant follow-up

Business to Business

• Extranets between Hoteliers and tour operators, travel agents to travel agents, tour operators to tour operators.

• Commissionable and non-commissionable rates

• Consolidated rates, profit mark-ups

• Credit facilities

Customer to Business

• One stop shop to buy flights, hotels, car rentals, insurances, activities, etc. in a single website.

• A wide range of choice in selection of product and the pricing

Corporate Business• Creating company database.

• Giving access to a specific user, along with login credential and system accessibility

• The user can login the system and make the reservation as per the requirement.

• A limit barem is set by the system administrator so that the user can make reservation upto an agreed upon limit of products.

Business to Consumer

• E-commerce applications is, where the consumers purchase air tickets

• E-Platform is, where the customers can as well act as agents. (B2B2C)

Consumer to Consumer

• Consumers informing other consumers over good or bad practice on the tourism products purchased online.

Eg: Forums

Social Media

The Tunisia Advantage• The geographical location/Accessibility

The Tunisia Advantage• The culture/language

Tunisia is a melting pot for various cultures. This unique mixture of cultures made Tunisia, with its strategic geographical location in the Mediterranean.

• The safety

Tunisia has been able to maintain a clean profile of a safe destination over the years, which is a priority requirement for most of the tourists.

The Tunisia Advantage

The climate is an important factor for tourism in any country. Having the benefits of an all-year round suitable weather, Tunisia can use this as an advantage to promote the tourism permanently on various e-platforms.

Focussing on Tunisian Hotels online• Direct contract can be obtained from all hotels

• The hotel inventory and rates are input in the system

• The specific seasonal rates can be updated as per contracts.

• Mark up can be added as per the tour operators target

• Once the mark up is set up, the hotel is activated as a live mode on the system.

• Therefore any client making a search can book the hotel inputted if the search criteria matched the data activated.

• The inventory is automatically updated as and when rooms are book

• The hotel is sent a reservation notification upon receipt of payment by the client.

• A voucher is generated by the system once payment is guaranteed.

Focussing on Tourism Activities• The activities provided by the various tour

operators can also be inputted in the system.

• Eg: Tunis city tour

• The particular activity is input as well as details such as activity provider, contact details, rate plan, contract limit, number of guests allowed, child policy, etc.

• The rate of the particular activity is inputted

• Any mark up is added

• The activity is made ‘live’ on the system.

• Any client looking for ‘City tour in Tunis’ can book the activity and proceed for payment.

• Even in this case, a voucher is generated once payment is guaranteed.

Focussing on Fixed Packages• A fixed package is one which consist of:

1. Flights

2. Hotel accommodation

3. Airport transfers

4. All meals included/excluded

5. Tourism Activities like excursions and events

• The system has separate modules for Airlines, Hotels, Activities

• Fixed Package module enables the service provider to attached the various component into one and sell it to online customers as a ‘fixed package’ or ‘All Inclusive’ Package.

• The fixed package will have a defined duration and the cost of the package will be pre-determined.

• The mark up can also be added.

• The fixed package can also be targeted to specific market depending upon the market requirement.

• The fixed package concept can be used for the ‘club’ concept.

The ‘CLUB’ destination

• Creating your own club

• Eg: Look Voyages, selling Tunisia to Europe. But using e-platform, a hotel based in Tunisia can design its own ‘club’ holidays and sell directly to the customers anywhere in the world, by-passing any external consolidators.

• The hotels which are eligible for being a club destination can adopt the E-tourism approach.

• The tour operators can be pulled up for activities and transfers

• The fixed package is created, on all-inclusive basis.

• These fixed package can be sold directly to customers online without the help of distributing companies

• This will promote higher rate of return to the hotels

• The customer will feel more connected towards the destination

• Any customisation can be directly requested to the service provider

• There will be a serious increase in revenue for tour operating companies in Tunisia.

Sell Online• The products to be sold have been defined as

Airlines, Hotels, Activities and Fixed Package.

• The inventory and rates are to be monitored by the system administrator

• The system has an Admin module as well as a Reports module which allows the provider to control the sales online.

ADMIN Module

• The admin module gives the control to the main system user to ability to control the other user, the sub agents, any corporate login customers, any B2B2C corporates, as well as the affiliates to the provider

• The report modules allows access to verify:

1. Rates and Inventory

2. Reservation made

3. Confirm bookings

4. Payment Made

5. List of Quotation Sent

6. List of cancellation

The reports also give a detailed view of the accounting pertaining to reservations made.

Reports Module

Presenting Brand Tunisia to the world

• By mean of the following e-services:

• 1. Social Medias

• 2. SEO & SMO

• 3. Travel & Investors forums

• 4. Visibility in websites related to target markets

THANK YOU