3-Eyl-15Travel e221 Dimitrios BUHALIS - Information Technology for strategic tourism management The...

19.Nis.2023 Travel e22 1

Dimitrios BUHALIS - Information Technology for strategic tourism management

• The profilaration of the Internet and the expansion of networking have revelutionized tourism industry and have altered the core business for all stakeholders.

• By networking tourism players globally, innovative operators have realized that a number of opportunities and challenges emerge.

TourismTourism ICTs and the Tourism SystemICTs and the Tourism System

• Principlals use ICTs primarily to reduce reduce operational and distribution costsoperational and distribution costs by establishing powerful tools to interact directly with the consumers.

• The innovative players took advantage of emerging ICT tools by developing appropriate products & services which add value in the process.



• The key reasons for this slow migration process are:

ICTs and the Tourism SystemICTs and the Tourism System

• On tourism supply side, ICTs play critical role on :– Production– Marketing– Financial– Operational

• Low profit margins in the Low profit margins in the industry result in industry result in reluctance to invest in reluctance to invest in ICTs.ICTs.

• ICTs develop faster than ICTs develop faster than the industry is able or the industry is able or willing to follow willing to follow

• Small Players cannot Small Players cannot aford.aford.

• Complete migration Complete migration requires all members & requires all members & channels of organization channels of organization to follow this to follow this development.development.

and Distribution...



• Distribution have become the most critical Distribution have become the most critical factor for the competitiveness of the factor for the competitiveness of the organizations & destinations.organizations & destinations.

DistributionDistribution

• ICTs have revelutionized distribution channels effectively.(e.g.: CRSs, GDSs ).– As tourism intermediation is all about handling

information & facilitating transactions, ICTs play critical role in the operation of intermediaries.

• Setting appropriate and effective distribution Setting appropriate and effective distribution channels influence consumer behaviour as well channels influence consumer behaviour as well as industry ability to respond guests & clients.as industry ability to respond guests & clients.



• While ICTs facilitate distribution, they influence While ICTs facilitate distribution, they influence the Marketing Mix the Marketing Mix (“P”s of Marketing(“P”s of Marketing):):


• Determine by assessing real-time Determine by assessing real-time demand & availabilitydemand & availability

PRICEPRICE

• Manupulate and formulate tourism Manupulate and formulate tourism by combining and specializing products by combining and specializing products according to customers’ needs & wantsaccording to customers’ needs & wants

PRODUCPRODUCTT

PROMOTIONPROMOTION• Facilitate by targeting specific Facilitate by targeting specific markets and establishing communucationmarkets and establishing communucation

BUSINESS BUSINESS MODELSMODELS

• They also transform by They also transform by introducing new distribution channelsintroducing new distribution channels

• Therfore, distribution channels bundle tourism Therfore, distribution channels bundle tourism products together, to make consumers confirm, products together, to make consumers confirm, and pay for the bookings.and pay for the bookings.



• Consumer Needs & WantsConsumer Needs & Wants that are satisfied that are satisfied by principle suppliers, Incoming&Outgoing tour by principle suppliers, Incoming&Outgoing tour travel agencies & our operators: travel agencies & our operators:


• Product Product knowledgeknowledge

• Non-stop Non-stop creativity.creativity.

• Product varietyProduct variety• Advice for Advice for

decissionsdecissions• Value for timeValue for time• Minimum form Minimum form

fillingfilling• Competent staffCompetent staff

• Pleasent Pleasent experienceexperience• Individual attentionIndividual attention

• Unbiased serviceUnbiased service• Best DealsBest Deals• Convenient AccessConvenient Access• Accurate & reliable Accurate & reliable

informationinformation

• Tourism distribution channels require detailed Tourism distribution channels require detailed analysis before ICT needs are examined!analysis before ICT needs are examined!



• Today ICTs are in the center of tourism Today ICTs are in the center of tourism organizations’ tactical planning & operational organizations’ tactical planning & operational managementmanagement

Operational ManagementOperational Management

1. Internet supported eTourism 1. Internet supported eTourism ManagementManagement• Most tourism organizations today have their Most tourism organizations today have their own detailed websites. They use internet to:own detailed websites. They use internet to:– Selling travel products online directly to customers. Selling travel products online directly to customers.

They can also adopt dynamic pricing according to They can also adopt dynamic pricing according to demand. demand.

– Brand building Brand building (Communucate the brand values on the (Communucate the brand values on the webpage)webpage)

– Loyalty clubs & affiliations. (Increase interaction with Loyalty clubs & affiliations. (Increase interaction with loyal customers, thus maximize customer loyalty). loyal customers, thus maximize customer loyalty). Airlines have pioneered loyalty clubs; e.g.: Airlines have pioneered loyalty clubs; e.g.: www.ba.com , , www.thy.com . .Not only to communucate, but also offer special Not only to communucate, but also offer special priviliges and benefits, as well as they also assist priviliges and benefits, as well as they also assist customers to manage with their rewards, air-miles, customers to manage with their rewards, air-miles, etc. etc.



Operational ManagementOperational Management2. Intranet systems & Intranet supported 2. Intranet systems & Intranet supported

eTourism Management!eTourism Management!• Communucation and interacting with staff and Communucation and interacting with staff and

partnerspartners– Partner systems: e.g.: authorized tour operators can Partner systems: e.g.: authorized tour operators can

access access – Facilitate a number of operational decissionsFacilitate a number of operational decissions– Controlling inventory helps principlals to actively Controlling inventory helps principlals to actively

anticipate and manage demand for their products.anticipate and manage demand for their products.– Timely sharing of all data accross the organization, is Timely sharing of all data accross the organization, is

critical for production; and sellingcritical for production; and selling– In addition, re-engineer, automate and facilitate In addition, re-engineer, automate and facilitate

entire business processesentire business processes– Provides: eSales, eProcurement, eAccounting & Provides: eSales, eProcurement, eAccounting &

eFinance, eHuman Resources... eFinance, eHuman Resources...



Operational ManagementOperational Management3. Extranet systems supported eTourism 3. Extranet systems supported eTourism

Management!Management!• Private intranet accessable to outsiders with Private intranet accessable to outsiders with

privilegesprivileges– Authorized tour company can access to a dedicated Authorized tour company can access to a dedicated

part of a hotel’s intranet to see corporate rates & part of a hotel’s intranet to see corporate rates & availabilitiy, or update rooming list, etc.availabilitiy, or update rooming list, etc.

– Amadeus, Wordspan, etc screens at Travel Agency Amadeus, Wordspan, etc screens at Travel Agency offices...offices...



e-Airlinese-Airlines• Airlines have been using ICTs since 1960s.Airlines have been using ICTs since 1960s.

• Consequently, airlines moved fast towards Consequently, airlines moved fast towards Internet Protocol systems. Internet Protocol systems. – 20 % of all world airlines already established their 20 % of all world airlines already established their

webbased sales system, webbased sales system, – 90% of airline companies have been reported to have 90% of airline companies have been reported to have

started the migration to IPs.started the migration to IPs.

– Today airlines see their own websites, as the most Today airlines see their own websites, as the most important distribution channelsimportant distribution channels

– CRSs from 1970s, offered airlines a tool to manage CRSs from 1970s, offered airlines a tool to manage their inventory internally, and also allowed their inventory internally, and also allowed distributors and partners to access information about distributors and partners to access information about availability and prices, schedules and routesavailability and prices, schedules and routes

– CRSs allowed airlines to compete fiercely, by CRSs allowed airlines to compete fiercely, by adapting their schedules and fares according to adapting their schedules and fares according to demand.demand.



e-Airlinese-Airlines• 1980s, the CRSs developed into a more 1980s, the CRSs developed into a more

comprehensive Global Distribution Systems comprehensive Global Distribution Systems (GDSs)(GDSs)• Scheduled CarriersScheduled Carriers = AirFrance, United = AirFrance, United Airlines, THY, etcAirlines, THY, etc– They primarily targeted Business Travelers for They primarily targeted Business Travelers for

eTickets, hence they facilitated online tickets.eTickets, hence they facilitated online tickets.– Developed interfaces with consumers over the web, Developed interfaces with consumers over the web,

but still keep their old traditional systems as but still keep their old traditional systems as alternative distribution channels (CRSs)alternative distribution channels (CRSs)

– All sold on the web with e-ticket; more often control, All sold on the web with e-ticket; more often control, minimized distribution costs. minimized distribution costs.

• No Frills (Low Cost)No Frills (Low Cost) = EasyJet, Jet Blue, etc. = EasyJet, Jet Blue, etc.

– Not on the GDS. Not on the GDS.

• Charter Charter = Britannia Airways, etc. = Britannia Airways, etc.



e-Airlinese-Airlines• According to According to 2002 2002 data, 2.8 % of all airlines data, 2.8 % of all airlines

revenue goes to ICT.revenue goes to ICT.

– Bussiness unit management. Bussiness unit management.

• Strategic Functions of e-AirlinesStrategic Functions of e-Airlines

– Route PlanningRoute Planning– Monitor competitorsMonitor competitors– Dynamic Pricing & yield managementDynamic Pricing & yield management

– Online Branding and communucation of principles to Online Branding and communucation of principles to usersusers– Partnerships and alliencesPartnerships and alliences



e-Airlinese-Airlines

– Management of inventory & booking trhough GDSs Management of inventory & booking trhough GDSs and Internetand Internet

• Interface with consumersInterface with consumers

– Route PlanningRoute Planning

– Reservation management, e-ticketingReservation management, e-ticketing

– Dynamic Pricing & yield managementDynamic Pricing & yield management– Online Branding and communucation of principles to Online Branding and communucation of principles to

usersusers

– Special offers, promotionsSpecial offers, promotions

– eProcurement and management of supplieseProcurement and management of supplies– Customer profiles, easy CRM, manage Loyalty clubsCustomer profiles, easy CRM, manage Loyalty clubs




– Assist in creation of maintanence and duty schedulesAssist in creation of maintanence and duty schedules

• Crew Management SystemsCrew Management Systems

– Comprehensive Crew databases to help contact with Comprehensive Crew databases to help contact with crew and crew controlcrew and crew control

– Assess Crew planning & controlAssess Crew planning & control

– Enable airline to plan their operations and to analyse Enable airline to plan their operations and to analyse all incoming informationall incoming information

– Automatic calculation and distribution of flight plansAutomatic calculation and distribution of flight plans– Aircraft maintanence, etc.Aircraft maintanence, etc.

• Operations Control SystemsOperations Control Systems

– Online catalogue system for ordering suppliesOnline catalogue system for ordering supplies– Various extranets..Various extranets..




– ““US sneezes, rest of the world catches cold”US sneezes, rest of the world catches cold”

Hot News about Eairlines & Low-cost Hot News about Eairlines & Low-cost AirlinesAirlines


– Air passengers fall drammatically..Air passengers fall drammatically..

– Crisis hitting all of us..Crisis hitting all of us..

– 1% oil increase reduces travel by 0.12 %1% oil increase reduces travel by 0.12 %

– -2% to -3% decrease in all World Travel is -2% to -3% decrease in all World Travel is expected..expected..– Business & Corporate Travel gets the worst decline..Business & Corporate Travel gets the worst decline..

• Increased oil costs make all air transportation Increased oil costs make all air transportation suffer..suffer..

– Vacations are still needed; shorter trips close to Vacations are still needed; shorter trips close to home tripshome trips– Conference & Exhibition industry will fall…Conference & Exhibition industry will fall…

– Webcasts and Teleconferences will increaseWebcasts and Teleconferences will increase




– 2004 to 2008 Low Cost airlines tripled their seat 2004 to 2008 Low Cost airlines tripled their seat capacity.capacity.



– Ryan Air carries aroud 3,5 million passengers Ryan Air carries aroud 3,5 million passengers incoming to Germanyincoming to Germany

– 60% of all air traffic to Poland is by Low Cost 60% of all air traffic to Poland is by Low Cost Airlines…Airlines…

– Low Cost Airlines stand for 40% of all European Air Low Cost Airlines stand for 40% of all European Air Travel… Travel… – Lufthansa closed down many routes due to lowcost Lufthansa closed down many routes due to lowcost competitioncompetition

• 113 Low Cost Airlines operate in Europe..113 Low Cost Airlines operate in Europe..

– Ryan Air opened 20 more routes in 2007-2008Ryan Air opened 20 more routes in 2007-2008

– However…However…




– Lufthansa fight back with advertisements, already Lufthansa fight back with advertisements, already got 10% seat capacity back from Low Cost Airlines.. got 10% seat capacity back from Low Cost Airlines.. (Lufthansa makes 1,5 billion Euro profit every year, (Lufthansa makes 1,5 billion Euro profit every year, therfore they have capital to fight back..)therfore they have capital to fight back..)



– Due to crisis in 2009, Lufthansa might take over Due to crisis in 2009, Lufthansa might take over Austrian..Austrian..– Due to high oil prices, Low Cost Airlines will no longer Due to high oil prices, Low Cost Airlines will no longer be low cost in 2009-2010. Therefore, reduced seat be low cost in 2009-2010. Therefore, reduced seat capacity..capacity..

– Many of them will go out of business..Many of them will go out of business..

– Key for airline industry is; people want to fly one-Key for airline industry is; people want to fly one-stop; same as airlines want to fly one-stop for cost stop; same as airlines want to fly one-stop for cost reasons..reasons..

– That’s how Low cost carriers made their ways up by That’s how Low cost carriers made their ways up by far..far..

Forecasting future… Forecasting future… / / The Boeing Company, The Boeing Company, Seattle Seattle


AirlinesAirlines


All Charts are taken fromAll Charts are taken from : : Current Market Outlook 2008-Current Market Outlook 2008-

20272027 / / The Boeing Company, Seattle 2008The Boeing Company, Seattle 2008


Airlines Worldwide Traffic Airlines Worldwide Traffic DistributionDistribution


Scenario ProjectScenario Project

FFutureutureHHotelotel


www.futurehotel.dewww.futurehotel.de

lightlight

-LED, OLED-LED, OLED-light effects-light effects

lightlight

-LED, OLED-LED, OLED-light effects-light effects

work placework place

-network infrastructure-network infrastructure-ergonomics-ergonomics-flexible display usage-flexible display usage-standardised interfaces-standardised interfaces-services & support-services & support-integration of brought -integration of brought along along private technical devices private technical devices

work placework place

-network infrastructure-network infrastructure-ergonomics-ergonomics-flexible display usage-flexible display usage-standardised interfaces-standardised interfaces-services & support-services & support-integration of brought -integration of brought along along private technical devices private technical devices

media technologies & media technologies & entertainmententertainment

-TV-device-TV-device-audio solutions-audio solutions-integrated displays-integrated displays-flexible projection surfaces-flexible projection surfaces-infotainment platform-infotainment platform

media technologies & media technologies & entertainmententertainment

-TV-device-TV-device-audio solutions-audio solutions-integrated displays-integrated displays-flexible projection surfaces-flexible projection surfaces-infotainment platform-infotainment platform

bathroom equipmentbathroom equipment

-integrated sanitary -integrated sanitary objectsobjects-display mirror-display mirror

bathroom equipmentbathroom equipment

-integrated sanitary -integrated sanitary objectsobjects-display mirror-display mirror

wellness & healthwellness & health

-FutureSpa-FutureSpa-EnergyBed-EnergyBed

wellness & healthwellness & health

-FutureSpa-FutureSpa-EnergyBed-EnergyBed

securitysecurity

-access technology, guest -access technology, guest identificationidentification-check in, check out-check in, check out

securitysecurity

-access technology, guest -access technology, guest identificationidentification-check in, check out-check in, check out

control of operational devicescontrol of operational devices

-voice control, sensoric -voice control, sensoric controlcontrol-control via mobile -control via mobile devicesdevices-usability-usability-integrated solutions-integrated solutions

control of operational devicescontrol of operational devices

-voice control, sensoric -voice control, sensoric controlcontrol-control via mobile -control via mobile devicesdevices-usability-usability-integrated solutions-integrated solutions

personalisationpersonalisation

-guest profile-guest profile-scenarios of -scenarios of usageusage-specific guest data-specific guest data-hotel management -hotel management systemsystem

personalisationpersonalisation

-guest profile-guest profile-scenarios of -scenarios of usageusage-specific guest data-specific guest data-hotel management -hotel management systemsystem

automation automation

-virtual mini bar-virtual mini bar-service and -service and cleaning robotscleaning robots

automation automation

-virtual mini bar-virtual mini bar-service and -service and cleaning robotscleaning robots

energy efficiencyenergy efficiencyenergy efficiencyenergy efficiency technology integrationtechnology integrationtechnology integrationtechnology integration comfort & guest satisfactioncomfort & guest satisfactioncomfort & guest satisfactioncomfort & guest satisfactionfacility managementfacility managementfacility managementfacility management

3-Eyl-15Travel e221 Dimitrios BUHALIS - Information Technology for strategic tourism management The...

Documents

Transcript of 3-Eyl-15Travel e221 Dimitrios BUHALIS - Information Technology for strategic tourism management The...