Business

Travel and Tourism – Emerging Marketing and Management Strategies

Introduction

The travel industry is the world’s largest industry, exceeding $4.5 trillion in gross output. Recent reports from the World Travel and Tourism Council indicate that tourism employs over 198 million people worldwide or approximately 7.8% of the global workforce. The emergence of travel as a significant economic activity began after World War II as travel became widely accessible to the general population.

Structure of the Industry and the Role of Information Technologies

The travel and tourism industry can be characterized as comprising all organizations that are involved in the production and distribution of travel and tourism products. It can be viewed as an umbrella industry containing a set of interrelated businesses, such as transportation companies, accommodation facilities, attractions, catering enterprises, tour operators, travel agents, and providers of recreation and leisure facilities. To respond effectively to the dynamic character of the industry, information must be able to flow among the clients, intermediaries, and each of the suppliers involved in serving the clients’ needs.

Hotels

The hotel industry bases much of its distribution on direct contact with customers (WTOBC, 1999). Historically, hotels have distributed information through print-based media such as brochures, travel planners or regional guides, and received reservations by mail, phone, and fax. More recently, hotel rooms have been made accessible for booking through global distribution systems (GDSs) and through direct access to hotels using central reservation systems (CRS)

Travel Agencies/Online Intermediaries

Travel agencies are intermediaries that arrange and distribute travel information to individual travelers, with some agencies specializing in certain market segments or products. In addition, many travel agencies function as tour operators, designing their own package tours and selling them either directly to the traveler or through other agents.

Travel agencies use information intensely and therefore need IT to process that information. In fact, information on travel products, destinations, schedules, fares, rates, and availability is their most important product and defines their existence. The more information a travel agency can access electronically, the timelier, more accurate, and efficient services it can provide to its clients.

Destination Marketing Organizations

Destination marketing organizations (DMOs) are typically not-for-profit, small and medium-sized, information intensive organizations that perform a wide range of activities to coordinate the diverse components of the tourism industry. DMOs act as a liaison, collecting and providing information to both the consumer and the industry in order to facilitate tourism promotion and development of a specific area

Emerging Marketing and Management Strategies

Management Strategies The adoption of information technology has transformed the way in which the tourism industry conducts business. With the assistance of new technology, especially the Internet, new opportunities have emerged for tourism organizations, which enable them to market their travel products and services and manage their daily business activities more effectively.

In particular, innovative marketing and management strategies have evolved in the areas of Web development, Web advertising/promotion, e-commerce activities, customer relationship management, and the use of online destination management systems.

Web Advertising/Promotion

The Internet is an almost pure manifestation of marketing principles and practices. It is a tourism marketer’s dream because (1) it enables travel companies of different sizes to compete on more equal terms and (2) it allows a travel company to open up a direct and potentially personalized channel of communication with its customers. In other words, travel companies of all sizes are much more equal in their competition for consumers’ attention on the Internet.

E-commerce Activities

Before the onset of the Internet, electronic commerce was usually conducted over a proprietary network connecting a group of organizations such as airline companies, travel agents, and hotels with each other through CRSs or GDSs. The nature of the transaction was purely business-to-business. Tourism businesses now use the Internet as a means of redefining their focus, creating new products, finding new distribution channels, and creating new markets.

For example, the major airline sites now offer customer reservations, electronic tickets, seat selection, in-flight merchandise, and reward points; in addition, some of the airlines have enhanced their sites to offer lodging, transportation-package deals, and cruises through their alliance partners.

Last word

Before the onset of the Internet, electronic commerce was usually conducted over a proprietary network connecting a group of organizations such as airline companies, travel agents, and hotels with each other through CRSs or GDSs. The nature of the transaction was purely business-to-business. Tourism businesses now use the Internet as a means of redefining their focus, creating new products, finding new distribution channels, and creating new markets.

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