E-business in tourism: introduction and history

UEF // University of Eastern Finland

Introduction and context E-business in tourism –course Finnish university network for tourism studies Juho Pesonen, Ph.D., Head of research (e-tourism),

Centre for Tourism Studies, University of Eastern

Finland

juho.pesonen@uef.fi

"Technology is nothing. What's important is that you have a faith in people, that they're basically good and smart, and if you give them tools, they'll do wonderful things with them." ~ Steve Jobs

Course goals

• Examine and understand the changes and possibilities rapid development of ICTs have brought upon tourism business. • E-business in tourism is examined from the viewpoint of tourism businesses and tourists. • Course material provides insights into different topics of e-business in tourism. • eTourism is a tremendously huge topic, so much more than just technology.

•Viewpoint of business

What do students know after the course?

•Why e-business is so important?

•What kind of theories are behind e-business in tourism?

•How is e-business conducted in practice in websites, social media, online travel agencies, mobile devices and applications?

•Assignments are designed to reflect these topics.

Completing the course

•Assessment:

•To support the assignments there are selected journal articles that provide a comprehensive view on the eTourism literature. The students are encouraged to search for additional references from the Internet and library.

•All the following assignments have to be successfully completed: 1) Research plan, 20 points 2) Digital Marketing Campaing assingment 15 points 3) E-business content, 5 points The due dates for assignments: 9.12.2016, 19.1.2017, or 11.2.2017

What is e-business in tourism?

•When you think yourself as a traveller, what things are connected to technology and tourism business?

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eTourism contains:

•E-commerce and E-marketing

•E-finance and E-accounting

•E-HRM & eR&D

•E-Procurement

•E-Strategy

•E-Planning

•E-Management

Importance of eTourism (Buhalis 2003)

•Revolution affecting all corporate processes. Value chains have changed as well as organization relationship to stakeholders.

•Utilisez intranets to reorganize internal processes, extranets to develop co-operation with partners and Internet to communication to all stakeholders.

•eTourism defines competitiveness of a tourism destination or company and is key to developing tourism industry.

The eTourism mix

Concept and domain

History of eTourism

• Increase in tourism since 1920

– Airplanes, private cars and tourism business around them.

– From supply creation to supply management.

•First CRS (central reservation system) 1950s.

– Increase in passanger number increased number of airplanes.

– It took 90 minutes to serve one flying customer reservations.

– First automatic reserveration systems in 1946 (American Airlines), still required humans to work.

– http://en.wikipedia.org/wiki/Reservisor#Magnetronic_Reservisor

eTourism history • 1959/1960/1962 first experimental GDS (Global distribution system) SABRE

(Semi-Automated Business Research Environment)

– Other examples Amadeus ja Galileo (Travicom first to enable reservation from more than one airline).

– Focus on selling and distribution starts.

• Gradully expanded to the use of other airlines and travel agencies and started to incorporate hotels too (Apollo by United in 1971)

• Owners of the systems gained revenue by charging comission and membership fees

– Too expensive for small businesses

• In 1980s Europea Amadeus started competing with Sabre.

eTourism history • 1970s first PCs

• Development of Internet from ARPANET to Internet 1970-1990

• Internet opens up for commercial use in 1995

– 1993 Internet contained 1 % of all information traffic.

– 2000 51 %

– 2007 97 % http://www.sciencemag.org/content/suppl/2011/02/08/science.1200970.DC1/Hilbert-SOM.pdf)

eTourism history

•Until mid 1990s about 50 % of all electronic

communication was tourism related.

– Mainly airlines

– 1995 Lonely planet web site

– 1996 Expedia by Microsoft

•Next step DMSs (Destination Management Systems)

– Information on local travel products, services and sights

– Alleviated seasonality by distributing travel demand.

•For a long time tourism was based on a long supply chain, brochures, non-elastic supply and telex.

• Gradully increasing usage of fax and e-mail.

eTourism history

•2000 the wild west of the Internet

•2000 TripAdvisor founded, online 2004.

•2004 Kayak.com (first flight search engine).

•2008 Airbnb

•2011 Google Flights

•New services are constantly developed and old ones fade

– Survival of the fittest

– Constant change

History of Google

•How to organize almost limitless information in the Internet?

• 1998 Google is founded: Larry Page ja Sergey Brin.

•October 2000 AdWords.

•February 2004: 6 billion indexed sites and files.

•August 2004 IPO, stock 85 $ .

•February 2005 Google Maps.

•November 2005 Google Analytics.

•November 2007, Android-operating system.

•September 2011, Google Flights

•May 2014, Google Glass

•Google X

• =Googopoly!

Exponential change

• It took radio 38 years to reach 50 million users.

• It took television 13 years to reach 50 million users.

• It took Internet 5 years to reach 50 million users.

• It took Google+ 3 months to reach 50 million users.

•Until 2003 mankind created 5 exabits of information.

– Now it doesn’t take a day.

•What happens in the future?

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http://blogs-images.forbes.com/tomcoughlin/files/2015/01/Data-Growth.png

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Technology fuels its own growth

•Amount of data generated by mankind doubles every year.

•As computing power increases it enables better algorithms.

– http://www.theguardian.com/science/2013/jul/01/how-algorithms-rule-world-nsa

– Lack of computing power limits innovation:

• http://www.dwavesys.com/d-wave-two-system

• What will happen when it doesn’t?

– Transition from algorithms into intelligence.

2008 Mobile revolution

• iOS opens up to third party applications: App Store

– Platform economy

– Ecosystems

In Finland the Internet is not growing any

(Tilastokeskus 8.9.2009)

But: https://www.google.fi/publicdata/explore?ds=d5bncppjof8f9_&met_y=it_net_user_p2&idim=country:FIN:NOR:SWE&hl=en&dl=en

Social media •Facebook 2004 ->

– 350 million new photos every day!

•Not including WhatsApp and Instagram

•https://www.statista.com/statistics/560262/share-of-social-media-platform-users-by-app-in-finland/

•TripAdvisor has more than 385 000 000 reviews.

9.11.2016 Sosiaalinen media / Juho Pesonen 28

Rise of social media in 2000s

http://1u88jj3r4db2x4txp44yqfj1.wpengine.netdna-cdn.com/wp-content/uploads/2016/04/facebook_monthly_q1_2016.png

9.11.2016 30

0 20 40 60 80 100 120

Used the Internet in the past 3 months

Usually uses the Internet usually several times a day

Used the Internet with a tablet outside home or

workplace in the past 3 months

Used the Internet with a mobile phone outside home or

workplace in the past 3 months

Bought over the Internet in the past 3 months

Followed a social network service in the past 3 months

Used a voting aid application before the Parliamentary

elections 2015

Prevalence of Internet usage and certain purposes of use

in 2015

Aged 75-89

Aged 65-74

Aged 55-64

Aged 45-54

Aged 35-44

Aged 25-34

Aged 16-24

Why are we using the web?

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https://www.weforum.org/agenda/2016/10/why-do-you-use-the-internet/

http://www.statista.com/graphic/1/225321/global-feature-phone-and-smartphone-shipment-forecast.jpg

http://blog.megafounder.com/blog/mobile-revolution/

9.11.2016 35

And this is only the beginning!

http://na1.www.gartner.com/imagesrv/newsroom/images/hype-cycle-pr.png;pv4a3db6f9c029a4db

9.11.2016 38

How much do we need technology?

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There is tourism without technology, but not tourism business.

9.11.2016 40

Thank you Contact

Juho.Pesonen@uef.fi @eppuJ

https://fi.linkedin.com/in/juhopesonen https://uef.academia.edu/JuhoPesonen

https://www.researchgate.net/profile/Juho_Pesonen

www.uef.fi/mot www.uef.fi/tmm

www.uef.fi

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