Impact of Technology on the Tourism Industry

Technological Convergence is becoming critical for the future. Discuss and illustrate implications for the tourism industry

Technological Convergence Overview

Convergence technologies are increasingly obliterating barriers of distance and time, providing anywhere, anytime communication and information sharing. The interactions that these technologies enable are incredibly varied, ranging from real-time one to one communications, to globally accessible electronic resources that reach mass audiences on demand. (Covell, 2000) These technologies also integrate all digital media types and indeed, one of the most powerful aspects of the digital convergence phenomenon is that these technologies can be used to combine interactions and media in so many different ways, thus producing innovative mechanisms, tools, and information resources.

Whilst advances in miniaturisation have yielded a massive advance in the range of multipurpose devices in the last two years, ranging from game consoles that can be used as photo viewers, to mobile phones that double as cameras and music players. At the same time, developments in high-speed communications are allowing providers of traditional services like cable TV, Internet and phone services to move beyond their realms to products like video on demand and music and video downloads, together with Internet access through endless different media. “As the lines between product offerings become blurred, a looming high-tech identity crisis is creating rivals out of companies that once considered themselves to be in separate industries.” (Young, 2006)

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Telecommunications operators now believe that they can create value out of providing TV services, whilst cable TV companies are bundling Internet and mobile services, and phone handset makers are getting into music players and cameras. However, whilst traditional technology and telecommunications firms fight it out, Internet companies like Google, Microsoft MSN and Yahoo are building up powerful brand names to leverage in the future, both on and off the Web. Signs of convergence are on display the world over, spanning the semiconductor industry in Asia, where the hearts and memories of many devices are made, to cutting-edge telecoms development from Europe to the thriving U.S. Internet community experimenting with new products and services. (Young, 2006) As a result, customers’ expectations and demands have risen to include combined functionality and, where this functionality is included, reliability. (Buhalis, 2003) As a result, technological convergence is becoming increasingly more critical for businesses wishing to market new products and services, and to extend the life of old ones.

Within the tourism industry, technological convergence has had three main impacts: on sales, transport, and the provision of services.

Sales

Travel agents have found that their role has had to evolve, due to the changing technological dynamics of the travel industry. The travel retail sector has been adversely impacted since 2001 by technological convergence factors, chiefly the increase in the level of Internet and communications access. This has resulted in a rise in the number of consumers and businesses booking their travel arrangements directly, via the telephone or Internet; and as a result airlines and travel companies have reduced commission fees to travel agents in order to save costs, and also set up their own reservation systems via the Internet. Even before 11 September 2001, sales were being hurt by lower commission fees and trends towards direct booking, (Global Market Information Database, 2004) and now many operators in sectors such as airlines, hospitality and car rental have began to take advantage of the technology boom to make their sales direct to the consumer, bypassing travel agents.

Travel

Although technological convergence has not had substantial impacts on tourist’s choice of long distance travel, asides from facilitating the low cost airline boom, through Internet sales and eTickets, it has had some impacts on resort based travel. A good example of this is highlighted by Daigle and Zimmerman (2004) who studied the Acadia National Park Field Operational Test, where Intelligent Transportation Systems components were deployed to help visitors travel around Mount Desert island and in Acadia National Park Real-time travel information was collected and integrated with island Explorer buses and disseminated to visitors via an automated announcer that transmitted an audio message and displayed the next bus stop on an electronic sign within the bus. Also, electronic signs displayed real-time departure times of the next Island Explorer bus at bus stops, and visitors could also obtain real-time parking conditions at two popular destinations in the park, similar to the technology used by TFL in its London bus network.

Services

Finally, the trend towards individual booking of holidays by Internet, or dynamic packaging, is predicted to continue as more and more people become ‘Internet-savvy’, and seek more control over pricing and planning of both business and leisure travel. (Global Market Information Database, 2004) As a result, tour operators will respond to these trends by introducing more flexible holiday booking and selection services allowing, for example, clients to combine low-cost flights with premium hotels, and creating more targeted packages, such as those aimed at over-50s, sporting or activity holidays. Hotel groups and airlines will respond by improving their websites and services, and especially trying to match the fares offered by online agencies or offering extra services. Technology convergence in the travel and tourism industry will thus continue to improve in order to increase convenience, cut airport waiting times and encourage business travel. This will likely include automated check-in, and check-in via the Internet, the continuing development of high-speed Internet services in hotels and on aircraft, and satellite navigation services in cars.

Conclusion

In conclusion, with the exception of online sales, technological convergence is yet to have as fundamental an impact on the tourism industry as it has had on the technology, media and telecommunications industries. However, as the Internet continues to grow, and converges with more varied technologies, the potential for innovative offering will increase and, as in the TMT sectors, these offerings will increasingly become the norm, thus making technological convergence even more critical for the future in yet another industry.

References:

1. Buhalis, D. (2003) eTourism: Information Technology for strategic tourism management. Pearson.
2. Covell, A. (2000) Digital Convergence: How the Merging of Computers, Communications, and Multimedia Is Transforming Our Lives. Aegis Publishing Group, Ltd.
3. Daigle, J. J. and Zimmerman, C A. (2004) The Convergence of Transportation, Information Technology, and Visitor Experience at Acadia National Park. Journal of Travel Research; Vol. 43, Issue 2, p. 151.
4. Global Market Information Database (2004) The World Market for Travel and Tourism. Euromonitor International.
5. Young, D. (2006) Reuters Summit – Technology convergence makes a comeback in 2006. Reuters Limited.