Literature Review

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Lit­er­at­ure Review

Zongqing Zhou (2003) defines e-com­mer­ce as using com­puter net­works to con­duct busi­ness. This includes buy­ing and selling online, elec­tron­ic funds trans­fer, busi­ness com­mu­nic­a­tions and oth­er activ­it­ies asso­ci­ated with the buy­ing and selling of goods and ser­vices online.” (Ritendra Goel (2007) ) fur­ther expands the defin­i­tion by stream­lin­ing their intern­al pro­cesses by using inter­net tech­no­lo­gies.

(Alan Char­les­worth, Rita Esen (2007)) men­tions five phases that an organ­isa­tion must fol­low to achieve e-busi­ness adop­tion. In the first step a com­pany will allow com­mu­nic­a­tion by e-mail by cre­at­ing’ an e-mail address. The second phase involves the cre­ation of a cata­logue’ web­site. The next two phases involve e-com­mer­ce and e-busi­ness func­tion­al­ity with the last phase being the a Busi­ness Trans­form­a­tion, with improved intern­al and extern­al pro­cesses.

E-Com­mer­ce has trans­formed the travel and tour­ism industry, the com­mu­nic­a­tion between the busi­ness and its stake­hold­ers and cli­ents. With e-com­mer­ce and its busi­ness mod­els, they can extend and expand the dis­tri­bu­tion and value chain. With the Inter­net, the hos­pit­al­ity industry can com­mu­nic­ate with all their stake­hold­ers.
E-busi­ness enables busi­nesses to re-design their intern­al sys­tems through the use of intranets and use extranets to build and improve rela­tion­ships with part­ners. e-tour­ism will increas­ingly determ­ine the com­pet­it­ive­ness of the organ­isa­tion.” (Buhal­is (2003)).
The European Travel Commission’s 2009 report out­lines the fol­low­ing facts about European tour­ism. Tour­ism provides 5% dir­ect and 10% indir­ect, of the European GDP with over two mil­lion firms that are act­ive in the tour­ism industry. (ETC 2009).
Carl H. Mar­cussen from the Centre for Region­al and Tour­ism Research com­piled the fol­low­ing stat­ist­ics about the European e-Tour­ism mar­ket. In 2008, 58.4 bil­lion Euros in travel sales were con­duc­ted over the Inter­net. The total European travel mar­ket was 260 Bil­lion Euros with 25.7% of all sales con­duc­ted online.
Dir­ect sellers accoun­ted for 64% of online sales with the remain­ing 36% from inter­me­di­ar­ies. The break­down of the mar­ket in 2008 was com­posed as fol­lows:
The World Organ­isa­tion Busi­ness Coun­cil states that The Web may account for one in every four travel pur­chases with­in the next five years”. The e-tour­ism mar­ket will increase as more people have access to the inter­net. In a 2009 sur­vey, Euro­stat con­duc­ted a sur­vey on the EU27 adop­tion rates. 65% of house­holds had access to inter­net, an increase of 5% com­pared to 2008. There is quite a sub­stan­tial dif­fer­ence in inter­net adop­tion rates across the EU27 with house­hold adop­tion rates from 30% in Bul­garia to 90% in the Neth­er­lands. Malta has an inter­net access rate of 64%.
The age group with the highest adop­tion rates are those aged 16 – 24. Three quar­ters of people in this age group use the inter­net on a daily basis. Again, there is a huge dif­fer­ence between the EU27 with the Neth­er­lands lead­ing the pack at 90% with the lowest in Romania at 41% and Malta at 74%.
37% of inter­net users in the 16 – 74 age groups have bought a good or a ser­vice online. Again, there is a con­sid­er­able dif­fer­ence between mem­ber states with Romania at 2%, Malta at 34% up to 63% in the Neth­er­lands and Sweden. Accord­ing to the Euro­stat sur­vey, men pur­chase more goods online than women.
Air-travel had 54% of the total mar­ket share fol­lowed by hotels and oth­er accom­mod­a­tion 19.5%, pack­age tours 15%, rail 17.5 % and rent­al cars and car fer­ries with the remain­ing 4%.
The three major eco­nom­ic forces in Europe (UK, Ger­many and France) have 64% of the total European mar­ket. South­ern Europe and the twelve new EU coun­tries have 17% of the total mar­ket.
The 2007 European e-Busi­ness Read­i­ness Index con­duc­ted a sur­vey to assess the ICT adop­tion rate by the EU27 enter­prises. After ana­lys­ing the data, one imme­di­ately notices that coun­tries from the north­ern part of Europe stead­ily occupy the top ranks”. The new’ mem­bers of the EU com­posed of the Medi­ter­ranean and East­ern European nations are still in the devel­op­ing stage of their e-busi­ness envir­on­ment.
Lar­ger firms per­form bet­ter in both ICT adop­tion and ICT use than smal­ler firms. The IT adop­tion rate and use also var­ies in dif­fer­ent sec­tors. H (Pro­vi­sion of short stay accom­mod­a­tion) seem to be char­ac­ter­ised by an import­ant use of ICT given the invest­ments made”.
Eurostat’s Use of Inform­a­tion and Com­mu­nic­a­tion Technologies”of 2008 provides some inter­est­ing stat­ist­ics. Among those enter­prises hav­ing a web­site in the EU27 in Janu­ary 2008, 57% provided pro­duct cata­logues or price lists, 26% had facil­it­ies for online order­ing, 26% for online job advert­ising or job applic­a­tions and 10% for online
pay­ment.”

Pro­duct cata­logues
or price lists Online order­ing, reser­va­tion or book­ing. Advert­ising jobs or online job applic­a­tions Online Pay­ment
EU27 57 26 26 10
Adap­ted from: Use of Inform­a­tion and Com­mu­nic­a­tion Tech­no­lo­gies 1732008 — 9 Decem­ber 2008

Han­nes Wer­th­ner defines the tour­ism industry as increas­ingly being dom­in­ated by inform­a­tion”. The World Trade Organ­isa­tion (WTO) defines a tour­ist as a per­son that spends a day or more away from his place of res­id­ence with the inten­tion of not going away per­man­ently. Leis­ure and busi­ness are the main reas­ons for trav­el­ling.
The tour­ism industry can be divided into two main parts. The hos­pit­al­ity sec­tor is part the ser­vice sup­pli­ers where they provide accom­mod­a­tion ser­vices. The second part is the deliv­ery of the ser­vice to the cli­ents. These dis­tri­bu­tion chan­nels are import­ant because this is used to deliv­er the products to the con­sumer.
Two main dis­tri­bu­tion chan­nels can be iden­ti­fied in the travel and tour­ism industry. The first is dir­ect mar­ket­ing where the poten­tial cli­ent approaches the firm through the inter­net or through advert­ising in the media. The second part is when the firm uses inter­me­di­ar­ies to make a sale to the cus­tom­er. Inter­me­di­ar­ies in the travel industry earn rev­en­ue by earn­ing a com­mis­sion which is nor­mally a per­cent­age of the selling price.
The tour­ism mar­ket has a num­ber of stake­hold­ers. ICT and the inter­net have altered the power of each stake­hold­er. The main stake­hold­ers who each have some­times con­flict­ing demands are
• Sup­pli­ers.
• The con­sumers.
• The tour­ist boards.
• The tour oper­at­ors.
• The travel agents and;
• Online reser­va­tion sys­tems.