Tourism Information Technology Chapter 3 Quiz

Tourism Information Technology

• Tourism Information Technology is a 3rd edition book by Pierre J. Benckendorff, Zheng Xiang, and Pauline J. Sheldon.
• The book is part of CABI Tourism Texts.

Chapter 3: Travel Intermediaries and Information Technology

• Learning Objectives:
  • Explain, compare, and contrast traditional and digital tourism distribution systems
  • Understand the evolution, role, and features of Global Distribution Systems (GDSs) as travel intermediaries
  • Analyze the challenges faced by GDSs as a result of technological change and innovation
  • Explain how traditional travel retailers use IT
  • Explain how IT has led to disintermediation and evaluate how this has impacted travel intermediaries
  • Describe and critically evaluate the different types of online travel intermediaries that have developed as a result of IT
  • Explain how tour operators can use IT to improve productivity and competitiveness

Key Concepts

• Travel distribution system
• Computer Reservation System (CRS)
• Global Distribution System (GDS)
• GDS New Entrant (GNE)
• New Distribution Capability (NDC)
• Tour Operators and Wholesalers
• Travel Retailers
• Online Travel Agents (OTAs)
• Channel Managers

Traditional Travel Distribution System

• Suppliers (Airlines, Rail, Cruise, Car Rental, Activities & Events, Hotels) connect to Supplier Reservation Systems (CRS, ARS, PMS)
• Connections layer includes Global Distribution System (GDS)
• Bookings layer includes Point of Sale (POS), Call Centre, and Traditional Travel Agent

Digital Travel Distribution System

• Suppliers (Airlines, Rail, Cruise, Car Rental, Activities & Events, Hotels) connect to Supplier Reservation Systems (CRS, ARS, PMS)
• Connections layer includes Channel Managers, Switch, GDS New Entrants (GNE), Global Distribution System (GDS), Destination Management Systems (DMS), Tour Operators, Wholesalers, Travel Management Companies (TMC), Online Travel Agents (OTA), Meta Search, DMO Website, Point of Sale (POS), Supplier Website, Social Media, Mobile App, Affiliate, and Traditional Travel Agent

Core GDS Functions

• Booking Requests
• Availability
• Passenger Information
• Rates and Conditions
• Ticketing and Itinerary Management

Secondary GDS Functions

• Integrated Travel Management
• Passenger Document Requirements
• Booking Ancillary Services
• Decision Support Systems
• Financial Management
• E-Commerce Tools
• Corporate Travel Management
• Communication and Scheduling

Traditional GDS "Green Screen" Display

• Example of a detailed transaction display

Sabre Red Graphical Workspace

• Example screenshot of a Sabre graphical workspace for showing flight and hotel availability

GDS Interfaces

• Suppliers connected to GDS through APIs which enables agents to access information and book

SWOT Analysis of GDSs

• Strengths: Market power, homogenized content, interline bookings, back office integration, client loyalty
• Weaknesses: Legacy-based systems, connectivity, pricing innovation
• Opportunities: New suppliers, new clients, dynamic packaging, interoperability
• Threats: GDS New Entrants (GNEs), open systems, direct bookings

GDS Trends

• Diversifying IT solutions
• Consolidation
• Connectivity and interoperability
• Transparency
• Personalization
• Social, Local, and Mobile (SoLoMo)

Tour Operator Use of IT

• Package creation
• Tour package distribution
• Reservations and customer management

Traditional Travel Retailers

• Front Office Systems
• Back Office Systems (Accounting Systems, Human Resource Systems)
• Customer Relationship Management (CRM)
• Communication
• Commission Tracking
• Transaction Settlement

Enterprise Resource Planning (ERP) Systems

• Back office functions can be integrated into cross-functional systems known as Enterprise Resource Planning (ERP) systems.
• Benefits: Productivity, Reporting, Customer Satisfaction, Forecasting

SWOT Analysis of Traditional Retailers

• Strengths: Time & cost, Expertise, Security, Value adding, Personalization, Special needs
• Weaknesses: Cost, Bias and errors, Less choice & transparency, Less control, High fixed costs, Limited opening hours
• Opportunities: Emerging markets, Hybrid models, Consolidation
• Threats: Decommissioning, Digital competitors, Public perceptions, Failure to attract talent, Lack of investment

Travel Management Companies (TMCs)

• Unique Characteristics:
  • Contracts and Preferred Suppliers
  • Travel Policy Compliance
  • Employee Productivity
  • Risk Management
  • Travel Expense Management

Types of Online Travel Intermediaries

• Aggregators
• Metasearch Engines
• Online Travel Agents (OTAs)
• Trip Planning Sites
• Affiliates
• Group Buying Sites
• Opaque Sites
• Product Review Sites

Online Travel Intermediary Innovations

• Opaque pricing
• Flexible date search
• Semantic search
• Dynamic packaging
• Matrix displays
• Search filters
• Low-fare notifications
• Pressure selling
• Alternative airport search
• Mapping

SWOT Analysis of Online Intermediaries

• Strengths: Low entry costs & investment, pricing & convenience, customization, flexibility, choice, control, instantaneous comparison, multimedia
• Weaknesses: Lack of transparency, cancellation & changes, security issues, time-consuming, limited advice, lack of expertise, support (general and specific needs)
• Opportunities: Social, mobile, integration, innovation
• Threats: Competition, direct bookings

Discussion Questions

• Questions regarding the impact of digital technology on travel distribution, challenges for small and medium enterprises (SMEs).
• Differences between GDS and GNE and the role of GNEs.
• How SMEs choose a GDS for their travel business.
• Role of traditional intermediaries in the advent of technology.
• Impact of IATA's New Distribution Capability (NDC) implementation on travel intermediaries.
• Significance of disintermediation and its effect on intermediaries.
• SWOT analysis of TMCs
• Evaluating metasearch engines and their capabilities.
• Impact of pressure-selling tactics used by OTAs on customers.

Useful Websites

• Relevant website links for further research and learning.

Case Study: Sabre Corporation

• Founded by American Airlines and IBM in 1953.
• The first private real-time online transaction system.
• Now diversified into travel technology solutions for various sectors.
• Employs nearly 9,000 workers globally.