Information Technology's Influence on the Tourism Sector: An Analysis

This report examines the significant impact of information technology on the tourism industry, which is increasingly competitive due to globalization. The report analyzes how IT, including the internet, mobile communications, and computer programs, has revolutionized various aspects of the tourism sector, enhancing customer experiences from booking to checkout. It explores the role of the internet in reservation systems, dynamic packages, flight tracking, and customer relationship management. Furthermore, the report evaluates the benefits of IT, such as easier processes, business growth, and a better understanding of consumer demands, while also addressing drawbacks like the shrinking of small businesses. The analysis provides a comprehensive overview of IT's influence, offering insights into how technology shapes the modern tourism landscape and its future trends.

Running head: INFORMATION TECHNOLOGY
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Information Technology

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Table of Contents
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Introduction
The intense competition between corporations, due to globalisation, has influenced every
industry in the world. The tourism and hospitality sectors are facing a similar intense
competition between various companies and countries. The success of modern tourism
organisation depends upon the successful implementation of the latest technology in their
operations. Many states are also implementing modern technology into various tourist
destinations to provide a better experience to tourist. The information technology has
changed multiple aspects of tourism sectors including the use of internet in reservation
systems, mobile communications, computer programs and much more. The latest technology
benefits customers by providing them a constant and streamlining hassle-free experience
from booking to checkout. These technological modifications have augmented the growth of
tourism industry. This report will focus on analysing the influence of information technology
over the tourism sector. Further, the report will evaluate positive and negative factors of
technology in the tourism industry.

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Tourism Industry
The travel and tourism industry is significantly more substantial regarding revenues; it is one
of the largest sectors regarding global economic contribution. As per Statista 2017, the
tourism industry contributed more than US$7.61 trillion in 2016 financial year, and the
income was more than US$1.22 trillion. In case of Australia, the tourism industry makes
about 3 percent of the country’s GDP, and it contributed more than AU$47.5 billion. Till
June 2017, travels has spent a record of AU$40.6 billion in the tourism industry of Australia;
this number has increased by 7 percent. The Australian travel corporations have welcomed
more than 8.5 million foreign travelers till June 2017; the number of travels has grown by 8.9
percent in Australia (Tourism Australia 2017). The tourism industry is proliferating with the
introduction of modern technology; the internet has changed the method of travel for peoples.
Modern travel organisations are under constant pressure from competitors to update their
facilities with advanced technology for successful development (Deery and Jago 2009).
Information Technology
The information technology is the implementation and examination of various systems which
include computers and telecommunications, for storing, recovering and distribution
information. As per Buhalis and Law (2008), this field contains design, support, and
management of database systems which collect the data from various users; such data use by
computer specialist and experts into forming multiple strategies. Information technology has
changed the method of data collection sources and marketing strategies for corporations.
Organisations use IT procedures to collect the data of from their targeted customers, and their
marketing strategies are also customised according to their consumer's requirement. These
companies use social media sites, data collection centers, artificial intelligence algorithms
and other internet services to collect such data and implement their strategies. The tourism
industry also uses a similar procedure for reaching targeted customers
Role of IT in Tourism Industry
Modern technology influence the method of business operations in every industry, the market
has to change its operation according to the latest technology. Though the ages, the progress
of technology has developed the tourism industry. The implementation of computer
technology can be divided into three main parts which include operations, guest facilities, and

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management information (Smith n.d.). Following are few examples of a most recent
technology which assists in the growth of tourism sector.
Internet
The development of web and internet-based serviced has influenced every industry in the
world; the internet has also modified the process of traveling. According to Litvin, Goldsmith
and Pan (2008), use of web-based services has affected all three essential part of tourism
series which include operational, guest facilities and administrative information. The internet
is an interactive medium, which benefits customers by diminishing the traditional one-way
communication with travel agencies. Tourism companies use the internet to provide their
customers various services such as reservation, checkout, payment, verification and much
more. Many traveling experts use online websites, blog or social media sites to provide
necessary information regarding traveling which can be used by customers to improve their
experience. Organisations collected data through multiple websites and social media
networks, which assist them in researching analysing the purchasing and traveling behaviour
of their customers (Leung and Buhalis 2009).
Application of E- Tourism
 Dynamic Packages: Online travel agencies allow their customers to customise their
holiday deals according to their requirements. The packages include flight tickets,
accommodations, transport facilities and hotel costs (Wahab 2007).
 Flight Tracking System: Many of the online services allowing users to monitor their
flights, which save time and improve their experience. Global aviation tracking
application includes RadarBox24, Plane Finder, and Flight Stats.
 Computer Reservation System: This system is accessible to travel agencies due to
its ability of store and retrieves information. CRS is used by Abacus, KIU, Sabre,
Travel Sky and many other corporations. CRS perform transactions relating to
booking of flight, train, car and hotel tickets (Loeffen 2008).
 Global Distribution Systems: GDS establish a link between travel agencies and
tourism service providers such as airlines, hotels and other transport facility providers.
Mainly travel agencies use GDS to provide their service regarding three main
domains including reservation, accommodations and transport service.
 Customers Relationship Management: CRM assist corporations in storing their
customer’s data, which later shown by the computer if the customer again uses

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services of the firm. The history of the customer helps enterprises understanding the
need of customers, which eventually improve their experience (Linoff and Berry
2011).
 Biometric Passports: These are also called E-Passports; they contain biometric
details of the person which can be used for their identification and verification.
Biometric information is the unique details of a person including fingerprints,
signature and retinal scans.
Mobile Communication
The cutting age development in the latest technology such as location services, Geo-tagging,
and online mapping is enabled through mobile services. Eriksson and Strandvik (2008)
depicted that these services offer various benefit to the travelers at their particular tourist
destination. The personal assistance is another latest technology which is evolving with time
to assist travelers in their journeys by providing quick services such as language translation,
currency convert, online searches and much more. The travelers can have a smooth and safe
traveling experience by using these facilities, and they also benefit them by providing an
excellent offer and resourceful deals regarding traveling.
Online Reservations
The internet websites have dominated the reservation procedure. As per the study of Travel
Weekly (2012), more than 80 percent of the traveling booking happened through online
portals. The customers can book flight tickets, train tickets, bus tickets, and hotel reservation
through online websites. It has become mandatory for tourism corporations to provide their
services through online sites. Many new online sites have dominated the traveling industry
such as Orbitz, Expedia, MakeMyTrip, and Thomas Cook. Even the government department
is providing their tourism services online, for example, customers can check travel
destination, check ticket prices, and book ticket through online portals of governments.
Social Media Platform
The popularity of social media websites has grown significantly in past decade; more than
2.46 billion people use social media sites. As per Xiang and Gretzel (2010), these websites
are the primary source for traveling sites to collect the information of peoples. People use
social media sites to follow their favorite holiday destinations, share their traveling interest
with friends & family and also collect necessary data regarding traveling agencies. Therefore,
Tourism Corporation prefers to market their products over social media sites to reach a

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broader and interested audience. Travel agencies can use the data collected through social
media sites into forming new strategies for their marketing plan. Social media also benefit
corporation in interacting with their audience; the customers can file their quarries and get
instant feedback through online portals of the firms.
Marketing Strategies
Modern organisations implement the data of IT into their marketing strategies to target
specific demographic. The companies collect data of various customers based on their age,
gender, interest, preferences, and financial position to specifically target a group for
advertisement. According to Middleton et al. (2009), the place for marketing has changed
with time; Tourism corporations use social media websites and other online platforms to
market their products. This strategy assists them to reach a broader audience who is also
interested in their products and services. Online marketing includes advertisement through
electronic posters, videos, online directory entries and much more.
Benefits of IT in Tourism Industry
The primary reasons for the growth of tourism industry are the implementation of IT
strategies by traveling corporations. Following are some examples of the advantage of using
IT in the tourism sector.
Easier Process
The primary benefit of technology in every sector is that it assists in simplifying the
procedures. In case of the tourism sector, customers and corporations use technology to make
their process more comfortable. As per Hjalager (2010), people can use online websites or
smartphones to collect the necessary data for their traveling requirements and book their
tickets. Booking tickets and making reservations has become more comfortable as well due to
the implementation of technology. Banks also offer the facility to their user to make payment
online through their portals, which reduces the lines in the banks.
The implementation of information technology has profoundly affected the business
procedure of tourism corporations. According to Pesonen and Horster (2012), the popularity
of vertical portals has redefined the process of travel agencies; most of the customers use
these portals for last minute reservations or flight bookings. Large organisations such as
British Airways have implemented e-commerce applications for their customers which allow
them to access their reservations systems directly. Therefore, customers can do flight

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searches and choose between various options provided by the corporations, and finally, the
users can make a purchasing decision. The internet offers high-quality information to users in
a shorter period, and it allows enterprises to provide their services 24*7 for 365 days.
Aid in Businesses’ Growth
Every aspect of tourism sector has been influenced by the implementation of information
technology which assists in the growth of the business. Information technology assists in the
progress of large corporations as well as small business. Usually, large companies such as
Expedia or MakeMyTrip target their services to a broader audience which require them to
provide their packages at various price points. To offer their services at lower prices, these
corporations contract with small firms which provide low-cost facility to travelers. Online
websites listed the booking of small hotels to attract such customers which did not prefer to
invest heavily in their travel; therefore, technology is beneficial for both small and large
businesses (Xiang, Magnini and Fesenmaier 2015).
Better Understanding of Consumers’ Demands
Modern organisations use information technology to collect and analyse the data of their
customers to understand their traveling preferences. According to Dwyer et al. (2009), the
traveling corporations accumulate the data from social media websites and other online
sources to research their preferences. The customer’s information includes details such as
web searches, liked pages, followed destination and most shared locations. The corporations
hire professionals to conduct research upon the customer’s data and prepare strategies
according to their requirements.
The latest technology such as artificial intelligence or machine learning can be used by
corporations to predict the future need of their customers. For example, by online searches
and social media data of a person, the travel agencies can customise their package according
to him. The financial position, family details and marital status of a person also assist travel
agencies in prepare tailored holiday packages, which encourage customers into buying such
deal.
Drawbacks of IT in Tourism Sector
The traveling corporations receive various advantages by implementing information
technology in their business, but it has numerous disadvantages as well. Following are few
examples of shortcomings of information technology in traveling sector.

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Shrinking of Small Businesses
The use of information technology assists online services such as Expedia and Thomas Cook
to reach a broader audience. Most people use online services which negatively affect the
business of offline corporations. In recent times, the growth of travel agencies depends upon
the number of online services provided by them. Thomas, Shaw and Page (2011) provided
that most of the small business has to accept the terms and conditions of large online
companies to remain in business. The small traveling agencies did not have resources to
implement information technology into their business which makes it easier for large
companies to apply their conditions upon them. The technology has swiftly changed the
procedure of tourism businesses; therefore, many of the small agencies are out of work
because the customers use online services.
High Expenditures
The implementation and usage of information technology for research and marketing
purposes require significant expenditure by the corporations. The technical parts needed in
the utilization of information technology, such as computer hardware, software, programs,
and servers, are considerably high in cost. As per Murphy (2013), the rates of the computer
have reduced in the past few years but latest technology, such as machine learning, top
processing computer, and artificial intelligence, has significantly high prices. Therefore, most
of the small businesses are not able to implement latest information technology into their
procedures, and only large corporations with high capital are taking advantage of information
technology.
Requirement of Skills
For effective implementation and usage of information technology in business, the
corporations are required to hire an employee with specific technical knowledge. As per
Nahvi (2014), the business owners did not know the utilization of modern technology; they
are expected to learn the software or hire the people who are professionals. The organisations
have to pay high salaries to the information technology experts which increase the
expenditure of business.
Security Risk
The corporation which implement information technology in their business procedure is
vulnerable towards the risks of cyber attracts. Hackers and cybercriminals attack over the
data of traveling companies, to collect information regarding their customers. For example, in

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February 2017, Association of British Travel Agents online accounts were hacked by
cybercriminals. The company reported that more than 43 thousand accounts were affected by
the attack which leaked personal data, passwords and contact details of their users (Morley
2017).
Recommendations
For augmenting the growth of tourism industry, the corporations can efficiently implement
information technology in their business procedure. Before establishing an IT structure, it is
necessary that the companies must analyse their requirement and then prepare a plan for
efficiently use IT in their business. The government should assist small businesses in the
proper implementation of IT because they do not have resources to implement that by
themselves. The progress of small travel agencies can increase the growth of national income
of a country.

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Conclusion
In conclusion, IT has a significant role in the augmented growth of tourism sector. The
traveling corporations use the latest technology to improve their business processes and the
experience of their customers. The enterprises use global distribution system, computer
relationship management, flight tracking software, social media profiles, mobile applications
and many other technologies to improve their process. The benefit of using IT in business
includes simple procedures, faster growth, a better understanding of customer’s requirements
and much more. Implementation of IT has numerous shortcomings as well such as high cost,
loss of small firms business and other security threats. For efficient use of IT in the tourism
sector, the corporation should analyse their requirement before implementing the latest
technology. The government should support to small traveling firms by providing the most
recent technology because they benefit the countries national income and it will assist in the
growth of tourism sector.

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