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Chapter 6

Chapter 6 notes gg294 .docx

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Barbara Carmichael

Chapter 6 notes  Technology has revolutionized the pace, scale and nature of business processes in tourism, changing the parameters and scale of business operation  Small business to operate globally through the use of technology  Technology has transformed the nature of tourism supply  Speed and pace of change in tourism = assisted from a business and consumer’s perspective by the development and implementation of information technology (IT)  Poons defines “as the collective term given to the most recent developments in the mode (electronic) and the mechanism (computers and communication technologies) use for the acquisition, processing, analysis, storage, retrieval, dissemination and application of information  Use of electron, computer based and commincation based technologies are used to aid the operation and execution of business process  Process and facilitating the flow of information within and between organizations and to and from the consumer  Basic element software, hardware and people who operate the IT systems  MIS = management information sys  Information and communication technologies in tourism ICTs have improved processing capability and the speed of computing, reduced equipment size and cost of purchasing software and hardware  Enable traveler to identify, customize and purchase tourism products globally  Example online hotel booking in Europe grew from 4 billion euros in 2004 to 10 billion in 2007  Buhalis and Law says tourism purchases now rate among some of the most expensive domestic outlays for many households, leading to more extensive use of ICT to research the wider social and emotional benefits of holidays  36 percent of people spend 10 hours selecting their ideal holiday vs 21 percent selecting mortgage  Tourism consumers and suppliers to communicate, enhance awareness of needs and offers, inform, negotiate and develop bridges to reduce distance and cultural and communication gas  Current concerns associated with this development o Some of the dot.com businesses which have revolutionized the supply of tourism services are still struggling with issues of profitability given the high capital costs of investing in technology and relatively high cost of recruiting customers o There is growing unease amongst some consumer over purchasing products online due to security issues of payment for these services, the rise of unsolicited web marketing which has heralded a new junk mail era and identity theft o Consumers are being saturated with online information, questionable terms of its derivation, origins and authencity o Levels of customer loyalty for supplier are declining due to the availability of low cost options they can find by surfing the internet, which may filter through to lower rates of brand loyalty as most travel consumer are not brand loyal o New forms of technology may quickly supersede existing modes of electronic delivery given the rapid pace of change as shown by the exponential growth of the social networking Use of ICT to manage Tourism Supply  Helping companies to understand how to improve profitability and yields from products. Most notable with airline reservation system to match supply and demand  Helping companies to understand what the tourist requires and to tailor the product to market demand  Allowing enhanced cooperation between partners in the supply chain  Enabling operational practices in tourism management to help manage supply and demand in a more timely fashion and to react quickly to changes  Extending the geographical scope of a company’s reach and scale of operation  Reorienting the nature of tourism intermediation (process of taking suppliers products and brokering them to clients) with the rise of e-mediaries and the e tourism revolution o Traditional model of business in the travel sector has gradually eroded or replaced bu merchant model with online travel B2B = business to business B2c = BUSINESS TO CONSUMERS B2G = business to government -to gain a competitive edge -to improve business performance and productivity and to develop new businesses -to facilitate new ways of managing and organizing business activities The consumer and ICTs: The distribution channels  Consumer normally purchase the tourism product in one of four ways o Travel agent o Tour operators o Regional tourism organization RTO o ICT techonology to purchase the product o RTO makes more money o ICT have the last minute holidays at discount price ICT can be used by tourism to develop their business  Cost leadership: to drive the unit price of production down  Product differentiation: where ICT can be used to add value or differentiate a
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