ICT and e-business in the tourism industry ICT adoption ... - empirica

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Tourism Currently, IATA members process about 300 million paper tickets each year. Based on these figures, it is estimated that the 100% e-ticketing will save the industry up to 3 billion US dollars per year. e-Ticketing cost savings will derive from the elimination of printing, postage, shipping, storage and accounting costs; costs for collateral materials like envelopes and ticket jackets, increased efficiency in revenue accounting; and last but not least, a reduction in space necessary for airport counters by increasing the use of selfservice check-in (cf. www.iata.org). North American airlines as forerunners – European airlines following suit North American airlines are forerunners in the application of e-ticketing as well as online sales of tickets in general, i.e. European airlines are very likely to emphasise further efforts to push e-ticketing even more vigorously. The following table gives an overview of the share in tickets sold on the airlines’ own websites, tickets sold via all online channels (including sales on airlines’ own sites) and the percentage of e-tickets issued. The figures are based on responses from 112 airlines, including low cost carriers. Exhibit 4-19: Impact of online sales and e-ticketing in 2004 Airlines’ own websites (%) Proportion of all tickets sold All online channels (%) e-tickets issued (%) North American airlines 29.5 37.1 41.4 European airlines 15.2 16.0 20.7 Asia/Pacific airlines 7.6 10.2 16.5 World-weighted average 14.9 20.7 33.8 Source: Airline Business and SITA (2004), quoted in Doganis 2006. Current data on online sales of airline tickets, as presented by Hannes Werthner at the EU tourism ministers’ conference in Vienna in March 2006, indicate that nearly 50% of all sales and reservations of airline tickets world-wide were conducted entirely online in the second half of 2005 (cf. Werthner 2006). The issue of e-ticketing is not necessarily directly connected to selling online, but in any case e-ticketing facilitates online sales. Here, sales via internet platforms bear enormous cost savings for airlines compared to traditional channels via travel agencies, which usually run over GDS. From this perspective, the direct sale of tickets via the internet by airlines constitutes another form of dis-intermediation. 73 The statements of two senior executives from Lufthansa and Star Alliance made in presentations at the ITB Berlin 2006 (the International Tourism Convention) clearly speak for themselves: “Star Alliance member carriers currently spend an average of 12 US dollars per ticket in GDS fees. GNEs[ 74 ] such as G2 SwitchWorks, ITA and Farelogix have indicated to the group that they could offer the same product for 2-3 US dollars per 73 74 See chapter 4.1 of this report for a more detailed discussion on the issue of dis- and reintermediation. GNE = Global New Entrant. 134
Tourism ticket.” (Matthias van Leeuwen, Vice President Sales, EMEA, Lufthansa Systems Group, ITB Berlin 2006) “These are credible companies. They can create all of the GDS offerings at a much lower cost because of internet technology. The low-cost carrier concept is about to arrive in the GDS world.” (Graham Atkinson, United’s Senior Vice President of Sales Chairman of the STAR Alliance Management Board, ITB Berlin 2006) 4.3.4 Customer self-service Self-service kiosks for check-in allow passengers to enjoy the same convenience they have with banks’ cash machines. Furthermore, these kiosks can be deployed at locations beyond the traditional check-in areas of airports, e.g. rail or bus stations, car hire plazas or hotel lobbies. From a provider’s perspective an important advantage – among others – is the smaller space needed compared to traditional check-in desks. British Airways, for example, intends to conduct 80% of its customer operations in self-service (and 95% in e- ticketing) in Heathrow Terminal 5, which is to be opened in March 2008 (cf. Doran 2006). The biggest single constraint in Heathrow is terminal capacity; it is the world’s busiest international airport, but occupying a very small space. Therefore, check-in kiosks in Terminal 5 will outnumber traditional check-in desks by far, which will save terminal space and is expected to increase the throughput of travellers considerably. At the 5 th eTourism Futures Forum at the University of Surrey in March 2006, Nick Doran from British Airways concluded his presentation “The customer-enabled airline and the contribution to competitiveness” with the following final statement: “In future, most customers will only have two direct contact points with BA – online and onboard…” (Doran 2006) IATA established the CUSS (Common Use Self-Service) standard, which allows airlines to share self-service kiosks. For over ten years, self-service kiosks have been deployed at airports for passenger check-in. Initially, these systems were proprietary; they were developed on behalf of individual airlines in order to give them a competitive advantage and targeted at frequent flyers and business travellers. In the meantime, the industry has realised that many variants of essentially the same tool were too expensive and the service offered was taken too quickly as granted by passengers. Therefore, IATA members decided to create and adopt a common standard to ensure a more cost competitive service offering to their customers. The CUSS standard allows airlines to share the self-service kiosk infrastructure whilst providing a vehicle for the airline to retain its branded kiosk application. Furthermore, as the kiosks are shared, there is a smaller number required for any given airport, thus CUSS kiosks use up less space in congested airport check-in areas in comparison to employing individual airline kiosks. The cost of the operation is significantly lower while the throughput is significantly higher (cf. www.iata.org). Thomas Frankl from SITA calculates average industry savings of 2.50 US-Dollar per check-in at a self-service kiosk. He also forecasts that common-use kiosks will become the choice for airlines in shared terminals (cf. Frankl 2006). 135
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Sector Report No. 8/2006 ICT and e-
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Tourism Table of Contents Executive
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Tourism Executive Summary Objective
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Tourism Ongoing market consolidatio
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Tourism 1 Introduction 1.1 About e-
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Tourism Methodology e-Business W@tc
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Tourism The 10 sectors studied in 2
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Tourism Exhibit 1-2: Process compon
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Tourism have a major impact, as the
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Tourism 2 Context and Background 2.
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Tourism 2.2 Industry background Tou
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Tourism Demographic changes and con
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Tourism Increasing importance of mo
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Tourism Need for stronger networkin
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Tourism 3.1 Use of and Access to IC
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Tourism Exhibit 3-2: Networks and p
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Tourism Exhibit 3-3: Demand for ICT
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Tourism Exhibit 3-4: Outsourcing an
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Tourism No figures are available on
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Tourism Exhibit 3-8: Use of e-stand
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Tourism In the tourism industry, ab
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Tourism Hence, if decision makers i
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Tourism In general, the rather low
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Tourism between different sub-secto
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Tourism Exhibit 3-15: Online cooper
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Tourism Exhibit 3-17: Adoption of e
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Tourism tourism sub-sectors covered
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Tourism Exhibit 3-20: Main type of
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Tourism Exhibit 3-22: Main location
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Tourism companies which have their
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Tourism 3.6.1 Companies receiving o
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Tourism whether they used rather "s
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Tourism 3.6.2 e-Integration of mark
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Tourism 3.7 ICT and Innovation To e
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Tourism 3.8 Drivers and Inhibitors
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Tourism 3.8.2 Barriers to e-busines
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Tourism 3.9 Summary of the quantita
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Tourism In 2006, results for some i
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Tourism abandonment of paper ticket
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Tourism savings to the consumers; c
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Tourism 4.1.4 Growth, mergers and a
Page 83 and 84: Tourism CASE STUDY: RE-INTERMEDIATI
Page 85 and 86: Tourism Exhibit 4-3: The booking re
Page 87 and 88: Tourism situated in attractive and
Page 89 and 90: Tourism CASE STUDY: SUCCESSFUL INTE
Page 91 and 92: Tourism rural tourism to flourish a
Page 93 and 94: Tourism LCTA was very successful in
Page 95 and 96: Tourism CASE STUDY: RE-INTERMEDIATI
Page 97 and 98: Tourism of about 2.2%. Its main com
Page 99 and 100: Tourism Enhancing real-time vacancy
Page 101 and 102: Tourism CASE STUDY: CONTROLLING THE
Page 103 and 104: Tourism Instead of reducing costs f
Page 105 and 106: Tourism Whereas today, the visible
Page 107 and 108: Tourism way Accor adopted a two-tie
Page 109 and 110: Tourism 4.2 Dynamic Packaging 4.2.1
Page 111 and 112: Tourism The legal dimension, which
Page 113 and 114: Tourism No such solutions can be fo
Page 115 and 116: Tourism DP Market All market observ
Page 117 and 118: Tourism CASE STUDY: IMPLEMENTING DY
Page 119 and 120: Tourism Exhibit 4-16: Technology bu
Page 121 and 122: Tourism References Research for thi
Page 123 and 124: Tourism continue to operate, as the
Page 125 and 126: Tourism Exhibit 4-18: Customer driv
Page 127 and 128: Tourism References Research for thi
Page 129 and 130: Tourism customer uptake is expected
Page 131 and 132: Tourism such as Germanwings, Hapag-
Page 133: Tourism Intermediaries in ticket sa
Page 137 and 138: Tourism terms of a considerable red
Page 139 and 140: Tourism CASE STUDY: ICT-DEPLOYMENT
Page 141 and 142: Tourism Encouraging passengers to t
Page 143 and 144: Tourism CASE STUDY: E-TICKETING AT
Page 145 and 146: Tourism e-Business activities SN Br
Page 147 and 148: Tourism implementation of a dedicat
Page 149 and 150: Tourism The case study about SN Bru
Page 151 and 152: Tourism Exhibit 5-1: Perceived over
Page 153 and 154: Tourism The influence of outsourcin
Page 155 and 156: Tourism Exhibit 5-4: Companies obse
Page 157 and 158: Tourism figures are considerably ab
Page 159 and 160: Tourism Background information: Mic
Page 161 and 162: Tourism mere availability of multip
Page 163 and 164: Tourism ICT impact on competition E
Page 165 and 166: Tourism 5.2.1 Policies to counterac
Page 167 and 168: Tourism loans, venture capital or p
Page 169 and 170: Tourism References Books and scient
Page 171 and 172: Tourism Röglein, D.; Rodriguez, M.
Page 173 and 174: Tourism Reise & Preise online (2004
Page 175 and 176: Tourism Annex I: The e-Business Sur
Page 177 and 178: Tourism Fieldwork Fieldwork was coo
Page 179 and 180: Tourism Feedback from interviewers
Page 181 and 182: Tourism The use of filter questions
Page 183 and 184: Tourism The e-Business Scoreboard 2
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Tourism Annex II: Expanded Tables -
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Tourism Exhibit A2-2: Demand for IC
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Tourism Exhibit A2-4: Companies rec
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Tourism Annex III: Glossary of Tech
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Tourism Modem MRO goods OOS Process
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Contact information: European Commi
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