Impact of Technology on Tourism Industry

The provided assignment is a detailed study on the impact of technology and communication on the tourism industry. It discusses various theories, including the concept of porters five force model, which can be utilized by top management to take effective decisions. The document also provides references from books and journals that support the research. A 3D image of a site and an illustration of a DJI screen share are included in the assignment. The study aims to understand how change in technology affects the total performance of the tourism industry.

CONTEMPORARY ISSUES

Table of Contents
TASK...............................................................................................................................................1
1.0 Introduction...........................................................................................................................1
2.0 Theories of technological development................................................................................1
3.0 Technology development and tourism..................................................................................3
4.0 Key concepts ........................................................................................................................5
5.0 Changing nature of tourism industry....................................................................................6
6.0 Critical evaluation of the competitiveness of the tourism industry......................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

TASK
1.0 Introduction
Travel and tourism industry is one of those sectors which experience maximum changes.
Every time an innovation is done in the present technology or code of conduct, it has a direct
impact on company’s total business (Novelli, 2005). Information communication technologies is
an important concept that is utilised towards bringing development in the tourism sector .
Following report will discsuss about the way change in technology has revolutionised the
tourism industry. Various theories will be focussed that will help in shaping competitiveness in
the leisure industry.
Developments in Technologies - The information communication technologies were developed
in order to experience growth in tourism industry. It helped business units in developing
countries as they with the implementation of these in organisation increase total capacity to
produce more with the same resources. The evolution of ICT is given as below which shows the
way changes were made in different time period:
ICT mid-1950 to late 1990 – Under this, the growth in information and communication
was done which helped tourism industry to establish better connections with the customers and
made private sector more organised. Computers were made available which helped in recording
and doing calculation which further facilitated tourism industry in keeping the data safe and
secured which can be utilised in the future too whenever required (Buhalis and Laws, 2001).
ICT 1990 to 2000 – In this phase, development in internet was done with the
introduction of new application which helped tourism industry in identifying various problems in
the health and education which further assisted in doing planning accordingly.
ICT late 2000 onwards – Developments in this phase helped in developing demand in
the market which is important for increasing the total sales and revenues for companies in
tourism industry.
2.0 Theories of technological development
Porters five force model – It is a five force study under which analysis of distinct sections that
has their impact on the company is done. In the tourism industry the environment is dynamic
1

which shows that it gets affected every-time a change is made. Given below is the analysis of
this sector.
Industry rivalry
It is a very much fragmented industry. The major competitors are present in the metro
areas and which provides customers with immense choice. If a person wish to travel a particular
site than he can easily through net surfing can compare the prices offered by various companies
and an therefore choose the one which is available at the most effective price (Crooks and et.al.,
2011).
Threats of substitute
Tourism is a sector that offers greater profits to all those who are dealing in same and
hence an individuals start up with this sector without taking much efforts. As per the demand and
availability of resources the services are modified which further makes the price also constantly
changeable. With the intervention of technology the overall size and scope of this business has
raised to a great amount. Existing competitors always have a threat to new entry as by adopting
an effective promotional technique or attracting services it can capture the market which will
have an adverse effect on the firms who are old in this field (Hall, 2010).
Bargaining power of buyers
In the tourism sector customers has immense availability of different service provides as
they can with the help of internet compare the prices offered by various organisation for the same
services. It gives immense power in the hands of clients to make selection of the best suitable
option and hence creates fulfilment of this model. It creates tough competition among the
existing firms to keep their prices reduced or comparative to one another so that they do not
looses their potential customers.
Bargaining power of suppliers
Here the treats which are associated with the suppliers are identified. In the refereed
industry work force is the major supplier and in case if it is not available on time or at the right
price than it can have an adverse effect on the operations of this industry. It is important that
effective employees are available to the management so that they can contribute in the
organisations productivity (Dickinson and et.al., 2014). It is important that employees are
attracted with the help of proper sources also that right person is recruited for the right job. In
2

case when supply of labour is less than what is available with the industry the bargaining power
raises with them and hence they can demand for the required pay scale.
From the above discussion of porters five force model this has been identified that every
big or small unit in this industry can take the benefit of this approach in order to produce higher
value chain. In this sector there are limited big organisation which further reduces the poer
concentration in few hands. Since the tourism has great share in the market it has its great impact
on the construction of organisations structure (Falk and et.al., 2012). This approach if utilised in
a proper manner than planning can be done in more appropriate manner as it will be supported
with all the possible threats that may occur in future and can effect the industry.
3.0 Technology development and tourism
 3D image – It was a development in the technology through which 2D images were
converted into 3d effects which has the capacity to add life in capture. This image shows
that continuous improvements were made in the technologies of communications which
further add success to the operations. It has facilitated the customers to get easy access of
products and services being offered by the hospitality industry to market and helped in
attracting people more.
 Multiple screen sharing economy - It is another software through which the user can
assess various screens at a time which helped him doing the comparison more effectively.
3
Illustration 1: 3D image of site

Through the development of this technology, tourists can take better decisions by sharing
their screens with those who can assist them in selecting what is good for them
(Moutinho, 2011).
Illustration 2: DJI screen share
§
4.0 Key concepts
There are different concepts related to the tourism industry among which the most common one
are as follows:
Disintermediation – Earlier it was known under the under terms but now it has become more
intense and specifically in the sector of tourism. Hotels and resorts are using facilities of the
same in order to reach more customers. With the help of internet the middlemen is removed
(agents) which were present before (Dickinson, Lumsdon and Robbins, 2011). It helped in
increasing the profit share along with the growth in the total satisfaction level for customers. This
also raised the quality of products and services which are being offered to the public. The
quarries of clients are also solved quickly by the implementation of this technique in tourism
industry. Most of the traditional agents got unemployed as their place is now taken by the online
sites such as kayak.com, expedia.com etc.
Business model - with the different innovations that are made in this industry the corporate
competition increased to a great level. Almost all the small and big units in this industry is now
capable of garbing the opportunity quickly at the same moment it takes place in the market.
4

Every organisation works towards adopting what is best and hence results into delivering the best
quality output. Through this innovation different brands dealing in this brand gets to know about
the market trends and demand of customers which they full fill to prove themselves better from
others (Kusluvan and et.al., 2010).
Value chain – It is a well known concept which was utilised by Michael Porter. It is a set of
different methods that are adopted by the different organisation in the tourism sector in order to
earn the competitive advantage. Porter refers the same as a system of values. In the tourism all
those activities which are performed are interlinked with one another which here is refereed as
chain as there is strong relation among them. Under this the capacity of an organisation is
compared with that of others in the same field in terms of cost. In tourism industry this approach
can be implemented by following two phrase;
Phase 1
Under this the mission of hospitality industry is analysed in order to check its structure.
After doing this an action plan is developed so that the economies of tourism companies can be
extended and positive impact can be experienced in the tourism sector.
Phase 2
Under this the practical implementation of the prepared plan is done in order to achieve
higher profits. Various stakeholders at this stage are encouraged to work towards promoting the
activities so that impact of tourism can be enhanced in the present economy.
There are different theorise which helps in studying the competitiveness of tourism industry
(Pritchard, Morgan and Ateljevic, 2011). With the help of these organisations can do better
planning for its future operations as these tools helps in analysing the market for the company
which is very important for the industries having various competitors:
5.0 Changing nature of tourism industry
Communication – As tourism covers a wide part in the present business world, different
countries are working on improving their communication tools so that more customers can be
attracted. Under this, ICT helps in establishing a strong connection with the potential clients so
that their choice of selection of tourist destinations can be influenced. Quality strategies of
communicating with clients are constructed in which ICT especially internet plays a crucial role.
Those countries that are successful in using internet to promote their destination are experiencing
more tourists from those who fail to utilise the communication through technology. Government
5

also supports the intervention of net in this sector as it contributes in country’s economy and
improvements in applications are also motivated which have more capacity to gain competitive
advantage.
Business to business trade – Before the evolution of ICT technology, it was observed
that there were limited relations among different partners and also, tourism was restricted to own
boundaries. Tourists used to travel within boundaries more as they were not aware of the spots
which are present globally. With the development in ICT, redesigning of the global relation was
observed as through this, customers can not get easy assess to out of country situation and
various tourists destinations that are present there (Theobald, 2005). It also helped various
companies in tourism industry to share electronic platforms with the customers which further
increased their total market share.
Reaching the customers – Availability of different media sites made it easy to sell the
services online which are easy to deliver and also, through the introduction of new technology
the physical barrier of reaching to customers was replaced. Better communication further helped
the tourism industry to raise customer satisfaction level.
Innovative applications of ICT - Various applications are developed specially for the
tourism sector under which different sectors were kept as the main focus which are corporate
clients, commercial travel particular passenger and others who just travel for leisure. Different
technologies were developed which can improve overall services which are being offered to
clients which further add positive image to the brand name.
Impact of technological development on tourism industry-
 ICT helped hotels and travel companies in providing individualized and personalized
information regarding travel packages and rates on registered wesites. Customers can
choose their desired locations and hotels by going through social and economic ratings.
 It also helps in strenghtening the brand image through promotions of press release and
latest discounts in travel packages on websites and other social media platforms.
Effective use of Internet technologies will help in more revenues (Cooper and Hall,
2008). Websites, blogs, online advertising, social media, online ordering and information
repositories helps customers to choose their desired locations.
 Quick online reservation system and recieving online payments has decreased the work
load of employees involved in tourism industry.Booking engines helps in easy access by
6

consumers and travel professionals. This system enables individuals to make
reservations and compare prices of various hotels. Companies like Expedia are available
through online interfaces. It helps in cost cutting for travel businesses by reducing call
volume and traveler has more control on overall purchasing process.
 It also facilitates in wifi connectivity, digital television and data ports in hotel rooms
which gives good experience to customers. Tourism businesses are large and dispersed
so they use computer systems to stay connected with all its stakeholders. It allows
communication between branches and locations which results in smooth functioning of
business. It facilitates easy access of information that improves the guest's experience
(Evans, Stonehouse and Campbell, 2012).
 Many companies uses mobile communication to keep customers updated about the
changes in packages and rates by sending text messages.
 Promotional activities through ICT is managed by governments and particular
businesses. Governments takes appropriate steps to motivate private sector organizations
to play role of promoters of their country as a tourism destination. Because ICT have
transformed the tourism sector globally and offering number of new opportunities for its
development during past few years. Government also focusses on particular businesses
by increasing their tourism sectors through the employment of creative technological
tools so as to survive in the global competitive scenario.
 It also allows the processing and comparison of information related to following
industries which are part of tourism sector such as hospitality industry, transportation
industry, mobile systems industry, which mainly concerns on distinctive mobile
applications are hotels, restaurants, airlines, weather and traffic conditions,
transportation, city guides/monuments guides, currency conversion, and translation
(Spenceley, 2012).
 The wide range of tourism and travel websites that are created in developing countries
shows the benefits of ICT in tourism industry. This demonstrates development of
technology in world as developed countries are not the only ones using ICT to expand
their tourism industries. It is correct that tourism and ICT have been linked but during
the last decade it has emerged as the fastest growing media and communication medium
and helped in boosting tourism industry.
7

6.0 Critical evaluation of the competitiveness of the tourism industry
Competition is present in modern business environment and , it is key focus of research
for many researchers . It is important and functional advantage for business concern involved in
tourism sector. Globalization results in creating trends and demand but there is also information
to suggest that strong awareness of the local community is a essential part of the destination
competitive advantage. Tourism fight is rarely examined at respective business level as the
quality of the tourism system is based on action and mutuality. According to World Economic
Forum, there are so many leaders in tourism industry across 136 economies and all these are
giving tough competition to each other (Connell, 2013). National economies are getting benefit
from the competition amongst these industries as they results in more income, employment
opportunities and tax revenue to government. Due to this, intensity of competition is high. It can
be evaluated on the basis of efficiency of companies. Evaluation of competitiveness is done by
analysing past records and current performance.
Technology is considered as one of the crucial feature related to competitiveness, while
evaluating efficiency. Adopting new technology in production systems is necessary to achieve
competitive advantages. Hence, one of the most essential component for the specialization of
performance between organization, and industrial sectors is technological competitiveness.
Macroeconomic factors are also the focus of systemic competitiveness. These are special
in each national circumstance, and should be expressly considered in terms of public or private
sector enterprise for the assistance of competition. In tourism industry it is important to provide
services for which customers are happy to pay. Long term competitiveness is measured by the
capability of an organization to remain in business and plan the investment of its company in
such a way so as to get maximum return on investment (Lyons and et.al., 2012. Competitive
advantages can be achieved through effective marketing, public policies, technological
advancement,cooperating with external factors. Marketing is an tool to communicate with target
consumers therefore, this includes activity of functional competitiveness in marketing.
Cooperating positively with environmental aspects is important to survive in competition. Public
policies for development of tourist sector are regulated by municipal, state and national
governments. Therefore, measuring this dimension, which deals with designing and
engagement enforced by various tourist bodies, has a functional competitiveness structure. Due
8

to these emerging trends, fight in this sector is at peak and to survive in this efficiency and
uniqueness in operations is required.
CONCLUSION
From the above given report this has been summarised that with the development in
information communication technologies a positive move in the tourism industry is experienced
which helped this sector in growing. An important role is played by the various applications that
are developed as it helped the organisation of this field to reach more customers by enhancing
the total market. Different applications are developed which helped the management in
producing better quality products at reduced price. Various theories are also described in the
above study which help in understanding the effects that change in the technology and
communication has on the total performance of the tourism industry. Thereafter, the concept of
porters five force model is also discussed which shows how it can be utilised by the top
management of tourism companies to take better and effective decisions that are capable of
overcoming the possible threats to the company.
9

REFERENCES
Books and Journals
Novelli, M. ed., 2005. Niche tourism: contemporary issues, trends and cases. Routledge.
Buhalis, D. and Laws, E. eds., 2001. Tourism distribution channels: Practices, issues and
transformations. Cengage Learning EMEA.
Moutinho, L. ed., 2011. Strategic management in tourism. Cabi.
Theobald, W.F. ed., 2005. Global tourism. Routledge.
Cooper, C. and Hall, C.M., 2008. Contemporary tourism: an international approach. Routledge.
Evans, N., Stonehouse, G. and Campbell, D., 2012. Strategic management for travel and
tourism. Taylor & Francis.
Spenceley, A. ed., 2012. Responsible tourism: Critical issues for conservation and development.
Routledge.
Connell, J., 2013. Contemporary medical tourism: Conceptualisation, culture and
commodification. Tourism Management. 34. pp.1-13.
Lyons, K. and et.al., 2012. Gap year volunteer tourism: Myths of global citizenship?. Annals of
tourism research. 39(1). pp.361-378.
Dickinson, J.E., Lumsdon, L.M. and Robbins, D., 2011. Slow travel: Issues for tourism and
climate change. Journal of Sustainable Tourism. 19(3). pp.281-300.
Kusluvan, S. and et.al., 2010. The human dimension: A review of human resources management
issues in the tourism and hospitality industry. Cornell Hospitality Quarterly. 51(2).
pp.171-214.
Pritchard, A., Morgan, N. and Ateljevic, I., 2011. Hopeful tourism: A new transformative
perspective. Annals of Tourism Research. 38(3). pp.941-963.
Crooks, V.A. and et.al., 2011. Promoting medical tourism to India: Messages, images, and the
marketing of international patient travel. Social Science & Medicine. 72(5). pp.726-732.
Hall, C.M., 2010. Crisis events in tourism: subjects of crisis in tourism. Current issues in
Tourism. 13(5). pp.401-417.
Dickinson, J.E. And et.al., 2014. Tourism and the smartphone app: Capabilities, emerging
practice and scope in the travel domain. Current Issues in Tourism. 17(1). pp.84-101.
Falk, J.H. And et.al., 2012. Travel and learning: A neglected tourism research area. Annals of
Tourism Research. 39(2). pp.908-927.
10