INDIAN INSTITUTE OF PLANNING & MANAGEMENTNEW DELHI

ROLE OF E-COMMERCE IN TOURISM AND TRANSPORT INDUSTRY

ABSTRACT

Tourism and Transport Industry are emerging as a fastest growing sector. With the

growth of the mode of transportation, both tourism and transportation industry are

doing extremely well in increasing the profits and balance of payments of country as

well as making the fame of the country in the international market by marketing its

beauty in the world and E-Commerce had given a boom to this industry with the

increase in turnover in multiples.

The study aims to gather information and analysis on the role of ecommerce in

tourism and transportation industry. As e-commerce is a global showcase of

information at the click of a button, vendors host severs sources to market their good

and services internationally and buyers buy these services regardless of wheel ever

they may be located.

The e-commerce has increasingly become a popular medium for marketing. This

study attempted to investigate the potential of the e-commerce for tourism marketing

and advertising and the current constraints on the full realisation of such potential.

Through an examination of the advantages of the e-commerce as a marketing tool and

the characteristics of the tourism industry, the paper found that the Internet was ideal

for marketing tourism. It then analysed the main Internet applications in tourism

marketing and explored the key factors that were attributable to the current low level

of travel sales an the Internet The study concluded with a brief discussion of the

major strategic issues in the implementation of Internet tourism marketing.

It is expected to contribute in a big way in knowing the hidden power and benefit of

internet as an advertising tool in Tourism and transportation Industry. It will also give

an idea of low cost vis-à-vis traditional and current advertising techniques. It will also

help the tourists on the web to know what strategies are being employed by the

marketers to woo the tourists through the use of web based information technology.

SIGNATORY PAGE

THESIS TOPIC APPROVAL

SYNOPSIS

1. Details of the student

Name = Ankush BihaniBatch = PGP spring summer (2006-2008)Specialization= Marketing & FinancePhone no. = +919950162425Email id= bihaniankush@gmail.com

2.Desired area intend to do research

How the increase role of E-Commerce had lead to the growth of the Tourism and Transport Industry.

3.Title of the thesis

Role of E-Commerce in Tourism and Transport Industry

4. Research objective

To analyze the increased role of E-Commerce in today’s world. To study and enlist the benefits of E-Commerce in Tourism &

Transport Industry To study and evaluate that how the E-Commerce is helping in the

selling. To see the effectiveness of the E-Commerce in increasing trade.

5.Introduction to the Area of research

Tourism and Transport Industry are emerging as a fastest growing sector. With the growth of the mode of transportation, both tourism and transportation industry are doing extremely well in increasing the profits and balance of payments of country as well as making the fame of the country in the international market by marketing its beauty in the world and E-Commerce had given a boom to this industry with the increase in turnover in multiples.

6.Scope of thesis work

Foreign exchange earnings from tourism during 2005-06 were US $ 3,933 million and from transportation Industry is worth 10,000 crore. Government is giving a lot of emphasis to develop these two sectors as it is turning up as a major upcoming industry In India. Both tourism and transportation industry are doing extremely well in increasing the profits and balance of payments of country as well as it is giving a boom to Hotel & Food Industry and hence the future of these Industry and their related industry is bright.

7.Research Methodology

Primary Data

Interviews of Tour operators Interview of project guide Customers survey

Secondary Data

Books and News paper Internet

8.Justification for choosing a particular research proposal

As said earlier tourism and Transport Industry are emerging as fastest growing sector in India and World as a whole, and all the develop or developing countries are giving their major concern towards these sectors. And due to the potential of these sectors I want to go for this research topic.

9.Details of the External guide

Name of the guide = Qualification = Designation =

ACKNOWLEDGEMENT

I wish to express my gratitude to __________ for the study on ‘The Role of e-

commerce in Tourism and Transport Industry’. Because of his guidance only, the

research work could be meaningfully accomplished. He has always extended his

valuable advices and suggestions during the Project and has always proved to be a

source of inspiration for me. I wish to put on record the same.

I would also like to express my sincere thanks to Prof. Sumanta Sharma and Prof.

Vijay Boddu for their able guidance and timely help for completing the thesis.

I also wish to express my appreciation to all the supporting staffs in PGP Programme,

who were very supportive throughout the course of study.

I also acknowledge my heartfelt gratitude to my friends for their excellent efforts and

encouragements, which had been provided to me throughout this study.

TABLE OF CONTENTS

Abstract

Signatory page

Thesis Topic Approval

Synopsis

Acknowledgement

Contents

Introduction

Research Methodology

Tourism and Transportation Industry

Internet Tourism Marketing

Advantages of Internet as a Marketing Tool

Application of E-commerce in Tourism Marketing

Analysis and Findings

Conclusion and Recommendations

Bibliography

Annexure

INTRODUCTION

Tourism is considered to be the world's largest industry as we are on the threshold of

a new era, an era in which the growth of leisure travel around the world is expected to

sell to dramatic proportions; increasing offence in many parts of the world is

resulting. In reduced working hours, were leisure time, and the economic resources

necessary for discretionary travel.

The potential impact of this dramatic tourism growth on our life is so staggering that

it does not seen an exaggeration to describe the coming era as the "Tourism

Revolution". It’s a revolution which promises great benefits and great challenges; if

we are able to meet the challenges, and deal with the problems, the potential benefits

are almost unlimited.

Travel and Tourism services have been mostly marketed via mailers, brochures,

advertisement on TV/print, on telephone or word of mouth; and it has always been

confusing for the traveler to find the best package or best destination for himself.

Same has been the case with hotel services, tour operators etc. where they have more

or less been in wait for the tourist season to come. The world wide web has

magically brought all these related services together on the internet platform,

combined and individually as well.

As for example an Indian couple wants to spend few days vocation abroad will

have to plan-countries/cities to visit, the best airline tot he first destination, connected

flights, reasonable hotels for stay, shopping malls, entertainment centres and so on.

Thus to decide this they will have to visit a travel agent to know if he has a tour

package for the destination, understand all the flight schedules and details, find out

the brochure of the country city, check hotel availability and cost structure at all the

places they are visiting. Hence to gather all this information and decide, they would

have to start planning a month before.

But with the internet it has become nothing but just a few clicks of the mouse. The

above couple can visit a travel portal, look at profiles of the countries they plan to

tour, choose online 2-3 real routes and select search. Thus within few seconds

would come the list of flights with their fare and timings as per each route and so

on. Travel-organizer website, put up their choices on country, centres of

entertainment, range of tarring for hotls, days they want to spend, hotel expense

range and shoot the query for the travel agency website to scan through its database

and come out with the best package with the likely hotel expenditure for each route

in few minutes, seconds perhaps.

The Internet is the global 'network of networks" of interlinked computers operating

on a standard protocol which allows data to be transferred between them. As an

information exchange system, the most important aspect of the Internet is its

connectivity, the ability to allow everyone to access the network . The potential of

using the Internet for marketing activities is derived from its general use as an

information exchange system in the digital age. The information can be stored, 

indexed,  retrieved,  restructured  and redistributed automatically by software and

without human  intervention.  The  Internet  connects companies  with  companies, 

companies  with customers, and people with people without regard to time, space and

hardware/ software platforms.

Although the Internet originated in the 19605, it is only in recent years that it has

become a buzz-word.  Internet  services  fall  into  two broad categories:

communication services and information services. Communication services such as e-

mail, and e-mail-based discussion lists and net news, allow the direct exchange of

information between Internet users. Information services, including Telnet, Gopher

and anonymous FTP (the File Transfer Protocol), allow users to access data that has

been made available by other users. Since 1993, the Internet has been transformed

completely by its newest component  the World Wide Web (WWW or the Web). The

WWW not only integrates other file transfer protocols like Gopher and FTP, but also

allows the user to access hosts through Telnet, read newsgroups and use e-mail.

Through an Internet browser, a user can link to any web sites and may explore the

Internet resource in an unprecedented way for both leisure and commercial purposes.

Moreover, the Web's capability to blend text, pictures,  sounds and video clips into

multimedia documents played the key role in popularising the Internet beyond its

traditionally academic boundaries and become an effective communication means in

business and everyday life. Indeed, the WWW has been so successful that it changed

the appearance of the Internet and for many it even become synonymous with the

Internet itself. The WWW or the Web is also used loosely and interchangeably with

the Internet or the Net simply because most marketing activities carried out on the

Internet are based on the World Wide Web.

The rapid growth of the Internet, especially the WWW, has attracted a great deal of

interest among both  academic  researchers  and  business practitioners, especially in

the fields of Information Technology and marketing. There are also an increasing

number of publications on Internet tourism marketing and advertising, in the last few

years.

OBJECTIVES OF THE STUDY

To analyze the increased role of E-Commerce in today’s world.

To study and enlist the benefits of E-Commerce in Tourism & Transport Industry

To study and evaluate that how the E-Commerce is helping in the selling.

To see the effectiveness of the E-Commerce in increasing trade.

RESEARCH METHODOLOGY

RESEARCH DESIGN

Research design is the plan, structure and strategy of investigation conceived so as to

obtain answers to research questions and to control variance”. The study conducted to

achieve the above said objectives was both exploratory and descriptive in nature and

involved mail surveys based on the questionnaire format.

DATA COLLECTION

Secondary Source: Through articles in magazines such as Business World,

Advertising and Marketing, Business Today etc. and from business newspapers such

as The Economic Times, Business Standard etc. and through Internet sites

Primary Source: Information was collected in a face-to-face situation through the

survey conducted.

Data Measurement Techniques:

The data measurement technique used for obtaining the desired information was the

questionnaire method.

SAMPLING

Sampling Technique – Simple Random Sampling

Sampling Unit - The target population consisted of Tourists in Delhi

Sample Size - 50

TOURISM AND TRANSPORTATION INDUSTRY

It is a well known fact that tourism with it’s socio-economic influences is of

great significance to world economy. “it is also believed that tourism is the

second largest and the fastest growing industry of the world today. On the

whole it is a worldwide industry and has a tremendous impact on the nations

economy. Last few decades have witnessed rapid developments is not only

international travel but also in dissemination of travel related information

through Internet; and this has led to access of tourists to the frothiest corners

of the globe.

For example “millenniums tourism” has emerged as one of the most significant

revenue earner for most countries. Travel agencies and fair operators the world

over are putting together millennium travel packages that promise their clients

the ultimate turn-of-the-millennium experience. Such is the reach of tourism

that the millennium madness is like a fever that is raging across worldwide

be it Bolivia or Bangladessi, Tokyo or Tibuck too, the kreunlin or the kelaudic

Government; turn-of-the-millennium bashes are being planned in every

country.

Millennium tourism has also boosted the careers of many a scientist who are all

busy calculating precisely where the first sunrise in Y2K is likely to take

place”2 are group of scientists chain that on island in the Andaman and Nicobar

Islands in the Indian territory is the coverted spot, another group has proclained

that Maleba till on Pitt Island, east of New Zealand, will see the first down of

the new millennium break at 1600 Guilt on December 31, 1999. Thus we can

see and appreciate now oveni present is the influence of tourism the world

over.

On the other hand tourism is a subject which is also extremely couple in so far

as that it touches not only the economic fabric of the society but also creates a

deep rooted effect on social norms and moral values if tackled with

understanding on one hand, it can generate immense benefits for a country but

on the other hand on unbalanced tourist movement can result in major social

upheavals which in turn can set off a chain of irreversible reactions.

Thus we see that “ tourism is a basic and most desirable human activity

deserving the praise and encouragement of all people and all governments” 3.

“It is an industry concerned with attracting people to a destination, transporting

them there, housing, feeding and entertaining them upon annual and returning

them to their homes”. In addition to a leisure time activity, tourism has many

other facets like cultural tourism, health tourism, sports tourism,

conference/convention tourism, religious tourism etc. on a similar front group

tourism has to be taken into consideration so as to offer the right type of a

package to not only the individual traveller but also to the travellers moving in

groups.

At this stage it is imperative to mention that tourism is not only an economic

activity of importance to national development, but also an important medium

of central changes among nations of the world. A lot of emphasis is generally

placed on the economic role of tourism, it’s contribution to the foreign

exchange earnings of the nation and it’s potential for greater employment.

However its high time to understand the important role of tourism as a means

of social education and social mobilisation in the country itself, as a

competing force for fostering better understanding among nations of the world

for developing closer cultural and business relations and as a significant factor,

contributing to world peace.

“The full impact of tourism on the national economy is not just through

expenditure on the front line tourist trade. It embraces called upon at various

stages of the process to supply goods or services. The output produced by the

industries which are outside the direct tourism sector are in very real sense due

to the needs of the tourist who spends the money in the first place and sets the

whole thing going”.

As per Richards, there are in the broadest terms two sets of links between

tourist spending and the economy Firstly we have the broad consumption items

which have a direct effect. These relate to the actual expenditure involved on

tourism e.g. transport, accommodation, food, drinks and shopping services etc.

Secondly. The links between the trades directly involved in tourism and those

trades and industries which supply the tourism trade with goods and services.

Tourist industry is a small but a significant part of the total leisure industry. it

is a complex industry of many parts, ranging from a multinational airline and

a international hotel chain to a husband and wife guide service of only two

employees. The letter are has become more prevalent with the advent of

internet and such small companies due to lower fixed costs are offering

customised travel packages at competitive prices.

For the success of modern tourism in the real sense, there is an exigent need of

perfect co-ordination between the primary and secondary trades of tourist

industry.

The tourist industry could be defined as sum total of providers of tourist

services. It is that part of the nations economy which caters for the travellers

who are visiting places outside the reality where they reside or work. On the

whole it is a nitrogenous group which embraces a large variety of trades and

industries which have supplying of travellers needs as their common base.

Thus on the whole we find that the industry is made up of various trades and is

one of the largest single economic group.

There are a member of primary and secondary trades which are directly

dependent on the travellers for their existence. The foremost among the

primary trades are hotel industry, transport industry and travel agencies. The

secondary trades consist largely of groups serving the travellers such as retail

shops, entertainment industry , and banks etc. This group also consists of the

suppliers of goods and services for hotliers, caterers and transport

undertakings, public utility undertaking and insurance companies etc. Thus we

see that tourist industry is the collective needs of travellers which gives it a

homogeneity on the surface but the diversity of the needs of the consumers

makes this activity a more couple field for economic study than most

agricultural, extractive, or manufacturing industries.

Concluding this section we try to look at the origins of the world tourism and a

few of it’s connotations in ancient times. As per certain researchers the world

‘TOURISM’ is related to ‘TOUR’ which in turn is a hebrew word. It derives its

morning from the Hebrew terms ‘torah’, which in turn means learning,

studying, and search. A tour as per the above mentioned origins represented on

attempt by the traveller to discover something about a place he visits. A tourist

wants to see for himself something he has heard about, or he wants to learn

about business opportunities, job possibilities health advantages, educational

benefits, environmental assets or recreational activities.

SCOPE OF TOURISM IN INDIA

India is a country of continental dimensions. It is a fascinating kaleidoscope of

races, languages, religions, customs and traditions. It is also a land of lofty

mountains, mighty rivers, ever green forests and all forms of flora and fauna.

No other country in the world in the world is richer in scenic grandeur with a

panorama of contrasting landscapes at different stages of evolution”. India

covers an area of 3.29 million sq. kms, the mainland extending from south to

north for 3,200 kms between 8o4 and 37o25’ East meridians of longitude”1.

While it ranks as the world’s seventh largest country, no other country except

the United States surpasses it in the extent of aerable land. In population, India

is the second largest country after China with a population of over 900 million

people. It has a land frontier of 15,200 kms and coastline of about 5700 kms. It

is divided into 25 States and seven Union Territories for administrative

purposes.

All the major land forms-hills, mountains, plateau’s and plains - are

represented in India. No rigid line is drawn between hills and mountains as

even parts of the Himalayas are often referred to as hill and named after “hill

stations” like Shimla and Darjeeling. Outside the Himalayas several other

elevations with slight summit area and steep attitude of 2,000 to 3,000 metres

or more are also called hills. The Naga hills with their highest summit Saramati

(3,826 metres) and Nilgiris in the South (Tamil Nadu) are typical of such hills.

India has seven principal mountain ranges, the Himalayas, the Patkai and other

ranges in the north-east, the Vindhya, the Satpura, the Aravalli, the Sahyadri

(Western Ghats) and the Eastern Ghats. Much of the surface of India has

developed a plateau character. Extensive plains, either flat or rolling, at levels

ranging from 300 to 900 metres and broadered by scrap are the main features of

plateau landscape. The geographical expanse, diverse land forms and varied

life styles of people make India insulated from any whirl winds occurring in

any part of the country.

Tourist Attractions of India

The tourist attractions of India include historical monuments, places of

religious importance, mountain and beach resorts, wild life and interesting eco-

systems, places with facilities for adventure, water and winter sports etc.

India abounds in attractive and well-preserved historical sites, ancient

monuments of architectural grandeur, not-so-ancient mosques/durgahs,

churches and places of worship of other diverse faiths and so on.

Among the places of cultural interest, the Ajanta and Elora cages and the

Elephant caves in Maharashtra, the Konark Sun Temple and the Jagannath

Temple in Orissa, the Khajuraho temples in Madhya Pradesh, the Hindu

temples of South India and of Varanasi and Mathura in U.P., the Golden

Temple at Amritsar in Punjab, the Vaishno Devi Temple in Jammu & Kashmir,

the numerous places of Buddhist interest like Bodhgaya, Sarnath, Sravasti,

Nalanda, Vaishali, Kushinagar etc., the Durgah of Chishti at Ajmer etc are a

few of the noted attractions in India. India is also known for some of its fine

beaches like Goa, Mamallapuram, Kovalam, Pondichery, Puri-Konark etc. In

addition island tourism has been developed at Andaman/Nicobar and

Lakshadweep Islands.

There are 421 wild life sanctuaries and 75 national parks scattered through out

the country which hold unlimited varieties of flora and fauna to entertain eco-

friendly tourists. Some of the known sanctuaries well developed for tourism

include Kaziranga and Manas in Assam, Jim Corbett Part in Uttar Pradesh,

Bharatpur, Ranthambore and Sariska in Rajasthan, Kanha and Bandhavgah in

Madhya Pradesh, Bandipur in Karnataka, Simplipal in Orissa, etc.

India also offers large potential for adventure tourism like trekking,

mountaineering, river rafting, winter sports, water sports etc. The winter sports

complex at Auli provide facilities for sking, ice-skating, chair lift etc.

The Indian handicrafts particularly, jewellery, carpets, leather goods ivory and

brass work, etc. enjoy high reputation amongst foreign tourists. The estimates

available through surveys indicate that nearly one-fourth of the tourist

expenditure is spent on shopping of such items. A number of handicrafts

emporia are available at most of the tourist centres to cater to the needs of

tourists.

Some of the cities in India do have facilities for organising international

conventions and conferences. This segment of the industry is now being given

considerable importance.

Above all India has a population with visitor friendly traditions., varied life

styles, cultural heritage, and colourful fairs and festivals. Thus we can see that

India is reworkable not only for her extreme diversity of physical features but

also that its population represents a veritable museum of races representing

almost all ethnic groups of the world with their characteristic features. (Subrato

Roy 2000)

The discoveries of Harappa cultures in the early past of this century has placed

India on the map of ancient cultures comparable in many of its characteristics

to the contemporary civilisations of Egypt and Sumar. The decline of the

civilisation and the rise of the Aryans way be considered as the turning point

of Indian history. Thus nature and history have both made India one of the

most attractive tourist countries of the world.

Tourism needs variety and India with it’s vast dimensions and diversity offers

to every class of visitor something, which is not found elsewhere. Unline

other export industries, there is comparatively little investment needed for

promoting tourism. The scope for its expansion is unlimited . Today we find

that a number of factors are coming into proper focus and are becoming an

integral part of much larger tourism industry.

Tourism is travel, relaxation, a holiday, and an exposure to other cultures. It

is an industry, a source of income especially of foreign exchange and an

exercise in national image building and in these times whose media is all

powerful in bearing images the world over, the national image building aspect

becomes all the more crucial.

Therefore even though India has a fantastic profile of rich and varied tourist

potential, it needs to enlarge it’s focus and not limit India to a set of

movements or scenic marvels like Khasuraho, Gularg, the Taj Mahal and

Mahabalipuram with little or nothing in between except a few necessary stop

overs.

It is a personal opinion without any rationalistic biases that a vast and varied

country like India; which it’s rich and colourful attaractions; deserves a

substantially greater tourist inflow than so called other foreign tourist

paradises, which have of almost everything to offer but which somehow

manage to get more tourists in a single season than India does in a year.

When talking about tourism on the whole, inbound tourism constitutes a major

chunk and this is so because of the various benefits attached to it. Now we attempt to

elaborate upon areas (to name a few) where inbound tourism has a significant effect.

Inbound tourism facilitates and accelerates the development of a region. It has

been largely observed that most of the tourist areas are those which were

economically most backward and had few production resources. The bulk of

tourist development in India has taken place in non-industrial locations normally

rural, mountain areas or coastal areas. There is no denying the fact that inbound

tourism is an industry and it uses land and goods which have no industrial or

agricultural value.

For example show (is good for winter sports), Saud (along the seashore for

beaches), dense forests and deserts (national parks). All these elements are

unproductive for other national industries, but they represent a source of wealth

for tourism.

Inbound tourism helps in combating unemployment specially in a country like

India where labour is in good supply. As mentioned earlier tourism industries

employed 9.1 million persons directly and 12.3 million persons indirectly during

2005, thereby making it one of the largest employment generating sectors of

Indian industry. This is so because be it inbound tourism or tourism on the whole

it is a labour oriented industry and provides employment several times more than

normal manufacturing industries. Thus is India inbound tourism has been a

important factor in combating unemployment since it represents a high percentage

use of labour force per invested capital.

Inbound tourism brings in foreign exchange which in turn rfacilitates the

improvement of trade balance. It is undeniable that for a country like India

inbound tourism has been a factor for economic development and correcting an

adverse balance of payment situation. Inbound tourism has always been highly

appreciated in India as it means an inflow of foreign exchange from the

international economy. In the process international purchasing power thus

bestowed upon India is then computering integrated into the total foreign assets of

the country. It’s beneficial effects are then manifested in our purchasing abroad ,

which then get extended over the entire country without discrimination since the

import of transport equipment and industrial goods made possible by these assets

is used directly to increase production capacity of other sectors in now way

connected with tourism.

Getting on with the study of inbound tourism, we first look at an overview of Indian

tourism given below:-

Indian Tourism

1. Foreign Tourist Arrivals During 2006-07 23,74,094

(i) Tourists other than the nationals of Pakistan and

Bangladesh

(ii) Tourists of Pakistan nationality

19,73,647

45,076

(iii) Tourists of Bangladesh nationality 3,55,371

(iv) Sea cruise passengers

2. World tourist arrivals during 2006-07 (Million) 612.8

3. Percentage share of India in world tourist arrivals during 2006. 0.39

4. World Tourism Receipts (excluding fare receipts) during 2006, (US $ Billion)

443.8

5. Estimated foreign exchange Receipts of India

(i) Rs. 11051. 43 crores (P)

(ii) US$ 3151.70 million (P)

6. Estimated foreign exchange receipts of India

(i) Rs. 11263.88 crores (P)

(ii) US$ 3172.93 million (P)

7. Percentage share of India in World Tourism receipts during 0.71

8. Estimated number of Domestic tourist visits in the country 156 million (P)

9. Estimated direct employment in tourism during 9.1 million (P)

Salient Features

1. Tourist Arrivals

Foreign tourist arrivals in the country (including the nationals of Pakistan and

Bangladesh) registered an increase of 3.8 per cent from 22, 87,860 in 2006 to

23,74,094 in 2007. The arrivals (excluding the nationals of Pakistan and Bangladesh)

increased from 19,23,695 in 2006 to 19,73,647 in 2007 registering a growth of about

2.6 per cent.

The following table gives the summary of international tourist traffic to India during

the last two years.

Country Tourist Arrivals %change

2006 2007

Pakistan 41,810 45,076 7.8

Bangladesh 3,22,355 3,55,371 10.2

Other Countries 19,23,695 19,73,647 2.6

Total 22,87,860 23,74,094 3.8

Further, the following table gives the summary of International tourist traffic to India

during the years 1990 to 2007.

Year (Excluding nationals of Pakistan & Bangladesh)

(Including nationals of Pakistan & Bangladesh)

Number %change

Number %change

1990 853148 6.6 1279210 -

1991 860178 0.8 1288162 0.7

1992 884731 2.9 1304976 1.3

1993 835503 -5.6 1193752 -8.5

1994 836908 0.2 1259384 55

1995 1080050 29.1 1451076 15.2

1996 1163774 7.8 1484290 2.3

1997 123992 6.5 1590661 7.2

1998 1337232 7.8 1736093 9.1

1999 1329950 -0.5 1707158 -1.7

2000 1236120 -7.1 1677508 -1.7

2001 1434737 16.1 1867651 11.3

2002 1442643 0.6 1764830 -5.5

2003 1562016 8.3 1886433 6.9

2004 1762228 12.8 2123683 12.6

2005 1923695 9.2 2287860 7.7

2006 1973647 2.6 2374094 3.8

As profiles of the tourists from Pakistan and Bangladesh are not available, the

analysis given in the following paragraphs relate only to other nationals.

2. Time of Visit

Tourist arrivals were the highest during the month of December while the lowest

number of arrivals were recorded during May. Arrivals during the first six months

upto January 2006 recorded an increase of about 3.6 per cent over the same period

of the previous year. The next six months recorded an increase of 1.7 per cent over

the corresponding period of the previous year.

Arrivals during the winter comprising of the first and the fourth quarters and the

summer months comprising of the second and third quarters of 2006 were 12,01,550

(60.9 per cent) and 7,72,097 (39.1 per cent) as against 11,65,616 (60.6 per cent) and

7,58,079 (39.4 per cent) respectively during the corresponding period of 2005.

3. Mode of Transport

Air continued to be the predominant mode of travel for the tourists coming to India

during 2005 and constituted 98.5 per cent of the total traffic. Arrivals by sea sea were

negligible and the share of arrivals through land routes was 1.5 per cent during 2006.

4. Port of Entry

Delhi emerged as the major port of entry during 2003 and it continued to remain the

same even during 2005 with 7,82,528 (39.6%) tourists disembarking at Delhi

followed by Bombay with 6,63,315 arrivals (33.6%). Both these ports put together

accounted for 73.2 per cent of the total tourist traffic. The arrivals at Madras and

Calcutta airports and Sonauli land check post constituted 13 per cent , 3.5 per cent

and 1.1 per cent respectively of the total tourist traffic sonauli Check-post continued

to be the most popular land entry point.

Goa airport opened for international flights from the month of November 1985. The

number of foreign tourists disembarked during 2005 at the Goa airport were 78,863

registering a growth of 7.1 per cent over the year 2004.

5. Age Distribution

Tourists in the age-group of 35.44 years (26.9 per cent) dominated the arrivals

during the year 2005 followed by those in the age-group of 25-34 years (23.4 per

cent) and 45.54 years (18.9 per cent). The tourists in the age group of 35.44 were

dominant amongst all the top ten tourist generating countries like UK, US, USA, Sri

Linka, Germany , Japan, France, Canada, Italy, Malaysia and Singapore.

6. Distribution of Tourists by Sex

The male tourists far exceeded the female tourists and accounted for 61.4 per cent of

the total tourist arrivals during 2005, and it was 3.9 per cent less than what was

observed during 2004. The proportion of male tourists was the highest (65.0%) in the

case of France and was the least (54.9% ) in the case of Sri Lanka.

7. Length of Stay

The estimated average length of stay of foreign tourists in 2006 was 30.8 days. The

total tourist days spent during 2006 were estimated to be 6,20,71,920 as compared to

5,73,17,116 during 2005.

8. Nationality -wise Arrivals

Nationals of United Kingdom with an arrival figure of 3,70,567 continued to occupy

the first position in the tourist arrivals to India during 2005 and accounted for 18.8 per

cent of the total tourist traffic as against an arrival figure of 3,60,686 (18.7 per cent)

during 2004. This was followed by USA with 2,44,239 tourist arrivals during 2005

constituting 12.4 per cent as compared to 2,28,829 (11.9 per cent) arrivals in 2004.

Other major countries whose relative shares in the total traffic were significant

include Sri Lanka (1,22,080 or 6.2 per cent), Germany (1,05,979 or 5.4 per cent) and

Japan (99,729 or 5.1 per cent ). Tourists from France, Canada, Malaysia, Italy and

Singapore each constituted between 4.6 per cent and 2.6 per cent of the total traffic

during 2005.

During 2005, arrivals from nine top ten tourist generating countries registered

positive growths. Maximum increase, however, was registered positive growths.

Maximum increase, however, was registered in the case of Sri Lanka (13.7 per cent)

followed by Malaysia (13.2 per cent), USA (6.7 per cent), Canada (6.1 per cent) and

Germany (6.1 per cent) over the previous year. However, negative growth was

registered by France (2 per cent).

INTERNET TOURISM MARKETING

The internet increasingly has become a popular medium for marketing. Offering

enormous potential, the internet is ideal for marketing tourism. This article will show

you how the internet can help you maximise the ROI of your tourism marketing

campaign. You can learn about the benefits and the current constraints, which hamper

the full realisation of such potential.

Though the internet has been in existence for a while now, its popularity has sky

rocketed in the recent years. There are two broad categories of internet services i.e.

communication and information services. Of the two, communication services allow

direct exchange of information between internet users. E-mail, e-mail-based

discussion lists and net news are also included in the communication services.

Information services, Telnet, Gopher and anonymous FTP (File Transfer Protocol),

allow users to access data made available by other users. The World Wide Web

(WWW) has completely overhauled the internet since 1993. WWW allow the user to

access hosts through Telnet, read newsgroups and use e-mail. Internet browsers have

now become a source of unlimited information for both leisure and commercial

purposes. The web’s ability to blend text, pictures, sounds and video clips into

multimedia documents, transformed the internet into an effective means of

communication. The WWW has changed the appearance of the internet so much so,

that for many it is now the same as the internet.

The vigorous growth of the internet has drawn a lot of attention from both academic

researchers and business operators. People in the fields of Information Technology

(IT) and marketing have swarmed the internet. Internet publications on tourism

marketing have grown significantly in the last few years. Some have provided a

necessary background to some in-depth discussions of the various issues of marketing

tourism on the internet. Some of these articles have highlighted the internet’s impact

on tourism distribution. However, this field of research is still in its infancy. Efforts

must be made to understanding the internet's role in tourism marketing and as to how

tourism organizations and destinations can exploit its full potential.

WHY INTERNET ADVERTISING?

Ironic, isn't it, that just 40 years ago television was considered "new media"? And just

15 years ago cable wore the same badge. During their respective early days, each of

these "new media" had to prove their value to earn a spot on the media plan-the same

position the Internet finds itself in today.

Does Internet advertising belong on your media plan? This is the question everyone is

asking. CEO's are asking their brand managers. Brand managers are asking their

agency account managers and account managers are asking their media departments.

The answer most certainly is YES - regardless of the brand you manage or the

category in which that brand competes. Look at the facts:

Fact: Television Audiences are Migrating to the Net

The erosion of the network television audience during the 1980s and 1990s changed

media plans forever. In the early '80s, television was simple to plan and buy with just

three networks to consider. Then came cable, then a fourth network called FOX,

followed by a dizzying array of syndicated offerings and yet more new network

entries: Paramount and the WB. New choices continued to fragment traditional

television viewing and advertising budgets soon followed this trend

Television's recent history has demonstrated that media budgets ultimately are

pragmatic. As audiences migrate, media plans follow, acknowledging that the

ultimate goal of any brand is to reach its target audience effectively and efficiently.

The exploding media landscape of the 90s-driven by increased TV audience

fragmentation and the Web's popularity-have put this process into overdrive. Like the

80s and early 90s, media planners are, again, adapting their plans to account for the

ever-growing numbers of people spending increasing amounts of time online at the

expense of other media.

The first evidence of this audience migration appeared last summer in a Forrester

Research report. The researchers asked PC users which activities they were giving up

to spend more time on their computers. And, while 24% did admit giving up eating or

sleeping to pound away on the PC, the activity sacrificed by over three-quarters of the

respondents was television. Shortly after the Forrester findings were published, a

study from The Georgia Institute of Technology's Graphic, Visualization and

Usability Center (GVU) was released. This study, conducted on the Internet, asked

users about their television viewing habits and what impact the Net might have on

them. Their findings indicated a distinct shift in media habits with almost 37% of

respondents claiming that they "use the Web instead of watching TV on a daily

basis." Earlier this year, MSNBC noted the fact that Nielsen's February ratings

sweeps found one million fewer U.S. households watching prime time television

versus the same period last year.

Simultaneously, Nielsen and Commerce-Net released their Internet study, reporting

that the North American online audience had doubled in the past 18 months. Clearly

the conclusions of these two studies are far from coincidence. Taken alone, this

migration of the television viewing audience to the Internet is particularly striking.

This data is made even more impressive by the fact that Internet users are remarkably

upscale. So, not only are we witnessing a fundamental shift in media habits, the

Internet audience represents that hard-to-reach, well-educated, high-income

population most coveted by marketers

Fact: The Net is the Fastest Growing Medium in History

Internet advertising began in 1994, when the first banner ads were sold (Hotwired,

October 1994) and the first commercially available Web browser, Netscape Navigator

1.0, was released (November 1994). In a recent study, Mary Meeker, Managing

Director, Morgan Stanley, and her team of researchers closely examined the adoption

rate of the Internet, contrasted to the three other major "new media" invented this

century: radio, network television and cable TV. As a common metric, they examined

the number of years it took or will take for each media to reach 50 million U.S. users.

With television, cable and radio included for historical context, the growth of the Net

is nothing short of remarkable. Meeker estimates the Internet will capture 50 million

users in just five years. It took TV 13 years and radio 38 years to reach this milestone.

Fact: Internet Demographics are a Marketer's Dream

Every major research organization has studied the demographic composition of the

Internet. While methodologies and approaches vary, the findings are consistent: Net

users are young, well-educated and earn high incomes. And, increasingly, research

shows that both men and women are using the Internet. Some topline findings from

some of the more recent surveys are summarized on the following page

GENDER The March 1997 Commerce-Net/Nielsen survey of Internet Demographics

found that women now represent over 42% of the online population. Source:

Nielsen/Commerce-Net

AGE The average age of Web users is 34.9 years old, according to the 6th GVU

WWW User Survey. This average age has been steadily increasing over the last

several GVU surveys. (Fourth Survey: 32.7 years, Fifth Survey: 33.0 years, Sixth

Survey: 34.9 years) Source: Georgia Institute of Technology, Graphics, Visualization

& Usability Center (GVU), 1997.

INCOME A 1996 survey by the Media Futures Program of SRI Consulting revealed

that more than 65% of Internet users have household incomes of $50,000 or more,

compared with 35% of the U.S. population as a whole (index 186). According to the

sixth GVU study, average household income of Internet users is $60,800 (US). The

distribution of income levels is very similar to the Fifth GVU survey: Less than

$29K: 18.8%, $30-50K: 23.0%, over $50K: 41.1%. Sources: SRI International; GVU,

1997. EDUCATION According to the same SRI study, more than 75% of Internet

users have attended college, as opposed to 46% of the total U.S. population (index

163). Source: SRI International.

Fact: Web ad banners build brand awareness and may be better at generating

awareness than television or print advertising.

Since their first appearance on commercial Web pages, the value of banner ads has

been debated. Many felt they were physically too small to offer much branding and

some advertisers convinced themselves that click-through was the only metric by

which to measure ad effectiveness. They erroneously believed:

- despite the fact that no research existed to support their belief

- that without a click-through, no brand building would occur.

In fall 1996, Millward Brown International set out to test the impact of banners on

brand awareness, the first study of its kind. Millward Brown's objective was to

measure the impact of a single ad banner exposure on brand awareness. The three

brands tested included a men's apparel brand, a telecommunications brand and a

technology company. The findings were significant and conclusive for each brand.

Awareness was significantly greater among the banner-exposed (test) group than the

non-exposed (control) group. Specifically, exposure to the ad banners alone increased

brand awareness from 12% to 200% in a banner-exposed group. The study also

compared the impact of the banner ads in this test to television and magazine norms

from prior Millward Brown studies. The findings were remarkable: Single exposure

to a Web banner generated greater awareness than a single exposure to a television or

print ad. Millward Brown used their FORCE score ("First Opportunity to See

Reaction Created by the Execution") as a means of evaluating the impact of the ad

banners relative to other media.

A FORCE score indicates the effects of time, exposure weight, diminishing returns

and base level. As such, FORCE scores can be directly compared across media types.

As the median FORCE score for television advertisements is 10, the scores reported

in the chart below (with an average score of 20 for the Web banners tested) suggest

that Web banners tested very favorably to most TV ads, in terms of creating brand-

linked awareness.

Now You Know the Facts

Every new medium has had to prove its value to advertisers. Just 15 short years ago,

cable television fought to earn the respect of advertisers. Today it is a $6 billion

industry. Those of us in Internet Publishing realize the Internet is no exception. We

accept the challenge to prove the value of this medium and will build the case with

facts-not hype- for including the Internet on your media plans. All these facts in

aggregate create an undeniably compelling case for advertisers today to include the

Internet in their media plans. As Lynn Upshaw, author of Building Brand Identity,

noted recently, "The World Wide Web will be one of the strongest brand building

tools available." Based on the facts at hand, we couldn't agree more.

Business online –pros and cons

The whole world is going online. The future of business is clear. The revolution

will not be televised. The battle for the future of business will be fought on the

Internet. In fact, doing business online penetrates every aspect of a company. The

nature of internet technology this development is simply a way to electronically

deliver, obtain and share information with other human beings. The web at its core is

a medium of communication.

The power of web lines in three fundamental features:

1. The web is global

2. The web is a powerful information source.

3. The web is interactive.

First, the web is a global phenomenon. It was developed from ground up to be an

open standard, accessible by any kind of computer or operating system. Built around

this standard are the servers and browsers that connect businesses with consumers.

This open technology has also allowed the internet to grow globally encompassing

every country and language into the World Wide Web.

Secondly, the web is a powerful information source for both consumer and

businesses. Consumers easily gain access to rich information about products and

services, comparing offerings from many different companies in real time. A great

web site can provide this type of information instantaneously, without the need for a

customer service operator.

Thirdly, the web is interactive . The true nature of the internet, and the basis of its

power, is in the ability to conduct a dialogue with the consumer. Their input can

affect not only what they seen on the website, but the real operations of company.

This integration becomes partnership whereby buyer and seller work together for

their mutual benefit.

Advertising revenues have long been an indicator of good financial growth.

Companies are investing a lot of time, money and marketing efforts on the internet

to target the e-commerce consumer. Many internet exports maintain that every

business should have a presence on the web. The decision of whether to put your

business online should be made only after you are swell you can commit the time

and resources to its development and nurturing. The net is a growing marketplace

and if handled rightly, your website can do more than tell people where you are and

how to reach you.

For the “marketers” the online services provide a number of benefits:

i) Establish a presence

Estimating the number of people on the world wide web is nearly impossible.

But internet growth is exponential, doubling at fantastic rates. Current

estimates place the number of web users between 200 and 240 million. That

means there are nearly 240 million potential customers using the web for

their shopping and information gathering needs. The demographics of a

typical web user are perfect for an online business. One of the biggest

reasons companies establish web sites is to get their name in front of these

high potential customers. Thus the online shorefront is available to anyone,

anytime, anywhere in the world and is always working for the marketer.

ii) Improved customer service

In recent years, a lot of attention has been given to the service a company

provides. More and more, customers are looking beyond just low prices or

excellent stock to the feeling they get from the company they are doing

business with good customer service leads to repeat customers and repeat

customers can be a large portion of company’s business. A company

website can help build relationships that will help satisfy customer’s desire

for efficient, effective customer service. There are many ways to enhance

customer service by using a web site. The very first being is to make the

business information available whenever the customer may need it. Having

a web site also makes it easy for the customers to send feedback on anything

from their latest purchase to the look of your last marketing campaign. It is

the directness and immediacy makes it perfect for consumer feedback. Thus

it is the twenty four hour nature of the web that makes a site attractive for

customer service. The site will serve clients or customer at their

convenience which is the hallmark good customer service. A happy

customer is a repeat customer.

iii) Foster employer relations :

The world wide web makes it easy for employers to staying touch with

home office, without tying up home office resources. With secure employee

section, on can post work schedules and newsletters. One can even offer

downloadable insurance information and forms that let employees change

their company health care, investment and tax choices at their own

convenience. Website is also an excellent way to recruit the best and

brightest employees from all over the country. The web is an especially

popular resource for candidates looking to relocate to anew city.

iv) Reduce costs

A penny you have not spent is a penny you do not need to earn back. The

web can lower costs in many different areas. businesses that have

implemented internet based solutions have seen lower costs in printing,

postage, order taking, market research and in customer service while seeing

the amount of items purchased in single transaction increase: Recent studies

include that online orders can be as much as four percent more profitable

than orders placed over the phone via a catalog. The business web site can

also keep save money on labour costs by making information available to

customers without taking up a lot of staff’s precious time. Businesses are

also going online so that they can offer more products to the customer than

they could even if in an ordinary catalog or in a traditional brick and moral

store.

V) Increase sales

The number one reason for building a business website is to sell products

and services. Besides just the increased sales that one can achieve from online

orders, increasing customers level of satisfaction is one of the biggest keys to

providing effective and excellent customer service.

Hence, clearly, marketers are adding on line channels to find, reach, communicative

and sell. On line marketing has at least five great advantages. Firstly, both small and

lavege firms can afford it. Secondly there is not real limit on advertising space in

contrast to print and broadcast media. Thirdly, information access and retrieval are

fast, compared to overnight mail and even fax. Fourthly, the site can be visited by

anyone , anyplace in the world at anytime. Lastly, shopping can be done privately

and shiftily.

However online marketing is not for every company nor for every product. The

internet is useful for products and services where the shopper seeks greater ordering

convenience, or lower cot. The internet is also useful where buyers need information

about feature and value differences. The internet is less useful for products that must

be touched or examined in advance.

At the same time for “potential buyers” the online services provide a number of

benefits:

i) Convenience: The customers can order products 24 hours a day wherever

they are. They don’t have to sit in traffic, find a parking space and walk

through countless airles to find and examine goods.

ii) Information : customers can find reams of comparative information about

companies, products, competitors and prices without leaving their office or

home.

iii) Fewer habbles : customers don’t have to face sales people or open themselves

up to preseason and emotional factors they also don’t have to wait in line.

The buyers have gained the following capabilities in the new information rich

regime as firstly they can get objective information for multiple brands, including

costs, prices, features and quality without relying on the manufacturer. Secondly ,

they can initiate requiests for advertising and information from manufacturers.

Thirdly they can design the offerings they want. Fourthly, they can use the software

agents to search for and chirte offers from multiple sellers.

Thus the new buyer capabilities mean that the exchange process in the age of

information has become customer initiated and customer controlled. Customers

define what information they need, what offerings they are interested in and what

prices they are willing to pay.

At the same the online marketers face a number of challenges which are as:

i) Consumer exposure and buying : Web users are doing more surfing than

buying. Only an estimated 18 percent of surfers actually for shopping or to

obtain commercial services such as travel information. The major online

buyers today are businesses rather than individual consumers.

ii) Skewed user demographics and psychographics : The online uses are more

upscale and technically oriented than the general population, making them

ideal for computers, electronics and financial services but less for

mainstream products.

iii) Chaos and clutter: The internet offices million of websites and a staggering

volume of information navigating volume of information navigating the web

can be frustrating. Many sites go in noticed and even visited sites must

capture visitors attention within eight seconds or lose them to another site.

iv) Security : The internet is becoming more secure, but there is a continuous

race between the pace of new code breaking measures.

Web Advertising A Year of Growth

With online demographics becoming more diverse and targeting becoming more

precise, advertiser spending on the Web clearly moved out of its experimental stage

during the past year. Internet advertising recorded the highest level of revenues

during the third quarter of 1997, totaling $227.1 million, and year-to-date revenues of

$571 million through September are already more than twice that of 1996 total annual

revenues of $267 million.

Factors contributing to this growth include an increase in budgets devoted to online

advertising, improvements in Web content and entertainment, growth in cross-

promotion of Web sites in other media (e.g., TV, print and radio) and the emergence

of "cyberbrands."

Key Trends-Consumer brand advertisers are now the largest category of

spenders on the Web.

In the latest IAB Advertising Survey, consumer brand advertisers accounted for 32%

of total ad revenues during the third quarter of 1997, up significantly from 17%

reported in the first quarter of that year. In contrast, computer-related advertisers

accounted for 22% of total revenues in Q3, down from 38% in 1996. Underscoring

this trend is Yahoo!’s recent report that its mix of advertisers has changed from 85%

computer-related in 1995 to approximately 80% consumer brands in 1997. Leading

consumer categories in the IAB third-quarter report include mail order catalog and

retail advertisers and, combined with the financial services category (20% of total

revenues), suggests the marketplace is increasingly recognizing the value of online

transactions.

Use of non-banner advertising is rising.

While ad banners remain the predominant advertising vehicle on the Web –

accounting for approximately 54% of total online advertising revenues – the

increased use of content sponsorships (and interstitials, micro-sites, etc.) almost

doubled during last year’s second quarter, marking a shift towards more creative

advertising on the Web.

Obviously, the type of advertising used is directly tied to the marketing objective.

Banners have proven to be the most effective direct marketing tool, producing

quantifiable units to which an advertiser can apply readable metrics and make real

conclusions with real numbers about the effectiveness of their campaign.

The use of sponsorships is not new to online; in fact, it was the first means by which

advertisers could get real estate online. Sponsorships of online content are much like

event sponsorships: the hope is that users will more closely associate the content with

the advertiser (e.g., Advil’s sponsorship of ESPN Sportszone’s Injury Report,

Oldsmobile’s sponsorship of AOL’s Celebrity Circle). If an advertiser has a strictly

branding/awareness goal, sponsorships are an efficient way to achieve this marketing

objective for a lower cost than traditional print. In addition, sponsorships typically

offer the advertiser exclusivity and right of first refusal for future opportunities.

Going forward, online advertisers will continue to demand more powerful advertising

models that better capture and sustain user attention, like the emergence of real digital

video approaching the standard-setting slickness of television commercials.

The growing presence of local advertisers and classifieds on the Web.

According to the third quarter IAB report, approximately 12% of total advertising

revenues of $227.1 million represented local advertisers, up from less than 5%

reported in Q2. Driving the growth of local advertising spending has been the use of

online classifieds, directory listings and local businesses advertising on local-content

Web sites (e.g., Sidewalk).

The growth of online classifieds poses the largest threat to newspapers, which derive

a significant portion of their revenues and profits from print classifieds. Classifieds

translate well online, leveraging the inherent strengths of the medium, including

searchability and database functionality, faster updated listings and more flexible

word-and-line spacing relative to print.

Major Web sites and consumer online services are moving toward business models

driven by multiple revenue streams. While content providers have tested a number of

revenue models during the past several years (e.g., subscription, syndication,

licensing, transaction), advertising has remained the most predominant for online

publishers. Nevertheless, successful online and Web strategies are increasingly

incorporating multiple revenue streams focused on brand leverage or brand

development, while adapting to the unique characteristics of online users.

The Wall Street Journal Interactive appears to be one of the most successful

subscription-based content sites on the Web – with a reported 150,000 subscribers –

pricing their service at $29 annually for existing subscribers to the print version and

$49 per year for non-print subscribers. Other leading online publishers that have

announced their intent or that have launched subscription-based services include

Disney and Time Inc. New Media.

WHAT ADVERTISING WORKS?

Advertisers are rolling up their sleeves to figure out how to make advertising work on

the Web. They are torn about what to spend and who to hire. But as Web advertising

becomes a significant portion of marketing budgets, advertisers will need to adopt a

set of best practices for this new medium.

Advertisers are searching for the formula that will unlock the potential of the Web.

Forrester interviewed 51 companies that currently advertise on the Web and found

that:

Spending patterns vary. Consumer brands spend a small fraction of their

budgets on the Web.

Technology companies spend five times more of their brand dollars there.

Spending on sites

still exceeds spending on ads.

Banner campaigns run the gamut. There is no such thing as a typical Web

advertising campaign.

Ad pricing frustrates advertisers. Nearly three-quarters of the respondents

want pricing to be based on results rather that CPM.

Personalized targeting has not yet taken hold. Advertisers target mainly on

content.

Web advertising needs best practices. As Web advertising becomes a

significant portion of marketing budgets over the next four years, advertisers

need to develop a set of best practices around what to build and what to pay.

WHAT TO BUILD

Advertisers on the Web have three choices. They can build: 1) destination sites,

which use information, entertainment, and high production values to pull users in and

bring them back again; 2) micro-sites, small clusters of brand pages hosted by content

sites or networks; or 3) banner campaigns and other low-overhead Web advertising-

like sponsorships (see Figure 1). To understand which is best, advertisers need to ask:

Can it be sold online? Products that can be sold online and shipped

economically or delivered digitally-such as music, tickets, books, software,

and mutual funds-can use a destination site to support everything from brand

awareness and consideration, through post-sales support. But if the Net

doesn't enable your company to offer a product faster, cheaper, or better, rule

out a destination site.

Is it a considered purchase? Sellers of complex products like computers,

cars, and industrial coatings can use a Web site to squeeze costs, allowing

prospects to check specifications, configure their purchase, and get product

support on-line (see Figure 2). But if your customers are more likely to ask

their neighbors than you about your product, you don't need a Web site.

Destination Sites Create A New Channel

Destination sites are right only for companies that can use the Net as a full-fledged

channel for exchanging information with customers, in order to book a sale (See the

September/October, 1996 Leadership Strategies Report, "The Fourth Channel:

Vision.") Advertisers that do build destination sites should:

Do a gut check beforehand. A company must be willing to spend $3 million or

more to build a destination site and then more to maintain it. A half-baked site

actually will erode a brand. Don't underestimate the volume of customer

interactions. L.L. Bean dedicates a team of customer service reps to reply to e-mail

seven days a week.

License, don't produce content. True content providers always will outpublish

advertisers. When Toyota first moved onto the Web, it created seven different

lifestyle 'zines. Today only Car Culture remains-and that will soon be

produced by one of the big auto publishers.

Get found. Once a site exists, marketers need to promote it. Smart companies

dedicate at least 20% of their overall interactive budgets to promoting the site

online. They also sneak URLs into print and TV ads and become experts in

such Web guerrilla marketing techniques as getting found by search engines and

trading links with other sites.

Micro-Sites Are Sufficient For Considered-Purchase Products

Micro-sites enable advertisers to communicate deeper product benefits and collect

customer information without the cost of a full-blown Web site. Advertisers of

considered purchases like clothes and appliances should:

THE ADVANTAGES OF THE INTERNET AS A

MARKETING TOOL

Addressability

The Internet has transformed the well-known marketing communication model from

one-to-many to one-on-one or from broadcasting to narrowcasting. The traditional

print, radio and television, follow the passive one-to-many communication model.

This way a company reaches many current and potential customers through repeated

broadcasts of the same message. This approach has three problems:

1. Generic message to every consumer,

2. Wasted exposures to uninterested audiences,

3. Competing and conflicting messages being sent to consumers.

The Internet gives the ability to address each consumer personally. Each time a user

visits a web site its server has a record of the user's electronic address. This

information will help, to send a personalised message to a smaller target audience or

an individual consumer.

Though mail, telephone and personal selling have been in existence for many years,

the internet however offers high-speed information transmission and retrieval at a low

cost. The addressability of the web provides the ability to customize and tailor the

product and/or the marketing effort to one consumer at a time. The internet makes it

possible to squeeze one-on-one marketing’s well-known four Ps into one element -

the relationship. It represents the ultimate expression of target marketing. Well-

designed web sites, emails and news-groups, can be as effective as personal selling.

Internet marketers can do the job of a sales-force with more flexibility, better memory

and at a fraction of the cost.

Interactivity

Another element of the net that makes it different from traditional communication

media is its ability to interact. The internet enables feedback. Dialog forms an

important element of relationship marketing, and is a vital factor in building customer

loyalty. Customers are empowered to communicate with companies, research

information and conduct transactions at the press of a few buttons. Companies too can

easily contact customers to clarify their needs or inform them of new products. Unlike

in the conventional communication channels like newspapers or television, the

customer is in greater control of choosing and processing information about the firm.

The internet makes the exchange of information between consumers as well as

between companies possible. Information exchanges between companies will provide

competitive intelligence and will enhance alliances and co-operation. Information

exchanges between the consumers establish virtual communities. Such virtual

communities will have significant implications for market segmentation, customer

service and understanding consumer behavior.

Flexibility

The web offers more flexibility than the conventional mass media. A website is like

an electronic brochure where visitors can read information on products or services. A

webpage is more flexible than a physical advertisement or catalogue. It can be

updated with fresh and current information gathered through feedback from

consumers. A virtual catalogue can be kept in sync with the requirements of the

consumers and inform them about new products and price changes.

As an industry heavily reliant on brochures the web's flexibility and immediacy in

information transmission is invaluable. The preparation and distribution of holiday

brochures is a costly and lengthy process during which the demand conditions and

competition situation could change greatly. In print media, any price and availability

changes can only be notified through supplementary brochures. With the web this can

be done instantly at little cost. A webpage can be linked to inventory data to show the

availability of any holiday tours. A website can be indexed in many ways and be

equipped with search facilities to locate items quickly.

Accessibility

The internet has an edge over any other media in its ability to permanently expose

information to a global audience. The net vastly improves the information availability

and user interaction. An effective web site keeps a company in business 24 hours a

day, 365 days a year in a global market place. Anybody in any part of the world can

access its marketing information at any time they desire. This ability will greatly

reduce place and time utility woes. Accessibility is vital in international trade where

business spans across different time zones.

Global exposure is of prime importance for tourism destinations. Till the mid-1990s

destination promotions were entirely reliant on travel agencies to market its products.

The web has enabled tourism destinations to market themselves through well

designed and well promoted websites. Doing business on the web has helped avoid

regulations and restrictions that companies must follow when physically doing

business in other countries. For example in some countries, foreign travel companies

are forbidden to operate. Finally, compared with the traditional media, the web allows

unlimited access for hundreds of millions users to an unlimited amount of

information.

Improved service

The Web makes it possible for companies to improve the service quality at all levels

of customer interaction i.e. pre-sale, during and post sale. The web provides four

tangible improvements in customer service.

1. A wider choice for the consumers: A website can display an array of products and

services

2. Quick processing of payments: Automatic processing of cyber-cash or credit card

charges.

3. Faster delivery: Especially for products like online software and music distribution

4. Making available a wealth of information that can be quickly and easily accessed.

In tourism the web-based distribution systems can help satisfy the consumer needs of

easy access to a wide choice of information and hassle free reservations. Increasingly

tourist satisfaction depends on the timely availability of accurate and relevant

information. Improved access to information on all aspects of tourist activities has

made it possible for marketers to offer personalized services at the same prices as

standard packages.

Cost Savings

 There are mainly five areas where costs can be minimized on the internet

1. Automation of the reservation processing and the payment system cuts down sales

costs.

2. Implementing a menu-driven web-based travel reservation system as opposed to a

command driven system where a sales clerk has to remember commands and airport

codes.

3. Implementing direct links between the producer and the consumer, saving on huge

distribution costs.

4. Saving on promotional costs due to the net’s ability to send customized messages

through electronic communication.

5. Reduced rental costs on office and sales space, and on administrative overheads.

Setting up a promotional web site without booking facilities, costs relatively less. An

averagely skilled person with the use of a proper software package, such as Microsoft

FrontPage can build a basic company web site in days. However a more

comprehensive and powerful web-site offering in depth information such as virtual

multimedia brochure including cataloguing products offerings and reservation and

transaction facilities, will cost more and take longer to develop. Eve though such a

site will cost more to build, the cost is considerably less than tens of millions of

dollars spent by airlines, tour operators and hotel chains on TV and magazine ads. By

providing information on a website, customers feel empowered to find answers to

their inquiries themselves, cutting costs on telephone charges on toll-free numbers.

 

Using the internet can help save on distribution costs. Promotion and distribution of

tickets, is a big cost factor in the airline industry. Selling tickets on the internet can

eliminate travel agent commission and GDS fees paid by the airlines. An internet

based supply channel management can also save procurement costs for businesses.

THE MAIN APPLICATIONS OF THE INTERNET IN TOURISM MARKETING

The Internet as a marketing media can be of great benefit to virtual all areas of

marketing, from marketing research, through market segmentation, targeting and

positioning, to the effective use of the marketing mix, and marketing organisation and

control. The following discussion does not attempt to provide an exhaustive list of the

Net's use in tourism; rather, it simply intends to exemplify its common applications in

and main implications for tourism marketing.

Marketing Research

The Internet does more than automating online business transaction, it can

"informate" in that it provides a vast amount of information which was previously

unavailable. Marketing is essentially an information-processing activity which links

an organisation to the external environment in which it operates. The Internet is an

invaluable source of low cost but up-to-date marketing intelligence which can be

sourced through a company's own site (for details of its customers) and other web

sites (for information on competition situations, market conditions and the general

environment). The Internet is extremely useful in build a customer information

database. With the use of proper software such as Aurum Software's Web-Trak (and

even with simple means like cookies, web forms and email feedback) it is easy to

gather systematic data about all users who visited the company's web site. This

information can be used to identify prospects, understand  customer  needs  and 

customise resources to give greater levels of service to customers (Heinen 1996). A

database of online transaction histories can be the primary marketing resource of

tourism companies, determining what kind of travel products they can deliver, what

market segments they serve best, and what is the lifetime value of each customer to

the firm.

By searching other web sites, a company can get valuable information about market

demand, supply, competition and economic, demographic, legislation and

technological changes in the domestic and international markets. Web sites of

government agencies,  media  companies  and  non-profit organisations usually

provide large amount of information free on general issues; while commercial sites

are good sources of information on new technologies, best business practices, and

industry initiatives. Scanning competitors' home pages helps companies to track 

competitors'  marketing strategies and tactics. For example, from hotel chains' web

sites, one can easily locate information about the chains' main business activities,

financial performance, new hotel openings and investment plans, and key marketing

strategies; whereas airlines' web sites often show such useful data as business and

financial analysis, strategic alliance groups, new routes development and fleet

expansion plans, frequent flyer programmes and (where a online GDS is available)

the fares and availability of flights between any two destinations.

Market Targeting

An important feature of the Web as a medium is that it is the consumer who is

actively searching for information about products or brands in which they are

interested. In effect the consumer is "pre-screened" and shows both interest and

involvement in visiting the web site. While on the Web, the consumer can also

provide instantaneous feedback to the marketer (Stern, 1995). All the feedback, and

indeed, every "click" or "hit" the user makes can be memorised by the web server.

Through the application of the IT data mining technique, companies can find patterns

within their internal customer data and make sense of data or turn data into 

meaningful  marketing  information.  For instance, the visitation record of an online

brochure may show the total number of hits, the distribution of the hits among the

pages and across time, the order of the pages been accessed. The user's visitation data

can be easily combined with user profile information from user registrations through

online visit cards or questionnaires and used to uncover the consumers 'interest and

the patterns of demand and buying behaviour. This in turn leads to identification of

likely target segments, often niches based on specific benefit sought. Armed with

such information, organisations can refine their targets and develop specific means to

achieve true one - to- one marketing (Pitta 1998).

The appropriate use of user profile and surfing behaviour data can improve the

effectiveness and efficiency of market segmentation and targeting. This is because the

traditional approach to market segmentation is often based simplistically on

geographical, demographic and economic variables while the psycho, behavioural or

lifestyle data is costly to collect and difficult to measure and compare. In Internet

marketing, it is easier to collect these data from potentially each and every user of the

company web site, though tangible rewards such as free prize draws and free

membership, are often needed to attract users to fill in web forms. It is even a great

deal simpler and more effective in market targeting as the email messages and even

tailor-made web-pages can reach the intended receiver with little cost. It is possible to

set up 'virtual" or cyber - communities for each target market niche in the form of

news-groups through which consumers with similar interest and behaviour patterns

can be sent with relevant product offering and other information from the marketer.

Members of such Internet communities can regularly exchange information between

them and strengthen a sense of belonging.

Product

One of the major advantages of the Internet in marketing is that the tourist can here be

a value creator for tourism companies through redefining the labour division between

the marketer and the tourist in providing tourist experiences (Dellaert 1999). This is

because, on the one hand, tourists can  provide  individual  preferences  for  or

specifications of holiday packages through feedback in the forms of web forms, email

messages or simply the 'clicking' patterns, which the tourism marketer can use to

development new products or tailor-make existing products to suit the needs of

particular consumer(s). In this sense, the Internet has accelerated a shift in the nature

of products from mass produced and tangible to customised and information based.

On the other hand, the self-servicing tourist can not only conduct transactions online

and reduce costs of sales for the supplier but also actively participate in the

production process itself. Provided with choices, a tourist can now assemble his own

product according to the specifications desired. This is especially useful in the

production and marketing of package holidays. Tour operators, for example, can offer

modular products or services, such as flights, rooms, tours, car hire and performances

on their web sites, and allow the user to participate in the development of the specific

holiday packages using a menu of options, ie., 'pick and mix" his own package. As

tour operators negotiate with the providers of these separate holiday items and buy in

bulk, The economies of scale will enable the  operators to offer lower "parts" prices to

individual consumers than they buy directly from the different producers of the travel

products. At the meantime, since the booking engine is integrated with the product

inventory, it is easy for the operator to adjust in real-time the prices of different

holiday components in response to their relative popularity and demand patterns. In

this way, tour operators can effectively provide the market with low cost and flexible

(rather than the conventional rigid) package tours This is what both marketers and

consumers have long dreamed for - high quality products made individually at a unit

cost level of mass production -all enabled by the power of the Internet.

Internet technologies can also contribute to the improvement of current products on

offer or development of new products and services that redefine the company's

strategic position. For instance, Boeing announced on 27 April 2000 plans for a

network which will allow passengers to use the internet, watch TV and receive other

data while flying. Called Connexion by Boeing, it will use satellite technology to

provide broadband services to aircraft, which could greatly improve passengers' flight

experiences. The introduction of electronic ticketing  (e-ticketing)  and  flight 

information exchange through mobile phones by many airlines in recent years also

improve customer services. The Internet also give tourist attractions such as museums

and galleries wider format options for electronic presentation and show web

collections which are physically impossible to construct (Taylor and Ran 1995). Zoos

and aquariums can improve its product offering through 'live" camera links using web

sites like whale-watching to show views of animals not in captivity (Benhow 1997).

Pricing

The role of the Internet in pricing is based on its ability in processing and exchanging

large amount of data instantaneously with a great number of people.  This information

processing capacity enables a company to analyze relevant pricing data effectively

and quickly. The information exchange capacity enables firms to set and change

prices in real time and also facilitates online bidding and flexible pricing. Both of

these qualities of the Net are extremely useful in tourism marketing.

The major tour operators in the UK, for example, produce some 2,000 to 3,000

brochure pages annually, most pages feature a price panel with perhaps 100 separate

prices, making a total of about a quarter of a million individual prices (Holloway and

Robinson 1995). The sheer number of prices, together with the fact that most

brochures are launched 10 months in advance of the holiday season, mean that pricing

in the travel industry is extremely difficult Since it is unpractical to set the

prices for such a great number of holidays on the bases on demand analysis or

competition research, most operators simply follow a cost-plus policy with little

regard to the market changes in the months to follow. Even an operator wishes to

adjust its holidays prices it is a costly and cumbersome process as new price panels

have to be printed and distributed to the travel agencies. With the help of a web-based

reservation system, the task can be a great deal easier. A tour operator can make real-

time adjustment to its thousands of holiday prices at a touch of a button in response to

competition moves and demand changes. A special late-booking section can also be

included in the main web site to promote 'left-over" holidays at the last minute to

solve the problems of over-supply or under-demand in the package tour industry

which has become a chronic issue in the UK during the last decade or so.

In Internet marketing, the potential for price discrimination is diminished given the

enhanced capability of consumers to identity the least expensive source, regardless of

supplier or location. The skilled consumer could have the "perfect knowledge" of

market prices, which could facilitate the realization, to certain extent, of 'perfection

competition" at the national and global markets. This will lead to the increasing

standardisation of prices across companies or even borders, especially for the

undifferentiated products such as airline seats, beach holidays and city breaks. Other

applications of pricing on the Web including bidding and flexible pricing - many

web-based businesses allow customers to bid for products on their sites. Customers

commit to the sale if the price is agreed upon. The bidding locks in customers to the

sale and the committed price. This is a flexible pricing strategy where the buying

capacity of the customer reflects in the eventual price. Companies such as Ebay.com

and Bid.com have developed a model where other vendors can place products up for

bids (De and Mathew 1999). Airlines could sell seats on over-demanded flights or

routes through online bidding to the highest bidders to generate extra revenue. Tour

operators may use online bidding in a different manner to market special holidays the

demand for which may be extremely difficult to estimate in advance. For example, a

tour operator can put on its web site the details of a package holiday to the moon and

the total cost (including profit margins) for a group, say 50 travellers, the more people

bid the lower the price for each traveller. This way of pricing could well enhance the

operator's image and profitability, as it is both an innovative marketing and sound

financial approach.

Place

The uniqueness of the Internet as a means of distribution is based on the fact that it

exists in "cyberspace" thus physical phenomena such as location and distance are less

significant or even irrelevant. For the producer, the Web enables it to have direct links

with consumers at a low cost therefore provides it with the opportunity of

"disintermediation". For the retailer, the Web threatens its livelihood and changes its

critical success factor from location, location, location to access, access, access. For

the wholesaler, web-based business means it can bypass retailers while at the same

time risk being bypassed by the producers.

The foremost role of the Web in tourism distribution is the direct electronic

reservation and transactions between tourism product supplier and consumers.

AIdridge et al (1997) argues that direct marketing is the name of the game on the

Internet, offering both consumers and marketers greater control and lower potential

costs of access due to the conveniences of the Net. Because direct channels may be

producer-direct or intermediary-direct, the potential for channel conflict will be

magnified. In order to assuage channel conflict and price  competition  between 

direct-sellers and retailers, both producers and intermediaries will have to develop

augmented product features and unique benefits. For example, direct online booking

of airline tickets often carries special benefits not available from travel agents, such as

extra frequent-flyer miles; while purchasing an airline ticket from an online travel

agency may also benefit from such services as hotel reservations and travel insurance.

Airlines are among the first industry to invest in and develop CRSs and GDSs to

exploit the potentials of IT. The Web offers the airlines even greater opportunities in

streamlining and shortening the distribution channel. The no-frills or low-cost airlines

emerged in the last few years are already heavily relying on the Web to distribute

flight tickets directly to customers. The major global airlines have also started to

believe that the Internet offers a unique opportunity to drive down costs and restore

profitability to the sector which is troubled with financial losses across the globe (e.g.,

the 266 IATA member airlines as a whole made an accumulated loss of US $800

million during the first 8 years of the 1990s) (IATA 2000). British Airways, for

example, launched an e-business strategy recently which places the Internet at the

centre of its efforts to transform relationships with both customers and suppliers. It is

planning to invest £90 million during the next two years to develop its web-based

operations with the aim of increasing the share of tickets sold over the Internet from

less than 1% in 1999 to 50% by 2004. It is also preparing to operate via mobile

phones and interactive television. Major airlines have also started to use the Internet

to manage  the  supply  channel  and  reduce procurement costs. For instance

American Airlines, Air France, British Airways, Continental Airlines, Delta Airlines

and United Airlines have agreed to jointly create and operate a web site that will

handle supply purchases with US$32 billion a year (CNET News 2000).

The biggest change to tourism distribution brought by the Web could, in the next 5 to

10 years, be the noticeable shrinking of the travel agent sector. Agents are squeezed

by both a decreasing market as more and more consumers go online and book directly

from airlines and operators and by airlines'  declining  commission  levels.  The

Association of British Travel Agents (ABTA) believes that the Internet will not cut

out the middleman, but it will certainly put their added value under scrutiny. It warns

that High Street travel agents that do not excel in what they do may not survive the

competition. Nevertheless, the travel agent sector will not be doomed to extinction.

How far and how soon the role of travel agent will diminish in the future is dependent

upon how flexible and innovative the travel agents can be and how fast the Web can

dominate both business and everyday life (Liu and Jones 1995). The Travel agency

will have to reinvent itself to suit the new Internet era by transforming from a travel

ticket seller to a travel information manager.

For tour operators, the potential disintermediation has a dual effect. On the one hand,

they can be bypassed by the producer as airlines and hotels that directly sell their

products to the travel agencies and consumers; on the other, tour operators could

benefit from its own direct sell operation by eliminating the travel retailers. It is hard

to estimate the full impacts of the two. But one thing is sure to say that the tour

operators, more than travel agencies, have a future in the Internet era. This is based on

the understanding that tour operators are not purely intermediaries as they do perform

some production function in assembling the various parts of tourism products into a

marketable package. Through this value-creating activities, tour operators can provide

convenience and better value for consumers, by passing on to them some cost savings

gained through bulk buying the separate components of the package, than they would

otherwise get from the individual tourist product providers. The major tour operators

(in the UK) are also 'backward" integrated and have their own charter airlines thus

major schedule airlines' direct selling is not much as a threat to them as to travel

agents.

Promotion

Arguably, the component of the marketing mix being most quickly transformed as a

result of Internet usage is promotion. The Internet provides a labour-efficient and

cost-effective way of distributing information almost instantaneously to millions of

potential clients in the global markets. Internet promotion combines mass media's

reach with the personalization inherent in two-way dialogue -previously only possible

in personal selling. It can be used for corporate visibility, brand name recognition,

advertising, public relations, corporate sponsorship,  direct  sales,  sales  promotion,

customer support and technical assistance. There are three main issues in the

application of the Internet to tourism promotion.

First, present the promotional information on the company's web site. The Web

enables more information to be transmitted to (potentially) more people cheaply,

instantly and with multimedia effect. The key to achieve these benefits is a well-

designed and maintained web site which is attractive, informative and interactive.

Through its multimedia capability, a good web site can and should incorporate

information as accurate and detailed as brochures or timetables, photos and graphs as

glossy as magazine ads, and videos as entertaining as TV commercials. The site can

and supply as much promotional information as possible as there is virtually no

capacity constraints or advertising space limits on the Web. By hyper-'inking pages

together in an appropriate fashion, the Web marketer can create an ultra-

comprehensive brochure to include everything a user wishes to know. For instance, a

tourism destination web site may become a 'information mall" which provides the

users with all the basic information about it such as the exchange rates, local

traditions, weather, what to buy, etc. and, through the hyperlinks to the sites of

tourism firms, details of flight schedules, tour prices, park opening times, late offers,

and so on. A company web site with email links or even telephone numbers and

address will enable users to contact it for further and often more personalised

information.

Second, promote the web site itself to increase its exposure and visitation since a

company's web site has to compete in the clutter of thousands of other web sites

selling similar products and services. This can be achieved through a number of ways.

A memorable Internet address to help user locate it on the Web, usually the company

or brand name or a catchy word or phrase. Links "from" other web sites, by

registering with search engines and online directories and paying relevant sites for

click-through links or banners ads, are particularly important if the company's site is

not well known. Links 'to" other sites, such as those offer news or entertainment  

services   and   those   offer complementary products can also make the site more

interesting as well as providing more relevant and up-to-date information for the

users. Promoting the web site through the traditional media is also important,

especially when it was first set up. For example, expedia.co.uk launched a £4 million

promotion campaign on British TV and Press recently. The company's web address

should also be included on all its media messages "to drive consumers to the Web".

Third, use the company's web site as a platform for advertising sites or products of

other businesses. Through "banners" and banner linked web pages, a company's web

site can also generate revenues by becoming an advertising medium for other

organisations. Indeed, the effectiveness of the Web as a medium for advertising has

already made online advertising a boom business itself. The Internet Advertising

Bureau's research shows that online advertising revenue reached US$4.62 billion in

1999. It also finds that banner advertisements is the predominate type of advertising,

accounting for 56%, sponsorships at 27%, interstitials at 4%, email at 2%, and other

rounding out the category at 11% (IAB 2000). Increased Web advertising will reduce

the attractiveness and spending on some traditional forms of promotion such as direct

mail, outdoor displays and radio advertising. Fletcher Research (2000) predicted that

the online advertising spending in the UK would soar from £50 million in 1999 to

£625 million by 2004, while expenditures on direct mail could see a 33% fall in the

same period.

CURRENT CONSTRAINTS ON INTERNET TOURISM ADVERTISING

The Internet has created great opportunities for tourism marketing. However, the

current level of online travel sales is low though most researchers expect it to increase

rapidly in the next few years. For example, it was estimated that purchases of travel

products represent just 6% of overall Internet sales and 0.5% of all travel and tourism

spending (Smith and Jenner 1998). In the US, Jupiter Communications  forecasts that 

online  travel bookings will grow from US$2.2 billion in 1998 to US$ 16.6 billion by

2003, representing a market share of total travel sales of 1.7% and 9.6% respectively

(Bates 2000, Tyler 2000). In the UK, Thomas Cook predicts that one in five package

holidays and 40% of all flights will be sold via the internet or digital television in the

next three years (Banerjee and Mayling 2000). Obviously, the comparative

advantages of using the Internet in tourism marketing is compelling but its full

potential as a marketing tool will only be realised if a number of well-documented

limitations are successfully addressed.

Demand Factors

Consumer  demand  is  the  fundamental determinant of all forms of businesses.

Whether an industry is initially supply-led or demand-driven, consumers are the key

force in deciding the scale, structure, style and speed of its development. The small

size of Internet business transactions in the world economy at present is caused to a

great extent by insufficient demand, though more limited by consumers' willingness

than their ability to shop on the Net.

First, the penetration rate of computer using and Internet connections is still low

worldwide. In the main developed countries, about 30-50% of the adult population

are Internet users while the global average is about 1-2%. One estimate shows that in

1997, there were 50.2 million web-users, of which 60% were in US and 20% in

Europe; the world total web-population in 2001 was predicted to be 174.5 million, the

US and Europe account for 54% and 18% respectively (Juliussen and Petska-

Juliussen

1998). Although people with Internet access tend to be more affluent, better educated

and younger than the average consumer, the small number of web-population does

reveal that globally it is still a relatively small market. Furthermore not all web-user

are frequent users. In the UK for example, a quarter of the 15 million adults with

Internet access surf the Web less than once a week, and only a fifth of web-users have

actually ordered something via the Internet (Fletcher Research 1999). At the well

publicised travel web cite - lastminute.com - only 6% of its 1.5 million register users

have ever purchased anything there.

Second, the low frequency of web surfing is mainly caused by high access cost,

especially in countries outside of North America. In the UK for example, local

telephone charges are still metered, though the Internet subscription fees has largely

gone from last year. Most consumers find it is an expensive hobby to surf the Web,

especially when the search task is complicated by low speed and difficulties in

locating the desired information. The main UK Internet service providers (ISPs) have

recently launched unmetered packages which will be available from mid-2000. This

new development could see a surge in web visitation in the country.

Third, The vast majority of users access web sites for information or entertainment

purposes rather than for online shopping. Among the Net resources, email is the most

frequently used, news and sports sites attract more visitors than commercial sites, and

sex and MP3 are for many years the most searched key words. Although Internet

transactions offer the potential benefits of convenience and cost savings, due to

factors discussed later, consumers still believe traditional shopping methods are more

reliable and sometimes more economical. A recent survey of 50,000 Internet users in

the UK show that 80% used the Web to access email while less than a third had

bought online (Fletcher Research 1999)

Fourth, concerns over privacy, information abuse, web crime, payment security and

undelivery or late delivery, are often cited as the main inhibitor to online shopping.

There is a lot of trust involved in online shopping. A web users has to trust that he

receives the product he orders as well as trust its quality to be as described. He also

wants to be sure that his private information such as address and credit card numbers

is handled  sensitively (Ratnasingham 1998). However, there is at present no special

legal provision to protect consumers' interest in web transactions and according to a

Consumers International survey: 6% of the items ordered took more than a month to

arrive and at least 8% never did; many sites did not give clear information about

delivery charges; only 13% of sites promised that they would not sell customers'

personal information on to a third party; and only 53% of the companies had a policy

on returning goods (BBC 1999a). As a result, in average less than 1% of those

'looking" are actually 'booking" at the web site. A recent MORI survey of package

holidaymakers in the UK also found that only 45% of the respondents answered 'Yes"

to the question of "In principle (if you had access) would you be prepared to book a

holiday through the Internet?" while 46% answered "No"; and 9% answered "Don't

know" (Martin 1999). A report on travellers' use of the Internet in the US, which has

the most advanced Internet businesses and Internet users, shows that 52.2 million

people used the Internet for researching travel in 1999 but only 16.5 million (32%) of

which actually made their travel reservations online (Tyler 2000).

Finally, consumers' anxiety over safety and security in online shopping is further

exacerbated by frequent media reports about web security breaches and frauds, and

insufficient knowledge of the matter itself. Most of the security worries are caused by

people who are not sufficiently aware of the possible protection that exists (Furnell

and Karweni 1999). Although the Web is generally considered to be user friendly and

even 'foolproof", a user without the proper IT knowledge and skills will certainly

encounter more problems and feel less confident in conducting web-based

transactions.

Technological Factors

Many of the current constraints and problems of conducting web-based business are

caused by the Web technology itself. 'Web technologies consist of the hardware,

software and networks that enable individuals and organisations to connect with and

interact with the World Wide Web. Hardware consists of the client terminals, the

server, the gateway, the router, and hubs. The software consists of operating and

application software, including the browsers and application software on the client

side, database servers, web servers and other application servers on the server side,

and network operating systems and managers on the network side. The networks

consist of cables, either leased or proprietary, and message carrier services" (Dc and

Mathew 1999:432). The main causes for concern over the ability of the Web in

implementing c-commerce are as follows:

The Web's slow speed, often dubbed as the 'world wide wait", slows down the growth

of the web-based businesses as users are often not prepared to wait for too long to see

the information appears on the screen. The slowness of the Web is a combined results

of three factors: the increasing number of Internet users, the increasing frequency of

use, and the increasing richness of the information (from simple text to full colour

pictures and videos) being transferred over the Internet (O'Conner 1999). Technology

will not reduce these growing demands on the Web, on the contrary, technology will

constantly expand the Web's capacity for accommodate and even stimulate the

increasing demand. For example, the new digital broadband service, due to be

introduced in the UK this year, could offer instant and always-on high-speed (10

times faster) Internet access. It will not only enable much faster Internet access but

also enhance facilities such as interactive digital TV and video e-mail. The advent of

broadband and mobile accessibility is creating a second wave in Internet development

(after the WWW in 1993). Research shows that a broadband customer will stay online

four times as long as a narrowband customer, and spend nearly three times as much

on c-commerce BBC 2000).

Functionally, the Internet is close to fully operational for commercial purposes. The

main remaining impediment to maximum use of the Internet for c-commerce is the

concerns for information security. The securing of information includes the protection

of: (1) confidentiality -providing confidentiality in the transmission (and sometimes

the storage) of data; (2) authentication -proving the identification of the individuals

both transmitting and receiving the data; certifying that all parties to a transaction are

indeed who they claim to be; and (3) non-repudiation - providing proof that the

transaction actually took place, establishing an irrefutable time stamp on the sending

and receiving of the message. In particular, there is an urgent need for an integrated

financial transaction system that is suitable for an open electronic marketplace such as

the Internet. How the consumer will pay for goods and services and how the provider

will receive the payment securely over the Internet are issues which are being seen as

some of the most important success factors for Internet commerce. A survey of US

corporations revealed that 75% of the executives lacked confidence in the Internet as

a vehicle for electronic commerce, primarily because of the vulnerabilities. The risks

in electronic commerce are shown in poor security such as: from the short-cuts in the

software development process, shortcomings in the popular operating system,

deficiencies in the Internet protocols and problems inherent in managing the Internet.

Related to security is the issue of 'cyber' crimes. Internet crimes include not only

fraud and theft-related activities, which simply represented the extension of

traditional crimes into the electronic environment, but also new and more advanced

forms of abuse such as hacking and computer viruses Furnell and Warren 1997). Web

scam and online credit card fraud are also increasing rapidly. Visa International says

that half of all credit-card disputes are about Internet transactions, despite online

transactions making up just 2% of Visa's overall business. Visa found that across the

EU only 5% of consumers trust e-commerce. Web technology does not cause the web

crimes but these cyber crimes are more difficult to prevent and detect as they are

committed in a virtual space. Unless the IT industry can come up with some effective

solutions to the security problems in web-commerce, consumers will have to either

take a high risk in or stay away from Net-shopping.

Furthermore, the 'unorganised" nature of the Web, makes it difficult to locate the

information users desired. The Web offers an uncontrolled and vast universe of

information: there are now about 5 million web sites with some 1 billion web pages.

However, there is no overriding structure and control over information, no single

entry point to the Web, and no centralized directory of content. Although the

development of search engines and online directories has made finding information

somewhat simpler, it i~ still easy to get distracted or lost during a search and much

precious time can be wasted in gathering information.

The other problems of the Web can be seen from Internet Industry Almanac's "Top 10

pain in the Net" - junk email, slow web sites with too many images to load, web sites

with white text that you can't print, cookies, broken links, interstitial ads, hard-to-read

tiny text, web sites with no basic company information, old forgotten web sites, and

the server is not responding.

Organisational Factors

The low level of web-based business is also attributable to the failure of business

organisations in implementing the Web technologies in operation and marketing.

Most business leaders did not realise the potential impacts of the Web on commerce

until very recently (some still do not). A survey of US hotel managers found that they

believe the Internet will 'someday" become an effective marketing and

communication tool but not at the present time. Ironically, respondents with greater

exposure to the Net rated its present usefulness lower than those with no net

experience. On the other hand, those same experienced users gave the Net's future

prospects a much higher rating than the inexperienced respondents.

Many companies, even with recognition of the advantages of the Internet in

marketing, failed to exploit its full potential due to the lack of management

commitment, investment capital and the qualified technical and managerial personnel.

This is particularly the case for small tourism businesses. In the UK for example,

travel agents are not using the Internet to provide better service to customers because

of perceived investment and access costs and fear of new technology. Sabre (UK)

recently discovered that fewer than half of its agency customers had an email address.

On the other hand, some large  travel corporations failed to develop web-based

operations wholeheartedly due to both complacency about their market leader

positions and the vested interest in their highly vertically integrated business

structure. The top three tour operators in the UK - Thomson, Airtours and First

Choice - for instance, did not have a formal Internet strategy until March 2000. They

probably overlooked the potential of the new Internet start-ups since the Net-

commerce had a slow start and the travel web sites were mainly selling airline seats

instead of package tours. The major tour operators were also concerned with the

impacts of web-based operation on their own travel agent chains because the

"disintermediation" in travel distribution saves operator side cost at the expense of

losing businesses at the agency side.

As a result, not all tourism companies are on the Web. When they are on the Web,

most of their web sites are PR or promotion sites that provide merely the companies a

presence on the Net or little more than advertisements for their products and services.

With the few comprehensive sales and transactions web sites, users were often asked

to phone an operator or offered a brochure in the post. Just a fifth of the UK's top 40

tour operators have a real-time booking facility on their Internet sites. A recent survey

also shows that 62% of the travel companies which have facilities to sell via the Web

or email have less than 1% of its total business is conducted through online booking.

Even when web sites are fully operational in real-time transactions, such as many

airlines owned sites, they often offer limited choice. Consumers increasingly want to

use the web, and they want the convenience to see all the options in one place, no

matter which airlines or tour operator is involved. However, most of the travel

products on sale over the Net are stored at various web sites owned and operated by

individual companies, such as airlines, tour operators, travel agencies and ferry

companies. Another problem is that the Web does not always offer the lowest prices

compared with the traditional distribution outlets. Research by Express Money (1999)

shows that booking holidays and flights through the Internet is not cheaper and

traditional, low-cost outlets offer lower prices for several popular destinations. This is

particularly the case for airlines as where a single flight could have over 50 different

fares, the cheapest fares are usually given to flight-brokers or consolidators. Since

most web users consider 'price" as the most important factor in buying an airline

ticket, they will certainly be discouraged from booking directly on the Web when

they realise that the traditional agents offer better deals.

Governmental Factors

The nature of the Internet enables no one to control its structure and content, while as

a recent phenomenon, laws and standards are yet to be developed and adopted to

facilitate and regulate its commercial use. Some of the problems highlighted above

are partly attributable to or greatly escalated by the lack of effective government

involvement in promoting, facilitating and regulating e-commerce on the Internet.

Governments across the world have been slow in realising the potential of the Internet

for economic growth and even slower in providing the necessary regulatory

framework appropriate for conducting Net-based business. Although existing

business laws and regulations are applicable to e-commerce, the particular nature of

Internet-based business does requires special treatment, especially in the areas of

security, fraud, sabotage, and data and consumer protection. Without the confidence

and trust of those participating in the process, it will be impossible to achieve

sustainable growth in e-commerce.  However,  censoring indecent  and potentially

criminal material on the Internet were often the main reasons chosen for regulation. In

the UK, one of the advanced Net-economies, the Government put forward a draft

Electronic Communications bill last year which deals with a wide range of issues

central to the healthy development of e-commerce, including consumer protection,

information security, authentication and digital  signatures,  confidentiality, 

encryption, taxation  issues,  intellectual  property  rights, technical standards, illegal

content and so on. The problem is, the bill remains to be a draft bill until the

Parliament passes it through a lengthy process that could last for years.

As the Internet is a global computer network and e-commerce is essentially global

business, the establishment of international standards and legal provisions for its

smooth function is also critical. International bodies like the Organisation for

Economic Cooperation and Development (OECD) and the European Union (EU)

started to address some of the key issues in e-commerce from 1998, such as building

trust in electronic commerce by ensuring the security and privacy of information and

the protection of consumers; establishing ground rules for electronic transactions; and

enhancing the information infrastructure through common interoperable standards,

and access to open networks. However, progress is lamentably slow. It appears that

each country will have to create their own Internet acceptable use policies, and figure

out how to enforce them. Until then, the Internet will be a lawless frontier where

anarchy and vigilantism are alive and well.

Legislation is of fundamental importance, but legal provisions only mark the

boundary of unacceptable business practices and protect the consumer by redressing

any illegal treatment. Consumers want to buy from companies that are not only law-

abiding but more importantly are reliable and offer quality and value. Nevertheless, it

is extremely difficult, if not impossible, to judge a company by its web site.

Therefore, other (non-legal) measures must also be taken to boost consumer

confidence in online shopping. The Indian Government is trying to promote the ideas

of 'e-hallmarks" which will guarantee that its users are legitimate traders offering

assurances on security of payments and communications and giving accurate

information on goods, prices and a returns policy. A new body -Trust - will be set up

to accredit c-commerce codes and there are plans to market the c-hallmark

internationally.  However, many business organisations oppose the idea, wanting

instead  to  rely  on  self-regulation  without government intervention. For example,

ABTA aims to clamp down on Internet sales by creating regulations for online travel

transactions. It plans to publish a single revised code of conduct for agents and

operators in May 2000, with a new section on Internet sales. It will require members

to have a secure payment system if using the Internet to take bookings, and to observe

the same ABTA rules as for other types of advertising.

ANALYSIS AND FINDINGS

The nature of your travel to India

Tourism Package 10

Independent 8

Business 12

Sports 2

Medical tourism 8

Religious 8

Others 2

Frequency of travel to India

Once in an year 18

2-3 times in an year 20

>5 times in an year 17

SOURCE OF INFORMATION

Marketing by Indian Ministry of tourism 6

Marketing by your travel agent 21

From your friend 6

Internet 17

Others 0

EFFECTIVENESS OF INTERNET IN TOURISM INDUSTRY

Attributes No. of respondents

Yes 36

No 4

The graphs shows that 90% of respondents, internet really affects the increase of

tourists. 10% respondents disagreed with the fact.

INFLUENCE OF E-COMMERCE stimulate the decisions of tourists

Attributes No. of respondents

Yes 30

No 5

Can’t say 5

From the above table, we can understand that E-commerce really affecting the

decision making power of tourists.

ADVERTISING EFFECTIVENESS

While the study told potential respondents that the research was designed to "learn

more about them", control was sought for a multitude of factors that could influence a

test of advertising effectiveness. The classic experimental research design, the most

rigorous study methodology available, was applied by randomly assigning users to be

part of either the test or exposed cells. Because Web ad banners are served

individually one at a time to Web users, this assignment was invisible to the

respondent. Importantly, both the exposed and test cells were treated identically in all

respects, except for the exposure to a test Web banner.

Online advertising has tremendous communications power; a single exposure can

generate increases in:

Advertisement awareness

Service awareness

Product attribute communication

Purchase intent

Nearly all of the impact measured was generated without a 'click-through' to the

advertiser's site, - proving the power of the ubiquitous banner.

Selected highlights of the report follow, while the document provides the results in

full.

Consumer acceptance of online advertising is comparable to that of

traditional media.

MBinteractive asked comparable questions for the Web, Print, and Television in a

separate survey of its recently established US nationally representative panel of Web

users. On a five point scale ranging from "Strongly in favor of" to "Strongly against,"

between 60% and 70% of Web users report top-two box scores in favor of Web,

Television, and Print advertising. Web users are less supportive of Radio advertising

and are somewhat opposed to outdoor signage/billboards (only one third report a top-

two box score in favor of such marketing vehicles).

Online Advertising dramatically increases advertisement awareness after

only one exposure.

Advertisement Awareness is measured by a question asking respondents if they recall

seeing an ad on a particular Web site in the past seven days. Those who respond "no"

are prompted with the tested ad and then re-asked the question.

By the criterion of getting noticed by consumers, the twelve ad banners tested by the

IAB demonstrate unequivocal success after a single additional ad exposure. Eleven

out of the twelve show marked improvement in advertisement awareness. An

additional exposure to the advertisement boosted advertisement awareness by 30% on

average (from 34.0% to 44.1%), statistically significant at the 95% confidence level.

Web advertising boosts awareness of advertised brands

Eight of the twelve ad banners we tested showed positive increases in brand

awareness (three of the brands tested already enjoyed nearly universal levels of

awareness at 100%, 99% and 92% respectively and could not go much higher). For

two relatively new brands, the increase was dramatic. Web ad banners not only have

the ability to remind consumers about brands for which they are already aware, Web

ad banners can and do inform users about products that were not previously on the

consumer's radar. Across the 12 brands tested, we observed an increase of 5%, on

average, in awareness of the services.

Online advertising provides significant service communications power.

The research investigated attitudinal shifts on a brand-by-brand, questionnaire item-

by-item basis.

Six of the twelve Web ad banners meet the statistically significant threshold of

90% on brand perception items

Five out of six demonstrate clear positive change while the sixth shows a

polarization of positive and negative attitudes, with a positive net effect on

purchase intent

In general, Web advertising can positively impact brand perceptions.

A closer look at the time spent, in comparison, on other media reveals that in urban

areas:

WeekDays Weekends

Thus Internet audience increased during weekdays, gaining 8 percentage points from

TV. Specifically in the A1 cities of Mumbai and Delhi it was found:

Mumbai Delhi

Thus average time spent during weekdays was 252 minutes on all three forms of

media together, and 318 minutes on weekends in the urban areas. The time spent on

the Net averaged more than 60% of that on TV, especially during weekdays the trend

being the same in the core cities.

Specifically, urban areas were found to spend on an average per week:

180 minutes on watching TV on weekends, 120 minutes on weekdays

66 minutes on weekends on the Press, 54 minutes on weekdays

72 minutes on the Net on weekends, 78 minutes on weekdays.

In Mumbai:

186 minutes on TV on weekends, 144 minutes on weekdays

54 minutes on weekends on the Press, 42 minutes on weekdays

84 minutes on the Net on weekends, 96 minutes on weekdays

In Delhi:

156 minutes on TV on weekends, 114 minutes on weekdays

78 minutes on the Press on weekends, 60 minutes on weekdays

78 minutes on the Net on weekends, 90 minutes on weekdays.

The study also found that Net users spent more time on TV and Press on weekdays

and weekends than non-users. For instance, on weekends:

Net users were found to spend an average of 180 minutes on TV on Sundays and 66

minutes on the press. Non users spent 158 minutes on TV, 50 minutes on the press.

On weekdays:

Net users spent 120 minutes watching TV, 58 minutes on the Press.

Non users spent 118 minutes on weekdays on TV, 40 minutes on press.

In the U.S., on the other hand, where the Internet has been growing rapidly since

1995 and is currently available in 35% of households, Net users were found to be

lighter TV viewers, according to a Nielsen Media Research survey conducted in May

1999.

Though light TV viewers even before they had access to the Net, they tended to

watch certain types of show more than those without access. They were also found to

be more affluent than the latter.

A survey by the Washington-based Strategis Group, on the other hand, found that

64% of the respondents watched less TV in order to surf the Net and 48% read less,

thanks to the Net.

HOW TO TARGET TRAVELLERS ONLINE?

Internet advertising allows for more personalization, creativity and interactivity as a

result of the technological edge it enjoys over traditional media like print and TV. As

televisions' reach expanded, brands gained instant exposure to millions of consumers.

But 'how best I reach them' is a question better answered by the Internet.

It's just the nature of the Internet. The interactivity of enables a greater ability to

identify the interests of consumers enabling marketers to target their audience on the

dot.

Only competent online solutions provide the key to efficient and effective online

advertising, and give the publisher and advertiser total control to define their TA,

track them, deliver the message and report the effectiveness across the site - all in real

time.

Some of the targeting parameters used are:-

Keyword search targeting: This is based on the visitor's usage of key words

in the search engine of the site. This process allows, on the search results page

for eg., to post an ad relevant to the search contents.

Content targeting: Based on the site content which matches the target

audience profiles. For eg. To reach a youth audience, you can post ads only on

youth sites and youth sections only, maximizing the impact.

Time targeting: The advertiser would have products to be targeted to office

goers or home users. The user is identified from the time he visits the site. It

helps evaluate when a message for a holiday would be most relevant. For

instance, it makes sense to show a pizza ad during lunch hour as it could

prompt a purchase.

System targeting: The visitor is identified from his usage of operating system

and browser and targets the visitor with a suitable advertisement. For eg., the

probability of a person using a Mac and being in a creative field is much

higher than he being in any other field. To cater to the entire gamut of IT

professionals, you need to target only the Windows NT, SUN and UNIX

operating systems. A flash banner can be posted to only a high end browser

like IE 5 and a static Jpg banner to a lower end browser etc.

Domain targeting: The advertiser can choose the domain he is targeting and

select his type of audience, who will be interested in his products or services.

Targeting can be by domain type (.com,.ernet), company name etc.

Geographic targeting: Based on specific location of the target audience

(Cities, towns etc.). For eg. Within the Rediff portal, ads can be posted to

Indian audiences and NRI's separately. Different promo ads can be posted to

different locations, which in turn drive creatives. If KBC is being watched

across India at the same time, a different ad. can be shown to different

audiences from different cities at the same time.

The availability of such targeting parameters defines the strength of the Internet as a

means to reach the target audience of your choice precisely and without any wastage.

Apart from these strengths, what makes this medium so powerful, is the availability

of post campaign evaluation and optimization tools which support superior

planning.

These tools allow:

To activate online changes to the campaign. Correct sub-performing creatives

within the planned period, assign higher weights to better performing

creatives, increasing effectiveness, make mid-course corrections to the

planned activity etc.

To assign different weights to parts of the entire communication mix.

Re-assign target markets to maximize effectiveness

Reset campaign objectives based on performance at the optimal time,

through the course of the campaign

Re-assign distribution of impression by content. Eg. An ad. for a

finance company will be given more weightage on business/ finance

web sites coupled with base presence in other relevant sites.

To drop non-performing sites/ cities from the mix.

Thus enhancing efficiencies of the campaign.

In short apart from the inherent strengths of Internet as a medium, a great online

support service can help reach your target audience efficiently and effectively using

targeting, evaluation and optimization parameters exclusive to the Internet.

CONCLUSION AND RECOMMENDATIONS

The survey findings might suggest that it is not picking up as yet with the customers

as they usually prefer not to click on the ads. This might be due to the fact that the

traditional forms of advertising are positioned in their minds and the concept of

Internet advertising might take some time catching on. Even the high rates and low

accessibility of Internet would be the hindering factor. But on the other hand the

increase in the spending on the Internet advertising clearly indicate that marketers are

willing to spend a significant part of their ad budgets on Internet advertising which in

turn is a sign of the emerging days of Internet advertising.

Love it of loathe it, Internet is here to stay and the marketers who will adapt to the

needs of the net users and communicate properly with the customers as regards their

products will make it big else they will perish. On the other hand the customers will

have a better access to information and will have a variety of products to choose from

with the Internet advertising gaining importance.

India has not lagged behind with respect to the general decibel level

generated on e-business. Unprecedented attention has been given to Tourism,

especially the connected environment and the benefits it can bring to the

common citizen. Several sites

such as Rediff on The Net offers sales over the Internet. Several state governments

have announced plans to set up kiosks for allowing citizens easier

access/transactions with the Government, and the list reads on. Yet, there is plenty we

need to do to catch up. The toughest challenge is not

technological but cultural. E-business will have real momentum when every

businessman, civil servant, common citizen begins to grasp its significance

and starts adapting it. For e-business is not a mere extension of the existing

order—not a tool to improve a step here, and a process there. Electronic

business promises to displace the current economic model and rebuild it

from the core. It’s going to change the business model fundamentally. This

will be a time of great opportunity for some, and a great threat to others, but

a period of great change for everyone.

As a nation, we are at a stage where awareness level of e-business is rising

rapidly. There is unprecedented interest in the Internet and computers. But

that is not enough. The real imperative is to fathom the true implications of

this brave new world, and to be prepared to respond proactively. The

media, academia, and the tourism industry are all, perhaps, doing their bit to help.

However, one of the biggest drivers for change is “experience” of the new

way. And that is happening too.

With tourism promotion, upto date and convenient facilities and enormous online

advertising effort by the tourist science enterprises the tourism industry is booming.

No doubt as the developing components of tourism will stand more efficiently for

supporting potential tourists, the scope of movement of general people will increase

drastically making tourist industry a larger, unique and dynamic industry.

This paper has so far examined some of the key issues related to the marketing of

tourism on the Internet. In particular, it has highlighted the main features of the

Internet as an effective and efficient communication  medium,  including its

addressability, interactivity,  flexibility and accessibility, and its role in improving

customer service and reducing costs. It has also analysed the unique characteristics of

tourism which make it perfect to be marketed on the Internet and further explored the

main areas in tourism marketing where the Internet could play a significant role and

provide substantial benefits for both the marketer and the consumer. In an

investigation of the key forces which drive Internet commerce, it has found that a

wide variety of factors, grouped conveniently in four broad  categories     demand, 

organisational, technological and governmental - could both enable and restrict the

application of the Internet in tourism marketing.

With regard to the future of Internet tourism marketing, there appears to be little

question that the Internet will permeate into every aspect of tourism business and

every area of marketing activities. Indeed, the Net could become the dominant

platform and instrument for tourism promotion and distribution in five years' time.

This is based on the author's belief that Internet marketing has now survived its

infancy and is ready to accelerate the transition from the introduction to the growth

stage as more and more people and organisations are recognising its unique and great

potential for marketing. The increasing power of computers, decreasing surfing cost,

and higher level of computer literary and web skills will make web surfing as a

necessity in everyday life to an increasingly large population, especially in the

developed world. Many of the current technological constraints could also be

overcome (though new problems will inevitably emerge) in the next few years with

the high quality broadband access via optical fiber or satellites to improve speed; the

wide application of constantly improving firewalls, encryption and digital signature

software to enhance  security; the development of more sophisticated search engines

and 'intelligent agents" to simplify web search task; and the Wireless Application

Protocol (WAP) technology linking mobiles to the Internet to extend the range of

services available to the public. At the same time, governments are increasingly

involved in the expanding e-commerce through providing incentives to small

businesses, facilitating infrastructure development and  establishing the regulatory

framework which supports and protects all those concerned.

It is obvious to the current writer that the key to the future growth and improvement

in Internet tourism marketing lies in tourism organisations. The market conditions and

web technologies are improving steadily and a conducive legal and social

environment is starting to take shape, it is now up to tourism organisations to seize

and exploit the opportunities created by such changes to its full potential. Therefore,

the crucial question for academic researchers and practitioners in future research is

how tourism organisations can take advantage of the changes and opportunities

brought about by the Internet. To offer a prescriptive list of policy recommendations

is neither feasible, because it requires a thorough understanding of all relevant issues

including expertise in technology, tourism, marketing and a keen awareness of all

new developments in both IT and tourism, nor necessary since different tourism

businesses have different resources and operate in different settings. Instead, an

attempt is made here to discuss issues that are both important and with wide

applicability. Three interwoven cognitive issues are highlighted below to emphasise

the significance of changing the mentality of tourism organisations to preparing for

the new virtual business environment.

In order to market tourism products successfully on the Internet, a tourism

organisation must first of all have a strategic vision whereby it can fully comprehend

the changing market space, from physical to both physical and virtual, and the

underlying forces shaping this new marketing space. The Internet has altered forever

the tourism marketing system and its environment, no tourism business can escape its

impacts but companies willing to become engaged in Internet and embrace Net

commerce should find more opportunities while those still pretend that the internet is

a bad dream, such as some travel agencies, will be left with all the threats. Whether a

organisation likes it or not, the Internet is here to stay and is going to dominate

tourism marketing. Andy Grove, the Chairman of Intel, has been widely quoted as

saying that in five years' time all companies will be Internet companies or they won't

be companies at all.

Second, the Internet must not be treated as just a promotion aid or distribution device,

but be seen as a major force in itself that profoundly changes the way tourist business

is conducted. 'Marketers will need to rethink fundamentally the processes by which

they identify, communicate, and deliver customer value. They will need to improve

their skills in managing individual customers and allies. They will need to involve

their customers in the act of codesigning their desired products" (Kotler 1999:206).

Indeed, tourism marketers should change their business paradigm and marketing

practices to suit the new Internet era.

Third, as the Internet alters the critical success factors in many businesses, tourism

organisations must use it effectively to create new competitive advantages. For

example, tour operators (in the UK) were obsessed with gaining control of

distribution through vertical integration with travel agencies in the last decade, but

with the emerging web-based online sales companies, control of how they let the

product be distributed now supersedes control of actual distribution. In responding to

the threats from airlines direct sale, the major GDSs have been using the Internet to

develop web-based GDSs and to diversify their product base to include hotels, car

rental, cruise lines, tour operators, etc. Clearly, tourism organisations have to adopt a

technology management policy that will assist their competitive strategy and usefully

leverage the technology innovations to their advantage. Strategic Internet partnerships

or alliances, especially those between tourism companies, and between tourism and

IT companies, are also a major source of competitive advantage.

BIBLIOGRAPHY

Bender, D. (2005). Marketing on the Web: Internet Strategies for Hospitality Travel

and Tourism. Washington, DC: Hospitality Sales and Marketing Association.

Inkpen, G. (2004) Information Technology for Travel and Tourism (2nd edn).

Harlow: Longman.

Kumar, Arun and Meenakshi N., Marketing Management – Comprehensive Text,

Vikas Publications, New Delhi, 2006.

Pran Nath Seth and Sushma Seth Bhat (2007), An introduction to Travel and

Tourism, Sterling Publications

www.advent.co.in/online-advertising.html

www.bitpipe.com/rlist/term/Online-Advertising.html -

www.agencyfaqs.com

www.domain-b.com

ANNEXURE

QUESTIONNAIRE

1. What is the nature of your travel to India?

Tourism Package

Independent

Business

Sports

Medical tourism

Religious

Others

2. How often do you travel to India?

Once in an year

2-3 times in an year

>5 times in an year

3. How did you get to know about India as a tourist destination?

Marketing by Indian Ministry of tourism

Marketing by your travel agent

From your friend

Internet advertising

Others

4. Can ecommece affect the increase of tourist?

Yes

No

5. Rate Importance e-commerce has tremendous communications power; a single exposure can generate increases in:

Advertisement awareness

Brand awareness

Product attribute communication

Purchase intent

6. Which media is more effective?

Newspaper

Television

Internet

7. Does e-commerce stimulate the decisions of tourists?

Yes

No

Can’t say

8. Any suggestions to improve marketing effectiveness of Tourism industry