TOURISM RECREATION RESEARCH VOL.

30(3), 2005: 7-16

Information Communication Technology
Revolutionizing Tourism
DIMITRIOS BUHALIS and PETER OCONNOR
This paper identifies a number of key changes in Information Communication Technologies (ICT) that gradually
revolutionize the tourism industry. E-tourism and the Internet in particular support the interactivity between tourism
enterprises and consumers and as a result they re-engineer the entire process of developing, managing and marketing
tourism products and destinations. All stakeholders related to tourism and hospitality, therefore, gradually see their
role being changed and new opportunities and challenges emerging. The paper demonstrates that future of e-Tourism
will be focused on consumer centric technologies to ensure that the new sophisticated and experienced consumers are
served. Therefore, agile strategies are required at both strategic and tactical management levels to develop the info-
structure for tourism organizations to manage their internal functions, their relationships with partners and their
interactions with all stakeholders including consumers. Only those organizations that appreciate the opportunities
which ICTs bring and manage their resources successfully will be able to enhance their innovation and competitiveness
in the future.
Keywords: strategic tourism management and marketing, ICTs, e-tourism, customer centric, value chain, networks.
DIMITRIOS BUHALIS is Programme Leader MSc in Tourism Marketing, School of Management, University of Surrey, Guildford GU2 7XH,
England, UK. e-mail: [email protected]
PETER OCONNOR is at Avenue Bernard Hirsch, BP 105, 95021 Cergy-Pontoise, France. e-mail: [email protected]
Introduction
Information Communication Technologies (ICTs) have
been transforming tourism globally. The ICT driven re-
engineering has gradually generated a new paradigm-shift,
altering the industry structure and developing a whole range
of opportunities and threats. ICTs empowers consumers to
identify, customize and purchase tourism products and
supports the globalization of the industry by providing tools
for developing, managing and distributing offerings
worldwide. Increasingly, ICTs play a critical role for the
competitiveness of tourism organizations and destinations
(Buhalis 1998, 2003; OConnor1999; Sheldon 1997; Poon
1993). ICTs are becoming a key determinant of organizational
competitiveness and a wide range of technological
developments propel this evolution. Successful ICT
deployment requires innovative management to constantly
review developments and adopt suitable technological
solutions in order to maximize organizational
competitiveness.
Technological Developments and ICT Empowered Change
Major hardware developments, include massive
enhancements in processing capabilities, allow computers
to handle complex algorithms with a constantly increasing
speed of computation (Beekman 2003). This allows
organizations to centralize ICTs to units that control the
entire organization and to outsource selected non-core
functions to specialists businesses which may simply host
data or applications or handle the entire process. Scalable
and on demand technologies also allow organizations to
switch computation power between applications, according
to dynamic demand. The combination of enhancements in
processing and flexibility of processing capability allows
organizations to use their resources more wisely and
profitably. Nano-technologies facilitate the minimization of
hardware and its mass production, reducing production
costs and improves the portability of devices. Nano-
electronics can provide the high-technology at low
manufacturing cost and will eventually make systems
become invisible and disappear into the background. The
development of mobile and portable devices, from laptops
and tablet PCs to PDAs (Personal Digital Assistants) and
Smart Phones also offer significant computation power,
storage and portability. Tablets are increasingly developing
interfaces that simulate notebooks and palmtops and PDAs
offer lightweight portable computing. As the distinction
between PDAs and mobile phones increasingly becomes
blurred, people will soon carry a device that incorporates
both a mobile phone and a fairly powerful and permanently
I.C.T. and Tourism: D. Buhalis and P. OConnor
8 Tourism Recreation Research Vol. 30, No. 3, 2005
BLUETOOTH
ACCESS ON
DEVICES
2G 2.5G 3G
GSM
WAP
GPRS
WNL
UMTS
MOBILE
Cellular based
Public access
through hotspots
WiFi
802.11 a/g 802.11b
WIRELESS
LAN
WIRELESS PC
/ PDA
CONNECTION
SHORT RANGE LONG RANGE
100M 20 M UP TO 12 KM
connected personal computer, enabling both voice and data
communications.
Extensive networking is growing both within and
between partner organizations (Amor 2002). The
proliferation of the Internet, Intranets and Extranets supports
communications between employees, units, organizations,
as well as with external partners and consumers. Intranets
and Enterprise Resource Planning (ERP) systems provided
inter-organizational between processes, departments and
functions enable enterprises to reduce labour cost, systems
that support an integrated electronic infrastructure. Synergies
and interoperability increase efficiency, enhance
responsiveness and make better informed decisions. This
empowers employees to improve their performance,
increasing internal efficiency and effectiveness. Intra-
organizational networking emerged through extranets,
which enhances interactivity and interoperability between
organizations and trusted partners. By linking and sharing
data and processes electronically, organizations formulate
alliances to build complementary services, expand reach and
enhance collaboration. The Internet empowered the
distribution of multimedia applications, such as textual data,
graphics, pictures, videos, and sounds. Search engines such
as Google and Yahoo provided unprecedented capability to
find anything, including destination and product
information. An electronic marketplace has gradually
emerged and suppliers have developed Internet interfaces
to communicate with clientele and partners to sell directly.
New intermediaries also emerge to take advantage of the
capabilities of the Internet and aggregate products through
dynamic packaging.
The huge increase in digital information sent and
received by households and businesses requires an increase
in bandwidth. Broadband provides fast always on access
to services, applications and content resulting in lifestyle
and productivity benefits. Despite the initial massive
investment required in new networks and infrastructure as
well as the development of new content, services and
applications, broadband is expanding rapidly (EU 2001).
Broadband access is mostly charged based on flat access
fees, resulting in both the expansion of time people spend
online and e-commerce involvement. Wireless and Mobile
networks have also developed to allow access everywhere.
The Global System for Mobile Communication (GSM) and
the Wireless Application Protocol (WAP) allowed the
communication of voice and data over mobile phones.
General Packet Radio Service (GPRS) and Universal Mobile
Telecommunications System (UMTS) as well as I-Mode in
Japan introduce third generation (3G) mobile services,
empowering multimedia communications on mobile devices.
In addition, Wireless Local Area Networks (WLANs) allow
connectivity of portable devices through wireless-radio
connections (WiFi), whilst Bluetooth connects devices over
short distances (Figure 1). Wireless LANs have limited area
coverage whilst 3G networks enable continuous data
transmission on the move. Increasingly, devices are equipped
with Bluetooth, WiFi and 3G capabilities and each technology
will be used according to requirements, location and costs.
The development of Digital Television will effectively
bring the Internet to the living room of most families. User
friendly interfaces based on an advanced television set will
be easily operated through a simplified keyboard that will
enable the vast majority of the population to have direct access
to organizations electronically. This will bring electronic
commerce to the mass digital market.
Werthner and Klein (1999) have identified the most
significant technological developments forcing a new wave
of technological evolution (Figure 2). The underlying trend
Figure 1. Wireless Technologies and Interlines
Tourism Recreation Research Vol. 30, No. 3, 2005 9
I.C.T. and Tourism: D. Buhalis and P. OConnor
of all developments is the integration of hardware, software
and intelligent applications through networking and
advanced user interfaces. Technological convergence leads
developments and only blurred boundaries between systems
exist to illustrate dependencies and relationships. However,
all technologies need improvements in order to enhance their
speed, inter-operability, reliability and adaptation to the
industry and consumer needs. Fast and reliable networks
need to emerge to support media rich applications and on-
line video presentations. Information Management supported
by object-oriented, relational databases are required to enable
inter-linking between all the information kept by
organizations to generate synergies. Data modelling and
knowledge management must enhance the use of operational
data in the decision-making processes and enable better
informed operational and strategic choices. Intelligent
applications need to incorporate knowledge from all sections
of organization, use simulation techniques and the
processing of statistics to improve the quality of information
used for decision making and enable organizations to adopt
more proactive approaches to management and marketing
problems. Knowledge discovery and data mining support
management and marketing functions whilst learning
systems and agents increasingly accumulate and use
knowledge productively to support employees and
organizations.
User-friendly interfaces enable non-specialists to use
computers without extensive training. Adaptive interfaces
and the visualization of computing functions simplify
processes and empower users to take advantage of systems
and applications. Finally, integration of all applications and
systems support interoperability on different platforms and
through different media. Werthner and Klein (1999: 29) define
interoperability as the provision of a well defined and end-
to-end service, in a consistent and predictable way. This
covers not only technical features, but also for example in
the case of electronic market environments, contractual
features as well as a set of institutional rules. Integration
enables end-users to access a broad knowledge basis and
empowers suppliers to appreciate the information as well
as product and service needs of consumers and partners.
Perhaps the next major revolution will emerge in the
form of Ambient Intelligence defined by ISTAG (2003) as a
set of properties of an environment that we are in the process
of creating. This represents a new paradigm for how people
can work and live together. According to the ISTAG vision
statement, humans will, in an Ambient Intelligent
Environment, be surrounded by intelligent interfaces
supported by computing and networking technology that is
embedded in everyday objects, such as furniture, clothes,
vehicles, roads and smart materials - even particles of
decorative substances like paint. Humans will live in an

Netwcrk(|ng)
InIcrmat|cn
Management
Inte|||gent
A||cat|cns
User InterIace
lSO/OSl
lnternet
ATM lPv6
System Architectures
C|ient - Server
Distributed and
Mobi|e Computing
Cryptography
Databases re|ationa|,
object-oriented
Mu|timedia
Data Mode|ing
UniIied Mode|ing Language
Programming Languages
Java
CSCW (Computer
Supported Cooperative Work)
Authoring Too|s
Participatory Design
ArtiIicia| lnte||igence
Logics
Optimisation
Simu|ation
Statistics
Know|edge Discovery
and Data Mining
Learning Systems
Agents
ArtiIicia| LiIe
What You See ls
What You Cet
Mu|timedia
Windowing
Metaphors
Visua|ization
Adaptive
lnterIaces
SCML
Wor|d Wide Web
Hypertext Markup Language
XML
User Mode|ing
Natura| Language
Processing
Integrat|cn
Metadata
Mediated Architectures
Faci|itators
Wrappers - Legacy Systems
Added Services - e-payment and e-commerce
Objcct-cricntaticn
Agcnts - Ontc/cgics
Distributcd
Architccturcs
Adativc
/ntcrIaccs
WAP
Data Mining & Warehousing
CSM
Figure 2. Lines of technological evolution
Source: Adapted from Werthner and Klein 1999
I.C.T. and Tourism: D. Buhalis and P. OConnor
10 Tourism Recreation Research Vol. 30, No. 3, 2005
Ambient Intelligence Space in which there will be seamless
interoperation between different environments home,
vehicle, public space, work, leisure space, tourism
destination etc. This implies a seamless environment of
computing, advanced networking technology and specific
interfaces which should be aware of the specific
characteristics of human presence and personalities; adapt
to the needs of users; be capable of responding intelligently
to spoken or gestured indications of desire; and even result
in systems that are capable of engaging in intelligent dialogue
(Figure 3). Ambient Intelligence facilitates participation by
the individual - in society, in a multiplicity of social and
business communities, and in the administration and
management of all aspects of their lives, from entertainment
to governance. It should be unobtrusive and interaction
should be relaxed and enjoyable rather than involve a steep
learning curve. To be acceptable, Ambient Intelligence needs
to be driven by humanistic concerns, not technologically
determined ones and should be controllable by ordinary
people.
Pursuit of the Ambient Intelligence vision will require
contributions from many streams of research to realize both
ambience and intelligence. The development of the
Ambient Intelligence space will depend not simply on
finding solutions to the research challenges for ambience
and intelligence, but on the extent to which mechanisms can
be found to ensure the successful, seamless, integration of
components and their convergence into Ambient Intelligence
systems. There are a number of research domains or
components in which significant progress must be made in
order to further develop and realize the Ambient Intelligence
vision. Table 1 indicates just some of the technologies for
Ambient Intelligence that requires significant research.
Components for ambiance Components for Intelligence
Smart materials that can emit light efficiently; e.g. electronic wallpaper or
large synthetic foils that can emit light, materials that can be used for
touch and tactile movement, and synthetic materials that enable mass
storage and processing of digital data, and that can be integrated into
fabrics.
MEMS and sensor technology, including ultra low power (mechanical)
effectuators, sensor devices bridging between the physical world and
the cyber world, i.e., touch, vision, smell, and technology for the
integration of smart materials, micro systems, and microelectronics
into systems.
Embedded Systems development technology for re-configurable real-time
embedded computing platforms, for remote diagnostics and repair of
embedded systems, and to build in security and trustworthiness to
embedded systems.
Ubiquitous communication including ubiquitous pico-radio networks for
active and passive tagging, Internet accessibility for any physical
object, and ubiquitous broadband access to content and data.
I nput/Output device technology that supports ubiquitous hands-free
speech control, ubiquitous touch pads and whiteboards, and can turn
any surface into a display.
Adaptive software that is self-managing or has self-adjusting capabilities
that can detect and adjust to the health or otherwise of its
environment, re-allocating resources as required and automating
much of the system configuration work that now has to be done
manually.
Media management and handling including presentation
languages that support produce once and present
anywhere, methods and tools to analyse content and enrich it
with metadata, and tools to exploit the Semantic
Natural interaction that combines speech, vision, gesture, and
facial expression into a truly integrated multimodal interaction
concept, allows human beings to interact with virtual through
physical objects, and that enables people to navigate the
seemingly infinite information they will be able to access.
Computational intelligence including conversational search and
dialogue systems, behavioural systems that can adapt to
human behaviour, and computational methods to support
complex search and planning tasks.
Contextual awareness, for instance systems support navigation in
public environments, ie. traffic, in airports and in hospitals,
service discovery systems that enhance the shopping
experience, and context aware control and surveillance
systems.
Emotional computing that models or embodies emotions in the
computer, and systems that respond to or recognise the moods
of their and systems that can express emotions.


Table 1: Technology Areas Requiring Further Research for Ambient Intelligence
User-centric
participation
Ambient Intelligence
environment aware of:
user
a pp lic a tion
e nvironm e nt
p e rform a nc e c onstra ints
Technically feasible
Usable, acceptable &
useful
Adding social &
economic value
Figure 3. User-centred, participative, Ambient
Intelligence
Source: ISTAG IST2003
Source: ISTAG 2003
Tourism Recreation Research Vol. 30, No. 3, 2005 11
I.C.T. and Tourism: D. Buhalis and P. OConnor
Eventually Ambient Intelligence will enable the
formation of virtual enterprises, the fluid configuration of
business processes, and the seamless inter-operation of
underlying information systems. This will support
organizations that are willing and able to accept
organisational changes to participate in several networks
simultaneously without the need to radically alter their
company cultures and preferred methods of working.
Whether people respond positively to the opportunities
presented by Ambient Intelligence will depend heavily on
the extent to which Ambient Intelligence complements rather
than replaces existing methods of work and social discourse
and the extent to which it requires fundamental changes to
organizational structures. Therefore, Ambient Intelligence
must be conceived holistically and as it needs to be realized
through highly complex systems. Performing specific
research, embodying results in particular technologies and
products, and then seek to commercialize those products is
an obsolete development process. The technical complexity
of modern systems based on ICTs requires that all aspects of
the innovation chain integrate their efforts and hence the
engagement of both the research and business communities
to integrate the rapid co-evolution of the technology, the
market, and social and administrative requirements that are
critical for success (ISTAG 2003).
Strategies for E-tourism in the Future
ICTs have profound implications for tourism and e-
tourism reflects the digitization of all processes and value
chains in the tourism, travel, hospitality and catering
industries. Tactically, e-tourism enables organizations to
manage their operations and undertake e-commerce.
Strategically, e-tourism revolutionizes business processes,
the entire value chain as well as strategic relationships with
stakeholders. E-tourism determines the competitiveness of
organizations by taking advantage of intranets for
reorganising internal processes, extranets for developing
transactions with trusted partners and the Internet for
interacting with all stakeholders (Buhalis 2003). ICT
developments generate both opportunities and challenges
for tourism organizations and the most significant emerging
trends can be examined within the framework of change
(Figure 4). Increasingly, tourism organizations need to use
ICTs to develop strategies that are customer centric,
profitability driven and partnership enabled. This will assist
them to focus on their customers, organizational needs and
distribution strategies respectively.
Consumer-centric Approach
ICTs should place users in the middle of its functionality
and product delivery. Every tourist is different, carrying a
unique blend of experiences, motivations and desires. The
population in general is travelling more frequently, becoming
more linguistically and technologically skilled and can
function in multicultural and demanding environments
overseas. The Internet empowers such new tourists with
more knowledge, and encourages them to seek exceptional
value for money and time. Experienced, sophisticated,
demanding travellers require interaction with suppliers to
satisfy their specific needs and wishes. Living a hectic life,
consumers have shorter periods of time to recharge batteries
and to engage in their favourite activities. Leisure time is
used more for edutainment, (the exploration of personal
interests for both personal and professional development)
and independently organized tourism facilitated by dynamic
packaging, whilst rigidly packaged mass tours are in decline.
The contemporary/connected consumer is far less willing
to wait or put up with delays, to the point where patience is
a disappearing virtue. Hence the key to success lies in the
quick and accurate identification of consumer needs and in
reaching potential clients with comprehensive, personalized
and up-to-date products and services that satisfy those
needs.
Tourism organizations need to develop technology-
supported personalized services to address individual
needs. They should collect customer information at each stage
of service - before, during and after a visit - in order to better
understand consumer behaviour choices, concerns and
determinants. Personalized services driven by advanced
Customer Relationship Management systems should record
customer preferences and requirements for present and future
usage. Systems need to be location, context and mood aware,
in order to provide sensible advice. Proactive services may
be offered based on the anticipated needs obtained from
Figure 4. ICT enabled e-Tourism Trends
eTourism
TRENDS
CONSUMER Customer Centric
Person ali zat ion CRM
Locat ion /Contex t/ Mood aware
Proact i ve/ant i cipat ory
Reacti ve/ adapt ive to consumer needs
Syst em int egrat ed
Sati sf acti on dri ven
COMPANY Profitability Driven
Revenue
Expansi on o f mar kets and operat ions
Market ing and promoti on
Dir ect Dist ri but ion
Yiel d management/ Revenue Management
Exte nsive di str ibut i on st rat egy
Cost
I nter nal Int egrat i on
Reduct ion of in ter medi ati on
I ntel li gent pr ocurement
ASPs
DISTRIBUTION: Partnership Enabled
Vi rtual Organizations
I nter operabi li t y
Devel oping a v alue syst em
I.C.T. and Tourism: D. Buhalis and P. OConnor
12 Tourism Recreation Research Vol. 30, No. 3, 2005
known/declared or previously experienced customer
profiles. Reactive services should be designed to meet the
needs of customers following incidents or external
environment factors. To achieve customer centricity,
organizations need to integrate their systems and develop
mechanisms for both recording customer reaction to stimulus
and also to develop tools to allow consumers to customize
their desired products to personal preferences.
Customer satisfaction depends highly on the accuracy
and comprehensiveness of tourism information and the
ability of organizations to provide tools for customization.
Consumers not only require value for money, but also value
for time for the entire range of their dealings with
organizations. ICTs enable travellers to access reliable and
accurate information as well as to undertake reservations in
a fraction of time, cost and inconvenience required by
conventional methods. Transparency between product
characteristics and pricing also empower customers. ICTs
can assist the customization of service quality and contribute
to higher guest/traveller satisfaction. Consumers can
personalize not only their choice of products but also the
essence of the product itself by customizing the layout of
hotel rooms, the channels available on the TV or the drawings
on the wall. A wide range of developments empower
consumers, as indicated in Figure 5.
User friendly and customised interfaces (e.g., MyHilton);
Consumers have more information and enjoy greater choice;
Accurate and richer marketing research by collecting data from
all transactions and enquiries
Better understanding of consumer needs based on research
interaction and data mining;
Differentiated and customized services according to personal
preferences and attitudes;
Pricing becomes more flexible and transparent;
Reduction of bureaucracy and paper-work frees employee time
for better customer service;
Customizing the product and establishing one-to-one marketing
through loyalty schemes ;
New personalized value added services (e.g., personalized in-
flight or in-room entertainment and information channels);
Automation of repetitive operational tasks through ITs (e.g., in-
room TV checkout);
Personalized services (e.g., telephone operator acknowledges
guest by name or waiter knows dietary preferences or
requirements);
Language barriers reduced through interfaces that markets
through automatic translations
Powerful databases, supported by innovative Decision
Support Systems, should therefore drive organizations to
personalize services and to match consumer needs with
organizational capabilities and offerings. ICT-supported,
consumer-centric, flexible service delivery is critical and the
industry needs to become more flexible, efficient and quicker
in responding to consumer requests as well as to offer ICTs
tools and mechanisms for product customization.
Profitability Driven
Tourism is a profit driven industry and ICTs should
contribute to profitability. This can be achieved through
driving increases in revenue, reductions of production and
operational cost and increase of awareness and promotion.
Emerging tools can support production increase,
improvement of load factor/occupancy levels and enhance
scheduling. Airlines for example, use technology to forecast
demand, schedule and monitor load factors before deciding
on route capacity, frequency, hub and spoke operations.
Other types of organizations can similarly manage capacity
more efficiently as well as expand to new markets using
similar ICT based tools. ICTs also facilitate direct distribution
- a critical function for increasing revenue. By distributing
directly organizations can save commission and fees and
reinforce their brand throughout the process, engage with
consumers, satisfy personalized needs and better understand
consumer preference and price elasticity. Selling products
directly also increases customer loyalty and reduces leakages
to competing organizations.
Technology empowered Yield/Revenue Management
support accurate demand estimates and decisions to either
fluctuate capacity (in the case of transportation) and/or price
to optimise revenue. Yield management is about coordinating
5Cs: calendar, clock, capacity, cost and customer.
Strategically, levels of yield management are geared to
matching service timing and pricing to customers
willingness to pay in relation to its timing and demand from
other customers (Enz and Withiam 2001). Historical demand
patterns, competitor pricing as well as events and
occurrences affecting demand can be scanned electronically
to provide revenue-management critical information.
Constant interactivity with consumers and partners enables
flexible and competitive pricing. Monitoring sales allows
marketers to adjust the product and price or/and to initiate
promotional campaigns. ICTs can also alert organizations
about excess capacity or demand. Multi-location
organizations (e.g., tour operators or airlines) can then divert
capacity to profitable segments or regions. On-line auctions
and last minute offers can provide additional revenue
streams and new avenues for disposing distressed capacity.
Specialist organizations such as lastminute.com and
Figure 5. IT Empowered Developments Enhancing
Customer Satisfaction
Tourism Recreation Research Vol. 30, No. 3, 2005 13
I.C.T. and Tourism: D. Buhalis and P. OConnor
QXL.com have developed their entire business model around
this proposition and dispose of distressed inventory without
spoiling suppliers brands.
Tourism organizations can also use ICTs for building
awareness and promotion through newsletters, pop-ups and
search engine optimization strategies. Regardless of size they
can build and maintain web sites, either internally or
through partners. ICTs enable tourism organizations to have
a global presence and partnerships around the world in an
efficient and cost effective manner enabling small firms to
build their virtual size. Until recently Global Distribution
Systems (GDS) were the only widely spread electronic
distribution channel, despite being limited to the distribution
of scheduled airlines, city hotel chains and large car rental
companies. The Internet enables all types of organizations
to distribute products directly to consumers and to link with
emerging intermediaries (such as Lastminute.com, Expedia,
eBookers and Hotels.com) expanding their value chain and
promote their products through a combination of systems
and partners (Buhalis and Licata 2002; OConnor 2003;
Krcher 1997).
Despite expensive initial investments, ICTs can reduce
administration and production costs by integrating internal
data and processes. Operational and communication costs
can be reduced by integrating operational systems,
maximizing internal efficiencies, decreasing back office
labour costs, reducing number and length of personal
communications, and enabling consumers to have direct
access to information. Disintermediation and reduction of
commission and fees for intermediaries also reduces costs.
Despite the cost of developing e-Commerce platforms, many
firms achieved savings by direct distribution. Many have
passed a proportion of savings to consumers to maintain
competitiveness. As more consumers are able to serve
themselves online, the distribution costs are declining. On
the procurement side, organizations will increasingly
purchase products from global electronic marketplaces.
Systematizing the procurement function, through electronic
connections with regular suppliers, can also reduce
processing and administration costs. Finally, Application
Service Providers (ASPs) allow organizations to rent ICT
applications developed and hosted by specialized
professionals (Paraskevas and Buhalis 2002). This enables
them to share the development and maintenance cost of such
software. Hence, ICTs should contribute to profitability
through increase of revenue and reduction of costs.
Enabled Partnerships
Few other industries depend on partnerships as much
as tourism. ICTs empower networking throughout the
industry and also improve the interactivity between tourism
production and distribution partners, supporting a closer
cooperation towards the provision of wide ranging products.
The creation and delivery of tourism products is based
on partnerships between a range of organizations, including:
transportation, accommodation, catering, entertainment and
cultural heritage. Taking advantage of the characteristics of
virtual reality, organizations will force firms to adapt their
product constantly to satisfy tourism demand; use
information extensively; develop partnerships; and outsource
a significant amount of functions in order to achieve
economies of scope (Hale and Whitlam 1997). Virtual
organizations will allow tourism firms to develop extended
products and services, produced independently and
instantaneously, in response to customer demand.
Informational networks can link up and bring together the
core competence of independent firms breaking traditional
organizational boundaries. Trusted partners can offer
flexible and speedy value added products and services,
through accessing world-class competencies, exploiting fast-
changing opportunities by sharing costs, skills, and by
accessing global markets. These corporations do not
necessarily need to be located near the consumer, as ICT
networks and tools empower corporations to develop a
virtual proximity to consumers and their needs.
Networking allows the outsourcing of non-core
functions to specialists, whilst value added services and
products can be sourced from competent trusted partners.
Distribution is the obvious function that benefits from virtual
organizations. The globalization of the industry intensifies
the information required for all tourism transactions and
requires instant confirmation and purchasing abilities. As
distribution has changed from facilitation of information
exchange and reservations to a sophisticated mechanism
for dynamic personalization of added value services, virtual
corporations enable tourism firms to expand their value
chain and include endless products and services.
Intermediaries have access to endless inventory whilst
suppliers become intermediaries by augmenting their
product by selling complementary products and services
from partners. Organizations need therefore to appreciate
the benefits of co-opetition and co-destiny, when
organizations need to collaborate with players that they
would normally regard as competitors.
Virtual corporations and globalization bring more
market participants and complicate distribution channels
further (Figure 6) increasing heterogeneity and requiring
standardization and inter-connectivity. The virtualization
of the tourism value chain will depend on the degree of
I.C.T. and Tourism: D. Buhalis and P. OConnor
14 Tourism Recreation Research Vol. 30, No. 3, 2005
interconnectivity and interoperability between organizations
to allow the flow of information and data in this complex
value process. To ensure interoperability, data from a variety
of independent sources has to be collated and delivered to
final users and distribution systems in a consistent format.
Hitherto a number of standardization initiatives [such as
IFITT Reference Model Special Interest Group (RMSIG),
Hospitality Industry Technology Integration Standards
(HITIS), Open Travel Alliance (OTA) and the Travel
Technology Initiative (TTI), the Hotel Electronic Distribution
Network Association (HEDNA) and Hotel Technology Next
Generation] have developed standards to promote
communication between different data structures and
organizations. However, these programmes have faced
adoption challenges in different countries and cultures.
Moreover, standardization initiatives are in general being
driven by the big players in the market and SMEs have little
or no choice but to adopt the changes, irrespective of their
suitability, or risk being left behind. There is a need for a
common tool that allows organizations to recognize and to
communicate with each other allowing wide
interoperability.
The advent of new technical frameworks (XML,
Semantic integration) raises new expectations on the
integration process. Semantic reconciliation tools are being
developed, such as a data mediator computer programs that
translates data between systems with different data exchange
formats/schemas. This approach depends on a shared,
conceptual reference schema: the ontology of the domain
and allows individual organizations to keep their
proprietary data format whilst exchanging information
based on the ontology (Missikoff et al. 2003; Fodor and
Werthner 2005). A mediation tool is based on three major
technologies: XML, for information coding and exchange;
ontology, for knowledge and content management;
integration of heterogeneous information sources, for the
reconciliation method. The mediator automatically generates
Individual
Corporate
travel
agenci es
virtual
tours
Local
Transport
(bus, tram)
Theatre
Visitor
Attractions
Museums
/ galleries /
culture /
historical
Events /
festivals
Restaurant
Taxi
maps
Accom-
modati on
Local
Councils
RTO
Incomi ng
operators
Ti cket
brokers
Leafl et
Wal k i n
Tel ephone
NTO
GDS
Switch
Teletext
websi te
Content
Provi ders
Internet
Gui debook
websi te
Teletext
res system
Off. TO res.
system
Online Tour
Operators i nc
Specialist eg
activity,coach
Onl i ne TO
res system
name your
own pri ce
websi te
Car Rental
websi te
Trai n websi te
Corporate travel
websi te
e-consorti ums
eg opodo, co-op
GDS
websi te
Airline website
Eurostar websi te
Crui se websi te
Online Travel
Agenci es
Ferry websi te
Online TA res
system
NYOP res
system
Car rental
Res Syst em
ETO res
system
Crui se
Res. system
Airline res
system
consort Res.
system
TIC
Internet
Wi rel ess
Brochure
I DTV
Other
hotels in
chain
Teletext
Gui debook
Offl i ne Tour
Operators
Call centre
Airline
Call centre
Of f . TO
Offline Travel
Agenci es
Call centre
On. TA
Ki osk
Leafl et
Call centre
On. TO
Call centre
Crui se
Call centre
Train
Call centre
Car rental
Call centre
Eurotunnel
Cal l centre Consort
Call centre etravel
Call centre Ferry
e-travel only
Hotel Chai n' s
websi te
Hotel Res.
system
Call centre
Hotel
Eurostar
Res. Syst em
Train
Res. Syst em
Ferry Res.
system
Corporate travel res
system
Figure 6. Interconnectivity in Tourism
Tourism Recreation Research Vol. 30, No. 3, 2005 15
I.C.T. and Tourism: D. Buhalis and P. OConnor
data translations from descriptions of the data in the source
and the receiver schemas, allowing users to keep their
proprietary data formats whilst allowing interaction among
their data.
ICTs increasingly transform distribution to a global
value system, where access to information and ubiquity is
achieved, while interactivity between principals and
consumers provides major opportunities. Hence, the Internet
propels the re-engineering of the entire process of producing
and delivering tourism products, as well as it boosts
interactivity between partners that can design specialized
products and promotion in order to maximize the value-
addition provided to individual consumers. Ultimately, ICT
tools reinvent the packaging of tourism to a much more
individual-focused activity, offering great opportunities for
principals and intermediaries and enhancing the total
quality of the final product (fitness to purpose). Equally, it is
changing the structure of the industry to an ecosystem of
individual but interrelated organisms and nodes all
interconnected and interoperable.
Conclusions
IT trends and Implications for Tourism
ICTs evolve constantly, providing new tools for tourism
marketing and management. They support the interactivity
between tourism enterprises and consumers and as a result
they re-engineer the entire process of developing, managing
and marketing tourism products and destinations. This
paper has identified a number of key changes in hardware,
software and networking that will impact on the tourism
industry in the future. Although the exact impacts are far
from clear, the future of e-Tourism will be focused on
consumer centric technologies that will enable
organizations to focus on their profitability through a
network of partnerships. Consumers will be more
sophisticated and experienced and, therefore, more difficult
to please. The availability of powerful ICTs empowers both
suppliers and destinations to enhance their efficiency and
re-engineer their communication strategies. Increasingly,
ICTs will provide the info-structure for the entire industry
and will take over all mechanistic aspects of tourism
transactions. Innovative tourism enterprises will have the
ability to divert resources and expertise to servicing
consumers and provide higher value-added transactions.
Agile strategies are required at both strategic and tactical
management levels to ensure that the ICT raised
opportunities and challenges are turned to the advantage of
tourism organizations to enhance their innovation and
competitiveness.
Acknowledgement
A version of this paper will be published in Tourism
Management Dynamics, edited by Dimitrios Buhalis and
Carlos Costa 2005. Permission to publish this article has
been granted by Elsevier Sciences.
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Submitted: January 7, 2005
Revised: July 22, 2005
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