ICT in Tourism and Hospitality Industry: literature review

ICT in Tourism and Hospitality Information and communication technologies (ICT) have had tremendous impact virtually all industries and sectors, as well as, specific business businesses processes. The impact of ICT on businesses relate to the facilitation of communication with organisational stakeholders, serving as an effective sales channel, providing an effective platform for engaging in marketing and others.

Literature review is a “systematic, explicit and reproducible method for identifying, evaluating and interpreting the existing body of recorded work produced by other scholars” (Khan, 2008, p.41). Importance of conducting literature review in this paper can be explained in a way that it allows to present the most notable data about various important aspects of ICT in tourism and hospitality so that this data can be referred to during the case study analysis.

 

ICT in Tourism and Hospitality Sector

Parsons and Oja (2013) mention online reservations systems as one of the greatest impacts of ICT on tourism and hospitality sector. Major travel companies such as Expedia, Orbitz, and Thomas Cook, as well as, medium and even small sized tourism and hospitality firms have online reservation functionalities on official company website. Online reservation capabilities provide substantial cost saving opportunities for businesses in tourism and hospitality sector that otherwise would have been spent on human resources making reservations in a manual manner.

Moreover, according to Mihalic and Buhalis (2013), while the majority of businesses in tourism and hospitality sector have adopted various components of ICT to certain extent, there are substantial differences between businesses in terms of extent and nature of adoption of those components. In simple terms, Mihalic and Buhalis (2013) argue that some tourism and hospitality organisations have effectively included ICT to the sources of competitive advantage, whereas opportunities offered by ICT are yet to be used by others.

 

Importance of ICT to Small Hospitality Companies

Mihalic and Buhalis (2013) perceive ICT as a potential source of competitive advantage to tourism and hospitality businesses regardless of their sizes. Mihalic and Buhalis (2013) specify that ICT-based competitive advantages can be achieved by small hospitality companies through unique viral marketing campaigns, maintaining effective communication with various organisational stakeholders and in a number of other ways.

According to Bajaj and Nag (2005) a range of advanced ICT systems such as Decision Support System (DSS) can be applied to gain substantial benefits on practical levels not only by large organisations, but also by small and medium-sized business organisations as well. Bajaj and Nag (2005) argue that DSS integration by small and medium-sized organisations can assist management by generating a set of alternative solution options to management problems of various levels complexities.

 

Challenges of ICT Adoption by Small Hospitality Companies

According to Mohapatra (2013) main barriers in increasing the level of integration of ICT with various other business processes in hospitality companies can be divided into two groups:

Firstly, managers of small hospitality companies may underestimate potential contribution of ICT to the bottom line i.e. profit maximisation. It may be perceived by management small tourism and hospitality firms that investments in ICT technologies is the sole privilege of large companies with substantial amount of budgets and these managers may consider investments in ICT by small businesses due to the limited scope of operations.

However, Mohapatra (2013) convincingly argues that ICT can offer substantial benefits to hospitality firms of small sizes as well, and these benefits may relate to marketing and communication practices. This opinion is also shared by Mihalic and Buhalis (2013) and Thomas (2013).

Secondly, adoption of ICT in relation to various organisational processes by hospitality companies can be associated with funding difficulties. In other words, according to Mohapatra (2013), even when managers of small hospitality firms do understand substantial benefits to various business processes to be gained from ICT adoption, the implementation of ICT adoption at full scale may prove to be challenging due to financial factors.

Vermaat (2013) also acknowledges this problem and recommends small hospitality firms with severe budget restrictions gradual integration of ICT starting from basic yet effective tools such setting up social networking sites, and starting using Skype and other online communication platforms.

 

Internet and Small Hospitality Companies

Internet has been defined as “the largest computer network in the world, carrying information from one continent to another in the blink of an eye” (Parson and Oja, 2013, p.16). There is a consensus amongst authors about massive impact of internet on a wide range of business processes. Specifically, internet is found to have made substantial impact on communication practices (William and Curtis, 2008), facilitation of sales (Schneider, 2010), marketing practices, and even organisational culture (Moutinho, 2010) in tourism and hospitality sector.

Introduction of Electronic Point of Sale (EPOS) and Payment Management System (PMS) re justly specified by Parsons and Oja (2013) as substantial opportunities offered by internet-related technologies to hospitality and catering industries. Parsons and Oja (2013) consider advantages associated with these systems to include reduction of operational costs for business, convenience for consumers, and rapid speed of transactions.

 

Importance of SEO to Small Hospitality Companies

Search engine optimisation (SEO) can be defined as “the process of editing the content of a website so that it has a higher search engine ranking and therefore attracts more visitors” (Macmillan Dictionary, 2013, online) and it plays an important role in terms of attracting visitors to a website.

Mihalic and Buhalis (2013) explain the importance and facilitation of SEO in simple terms. According to Mihalic and Buhalis (2013), businesses need to identify key words and terms directly associated with their products and services achieve website ranking for these terms within algorithms of the most popular search engines such as Google, Yahoo! and Bing as high as possible.

SEO strategies are divided by Vermaat (2013) into two different categories: ‘white hat’ and ‘black hat’. ‘White hat’ SEO techniques such as ensuring an adequate amount of key terms within content and regularly updating the site is generally approved by search engines and implementation of ‘white hat’ SEO techniques in an effective manner can result in good rankings for longer term perspectives.

Engagement in ‘Black hat’ SEO techniques, on the contrary, are discouraged by search engines because they aim to gain unfair competitive advantage in ranking competition. Vermaat (2013) confirms that search engine algorithms are becoming increasingly sophisticated in terms of identifying and penalising the rankings of websites that employ ‘black hat’ techniques.

 

Social Media and Small Hospitality Companies

Social media has been defined by Amason (2011) as website and application that provides users with the possibilities of content creation and sharing. Key social platforms have been specified by Chandraserkar (2010) to include blogging, micro-blogging, RSS, widgets, social networking, chat rooms, message boards, podcasts, video sharing and photo sharing.

Social media marketing is partially based on buzz marketing that can be explained as “word-of-mouth messages that bridge the gap between a company and its products” (Boone and Kurtz, 2013, p.22). Benefits of social media to small hospitality businesses are explained by Mihalic and Buhalis (2013) by referring to the concept of viral marketing.

William and Curtis (2008) convincingly argue that effective viral marketing campaigns can offer tourism and hospitality businesses, as well as, other organisations the advantages of spreading the marketing message rapidly at a minimum cost.

At the same time, negative impacts of viral marketing are mentioned by Mihalic and Buhalis (2013) as absence of control over the marketing campaign after its launch, vulnerability to being manipulated or spammed, and possible counter productive impacts due to differences in perception.

According to Tuten and Solomon (2013), social media can be classified as a reflection of collective intelligence and their value increased by the level of participation in them.

Moreover, high levels of effectiveness of social media within a small niche that represent target market has been confirmed by Thomas (2013). In simple terms, Thomas (2013) explains that social networking circles are usually formed on the basis of mutual interests, and therefore, sending marketing messages through social media to social circles that consist of representatives of target customer segment in hospitality sector can increase the numbers of customers and revenues.

 

Importance of Website, and Its Design and Evaluation for Small Hospitality Companies

Manzoor (2010) stresses the role of first impression of a visitor about a website and convincingly agues that visitors make decision about browsing the website or leaving during the first six seconds of their visit.

Importance of website evaluation in an appropriate manner is confirmed by a range of authors such as William and Curtis (2008), Schneider (2010) and Moutinho (2011), and the most comprehensive evaluation criteria is found on the official website of The Management Centre International Limited (2013).

According to Schneider (2010) various competitions, special offers, and a wide range of freebies can be offered on the website so that the numbers of return visits can be dramatically increased. William and Curtis (2008), on the other hand, argue that in order for a website to be able to contribute to revenues of the businesses in a sustainable manner, it’s compatibility with various browsers and screen sizes needs to be ensured.

References

Amason, A. (2011) “Strategic Management: from Theory to Practice” Taylor & Francis

Bajaj, K.K. & Nag, D. (2005) “E-Commerce: The Cutting Edge of Business” Tata McGraw-Hill Education

Boone, L.E. & Kurtz, D.L. (2013) “Contemporary Marketing” Cengage Learning

Chandraserkar, K.S. (2010) “Marketing Management: Text & Cases” Tata McGraw-Hill Education

Khan, J.A. (2008) “Research Methodology” APH Publishing Corporation

Kozak, M. & Baloglu, S. (2011) “Managing and Marketing Tourist Destinations: Strategies to Gain A Competitive Edge” Taylor & Francis

Manzoor, A. (2010) “E-Commerce: An Introduction” Lambert Academic Publishing

Mohapatra, S. (2013) “E-Commerce Strategy: Text and Cases” Springer Group

Moutinho, L. (2011) “Strategic Management in Tourism” CABI

Mihalic, T. & Buhalis, D. (2013) “ICT as a New Competitive Advantage Factor – Case of Small Transitional Hotel Sector” Economic and Business Review, Vol.15, No.1 pp. 33-56

Parsons, J.J. & Oja, D. (2013) “New Perspectives on Computer Concepts 2013: Comprehensive” 15th edition, Cengage Learning

Schneider, G. (2010) “Electronic Commerce” 9th edition, Cengage Learning

SEO (2013) Macmillan Dictionary, Available at: http://www.macmillandictionary.com/buzzword/entries/seo.html

Thomas, C. (20113) “E-Commerce Marketing: How to Drive Traffic that Buys to Your Website” Kernu Publishing

Tuten, T.L. & Solomon, M.R. (2013) “Social Media Marketing” Pearson College Division

Vermaat, M.E. (2013) “Discovering Computers: Student Success Guide” Cengage Learning

William, J. & Curtis, T. (2008) “Marketing Management in Practice” Routledge

10 Criteria to Evaluate a Website (2013) The Management Centre International Limited, Available at: http://www.mcil.co.uk/review/7-10-criteria.htm,