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1、E-Commerce Applications in the Tourism IndustryRob Law, Ph.D.School of Hotel and Tourism ManagementThe Hong Kong Polytechnic University Hung Hom, Kowloon, Hong Kong SARBiography of authorDr. Rob Law is an Associate Professor of Information Technology at the School of Hotel & Tourism Management, the
2、Hong Kong Polytechnic University. Prior to joining the Hong Kong Polytechnic University in 1995, Dr. Law has worked in Canada and Hong Kong in academia and industry. Dr. Laws research areas include Information Technology, Internet/e-Commerce, Modeling/Forecasting, and Computer-Assisted Education. Dr
3、. Law actively serves on research and professional bodies in the fields of hospitality and tourism, and publishes widely in leading research journals. He is the Internet Editor of the Journal of Travel & Tourism Marketing, a Guest Editor for the Journal of Convention & Exhibition Management and the
4、Journal of Travel & Tourism Marketing, and an editorial board member of Tourism Management, the Journal of Hospitality & Leisure Marketing, FIU Hospitality Review, Information Technology in Hospitality, and Information Technology & Tourism. He also serves many other research journals as a referee. D
5、r. Law has been on the program/organizing/review committees of many international conferences on Tourism and Hospitality, Information Technology, and E-Commerce. AbstractThe emergence of the Internet has had an unprecedented impact on business in general, and on the tourism industry in particular. T
6、he information-intensive nature of the tourism industry and the perishable nature of tourism products are the crucial factors behind the rapid growth of Internet applications for travel and tourism. This paper reviews the historical background of Internet technology, analyzes the current level of de
7、mand for Internet applications, and the performance of hotel websites. In addition, this paper examines the perception of disintermediation from the perspectives of consumers, intermediaries, and suppliers. Lastly, the paper makes an attempt to project future trends, draws some conclusions, and prov
8、ides suggestions for tourism professionals.Keywords: Internet, tourism, hospitality, performance, disintermediation1. IntroductionArising from national defense research in 1969, the Internet was originally formed to connect different networks in different locations for the purpose of sharing informa
9、tion. The initial concept for developing the technology was for a few military institutes and universities to share information. In the 1970s, more official bodies joined the network, and technological advancements in the 1980s further enhanced the accommodation of more organizations, and with diffe
10、rent types of networks. In the 1990s, the official requirement for joining the Internet was removed. Since then, business organizations and private individuals have been able to join the Internet without the need to receive support from official bodies. Such a relaxation of the entrancement requirem
11、ents has led to a proliferation of Internet applications in many business areas in general and in travel and tourism in particular. It has been predicted that with continuous improvements in technology, the low cost of acquiring personal computers, and the increasing competitiveness of online prices
12、, use of the Internet use will continue to grow rapidly in the future (Law and Chen, 2000).The advantages of Internet applications have been widely discussed in the travel and tourism literature (Law and Leung, 2000; Law and Wong, 2003). The Internet is a new distribution channel that offers an unpr
13、ecedented level of access. Consumers can access all the travel-related information that they want without any geographical, technical, or time constraints. Likewise, suppliers of travel services or products can promote their products to global customers without most, if not all, of the traditional l
14、imitations. The relationship between the Internet and tourism appears to be a direct fit because of the direct communication link between suppliers and customers (Law, 2000). In addition, the relationship removes unequal barriers for customers and suppliers. This, in turn, leads to equal competition
15、 among companies with different backgrounds, and price discrimination cannot easily be carried out. Hence, travel and tourism businesses have to reorganize their business strategies. As Internet applications in travel and tourism are new, the behavior of consumers and the performance of travel websi
16、tes have yet to be examined by industrial and academic researchers. The following section gives an overview of the demand for Internet applications and the performance of travel websites. Following this is a section analyzing the potential of disintermediation. The concluding section offers suggesti
17、ons for travel and tourism practitioners. 2. The current demand for Internet applications and the performance of supplier websites As previously stated, the number of Internet applications has been increasing since the 1990s. Figure 1 shows the exponential growth of Internet users worldwide from 198
18、5 to 2007. Table 1 further reveals the number of Internet users per one thousand people in the world in the same time period. Figure 1 Growth in the number of Internet users worldwideSource: http:/ 1 Growth in the Number of Internet Users Worldwide1985199019952000200220042007Worldwide Internet Users
19、 (#M)0.0212.1344.64186669451,466Worldwide Internet Users/1,000 People (#)0.0040.407.8768.9106.9148.0221.9Source: http:/ terms of numbers of Internet users, since 2001 the region where the Internet originated, North America, has been surpassed by Asia. Asia is expected to maintain its leading positio
20、n in the near future. Figure 2 presents the number of Internet users in different regions from 1998 to 2007. Figure 2 Internet users by regionsSource: http:/ growth of Internet applications in Asia is not merely in the number of users but also in business revenues. Table 2 shows the rapid increase i
21、n both business-to-business (B2B) and business-to-consumer (B2C) revenues in the Asia-Pacific region. It is estimated that such an increase will continue. In the travel and tourism context, Greenspan (2004) has stated that two-thirds of Internet users use the Internet for planning trips, with slight
22、ly more than one-third of such users making a subsequent purchase. In the United States, more than 64 million people, representing 67% of all travelers, used the Internet in 2003 to check for travel-related information. More than 42 million of these travelers actually made an online purchase. This r
23、epresents an increase of 8% over the previous year. Lastly, 29% of online bookers made all of their travel arrangements online in 2003, and 11% of online travelers had made a spontaneous trip because of an e-mail promotion, discount, or offer (Greenspan, 2003; 2004). All of these figures indicate th
24、at a strong demand exists for Internet applications in travel and tourism.Table 2 B2B and B2C E-Commerce revenues in the Asia-Pacific regionYearB2B E-Commerce Revenues in the Asia-Pacific Region (in billions)B2C E-Commerce Revenues in the Asia-Pacific Region (in billions)2000$36.2$3.22001$68.6$8.220
25、02$120.3$15.62003$199.3$26.42004$300.6$38.0Source: http:/ 3 shows the results of an exploratory study that investigated the factors that are perceived to be important in a website by Hong Kong purchasers of travel products (Law and Wong, 2003). According to the online purchasers, the three most impo
26、rtant factors behind a successful website are a secure payment method, different price ranges for products/services, and user-friendly systems.Table 3 - Attributes of a successful travel website as perceived by online purchasers of travel productsAttributesMean*StdSecure payment method4.291.07Differ
27、ent price ranges for products/services4.070.83User-friendly system4.000.58Rapid (speed) information searching3.860.53Online booking and confirmation3.850.90Comprehensive information on destinations3.711.20Availability of help functions such as toll-free telephone numbers3.640.50Provision of related
28、virtual links 3.640.84Information on the late availability of products/services3.570.76Availability of virtual tours or video files of the destination3.140.77Presentation style such as background color and attractive photos3.000.88Specifically designed for travelers in Asia Pacific 2.540.66*Scale: 1
29、- very unimportant, 2 - unimportant, 3 - neither important nor unimportant, 4 - important, 5 Very importantTravelers usually make plenty of comparisons when planning travel arrangements. As previously stated, one of the most important attributes of a website as perceived by travel purchasers is user
30、-friendliness. Therefore, it is crucial to design travel websites that have good usability performance, ultimately making the websites efficient and enjoyable to use (Lu and Yeung, 1998). Table 4 shows the usability performance of hotel websites in Hong Kong, calculated using values of usability haz
31、ards indices (Au Yeung and Law, 2003; 2004). As shown in Table 4, the industry average for Hong Kong was 19.569 out of 100 (100 represents the worst score). In other words, minor problems were found on Hong Kong hotel websites. It is interesting to note that there were no significant differences in
32、usability performance among the different categories of hotels.Table 4 - Comparison of Usability Performance by the Classification of the HotelsDimensionUsability PerformanceHigh Tariff A Hotel(n=17)High Tariff B Hotel(n=30)Medium Tariff Hotel(n=30)All Hotels(n=77)1. Language 1.6912.2172.5682.2382.
33、Layout & Graphics3.7444.7924.1814.3233. Information Architecture 1.9692.8033.8533.0284. User interface 4.2864.6615.9185.0685. General 6.2074.9894.1044.913Overall Score17.89719.46220.62319.569In addition to usability, the contents or functionality of travel websites are also very important (Law, Leun
34、g, and Au, 2002; Liang and Law, 2003). Tables 5 and 6 listed the importance rating and performance scores for the functionality of hotel websites in Hong Kong (Chung and Law, 2003; Law and Chung, 2003). Unlike usability performance, hotel websites in Hong Kong showed significant differences in funct
35、ionality performance among the different categories of hotel. Luxury (High Tariff A) hotels significantly outperformed mid-priced (High Tariff B) hotels, and mid-priced hotels did significantly better than economy (Medium Tariff) hotels. Table 5 - Performance of Dimensions of FunctionalityVariablesI
36、mportance (average weighted score)Performance (mean score)Information on Facilities30.5846.21Information on Reservations21.4557.89Customer Contact Information19.4248.40Management of Website15.0750.58Information on Surrounding Area13.4831.18Total Score100Table 6 - Comparisons of Website Functionality
37、 Performance by Hotel ClassificationVariablesMean ScoreHigh Tariff A Hotel(n=18)High Tariff B Hotel(n=29)Medium Tariff Hotel(n=33)All Hotels(n=80)Information on Facilities63.1452.5730.7546.22Customer Contact Information56.7851.7740.6448.44Information on Reservations78.7461.9242.4057.90Information on
38、 Surrounding Area60.9231.5814.3131.27Management of Website58.3051.7044.2650.21Total Score64.2251.4534.9947.743. DisintermediationThe rapid growth of the Internet has had a great impact on the travel and tourism industry. To the extent that the Internet allows travelers to easily arrange and purchase
39、 their own services and products, the future role of travel agencies has become uncertain. In the travel and tourism context, the topic of disintermediation, the elimination of the intermediary by using the Internet in the customer-agent-supplier network, has recently become a topic of debate. Table
40、 7 shows the results of a large-scale survey to investigate what kind of impact travelers think the Internet will have on travel agencies (Law, Leung, and Wong, 2002; 2004). Table 7 View of Travelers on DisintermediationQuestionMean*(n = 413)Std1.Travel agents offer a human touch and a human interfa
41、ce with the industry.4.090.832.Technology, particularly the Internet, allows customers to conveniently perform most travel searching and purchasing functions.4.070.923.Travel agents are professional counselors and offer valuable services and advice.3.830.914.Travelers ultimately have to bear the cos
42、t of commissions to travel agents.3.681.095.Travel agents are usually in favor of principals who offer more attractive commissions or in-house partners, and are thus making biased recommendations.3.561.106.Travel agents reduce the insecurity of travel, as they are responsible for all arrangements.3.
43、551.107.Online travel agencies (electronic travel intermediaries) are much more flexible and can offer many more choices than travel agents.3.471.108.It is more convenient to seek advice from travel agents than from technology.3.291.089.Travel agents mainly serve bookings and reservations, and they
44、add little value to tourism products/services.2.981.2510.Technology-assisted travel counseling will not be popular because many travelers are computer illiterate.2.831.16*Scale: 1=Strongly Disagree, 2=Disagree, 3=Neutral, 4=Agree, 5=Strongly Agree.Basically, travelers agreed that travel agencies per
45、formed better than travel websites in terms of human touch and personal service. Travelers, however, also realized that travel agencies are business-oriented, and hence will serve their own interests before those of the customer. Additionally, travelers believed that online travel agencies have a go
46、od potential to become a popular channel for providing travel services. Table 8 presents the perceptions of travel agents on the issue of disintermediation (Fong, 2002; Fong and Law, 2002). The respondents felt that the traditional intermediary has competitive advantages over Internet-based distribu
47、tion channels such as airline websites. Besides, the Internet is still not a mainstream medium of distribution in the local travel industry. The travel agents, however, agreed that local travelers are becoming increasingly more sophisticated, and the introduction of e-tickets and the offer of competitive airfares in airline websites are the driving forces for disintermed