The European e-Business Report The European e ... - empirica

The European E-Business Report 2005
online product, i.e. their internet portal. The first and most obvious task is to maximise the number of
visitors to the destination’s website.
In recent years, however, the exponential growth in travel and tourism information available on the
internet may also be challenging for many users. Individual tourism companies have set up their own
websites, but comparing prices and facilities across a number of different service providers can be
very difficult for the prospective tourist. To counter this, DMOs have set up their own portals, on which
(registered) tourism service providers in the region are featured, much as they are in the equivalent
printed brochures.
Another issue is dis-intermediation, where traditional intermediaries such as travel agencies and tour
operators are skipped in the tourism value chain as tourists may deal with service providers directly.
DMOs may strengthen the trend towards dis-intermediation by means of their Destination
Management Systems (DMSs). These systems are expected to be instrumental in achieving a certain
degree of independence from travel agencies and tour operators, by encouraging consumers to book
directly with local service providers.
Customer Relationship Management (CRM) in tourism destinations
CRM involves building up in-depth customer information. Normally, this information includes
customers’ socio-demographic profiles, interests and activities, as well as their past and possible
future requirements. With this type of information most efficiently stored in an electronic database,
tourism service providers could ideally be:
• knowledgeable and efficient in servicing enquiries,
• proactive in targeting best prospect customers with products specifically appropriate to their
needs, and
• establishing the basis for a lifetime relationship with the customer, and maintaining it even
where transactions are not involved.
e-Business W@tch surveyed the diffusion of CRM systems and how satisfied companies are with their
effects. The outcome is striking: only 7% of tourism companies reported using a CRM system, which is
significantly below the EU-7 average of 15% for all 10 sectors surveyed. The difference to sectors
leading in CRM usage is substantial.
Obviously, there is a correlation between the application of CRM systems and company size in tourism
as in general. Medium and large companies are about twice as likely to apply CRM as micro and small
companies. Given the weight of micro and small enterprises in tourism, this partly explains the low
take-up of CRM in the sector.
Yet, in spite of this modest diffusion of ICT-supported CRM solutions in tourism, many researchers
underline the importance of CRM on the sector. Indeed the issue is heavily discussed by experts in
the field and it is on the agenda of numerous conferences, workshops and other events targeted at
decision-makers in tourism.
This discrepancy between the modest adoption of CRM by tourism companies and the perceived
significance of this issue is also empirically evident. Overall, tourism companies using a CRM system
consider CRM much more helpful than companies from other sectors surveyed. Differences in CRM
assessment are significant: in tourism, 51% of companies perceive CRM as 'very helpful for the
effectiveness of marketing' compared to 41% on average in the 10 sectors studied in 2005.
In fact, tourism has witnessed the introduction of many relationship management and relationship
marketing practices. Airline frequent flyer programmes and hotel frequent guest programmes are at
the forefront of CRM applications in tourism, trying to 'lock' customers systematically to the supplier
because of bonus systems or beneficial pricing systems. Such CRM systems work very well with large
players in the industry. Yet most examples of best practice for a CRM system concern large
enterprises such as the airline industry, intermediaries or hotel chains.
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