With the Internet fast becoming the platform of the day for conducting commercial activities and business transactions, it is important for companies to take advantage of information communication technologies, electronic commerce, mobile computing, and software agents. Internet technologies bring about opportunities for automating customer transactions, internal business processes, as well as business collaborations with associate companies or alliance members for both B 2 C and B 2 B e-commerce activities. Electronic commerce, simply put, is the exchange of money for goods and services via electronic means. In other words, electronic commerce is when a consumer purchases something off of the Internet. Electronic commerce is often referred to as e-commerce, or e-business which is a subset of e-commerce. E-business can be anything from purchasing a toaster from a department store online to checking your bank statement online.
All are examples of the many aspects of e-business. In today's business world, e-business activities of various types contribute significantly to the efficiency of business processes, and to the recognition of products and services. The Internet plays a very important role in this process, as it offers numerous possibilities for communication with customers and performance of business activities. No wonder it has become a tool used daily by suppliers of products and services, as well as their users. For example a growing number of companies in the travel industry make use of the Internet platform as virtual shops for marketing and selling travel products and services. Web travel sales has almost doubled annually for the past three years.
In 2003, Internet online sales reached 10% of the total bookings and business transactions of the travel industry, including the airlines, hotels, and car rental companies. The followings are indications of the current trends, activities and features: 1. Many hotels have set up their own Web sites to market and sell their hotel rooms (e. g. Holiday Inn, Sheraton Hotels, and the Marriott chain).
Most sites allow visitors to check rates and availability, make reservations, and receive a confirmation number within a minute or so of the reservation request. 2. Airlines are selling tickets via their Internet portal at reduced prices. 3. Car rental companies do not hesitate in putting up Web sites to handle reservations (e. g.
Hertz, Avis). 4. Travel companies compete with one another and various Internet travel portals by offering their own Internet e-shops that market their travel packages as well as provide reservation services for airfares, lodgings, and various travel products. There is a range of players in the travel services industry: the small storefront retailer, the large retailer and the virtual travel office. Each can be part of a chain, franchise, consortium or independent owner operators. Within each sector, e-commerce solutions are becoming a critical component for success.
Stakeholders are faced with their own challenges resulting from the increased competitive marketplace. This includes the Computer Reservation Systems (CRS), airlines, tour operators, the hotel and car rental industry and others. Each player is responding to the challenges of promising technologies shaping a new business frontier. These technologies and their business applications are driving all players to seek out new competitive strategies to lower distribution costs, improve productivity and increase access to the marketplace through the Internet. The travel industry, as a reseller of travel or intermediary, must reposition itself as these competitive dynamics unfold. Small retail travel service businesses, 'bricks and mortar' retailers, are migrating to the Internet and e-mail in an effort to participate in new consumer buying habits and B 2 B or B 2 C communication.
It's an effort to stay relevant in a changing business climate. The CRS is a critical link between retailers and airlines and a global distribution system for thousands of suppliers including hotels, car rental companies, cruise lines and tour operators to name a few. They are developing Internet connectivity to facilitate 'end to end's ales for the retail travel industry, an important part of their revenue stream. Their strategy is to strengthen the relationship with retailers through e-commerce solutions and lock-in their buying habits.
There are two main challenges facing the travel industry: Business and Process Integration -- In order for enterprises to work together closely via some kind of e-business internet based virtual organization, establishment of a formal working relationship among members of a virtual organization is necessary. This is to facilitate the orchestrating of the overall workflow, streamlining of common business processes and optimal system interconnection. Hence, enterprises with complementary or synergetic values which could form alliances at an early stage of the market development would have a competitive advantage in terms of economy size, market penetration and coverage, and cost-effectiveness. For future and continues success technical know-how -- The question is how will businesses in the travel industry use the network to there advantage in every aspect of their business? And most important, how can they get there faster? The answers to some of these questions are: 1.
Define a sound business strategy that covers customer relationships, supplier and strategic partner interaction, sales operations, and products and services. 2. Build a sound Web architecture that is service-driven, robust and user friendly. 4.
Deploy and manage the infrastructure (Web-based production environment) in such a way that it delivers the quality of service levels the end user's demand. On The Horizon The Internet is here to stay. Travel companies cannot afford to miss out on the many e-business opportunities presented in enhancing customer services and sales channels and improving operational efficiency. However, for B 2 B e-commerce, standardization of business practices and streamlining of procedures to facilitate collaboration among associate companies or members of alliances are the critical success factors. Whereas for B 2 C e-commerce (like customer services), customer-centric focus is the critical success factor.
So, members of the travel industry will have to quickly do some more strategic thinking on how they can keep embracing technology to re-engineer their business to maintain that competitive advantage.