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286 X INDIAN JOURNAL OF APPLIED RESEARCH
Volume : 4 | Issue : 11 | November 2014 | ISSN - 2249-555X
ReseaRch PaPeR
Internet Marketing in Tourism
Dr.S.PraveenKumar
ASSISTANT PROFESSOR, CENTRE FOR TOURISM AND HOTEL MANAGEMENT, MADURAI KAMARAJ
UNIVERSITY, MADURAI – 21
Keywords
Management
ABSTRACT Tourism is the world's largest civilian industry whose growth, economic significance andpotential are phe-
nomenal across the globe. Online tourism is rapidly becoming a growing topic of research and its impor-
tance as future mode of acquiring information and purchase of tourism products and services is growing day by day.It
is evident that e-business is an essential prerequisites for successful organizations in the emerging, globally networked,
internet-empowered business environment, especially for the tourism industry. Worldwide there is an increased use of
internet by both demand and supply sector in tourism has been brought to the limelight in this paper. Significance of
internet marketing in Tourism, its benefits to the seller and its benefits to the buyer are also focused here.
INTRODUCTION
Tourism industry is considered as one of the largest and
the most diverse industriesin the world. After the ma-
chinery and oil industry, this industry as a modern servi-
ceindustry and the device to create connectivity among
nations and various people in the worldhave been under
public attention. Attention to this industry especially in the
countries which arerich in historic, cultural and natural at-
traction resources is more considerable.The international
leading position of tourism industry has opened up a stra-
tegic window for many developing countries to boost their
economy by positioning them to record global market
share in tourism. Employment opportunities, environmen-
tal consciousness and an influx of foreign currency to the
host nation are few examples of contributions of tourism to
the economy of the country. The WTO has predicted that
in 2010, America would lose its favorable position behind
Europe to Asia and the Pacific in receivinginternational
tourists and that by 2020, Asia and the Pacific can expect
around 397 million arrivals1.
For the survival and success of any industrial cluster, prop-
er acquisition of technology and effective usage of its in-
novations have become vital elements. The extraordinary
growth in Information Communication Technologies (ICTs)
has revolutionized the business world. As one of the
world’s largest and most pervasive industries, the travel
and tourism sector is as exposed as any other to the forces
of change that are being brought about by ongoing devel-
opments in the Information and Communication Technolo-
gies (ICT) arena.The advent of the Internet is also having
profound impacts on the industry: travel and tourism has
become the single largest category of products/services
sold over the Internet and the proportion of business be-
ing transacted through this medium is constantly growing.
Significance of Internet Marketing
WTO argues that “the key to success lies in the quick
identification of consumer needs and in reaching potential
clients with comprehensive, personalised and up-to-date
information”2. Technology and the Internet have created a
revolution in tourism marketing. The Internet is the most
important innovation since the development of the print-
ing press3. The Internet not only inspires and provides
consumers with information on potential travel destina-
tions, but enables them to take immediate action by book-
ing online.Internet marketing communication is attractive
to the tourism industry as “travel is an information-based
product and the Internet is full of information.”4.Internet
marketing, also referred to as online marketing or Emar-
keting, is marketing that uses the Internet. The interactive
nature ofInternet media, both in terms of instant response,
and in eliciting response at all, are both unique qualities of
Internet marketing.Internet marketing ties together creative
and technical aspects of the internet, including design, de-
velopment, advertising and sales.
Internet marketing methods include search engine mar-
keting, display advertising, email marketing, affiliate mar-
keting, interactiveadvertising, blog marketing, and viral
marketing.The Internet combines many of the features of
existing media with new capabilities of interactivity and ad-
dressability; thus, it transforms not only the way individuals
conduct their business with each other, but also the very
essence of what it means to be a human being in society5.
Nowadays, millions of people worldwide rely on the Inter-
net for working, learning, socializing, entertainment, leisure
and shopping.
The Internet has been identified as cost effective as and
easier to set-up and update than traditional marketing
communication channels6. Marketing communications on
the Internet have four stages of complexity from a simple
website with no interactivity, to a website with email inter-
activity, website with offline transactions, to a complex site
with online transactions, complete interactivity and distri-
bution7. A survey reports that 30% of the American adult
population used internet to browse travel information in
2003, while the European online travels sales for the same
period increased by 44%8.
The above study clearly shows the increasing trend of in-
ternet based tourism reservation from year 2003, over
the years.Global Online Travel Report 2012 – a market re-
search report submitted by yStats.com9says that the trend
to book travel arrangements online will continue in 2012,
especially in emerging economies such as China, India and
Brazil. In line with this trend the share of the online seg-
ment compared to the total travel market is has increase
to almost one third worldwide. In 2011 the value of the
INDIAN JOURNAL OF APPLIED RESEARCH X 287
Volume : 4 | Issue : 11 | November 2014 | ISSN - 2249-555X
ReseaRch PaPeR
US online travel market was still higher than that of Great
Britain, China, India and Brazil combined.Further the same
report stated that the clients who bought travel products
online in 2011 made most purchases through online trav-
el agents amounting to almost 50%, followed by search
engines and websites of tour operators. In the category
mobile bookings, hotels were booked most frequently, fol-
lowed by flights and travel packages.
Outcomes of E-marketing in Europe
Online travel sector is especially successful in Europe. In
Europe the total number of bookings through online travel
agencies increased by almost 20% from 2010 to 2011. In
Great Britain, more than half of all consumers avoid tra-
ditional travel agents altogether and book their holidays
online instead. In Germany, in 2011 customers preferred
travel agents for more expensive travel arrangements and
online booking for cheaper tours. In this sector online rev-
enue has grown considerably, while offline revenue has
decreased. In France revenue generated with online trav-
el bookings grew between January and September 2011
more than the total B2C E-Commerce revenue. Addition-
ally, in 2011, B2C E-Commerce revenue in the category
“Travel and Holiday Accommodation” was higher than in
the next four categories combined.
Growth potential of online marketing in Asia-Pacific re-
gion
In Japan the share of online travel bookings - in line with
the soaring trend - exceeded for the first time 50% in
2010. In China in 2011, only 14% of all internet users had
ever visited a travel website, but online travel bookings are
expected to become more popular there too. The Indian
online travel market was almost 30% in 2012. The data for
Australia is outstanding: as shown in the report by market
research specialist yStats.com, the category “Travel, Ac-
commodation, Memberships or Tickets of any Kind” was
the most popular online product category in June 2011.
Online travel market in the Middle East is catching up
Spurred by the introduction of online payment options;
the online travel market in the Middle East is expected to
grow considerably compared to 2011.
The yStats.com report predicts growth for the share of
online travel bookings in relation to total revenue gener-
ated with travel tickets until 2015, compared to 2010 fig-
ures. According to the “Global Online Travel Report 2012”
by yStats.com10 almost half of all Italian online customers
booked their accommodation online in 2011, making this
the strongest category within Italian B2C E-Commerce. In
Russia almost 50% of all passengers had purchased their
flight on a travel website, while nearly one quarter had
booked tickets via phone.
Tour operators shift focus to E-Commerce
TUI Travel’s strategy, for example, to focus on online sales
in Great Britain paid off, considering that in January 2012
far more online bookings were recorded than in Janu-
ary 2011. In September 2011, Google introduced a flight
search service in the USA, but it was faced with certain
restrictions. Meanwhile, Priceline may be able to replace
Expedia as the number one online travel specialist world-
wide – in terms of international revenue this milestone has
already been achieved in 2011. In 2011 and 2012, Orbitz
Worldwide signed multi-year agreements with AOL Travel
and United Continental Holdings. In February 2012, Make-
MyTrip, one of the top online travel firms in India, success-
fully secured more than 50% of the Indian online travel
market.
Key Findings:
· The trend of booking trips online is expected to grow
further in 2012, especially in emerging markets such as
China, India and Brazil.
· In 2012, the “Online Travel Segment” is forecast to
represent almost a third of the total global travel mar-
ket value.
· Online travel sales in the US are forecasted to increase
by more than +10% in 2012 compared to2011.The UK
is projected to remain the largest share of Europe’s on-
line travel market in 2013, followed by Germany and
France.
· Gross bookings on the Asia Pacific online leisure/ un-
managed business travel market are expected to in-
crease by more than +30% in 2012 compared to 2010.
Arguably one the best features of the internet is the ease
at which one can research and book travel plans. Internet
travel booking revenue has grown by more than 73% over
the past five years.
Online Travel Booking Statistics Data
Number of travel bookings made on the
internet each year
148.3 million
Percent of all travel reservations made on
the internet
57 %
Percent of same day hotel reservations
made from a smartphone
65 %
Internet Source for Hotel Booking Share of
Bookings
Brand Website: Website where distribution
is operated and managed by the brand
(e.g www.marriott.com/).
65.4 %
Merchant Website: (e.g. Expedia/Hotels.
com, Travelocity and Orbitz).
19.5 %
Opaque Website: Customers to choose a
fare or rate without knowing the brand of
the supplier until after the item is pur-
chased (e.g. Priceline).
11.3 %
Retail Website: Third-party distributor
where the hotel lists inventory at the same
price that it is sold to the consumer and
hotel pays distributor agreed upon com-
mission (e.g. HRS, Bookings, Venere in
Europe).
3.7 %
Annual Online Travel Sales
Online Sales
2012
$162.4 billion
2011 $145 billion
2010
$128.9 billion
2009
$116.1 billion
2008 $105.1 billion
2007
$93.8 billion
Online Travel Sales Revenue Breakup (Q1
2012)
Hotel Reservations
39 %
Air Ticketing 37 %
Packaged Tour
17 %
Corporate Travel
4 %
Others
3 %
Top Visited Travel Sites by Traffic Alexa Rank
Booking.com (Part of Priceline.com)
157
Expedia.com
427
Hotels.com 601
Priceline.com
697
Kayak.com
816
Travelocity.com
1,108
288 X INDIAN JOURNAL OF APPLIED RESEARCH
Volume : 4 | Issue : 11 | November 2014 | ISSN - 2249-555X
ReseaRch PaPeR
Orbitz.com
1,215
Hotwire.com 1,573
Travel Booking Site Statistics
Data
Average number of reviews for a hotel
238
Percent of travelers who find user reviews
important
81 %
Percent of travelers who won’t book a
hotel without reviews 49 %
Percent of travel reviews written by women
53 %
Tourism and Information Technologies
Tourism is inevitably influenced by the business process
re-engineering experienced due to thetechnological revo-
lution. As information is the life-blood of the travel indus-
try, effective use of ITs ispivotal. Hence, “a whole system
of ITs is being rapidly diffused throughout the tourism in-
dustry andno player will escape its impacts”12. Unlike dura-
ble goods, intangible tourism services cannot bephysically
displayed or inspected at the point of sale before purchas-
ing. They are bought before thetime of their use and away
from the place of consumption.
Hence they depend exclusively uponrepresentations and
descriptions, provided by the travel trade, (e.g. information
in brochures), fortheir ability to attract consumers. Timely
and accurate information, relevant to consumers’ needs,
isoften the key to satisfaction of tourist demand. Therefore,
ITs provide the information backbone thatfacilitates tour-
ism13.
Benefits of Internet Marketing in Tourism
Benefits to buyers
· It is convenient and easy to use,and it offers privacy
– Buyers donot have to leave the room to buy;buyers
don’t have to facesalespeople and their salespitches.
· It offers greater product access,selection, and hence,
comparativeinformation – Buyers have easyaccess to
a wide range ofalternatives and it is so mucheasier for
them to makecomparisons among alternatives.
· Internet buying is interactive andimmediate. This na-
ture of thebuying process allows buyers to interact
with the sellers’ sitesimmediately to create theconfigu-
ration of information,products, and services desired.
· It gives buyers greater controlover the buying process
–example: customers can choosetheir in-flight seats via
theinternet.
Benefits to sellers
· It is a powerful tool for customer relationship building
– sellers can interact with their customers
· Online and learn about their customers’ needs and
wants through questions asked by customers and com-
ments provided.
· It reduces cost of doing business and increases speed
and efficiency – example: no physical store is involved
for e-tailers who sell travel products and they can in-
form buyers about their orders within seconds.
· It offers greater flexibility – It allows hospitality market-
ers to make ongoing adjustments to itsoffers and pro-
grams. For instance, hotel can easily adjust their room
rates based on the projected occupancy conditions.
6 ‘C’s Merits of Internet Marketing in Tourism
1. Cost reduction: Achieved through reducing the need
for sales and marketing enquiries to be handled by tel-
ephone operators and the reduced need for printing and
distributing marketing communications material, which is
instead published on the web site.
2. Capability: The Internet provides new opportunities for
new products and services and for exploiting new markets.
3.Competitive advantage: If a company introduces new
capabilities before its competitors, then it will achieve an
advantage until its competitors have the same capability.
For example, customers who transferred to Federal Ex-
press because of its new Internet services are likely to be
less disposed to revert to an existing courier since they are
‘locked in’ to using the particular tools provided by Fed-
eral Express.
4. Communications improvement: These include im-
proved communications with customers, staff, suppliers
and distributors.
5. Control: The Internet and intranets may provide better
marketing research through tracking of customer behaviour
and the way in which staff deliver services.
6. Customer service improvementProvided by interactive
queries of databases containing, for example, stock avail-
ability or customer service questions.
Online advertising
As the world’s population continues to upgrade to new
technology, more and more individuals get their news, en-
tertainment and information from the Internet rather than
the traditional forms of media discussed above. Therefore,
online advertising presents several advantages.
· Online advertising is open to combine nearlyevery
other type of medium. Ads may be presented in print,
audio or video with high-quality color and imagery.
· A huge amount of information can be presented in
online advertisements. Consumers have the option
to click deeper and deeper into the advertisement
as their interest is piqued. Messages can be layered
through links in the advertisement.
· Online advertisements have the option of directly turn-
ing into a sale. If consumers like what they see in an
advertisement, they can place an order right then and
there.
To conclude that,the importance of the Internet for the
travel and tourism industry has increasedrapidly over the
last few years. Understanding how travelers behave is
ofcritical importance to travel suppliers and tourism au-
thorities for formulatingefficient marketing strategies and
policies, in order to fully exploit the potential ofthis new
channel. Travelers have heavily relied on the Internet be-
cause of the information-intensive characteristic of travel
products. Travel products are generally intangible (e.g.,
products cannot be touched nor returned), inseparable
(e.g., products must be produced and consumed simulta-
neously although they are often paid for in advance), het-
erogeneous (e.g., products are difficult to standardize) and
perishable (e.g., products cannot be stocked). Thus, travel
products are normally purchased before the time of use,
consumed (i.e., experienced) after arriving at the travel
site, and best evaluated after consumed. Because of all
these unique characteristics, pur chasing travel products is
associated with a higher level of perceived risks compared
to tangi ble products. Consumers, therefore, search for a
greater amount of information via the Internet to reduce
the risks.
The Internet enables travelers to access reliable and ac-
curate information as well as to under take reservations in
INDIAN JOURNAL OF APPLIED RESEARCH X 289
Volume : 4 | Issue : 11 | November 2014 | ISSN - 2249-555X
ReseaRch PaPeR
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a fraction of the time, cost and inconvenience required
by conventional methods. Thus, they improve the service
quality and contribute to a higher tourist satisfaction. Ad-
ditionally, the Internet provides access to transparent and
easy to compare information on destinations, holiday pack-
ages, travel, lodging and leisure services, as well as about
their real-time prices and availability. Increasingly consum-
ers utilise commercial and non-commercial In ternet sites
for planning, searching, reserving, purchasing and amend-
ing their tourism products. They can also get immedi-
ate confirmation and speedy travel documents, enabling
prospective travellers to book at the “last minute.” Expe-
rienced travellers are empowered by ICTs and use infor-
mation and booking systems to improve their personal ef-
ficiency and competencies.
