The Rise of the Digital Economy and Tourism

Industry 4.0 is the term used to capture a number of trends occuring in the manufacturing sector driven by digitalisation, including automation, increased interconnectivity between cyber and physical systems, and increased management efficiencies provided by big data analytics and cloud computing (Dredge et al., 2018; Smit et al., 2016).

Tourism, which exhibits characteristic of both industry and service sector, is undergoing massive transformation as a result of advances in information technologies and processes of digitalisation.

Technology Development in Tourism

There are three key phases of technology development can be identified in tourism (Dredge et al., 2018).

• Phase 1: Sales and marketing
  • 1990-2000: destinations and business able to use Internet as marketing tool, in this way, Websites began to replace paper-based marketing materials.
  • Web-based reservation systems started to facilitate business transactions, and distribution systems facilitated increased coordination across the industry.

In 1996, British Tourism Authority launched its new website, visitbritain.com, and plans are made to tailor the site to local markets in the USA, Asia, and Europe.

50 Years Timeline – 1990 to 1999

• Phase 2: Digital business ecosystems
  • 2000-2010, the Internet becoming the key source of information for travellers, and it is acting as a virtual marketplace, allows products and services could be searched, compared, and transacted.
  • Visitor experience becoming more important than simply provide products by suppliers.
  • Customising products and personal connections with customers are key to suppliers.

New business model: innovative online intermediaries, Expedia vs. traditional travel agency

Review sites: TripAdvisor, empower customers as controller of their purchase and as influencer for future consumer

(Dredge et al., 2018)

• Phase 3: Integration of systems
  • 2010- , advances such as cloud computing, mobile and wearable technologies, augmented and virtual reality, GPS, and increased integration and interoperability of digital systems have facilitated interconnective between digital and physical worlds.

Today, it’s possible to “teleport” ourselves to the most remote corners of the globe without getting off the couch. That’s what you can get using Everest’s EVEREST VR app, which lets you see the top of the world without having to climb to the top.

The New Technology and Travel Revolution

E-Tourism

The service industry as Tourism is one of the early adopters of digitalization which included airlines, travel agencies and hotels. There is a new sector created as the result of digitization in Tourism Industry named: Electronic tourism (E-Tourism), means all tourism services using a single platform (Jallouli et al., 2019).

E-Tourism represented by online travel agents (OTAs) are a perfect example of customers empowerment. Through OTAs, tourists could gain access to a wider based discounted, tailored, and up to date travel information. Also, mobile integration has aided the move of tourism into the digital age. Smartphone users could use travel apps to plan their trips, and they could track air fares, hotel bookings, price comparison, availability with automatic notifications delivered to their phone. Social media platforms could be used by gathering consumer’s data to pop-up tailored ads based on customers’ preferences of travel.

Hopper, provides forecast for air fares;

Airbnb, supply its uses with apartments that can be rented and cheaper than hotels;

Skyscanner, provides its uses with a matrix of what are the cheapest air fares, hotels, and car rental agencies during a period of time.

(Jallouli et al., 2019)

OTA’s are major entrepreneurs in the tourism history. Their innovation in tourism covers plenty of areas, such as tourism destination, tourism products, technology, processes, organizations and business models, skills, architecture, services, tools and/or practices for management, marketing, communication, operation, quality assurance and pricing.

Data Matters

Today is the Era of data, the internet of things, artificial intelligence, and data analysis. E-tourism through OTAs and service providers platforms, have gained access to a wider consumer database, and they speak social platforms’ language. From customers number of clicks, previous transactions, demographics, travel preferences, service providers could tailor their products base on customers’ needs.

If a traveller surfs booking.com for a hotel booking in a target city, he/she will receive ads on all connected social media platforms associated with his google accounts on deals arising for that place to create a greater chance for them do book

(Jallouli et al., 2019)

E-tourism is a win-win deal of consumers and suppliers. The data exhaust of tourist/travellers’ preferences can be a great way to influence consumers choices of destinations, hotels, sightseeing, attractions and entertainment (Jallouli et al., 2019). In this way, as an entrepreneur, E-tourism acts as an eyeopener on different services and a way to invent new services/products and markets which falls directly into the aims of innovation in tourism.

Ads from OTAs are not always targeted towards consumer preferences, they sometimes provide the consumer with suggestions based on likes, click, comments, and even random search categories. In this way, it helps suppliers to widen their target market and promote their products and services to an expanded range.

(Jallouli et al., 2019)

The Future Role of Travel Agents

The E-tourism revolution identified above highlights a major problem for the travel agency sector in its current shape and form. E-mediaries, such as Microsoft’s Expedia in the USA, which rose from a newcomer to one of the top US travel agencies in four years (Buhalis 2003), have grown phenomenally due to the impact of Information Communication Technologies and new forms of intermediary and distribution electronically on the conventional high-street travel agent (Page & Connell, 2014).

Buhalis (2003) has suggest that the successful future travel agency will take less of a booking-office role and more of a travel management and adviser role, while adding value not accessible from online booking (2014).

References

50 Years Timeline – 1990 to 1999. (2020). Retrieved 13 February 2020, from https://www.visitbritain.org/50-years-timeline-1990-1999

Jallouli, R., Bach Tobji, M., Bélisle, D., Mellouli, S., Abdallah, F., & Osman, I. (2019). Digital Economy. Emerging Technologies and Business Innovation (pp. p29-39). Cham: Springer International Publishing.

Knopwood, A. (2019). 4 Amazing Design Ideas to Transform Your Travel Agency – Ezine Blog. Retrieved 13 February 2020, from http://www.ezineblog.org/2019/07/29/4-amazing-design-ideas-to-transform-your-travel-agency/

Magnitude, M. (2019). US Digital Marketing vs. Traditional Marketing | Marketing Magnitude. Retrieved 13 February 2020, from https://marketingmagnitude.com/us-digital-marketing-vs-traditional-marketing/

Page, S., & Connell, J. (2014). Tourism. Andover, UK: South-Western Cengage Learning.

RÙSLAND, K. (2016). New: Dynamic Ads for Travel – Increase Conversion and Lower Costs | StitcherAds. Retrieved 13 February 2020, from https://stitcherads.com/blog/new-dynamic-ads-travel-increase-conversion-lower-costs/

VIDAL, B. (2019). The New Technology and Travel Revolution. Retrieved 13 February 2020, from https://www.wearemarketing.com/blog/tourism-and-technology-how-tech-is-revolutionizing-travel.html

Zakkas, S. (2012). Online Travel Ecosystem – iNFOGRAPHiCs MANiA. Retrieved 13 February 2020, from https://infographicsmania.com/online-travel-ecosystem/