New Technology's Influence onto Uk's Tour Operating Industry

1. Introduction

New technologies have affected every aspects of the world in the recent decades. IT, e-commerce have used in many industries to help their development; while internet has become a necessary for our everyday life. Most of the industries have set their new value propositions to adjust themselves to the new technologies. Without exception for tour operating industry, they are experiencing a big impact from those technologies and also responding to them and trying to develop in the trend. This assignment will discuss the influence for UK tour operating industry from new technologies and also the industry’s adjustment to the technologies.

2. Context

2.1. Economic background

Though the world tourism market has been in downturn since the 9.11, 7.7 and following acts of terrorism, The UK outboard holiday continues to grow in both volume and spend (Mintel, 2006). Between 2003 and 2006, total spending on holidays abroad by UK residents increased by a strong 18% to Ð'Ј23.3 billion (MBD, 2007). In the five years to 2012, MBD (2007) believe UK expenditure on holidays abroad will increase year on year culminating in an overall increase of 15% to Ð'Ј28.4 billion. MBD (2007) believe demand for holidays abroad by UK residents will continue to develop at a faster rate than domestic tourism due to a range of factors that are making travelling abroad cheaper for customers, including low cost airlines and the introduction of budget brands by many companies e.g. Sunstart from First Choice. However, the overall market is now much more competitive.

2.2. New technology in tourism industry

The most dovetailed industry with tourism was travel agencies. With the rise and development of electronic commerce, it had become a trend that travel agencies used information technology to trade and communicate. Most of the software companies already caught this international tendency to develop or bring in all kinds of applied software to assist industries leading in Business-to-Business Electronic Commerce (B2BEC) and the travel agencies had no exceptions. In order to orientate the international tendency, lower trading cost and raise business efficiency, the government also planed the electronic and automation industry and business applied Internet to assist every enterprises being electronic and there were some obvious outcomes.

3. Influence from New Technology

There is no doubt that new technology brought a lot of convenience to our life. In this part, some representatives of new technologies will be selected to be discussed for their influences in tour operating business.

1. E-commerce

Electronic commerce has the characteristics of convenience, immediateness and safety and it will replace the selling channels of traditional tourisms. E-commerce makes it easier to book holidays. Customers don’t need to go to a travel agent or look through a big selling catalogue any more. What they need to do might be just stay at home, order through TV, phone, internet or etc. This also makes it cheaper as well. A lot of cost can be saved through E-commerce, for instant, Shop renting, catalogue printing or sales staff employing. On the other hand, E-commerce also killed traditional tour operators with its cheapness and convenience.

2. Internet

Up to 1991, the commercialized of World Wide Web and the well-development of related technologies, such as WWW, multimedia and communication protocols, E-Commerce has a comprehensive applications and creates high performance. In 2001 some 5% (900,000) of all UK tourism trips in Scotland were booked through the Internet totaling Ð'Ј270 million (SPIC, 2002). It is claimed that in the near future one third of the travel buying population will purchase at least some of their travel products online (SPIC, 2002). Internet becomes necessary to our everyday life, which also make it possible for tour operators to approach everybody through internet. Also, internet makes the tour operating business more flexible. Business can be open 7 days a week, 24 hours per day. Customers can book their holidays whenever they want, wherever they are.

3. Virtual reality

Today, some of these websites display three dimensional (3D) models of objects, buildings and sites so that one can visualize these models from any angle by rotating them on the computer screen. This visualization is improving and will allow the �virtual visit’ of a site, of heritage buildings and of objects surrounding them. This improvement has introduced the term �virtual reality tourism’ thus providing new tools for heritage site interpretation and presentation, and for sustainable tourism. Virtual reality, which delivers an entirely computer-generated scene to the viewer, is quite direct and will help selling the tour products through internet. This is also helpful for hotels to sell their rooms. Sometimes, customers still would prefer to book the holiday or hotel after they see how they look like.

There are a lot more new technologies that have been used in tour operating business. The three we have just discussed are just representatives for them. However, after looking at those three, we could possibly draw out some key influences.

Benefits from new technologies are:

пЃ¬ Reducing operating costs through service orientation. New technology makes it more cost effective of communicating with target markets and disseminating information. It also reduces costs through increased efficiency in internal operations and purchasing processes

пЃ¬ Integrated marketing. New technology makes it possible to approach everybody.

пЃ¬ 360 degree customer service. It offers opportunities for improvements in customer service and retention through meeting and promoting individual preferences.

пЃ¬ Better co-operations among the tour operating industry. New technologies make it possible and easy to share information between each other. It also encourages greater co-operation amongst traditional competitors through the provision of hypertext links. Links are a cheap, quick way of raising the profile of a new site and getting round the difficulty of up-dating information.

Possible disadvantages have also been identified:

пЃ¬ The preference of many customers to conduct complicated