The overall satisfaction of a tourist depends on the experience of the product as
well as on the experience from various intermediaries involved in the bundling, packaging
and making the tourism product available to the tourist for purchase. The full range of
activities which are required to bring the tourism product from conception and production
to the actual experience of the tourist can be defined as tourism value chain. It is a series
of transfer activities from product supplier to final consumer, and is constituted by tour
product supplier, travel agents and the final consumer.
Information Technology and Tourism Value Chain Integrated Approach
Source: Vivek Gupta &Devashish Das Gupta
The proposed tourism value chain (Figure) is made up of tourist, an integrated
tourism destination website (with a financial payment gateway and a global, distributed
computer reservation system), tour operators/travel agents, hotels, airlines, national tourism
planners, administrators and tourist destinations.
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Atourist may choose to book a tourism product from any of the five intermediaries, viz.,
(1) Travel agents,
(2) Tour operators,
(3) Online destination website,
(4) Hotels, or
(5) Airlines.
Tour operators can be seen as tourism product aggregators,
whereas travel agents
act as information brokers, providing the final consumer with the relevant information and
booking facilities. The integrated tourist destination website connects the tourist with other
intermediaries, with many features such as querying online, online reservations, etc.
Imperatives of Successful E-Tourism System
A decade after the Internet spurred airlines, hotels, and other travel players to sell
directly to customers; the sector’s ecosystem is fracturing. Companies are abandoning
the systems that are supposed to provide consumers with one-stop shops to book flights,
accommodations, and other services. Lawsuits are being filed. And the very people whose
interests should be paramount—customers—are being caught in the cross fire. That’s giving
newcomers a chance to swoop into a sector that today boasts annual online sales of almost
$100 billion, around a third of all global e-commerce activity.
This turbulence isn’t a bad thing: the travel sector has reached the next phase in
its evolution, and some creative destruction is necessary. In fact, companies are already
investing billions of dollars in the next wave of travel e-commerce, from revamping Web
sites to changing the technology infrastructure.
Airline like Air Asia and tiger airways own a very powerful web page and promotions
that makes them very attractive as they have e booking process that allows them to customise
their products which offers them a chance to ignore services that might not be importance
and pay less.
Robert Carey et.al has signified the importance of certain changes in the e-tourism
in order to remain successful and overcome certain challenges. Below mentioned are those
imperative suggested for the success of e-tourism in the future.
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Low Cost Carrier With Options to Book E-Ticket
Air Asia’s promotions – Example for lowest air fare
a. Focus on Customers, not Channels
The travel sector’s approach for two decades has been to push customers toward
lower cost yet more uniform distribution channels. We believe this is the wrong response
to a growing mandate for product differentiation: while some customers value price above
all else, that attitude is far from universal. Travellers differ in clear ways when it comes to
their requirements—both in their travelling needs (which inform product design) and their
shopping needs (which inform merchandising design and are relevant for distribution).
Suppliers should shift from a business-to-business, channel-centric approach to a decidedly
customer-centric one: the overarching goal should be to win customers, not to fight a zerosum game with intermediaries (for more on how to win customers, see the accompanying
interactive exhibit, “Understanding travel’s core customers,”on mckinseyquarterly.com).
In an ideal world, suppliers would tailor services to each individual. Reality makes
that goal almost impossible to achieve, but travel companies can and should craft focused
solutions for a range of broad customer segments. Price-driven leisure travellers, for instance,
are drawn to transparency and comparability above all else, shopping at an average of three
to four Web sites before making a purchase. So why don’t airlines, hotels, and car-rental
companies bring price comparability to their own sites? This is exactly the model adopted
by US insurance companies that quote competitors’ prices alongside their own. While
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there is some risk of customer defection—especially among price-focused travellers—that’s
mitigated by the fact that this approach helps earn customer trust and draws valuable insights
(about consumer preferences and behavior) that enable more effective merchandising.
Customers in another segment—unmanaged business travellers—are too small to
justify the expensive services of large travel-management companies. However, less costly
and more efficient technologies make it easier to service this “long tail” of corporate
travellers, and suppliers and travel-management companies alike recognize the potential
ROI of moving them to online channels. Unmanaged business travellers seek less expensive
versions of the services received by larger accounts, such as expense-management tools,
profile management, and company loyalty programs.
Meeting this demand will be complicated, but in industries such as banking and
telecommunications we see a potential answer by combining a customized product offering
with a different sales model. Consortiums and partnerships are likely to be the key to
success—for example, imagine deploying a sales force to sell airline product bundles to
small- and medium-sized businesses, empowered by the latest external advances in tracking
and reporting tools.
A channel-based mind-set limits the willingness of players, particularly suppliers,
to make such moves. Instead, they tend to focus on market share targets for channels
(and attempt to achieve these targets with initiatives such as Web site overhauls), without
considering what it takes to shift preferences by consumer segment. New capabilities, not
cosmetic changes, are what are really needed. Focusing on customer-based ROI rather than
on channel targets forces executives to ask themselves how much they are going to invest—
in which capabilities and targeting which customer shopping needs—to produce which
results.
