Factors Affecting Tourism – Technological Factors

As tourism is so unpredictable and volatile in today’s world

any changes, be they social, economic, environmental,
political, cultural or religious can have a counter effect on the
trends of the industry at that point. When it comes to travel
consumers are incredibly influenced. Since the development
of tourism began in 1700 (wikipedia article) it has changed
radically in that it is available to the masses and with a wide
choice. This report will study the technological advances and how this affects tourism
through volume, type or impact on a place at a certain period.

"... most of the world’s cities are now within 36 hours of each other ...” Peter Haggett,
2001

Technological changes within tourism surround several different factors from medical
advances to the innovative space tourism. Similar to tourism, technology is an ever
changing and sometimes unstable business. Better communication, transport and
safety have encouraged new consumers to the industry. Improvements in water
supply, medicine and knowledge have meant areas are opened up which were not
possible before technological advances. In today’s society in which a consumer wants
easier, quicker and cheaper service only technology has helped tourism fulfil the
customers demand.

The Dominican Republic had an issue in the

late 1990s of a lack of technology. Supply of
accommodation, services or even water could
not meet the heavy demand of tourists coming
to the country due to cheap air flights and
warm climate (A2 Geography by Steve
Cooper). Hotels were built quickly, but also
poorly, creating issues of health and safety.
The infrastructure in the country, especially at
the capital Santo Domingo and the beach www.lonelyplanet.com/.../dominican_republic.gif

resorts were at the brink of collapse due to

growth in additional population. This shows
how lack of technology affected the country. But investment was brought into the
state and spending was put into the economy to improve transport, health, business
etc. In the new millennium the country has now stabilised and still continues to collect
tourists from oversees due to its attractive location on the Caribbean. (A2 Geography
by Steve Cooper).

Another massive effect on tourism is the rapid increase in online booking that has
given consumers more opportunity to make a holiday.

Through technological advances, online booking has been one of the biggest factors
in affecting tourism, leisure and recreation in today’s world. There were 37,600,000
Internet users in the United Kingdom (representing 62.3% of the population) in March
2007, according to Internet World Stats. This was up by 144.2% compared to 2000.
(Internet World Stats, March 2007) and a new Google Survey has shown that surfing
the web has topped watching television as Britain’s favourite past time. On average
residents in the UK spend 164 minutes online every day compared to 148 minutes
watching television (Daily Mail, Friday 10th March 2006). This shows how much the
internet is now an integral part of life and has had an effect on other aspects
influencing the tourism business.

More and more people are now booking their holiday on the internet, as many people
are looking for a better priced deal than they’re being offered by their travel agent.
Both holiday and airline bookings have not dramatically rose in s
ales from the travel slump of 2001-02 due to the massive consequences of September
11th and the threat of terrorism which has increased (it saw similar slumps although
smaller after the Madrid bombings and 7/7 terrorist attacks). The Iraq war, the
SARS/bird flu epidemics and very consistent hot European summers have persuaded
the usual long haul travellers to stay at home.

A World Map to show Tourist Origins by Million Annual Tourists

http://www.worldmapper.org/display.php?selected=20

Of all the air passengers in the world, 40% fly on aeroplanes registered in the United
States. These flights are both domestic and international. In the year 2000 there
were 1.6 billion aircraft passengers. In these statistics, every time a person takes a
flight, they are counted as an aircraft passenger. Some people are passengers
many times in a year so far fewer than 1.6 billion individual people fly in a year.
This map was before September 11th 2001 and the influence of that meant less
people from the US and Western Europe were travelling by aircraft any longer.
This shows what effects this would have on the tourist industry.
"Tourists are very fickle beasts, even the perception that a destination is risky will
lead to a marked decrease in tourist traffic." Dr Howard Rosenzweig, 2003.

Technology has also aided the tourist industry especially airlines because of the better
transport, infrastructure and civil engineering that has meant that places inaccessible
before by car or train can be accessed swiftly. Significant features such as the Channel
tunnel, Gotthard Pass tunnel and Mont Blanc tunnel have all helped tourists get to
bordering countries a lot easier without using short haul flights.

"Sixty nine percent of EU citizens indicated that travelling across EU borders is as

easy as travelling in their own country." Elitsa Vucheva, 2005 World Mapper, Tourist Origins.
This has seen a loss in sales and therefore profits causing one of the hardest aviation
crises of the industry. The number of job cuts that were announced in 2003/04 was
well over 100,000 according to BBC News, November 2005. Routes had been slashed
and several European carriers were barely clinging to life. The turmoil in the industry
went from Aer Lingus to XL Airways, but times were changing and the industry
needed something new. Survival tactics started to emerge and online travel started to
show evidence of bucking this gloomy trend.

The Interactive Media in Retail Group (IMRG),

www.airlinelogos.net
All these airline companies saw job
losses and decline in sales as a result
of the 2001-02 crisis in travel.
as cited in a May 21, 2002, Financial Times
article had cited for many years that online
spending was increasing and predicted it to
triple at the end of the decade. Looking at e-
commerce data overall, the firm counted travel
as the biggest online sector, followed by
electronic products and apparel. IMRG also said
British shoppers were buying larger and more
expensive goods online, such as furniture and
kitchen appliances. This showed a large gap in
the sub-market that needed to be exploited.

At the start of the boom these were seen as survival tactics by the airlines and the
government also pushed for more progress in online booking to make the travel
industry more prosperous. The economic realities forced travel companies to be more
efficient in running their business. Websites, for example were able to promote the
latest ticket prices, particularly at a time Online Travel Spend
when they were being slashed on a day-to- ($bn)
day basis which was used to tempt Europe N.America U.K
travellers back into the air. Similarly travel 2000 2.4 6.4 0.8
sites e-mailed a wide customer base with 2001 5.8 11.00 1.8
relative ease to promote special deals. It is 2002 12.7 18.7 3.7
Source:
seen as the cheapest method of booking a Datamonitor
holiday, the LogicaCMG (a marketing
body) has said that phone bookings typically cost about £30 to service. By contrast
net bookings cost around 75p.

One of the biggest online travel sites Expedia, took an initial knock from 11
September, but then saw its transaction volumes recover by 80-85% during October.

“Like every travel company, we experienced a downturn, but we then recovered a lot
more quickly than the traditional industry” said James Vaile, managing director of
Expedia in the UK.
Online Leisue/Unmanaged B usiness
Online travel sites are also well positioned travel sales in the UK 2006-2011
(eMarketer)
to exploit the recent procrastination by
consumers in booking holidays. People are 35
30
booking later than usual in recent years and 25
$ Billion

the internet is seen as the obvious and 20

15
natural place to hunt down last-minute 10
5
0
2006 2007 2008 2009 2010 2011
Ye a rs
 bargains. As this bar chart shows travel sales online rose rapidly from 2006-2007 and
it is expected to continue to rise to over $30
billion. Top 10 upstream industries:
The consumers weren’t only using the 1. Internet: 56.56%
internet to book their holidays but also to 2. Search Engines: 48.57%
research and gain knowledge of the 3. Travel: 25.25%
4. Destinations and Accommodation:
destinations they wanted to go to. The 16.94%
search engines were flooded with searches 5. Agencies: 5.43%
over cheap flights, accommodation and new 6. Shopping and Classified 3.19%
destinations (as shown in the rankings). 7. Business and Finance: 2.80%
From the bar chart below it shows that web- 8. Entertainment: 2.27%
9. Net Communities and Chat: 2.26%
search is the preferred method of obtaining 10. Email Services: 2.25%
travel information with it being preferred
nearly twice as much as personal (Hitwise United Kingdon Newsletter June
recommendation, the second most preferred 2007)
method. This is then followed by TV
programmes, but the travel agents became the fourth option of consumers to collect
travel information. Web-searches are high due to people liking to make their own
decisions at their own pace and this can’t be done in travel agents where they are
pushed, poked and pressured. This is unpleasant for the consumer and has changed
the trend in which consumers went to travel agents for advice, whereas now they
would rather use the internet.
The internet is the preferred method of obtaining
travel information

Other Method

Newspaper
Options

Travel agents office

TV Program

Personal Recommendation

Web Search

0 10 20 30 40 50 60 70
No. of People

A P ie Chart to show the m ethods internet users book a holiday with

As this pie chart to the left
shows the internet has had
Travel agent brochures a huge impact on the
7% 1% and booking
11% booking of a holiday, with
Teletext
17% 79% of all booked
Telephone after holidays using the internet
reasearching on internet
High street after
in the process. Also, the
9% res earching on internet internet has seen a large
Internet book ings increase in the number of
55%
Other m ethod
“last minute" business as
many tourists feel it is
better-placed and they can
search for the best priced,

Data from Nielsen/NetRatings study on holiday bookings

most suitable holidays or excursions. Furthermore, since the growth of the internet,
online advertising has been used as a huge marketing tool, where holiday and travel
providers can target large quantities of potential customers and keep advertising costs
low. This has also been used to great effect as they appear to be a successful method
and an efficient way of gaining business from the wallet-conscious consumers,
whereas high street advertising receives less notice.

Moreover, the internet has caused the high street travel agencies to close, therefore
creating job losses within the businesses. This is mainly due to the fact that more
people are booking direct with the holiday providers, thus cutting out the middle man
and saving money by doing the research and booking themselves. This is usually done
by using the internet or telephone booking where the overhead costs are much lower
as an outlet has to be staffed and incur running costs such as electricity bills and also
because of the larger volumes of people that are able to access the service.

A recent example of this is was in 2001, when

Airtours, the UK’s largest tour operator had to cut
one-in-seven of its high street branches in an effort to
return to profitability. According to finance director
David Jardine, around 120 shops going under the
name “Going Places” were closed as the business
stated that they were finding there was an “increasing
trend in customers wishing to book direct".

On the other hand, online companies such as Expedia.com have seen their profits on
the rise over the past few years as would be expected, although they had not
anticipated such a large growth. For the last three months of 2001, Expedia saw its net
income surge to $19m according to BBC News, compared with a loss of $2.6m in the
same quarter of 2000 and also the firms revenues were in excess of $80 million for
2001, over double that for 2000, showing how quickly it has established itself as an
efficient internet booking service.

So in conclusion online booking for travel has dramatically changed tourism in the
world. It has provided a less time consuming, cost effective and an overall
efficient/productive method in organising tourism which has seen triggered a rapid
rise in sales. Airlines are now recovering after effects that were unforeseen. BAA
Limited, formerly the British Airport Association said seven UK Airports handled a
total of 11.5m passengers in August 2006 making it a record summer with the highest
number of passengers ever recorded over a two month period. BAA also revealed here
was a 6.8% increase in passenger traffic for the 12 months to August 31st 2006.
Bigger discounts and better security could tempt more people to book holidays online,
a LogicaCMG survey (http://news.bbc.co.uk/1/hi/technology/3939035.stm) found.

However, the future of online booking although seen as prosperous can also turn, but
due to the recovery in airline business they are starting to hit back. Prices are starting
to rise and now you must book early to get the best price. The same survey revealed
that online discounts were still not high enough to tempt potential customers onto
travel websites and that the process was still too complicated for some consumers. A
serious issue with online booking is the fear of fraud. Consumers are not convinced
that any personal and financial information they hand over would be kept secure by
online travel shops and this is slowing the potential growth that could occur
otherwise.

The Association of British Travel Agents (ABTA) sees the online travel market
having a long way to go before it replaces high street travel agents. ABTA estimates
that by the end of 2007 online travel will be 17% of the UK’s £28bn travel market but
this growth will only occur if trends continue as it relies on steadily growing numbers
of people happy to book holidays online and as well as improvements in technology
and the creation of better websites by travel firms. Issues over security, faults and
complications need to be solved if this method of booking is to prosper. The travel
industry although brash will always be around due to the need and want of consumers
to travel.

"For my part, I travel not to go anywhere, but to go. I travel for travel’s sake. The
great affair is to move." Robert Louis Stevenson, 1879

Bibliography References

o http://www.etcnewmedia.com/review/default.asp?SectionID=11&CountryID=53
o http://www.sasi.group.shef.ac.uk/worldmapper/posters/worldmapper_map19_ver5
.pdf
o www.traveldailynews.com/new.asp?newid=14083&subcategory_id=77
o www.patp3.webbler.co.uk/doc.php?id=1824
o http://news.bbc.co.uk/2/hi/business/3556503.stm
o http://news.bbc.co.uk/2/hi/business/3121865.stm
o http://www.expedia.co.uk/pub/agent.dll?qscr=over&rfrr=-
13011&&zz=1184276601343&
o http://www.emarketer.com/
o http://www.hitwise.com/
o Dove, Jane 2004 “Tourism and Recreation” pages 21-24– ATG
o http://www.dominicantoday.com/app/article.aspx?id=24206
o Nielsen/NetRatings study on holiday bookings
o http://news.bbc.co.uk/1/hi/business/1196691.stm
o http://news.bbc.co.uk/1/hi/business/1787962.stm