INDIAN INSTITUTE OF PLANNING & MANAGEMENT

NEW DELHI

ROLE OF E-COMMERCE IN TOURISM AND

TRANSPORT INDUSTRY

ABSTRACT
Tourism and Transport Industry are emerging as a fastest growing sector. With the
growth of the mode of transportation, both tourism and transportation industry are
doing extremely well in increasing the profits and balance of payments of country as
well as making the fame of the country in the international market by marketing its
beauty in the world and E-Commerce had given a boom to this industry with the
increase in turnover in multiples.
The study aims to gather information and analysis on the role of ecommerce in
tourism and transportation industry. As e-commerce is a global showcase of
information at the click of a button, vendors host severs sources to market their good
and services internationally and buyers buy these services regardless of wheel ever
they may be located.
The e-commerce has increasingly become a popular medium for marketing. This
study attempted to investigate the potential of the e-commerce for tourism marketing
and advertising and the current constraints on the full realisation of such potential.
Through an examination of the advantages of the e-commerce as a marketing tool and
the characteristics of the tourism industry, the paper found that the Internet was ideal
for marketing tourism. It then analysed the main Internet applications in tourism
marketing and explored the key factors that were attributable to the current low level
of travel sales an the Internet The study concluded with a brief discussion of the
major strategic issues in the implementation of Internet tourism marketing.
It is expected to contribute in a big way in knowing the hidden power and benefit of
internet as an advertising tool in Tourism and transportation Industry. It will also give
an idea of low cost vis--vis traditional and current advertising techniques. It will also
help the tourists on the web to know what strategies are being employed by the
marketers to woo the tourists through the use of web based information technology.

SIGNATORY PAGE

THESIS TOPIC APPROVAL

SYNOPSIS
1. Details of the student
Name = Ankush Bihani
Batch = PGP spring summer (2006-2008)
Specialization= Marketing & Finance
Phone no. = +919950162425
Email id= bihaniankush@gmail.com

2.Desired area intend to do research

How the increase role of E-Commerce had lead to the growth of the
Tourism and Transport Industry.

3.Title of the thesis

Role of E-Commerce in Tourism and Transport Industry

4. Research objective
To analyze the increased role of E-Commerce in todays world.
To study and enlist the benefits of E-Commerce in Tourism &
Transport Industry
To study and evaluate that how the E-Commerce is helping in the
selling.
To see the effectiveness of the E-Commerce in increasing trade.

5.Introduction to the Area of research

Tourism and Transport Industry are emerging as a fastest growing sector.
With the growth of the mode of transportation, both tourism and
transportation industry are doing extremely well in increasing the profits
and balance of payments of country as well as making the fame of the
country in the international market by marketing its beauty in the world
and
E-Commerce had given a boom to this industry with the
increase in turnover in multiples.

6.Scope of thesis work

Foreign exchange earnings from tourism during 2005-06 were US $
3,933 million and from transportation Industry is worth 10,000 crore.
Government is giving a lot of emphasis to develop these two sectors as it
is turning up as a major upcoming industry In India. Both tourism and
transportation industry are doing extremely well in increasing the profits
and balance of payments of country as well as it is giving a boom to
Hotel & Food Industry and hence the future of these Industry and their
related industry is bright.

7.Research Methodology
Primary Data

Interviews of Tour operators

Interview of project guide
Customers survey

Secondary Data

Books and News paper

Internet

8.Justification for choosing a particular research proposal

As said earlier tourism and Transport Industry are emerging as fastest
growing sector in India and World as a whole, and all the develop or
developing countries are giving their major concern towards these
sectors. And due to the potential of these sectors I want to go for this
research topic.

9.Details of the External guide

Name of the guide =
Qualification =
Designation =

ACKNOWLEDGEMENT

I wish to express my gratitude to __________ for the study on The Role of ecommerce in Tourism and Transport Industry. Because of his guidance only, the
research work could be meaningfully accomplished. He has always extended his
valuable advices and suggestions during the Project and has always proved to be a
source of inspiration for me. I wish to put on record the same.
I would also like to express my sincere thanks to Prof. Sumanta Sharma and Prof.
Vijay Boddu for their able guidance and timely help for completing the thesis.
I also wish to express my appreciation to all the supporting staffs in PGP Programme,
who were very supportive throughout the course of study.
I also acknowledge my heartfelt gratitude to my friends for their excellent efforts and
encouragements, which had been provided to me throughout this study.

TABLE OF CONTENTS
Abstract
Signatory page
Thesis Topic Approval
Synopsis
Acknowledgement
Contents
Introduction
Research Methodology
Tourism and Transportation Industry
Internet Tourism Marketing
Advantages of Internet as a Marketing Tool
Application of E-commerce in Tourism Marketing
Analysis and Findings
Conclusion and Recommendations
Bibliography
Annexure

INTRODUCTION
Tourism is considered to be the world's largest industry as we are on the threshold of
a new era, an era in which the growth of leisure travel around the world is expected to
sell to dramatic proportions; increasing offence in many parts of the world is
resulting. In reduced working hours, were leisure time, and the economic resources
necessary for discretionary travel.
The potential impact of this dramatic tourism growth on our life is so staggering that
it does not seen an exaggeration to describe the coming era as the "Tourism
Revolution". Its a revolution which promises great benefits and great challenges; if
we are able to meet the challenges, and deal with the problems, the potential benefits
are almost unlimited.
Travel and Tourism services have been mostly marketed via mailers, brochures,
advertisement on TV/print, on telephone or word of mouth; and it has always been
confusing for the traveler to find the best package or best destination for himself.
Same has been the case with hotel services, tour operators etc. where they have more
or less been in wait for the tourist season to come. The world wide web has
magically

brought all these related services together on the internet platform,

combined and individually as well.

As for example an Indian couple wants to spend few days vocation abroad will
have to plan-countries/cities to visit, the best airline tot he first destination, connected
flights, reasonable hotels for stay, shopping malls, entertainment centres and so on.
Thus to decide this they will have to visit a travel agent to know if he has a tour
package for the destination, understand all the flight schedules and details, find out
the brochure of the country city, check hotel availability and cost structure at all the

places they are visiting. Hence to gather all this information and decide, they would
have to start planning a month before.
But with the internet it has become nothing but just a few clicks of the mouse. The
above couple can visit a travel portal, look at profiles of the countries they plan to
tour, choose online 2-3 real routes and select search. Thus within few seconds
would come the list of flights with their fare and timings as per each route and so
on. Travel-organizer

website, put up their choices on country, centres of

entertainment, range of tarring for hotls, days they want to spend, hotel expense
range and shoot the query for the travel agency website to scan through its database
and come out with the best package with the likely hotel expenditure for each route
in few minutes, seconds perhaps.
The Internet is the global 'network of networks" of interlinked computers operating
on a standard protocol which allows data to be transferred between them. As an
information exchange system, the most important aspect of the Internet is its
connectivity, the ability to allow everyone to access the network . The potential of
using the Internet for marketing activities is derived from its general use as an
information exchange system in the digital age. The information can be stored,
indexed, retrieved, restructured and redistributed automatically by software and
without human intervention. The Internet connects companies with companies,
companies with customers, and people with people without regard to time, space and
hardware/ software platforms.
Although the Internet originated in the 19605, it is only in recent years that it has
become a buzz-word.

Internet

services

fall

into

two broad categories:

communication services and information services. Communication services such as email, and e-mail-based discussion lists and net news, allow the direct exchange of
information between Internet users. Information services, including Telnet, Gopher

and anonymous FTP (the File Transfer Protocol), allow users to access data that has
been made available by other users. Since 1993, the Internet has been transformed
completely by its newest component the World Wide Web (WWW or the Web). The
WWW not only integrates other file transfer protocols like Gopher and FTP, but also
allows the user to access hosts through Telnet, read newsgroups and use e-mail.
Through an Internet browser, a user can link to any web sites and may explore the
Internet resource in an unprecedented way for both leisure and commercial purposes.
Moreover, the Web's capability to blend text, pictures, sounds and video clips into
multimedia documents played the key role in popularising the Internet beyond its
traditionally academic boundaries and become an effective communication means in
business and everyday life. Indeed, the WWW has been so successful that it changed
the appearance of the Internet and for many it even become synonymous with the
Internet itself. The WWW or the Web is also used loosely and interchangeably with
the Internet or the Net simply because most marketing activities carried out on the
Internet are based on the World Wide Web.
The rapid growth of the Internet, especially the WWW, has attracted a great deal of
interest among both academic researchers and business practitioners, especially in
the fields of Information Technology and marketing. There are also an increasing
number of publications on Internet tourism marketing and advertising, in the last few
years.

OBJECTIVES OF THE STUDY

To analyze the increased role of E-Commerce in todays world.

To study and enlist the benefits of E-Commerce in Tourism & Transport Industry

To study and evaluate that how the E-Commerce is helping in the selling.

To see the effectiveness of the E-Commerce in increasing trade.

RESEARCH METHODOLOGY
RESEARCH DESIGN
Research design is the plan, structure and strategy of investigation conceived so as to
obtain answers to research questions and to control variance. The study conducted to
achieve the above said objectives was both exploratory and descriptive in nature and
involved mail surveys based on the questionnaire format.
DATA COLLECTION
Secondary Source:

Through articles in magazines such as Business World,

Advertising and Marketing, Business Today etc. and from business newspapers such
as The Economic Times, Business Standard etc. and through Internet sites
Primary Source: Information was collected in a face-to-face situation through the
survey conducted.
Data Measurement Techniques:
The data measurement technique used for obtaining the desired information was the
questionnaire method.
SAMPLING
Sampling Technique Simple Random Sampling
Sampling Unit - The target population consisted of Tourists in Delhi
Sample Size - 50

TOURISM AND TRANSPORTATION INDUSTRY

It is a well known fact that tourism with its socio-economic influences is of
great significance to world economy. it is also believed that tourism is the
second largest and the fastest growing industry of the world today. On the
whole it is a worldwide industry and has a tremendous impact on the nations
economy. Last few decades have witnessed rapid developments is not only
international travel but also in dissemination of travel related information
through Internet; and this has led to access of tourists to the frothiest corners
of the globe.
For example millenniums tourism has emerged as one of the most significant
revenue earner for most countries. Travel agencies and fair operators the world
over are putting together millennium travel packages that promise their clients
the ultimate turn-of-the-millennium experience. Such is the reach of tourism
that the millennium madness is like a fever that is raging across worldwide
be it Bolivia or Bangladessi, Tokyo or Tibuck too, the kreunlin or the kelaudic
Government; turn-of-the-millennium bashes are being planned in every
country.
Millennium tourism has also boosted the careers of many a scientist who are all
busy calculating precisely where the first sunrise in Y2K is likely to take
place 2 are group of scientists chain that on island in the Andaman and Nicobar
Islands in the Indian territory is the coverted spot, another group has proclained
that Maleba till on Pitt Island, east of New Zealand, will see the first down of
the new millennium break at 1600 Guilt on December 31, 1999. Thus we can
see and appreciate now oveni present is the influence of tourism the world
over.

i . exe

On the other hand tourism is a subject which is also extremely couple in so far
as that it touches not only the economic fabric of the society but also creates a
deep rooted effect on social norms and moral values if tackled with
understanding on one hand, it can generate immense benefits for a country but
on the other hand on unbalanced tourist movement can result in major social
upheavals which in turn can set off a chain of irreversible reactions.
Thus we see that tourism is a basic and most desirable

human activity

deserving the praise and encouragement of all people and all governments 3 .
It is an industry concerned with attracting people to a destination, transporting
them there, housing, feeding and entertaining them upon annual and returning
them to their homes. In addition to a leisure time activity, tourism has many
other

facets

like

cultural

tourism,

health

tourism,

sports

tourism,

conference/convention tourism, religious tourism etc. on a similar front group

tourism has to be taken into consideration so as to offer the right type of a
package to not only the individual traveller but also to the travellers moving in
groups.
At this stage it is imperative to mention that tourism is not only an economic
activity of importance to national development, but also an important medium
of central changes among nations of the world. A lot of emphasis is generally
placed on
exchange

the economic role of tourism, its contribution to the foreign

earnings of the nation and its potential for greater employment.

However its high time to understand the important role of tourism as a means
of social education and

social mobilisation in the country itself, as a

competing force for fostering better understanding among nations of the world
for developing closer cultural and business relations and as a significant factor,
contributing to world peace.

The full impact of tourism on the national economy is not just through
expenditure on the front line tourist trade. It embraces called upon at various
stages of the process to supply goods or services. The output produced by the
industries which are outside the direct tourism sector are in very real sense due
to the needs of the tourist who spends the money in the first place and sets the
whole thing going.
As per Richards, there are in the broadest terms two sets of links between
tourist spending and the economy Firstly we have the broad consumption items
which have a direct effect. These relate to the actual expenditure involved on
tourism e.g. transport, accommodation, food, drinks and shopping services etc.
Secondly. The links between the trades directly involved in tourism and those
trades and industries which supply the tourism trade with goods and services.
Tourist industry is a small but a significant part of the total leisure industry. it
is a complex industry of many parts, ranging from a multinational airline and
a international hotel chain to a husband and wife guide service of only two
employees. The letter are has become more prevalent with the advent of
internet and such small companies due to lower fixed costs are offering
customised travel packages at competitive prices.
For the success of modern tourism in the real sense, there is an exigent need of
perfect co-ordination between the primary and secondary trades of tourist
industry.
The tourist industry could be defined as sum total of providers of tourist
services. It is that part of the nations economy which caters for the travellers
who are visiting places outside the reality where they reside or work. On the
whole it is a nitrogenous group which embraces a large variety of trades and
industries which have supplying of travellers needs as their common base. Thus

on the whole we find that the industry is made up of various trades and is one
of the largest single economic group.
There are a member of primary and secondary trades which are directly
dependent on the travellers for their existence. The foremost among the
primary trades are hotel industry, transport industry and travel agencies. The
secondary trades consist largely of groups serving the travellers such as retail
shops, entertainment industry , and banks etc. This group also consists of the
suppliers of goods and services for hotliers, caterers and transport
undertakings, public utility undertaking and insurance companies etc. Thus we
see that tourist industry is the collective needs of travellers which gives it a
homogeneity on the surface but the diversity of the needs of the consumers
makes this activity a more couple field for economic study than most
agricultural, extractive, or manufacturing industries.
Concluding this section we try to look at the origins of the world tourism and a
few of its connotations in ancient times. As per certain researchers the world
TOURISM is related to TOUR which in turn is a hebrew word. It derives its
morning from the Hebrew terms torah, which in turn means learning,
studying, and search. A tour as per the above mentioned origins represented on
attempt by the traveller to discover something about a place he visits. A tourist
wants to see for himself something he has heard about, or he wants to learn
about business

opportunities, job possibilities health advantages, educational

benefits, environmental assets or recreational activities.

SCOPE OF TOURISM IN INDIA
India is a country of continental dimensions. It is a fascinating kaleidoscope of
races, languages, religions, customs and traditions. It is also a land of lofty
mountains, mighty rivers, ever green forests and all forms of flora and fauna.
No other country in the world in the world is richer in scenic grandeur with a

panorama of contrasting landscapes at different stages of evolution. India

covers an area of 3.29 million sq. kms, the mainland extending from south to
north for 3,200 kms between 8 o 4 and 37 o 25 East meridians of longitude 1 .
While it ranks as the worlds seventh largest country, no other country except
the United States surpasses it in the extent of aerable land. In population, India
is the second largest country after China with a population of over 900 million
people. It has a land frontier of 15,200 kms and coastline of about 5700 kms. It
is divided into 25 States and seven Union Territories for administrative
purposes.
All the major land forms-hills, mountains, plateaus and plains - are
represented in India. No rigid line is drawn between hills and mountains as
even parts of the Himalayas are often referred to as hill and named after hill
stations like Shimla and Darjeeling. Outside the Himalayas several other
elevations with slight summit area and steep attitude of 2,000 to 3,000 metres
or more are also called hills. The Naga hills with their highest summit Saramati
(3,826 metres) and Nilgiris in the South (Tamil Nadu) are typical of such hills.
India has seven principal mountain ranges, the Himalayas, the Patkai and other
ranges in the north-east, the Vindhya, the Satpura, the Aravalli, the Sahyadri
(Western Ghats) and the Eastern Ghats. Much of the surface of India has
developed a plateau character. Extensive plains, either flat or rolling, at levels
ranging from 300 to 900 metres and broadered by scrap are the main features of
plateau landscape. The geographical expanse, diverse land forms and varied
life styles of people make India insulated from any whirl winds occurring in
any part of the country.

Tourist Attractions of India

The tourist attractions of India include historical monuments, places of
religious importance, mountain and beach resorts, wild life and interesting ecosystems, places with facilities for adventure, water and winter sports etc.
India abounds in attractive and well-preserved historical sites, ancient
monuments

of

architectural

grandeur,

not-so-ancient

mosques/durgahs,

churches and places of worship of other diverse faiths and so on.

Among the places of cultural interest, the Ajanta and Elora cages and the
Elephant caves in Maharashtra, the Konark Sun Temple and the Jagannath
Temple in Orissa, the Khajuraho temples in Madhya Pradesh, the Hindu
temples of South India and of Varanasi and Mathura in U.P., the Golden Temple
at Amritsar in Punjab, the Vaishno Devi Temple in Jammu & Kashmir, the
numerous places of Buddhist interest like Bodhgaya, Sarnath, Sravasti,
Nalanda, Vaishali, Kushinagar etc., the Durgah of Chishti at Ajmer etc are a
few of the noted attractions in India. India is also known for some of its fine
beaches like Goa, Mamallapuram, Kovalam, Pondichery, Puri-Konark etc. In
addition island tourism has been developed at Andaman/Nicobar and
Lakshadweep Islands.
There are 421 wild life sanctuaries and 75 national parks scattered through out
the country which hold unlimited varieties of flora and fauna to entertain ecofriendly tourists. Some of the known sanctuaries well developed for tourism
include Kaziranga and Manas in Assam, Jim Corbett Part in Uttar Pradesh,
Bharatpur, Ranthambore and Sariska in Rajasthan, Kanha and Bandhavgah in
Madhya Pradesh, Bandipur in Karnataka, Simplipal in Orissa, etc.

India also offers large potential for adventure tourism like trekking,
mountaineering, river rafting, winter sports, water sports etc. The winter sports
complex at Auli provide facilities for sking, ice-skating, chair lift etc.
The Indian handicrafts particularly, jewellery, carpets, leather goods ivory and
brass work, etc. enjoy high reputation amongst foreign tourists. The estimates
available through surveys indicate that nearly one-fourth of the tourist
expenditure is spent on shopping of such items. A number of handicrafts
emporia are available at most of the tourist centres to cater to the needs of
tourists.
Some of the cities in India do have facilities for organising international
conventions and conferences. This segment of the industry is now being given
considerable importance.
Above all India has a population with visitor friendly traditions., varied life
styles, cultural heritage, and colourful fairs and festivals. Thus we can see that
India is reworkable not only for her extreme diversity of physical features but
also that its population represents a veritable museum of races representing
almost all ethnic groups of the world with their characteristic features. (Subrato
Roy 2000)
The discoveries of Harappa cultures in the early past of this century has placed
India on the map of ancient cultures comparable in many of its characteristics
to the contemporary civilisations of Egypt and Sumar. The decline of the
civilisation and the rise of the Aryans way be considered as the turning point
of Indian history. Thus nature and history have both made India one of the most
attractive tourist countries of the world.
Tourism needs variety and India with its vast dimensions and diversity offers
to every class of visitor something, which is not found elsewhere. Unline

other export industries, there

is comparatively little investment needed for

promoting tourism. The scope for its expansion is unlimited . Today we find
that a number of factors are coming into proper focus and are becoming an
integral part of much larger tourism industry.
Tourism is travel, relaxation, a holiday, and an exposure to other cultures. It is
an industry, a source of income especially

of foreign exchange

and an

exercise in national image building and in these times whose media is all
powerful in bearing images the world over, the national image building aspect
becomes all the more crucial.
Therefore even though India has a fantastic profile of rich and varied tourist
potential, it needs to enlarge its focus and not limit India to a set of
movements or scenic marvels like Khasuraho, Gularg, the Taj Mahal and
Mahabalipuram with little or nothing in between except a few necessary stop
overs.
It is a personal opinion without any rationalistic biases that a vast and varied
country like India; which its rich and colourful attaractions; deserves a
substantially greater tourist inflow than so called other foreign tourist
paradises, which

have of almost everything to offer

but which somehow

manage to get more tourists in a single season than India does in a year.
When talking about tourism on the whole, inbound tourism constitutes a major
chunk and this is so because of the various benefits attached to it. Now we attempt to
elaborate upon areas (to name a few) where inbound tourism has a significant effect.

Inbound tourism facilitates and accelerates the development of a region. It has

been largely observed that most of the tourist areas are those which were
economically most backward and had few production resources. The bulk of
tourist development in India has taken place in non-industrial locations normally

rural, mountain areas or coastal areas. There is no denying the fact that inbound
tourism is an industry and it uses land and goods which have no industrial or
agricultural value.
For example show (is good for winter sports), Saud (along the seashore for
beaches), dense forests and deserts (national parks). All these elements are
unproductive for other national industries, but they represent a source of wealth
for tourism.

Inbound tourism helps in combating unemployment specially in a country like

India where labour is in good supply. As mentioned earlier tourism industries
employed 9.1 million persons directly and 12.3 million persons indirectly during
2005, thereby making it one of the largest employment generating sectors of
Indian industry. This is so because be it inbound tourism or tourism on the whole
it is a labour oriented industry and provides employment several times more than
normal manufacturing industries. Thus is India

inbound tourism has been a

important factor in combating unemployment since it represents a high percentage

use of labour force per invested capital.

Inbound tourism brings in foreign exchange which in turn rfacilitates the

improvement of trade balance. It is undeniable that for a country like India
inbound tourism has been a factor for economic development and correcting an
adverse balance of payment situation. Inbound tourism has always been highly
appreciated in India as it means an inflow of foreign exchange from the
international economy. In the process international purchasing power thus
bestowed upon India is then computering integrated into the total foreign assets of
the country. Its beneficial effects are then manifested in our purchasing abroad ,
which then get extended over the entire country without discrimination since the
import of transport equipment and industrial goods made possible by these assets

is used directly to increase production capacity of other sectors in now way

connected with tourism.
Getting on with the study of inbound tourism, we first look at an overview of Indian
tourism given below:Indian Tourism
1. Foreign Tourist Arrivals During 2006-07

23,74,094

(i) Tourists other than the nationals of Pakistan and 19,73,647

Bangladesh

(ii)

Tourists of Pakistan nationality

(iii)

Tourists of Bangladesh nationality

(iv)

Sea cruise passengers

45,076
3,55,371

2. World tourist arrivals during 2006-07 (Million)

612.8

3. Percentage share of India in world tourist arrivals during 2006.

0.39

4. World Tourism Receipts (excluding fare receipts) during 2006, 443.8

(US $ Billion)
5. Estimated foreign exchange Receipts of India

(i) Rs. 11051. 43 crores (P)

(ii)

US$ 3151.70 million (P)

6. Estimated foreign exchange receipts of India

(i) Rs. 11263.88 crores (P)

(ii)

US$ 3172.93 million (P)

7. Percentage share of India in World Tourism receipts during

0.71

8. Estimated number of Domestic tourist visits in the country

156 million (P)

9. Estimated direct employment in tourism during

9.1 million (P)

Salient Features
1. Tourist Arrivals
Foreign tourist arrivals in

the country (including the nationals of Pakistan and

Bangladesh) registered an increase of 3.8 per cent from 22, 87,860 in 2006 to
23,74,094 in 2007. The arrivals (excluding the nationals of Pakistan and Bangladesh)
increased from 19,23,695 in 2006 to 19,73,647 in 2007 registering a growth of about
2.6 per cent.
The following table gives the summary of international tourist traffic to India during
the last two years.
Country

Tourist Arrivals

%change

2006

2007

Pakistan

41,810

45,076

7.8

Bangladesh

3,22,355

3,55,371

10.2

Other Countries

19,23,695

19,73,647

2.6

Total

22,87,860

23,74,094

3.8

Further, the following table gives the summary of International tourist traffic to India
during the years 1990 to 2007.

Year

(Excluding nationals
of
Pakistan
&
Bangladesh)

(Including nationals
of
Pakistan
&
Bangladesh)

Number

%chang
e

Number

%change

1990

853148

6.6

1279210

1991

860178

0.8

1288162

0.7

1992

884731

2.9

1304976

1.3

1993

835503

-5.6

1193752

-8.5

1994

836908

0.2

1259384

55

1995

1080050

29.1

1451076

15.2

1996

1163774

7.8

1484290

2.3

1997

123992

6.5

1590661

7.2

1998

1337232

7.8

1736093

9.1

1999

1329950

-0.5

1707158

-1.7

2000

1236120

-7.1

1677508

-1.7

2001

1434737

16.1

1867651

11.3

2002

1442643

0.6

1764830

-5.5

2003

1562016

8.3

1886433

6.9

2004

1762228

12.8

2123683

12.6

2005

1923695

9.2

2287860

7.7

2006

1973647

2.6

2374094

3.8

As profiles of the tourists from Pakistan and Bangladesh are not available, the
analysis given in the following paragraphs relate only to other nationals.

2. Time of Visit
Tourist arrivals were the highest during the month of December while the lowest
number of arrivals were recorded during May. Arrivals during the first six months
upto January 2006 recorded an increase of about 3.6 per cent over the same period
of the previous year. The next six months recorded an increase of 1.7 per cent over
the corresponding period of the previous year.
Arrivals during the winter comprising of the first and the fourth quarters and the
summer months comprising of the second and third quarters of 2006 were 12,01,550
(60.9 per cent) and 7,72,097 (39.1 per cent) as against 11,65,616 (60.6 per cent) and
7,58,079 (39.4 per cent) respectively during the corresponding period of 2005.
3. Mode of Transport
Air continued to be the predominant mode of travel for the tourists coming to India
during 2005 and constituted 98.5 per cent of the total traffic. Arrivals by sea sea were
negligible and the share of arrivals through land routes was 1.5 per cent during 2006.

4. Port of Entry
Delhi emerged as the major port of entry during 2003 and it continued to remain the
same even during 2005 with 7,82,528 (39.6%) tourists disembarking at Delhi
followed by Bombay with 6,63,315 arrivals (33.6%). Both these ports put together
accounted for 73.2 per cent of the total tourist traffic. The arrivals at Madras and
Calcutta airports and Sonauli land check post constituted 13 per cent , 3.5 per cent
and 1.1 per cent respectively of the total tourist traffic sonauli Check-post continued
to be the most popular land entry point.
Goa airport opened for international flights from the month of November 1985. The
number of foreign tourists disembarked during 2005 at the Goa airport were 78,863
registering a growth of 7.1 per cent over the year 2004.

5. Age Distribution
Tourists in the age-group of 35.44 years (26.9 per cent) dominated the arrivals
during the year 2005 followed by those in the age-group of 25-34 years (23.4 per
cent) and 45.54 years (18.9 per cent). The tourists in the age group of 35.44 were
dominant amongst all the top ten tourist generating countries like UK, US, USA, Sri
Linka, Germany , Japan, France, Canada, Italy, Malaysia and Singapore.
6. Distribution of Tourists by Sex
The male tourists far exceeded the female tourists and accounted for 61.4 per cent of
the total tourist arrivals during 2005, and it was 3.9 per cent less than what was
observed during 2004. The proportion of male tourists was the highest (65.0%) in the
case of France and was the least (54.9% ) in the case of Sri Lanka.

7. Length of Stay
The estimated average length of stay of foreign tourists in 2006 was 30.8 days. The
total tourist days spent during 2006 were estimated to be 6,20,71,920 as compared to
5,73,17,116 during 2005.
8. Nationality -wise Arrivals
Nationals of United Kingdom with an arrival figure of 3,70,567 continued to occupy
the first position in the tourist arrivals to India during 2005 and accounted for 18.8 per
cent of the total tourist traffic as against an arrival figure of 3,60,686 (18.7 per cent)
during 2004. This was followed by USA with 2,44,239 tourist arrivals during 2005
constituting 12.4 per cent as compared to 2,28,829 (11.9 per cent) arrivals in 2004.
Other major countries whose relative shares in the total traffic were significant
include Sri Lanka (1,22,080 or 6.2 per cent), Germany (1,05,979 or 5.4 per cent) and

Japan (99,729 or 5.1 per cent ). Tourists from France, Canada, Malaysia, Italy and
Singapore each constituted between 4.6 per cent and 2.6 per cent of the total traffic
during 2005.
During 2005, arrivals from

nine top ten tourist generating countries registered

positive growths. Maximum increase, however, was registered positive growths.

Maximum increase, however, was registered in the case of Sri Lanka (13.7 per cent)
followed by Malaysia (13.2 per cent), USA (6.7 per cent), Canada (6.1 per cent) and
Germany (6.1 per cent) over the previous year. However, negative growth was
registered by France (2 per cent).

INTERNET TOURISM MARKETING

The internet increasingly has become a popular medium for marketing. Offering
enormous potential, the internet is ideal for marketing tourism. This article will show
you how the internet can help you maximise the ROI of your tourism marketing
campaign. You can learn about the benefits and the current constraints, which hamper
the full realisation of such potential.
Though the internet has been in existence for a while now, its popularity has sky
rocketed in the recent years. There are two broad categories of internet services i.e.
communication and information services. Of the two, communication services allow
direct exchange of information between internet users. E-mail, e-mail-based
discussion lists and net news are also included in the communication services.
Information services, Telnet, Gopher and anonymous FTP (File Transfer Protocol),
allow users to access data made available by other users. The World Wide Web
(WWW) has completely overhauled the internet since 1993. WWW allow the user to
access hosts through Telnet, read newsgroups and use e-mail. Internet browsers have
now become a source of unlimited information for both leisure and commercial
purposes. The webs ability to blend text, pictures, sounds and video clips into
multimedia documents, transformed the internet into an effective means of
communication. The WWW has changed the appearance of the internet so much so,
that for many it is now the same as the internet.
The vigorous growth of the internet has drawn a lot of attention from both academic
researchers and business operators. People in the fields of Information Technology
(IT) and marketing have swarmed the internet. Internet publications on tourism
marketing have grown significantly in the last few years. Some have provided a
necessary background to some in-depth discussions of the various issues of marketing
tourism on the internet. Some of these articles have highlighted the internets impact
on tourism distribution. However, this field of research is still in its infancy. Efforts
must be made to understanding the internet's role in tourism marketing and as to how
tourism organizations and destinations can exploit its full potential.

WHY INTERNET ADVERTISING?

Ironic, isn't it, that just 40 years ago television was considered "new media"? And just
15 years ago cable wore the same badge. During their respective early days, each of
these "new media" had to prove their value to earn a spot on the media plan-the same
position the Internet finds itself in today.
Does Internet advertising belong on your media plan? This is the question everyone is
asking. CEO's are asking their brand managers. Brand managers are asking their
agency account managers and account managers are asking their media departments.
The answer most certainly is YES - regardless of the brand you manage or the
category in which that brand competes. Look at the facts:
Fact: Television Audiences are Migrating to the Net
The erosion of the network television audience during the 1980s and 1990s changed
media plans forever. In the early '80s, television was simple to plan and buy with just
three networks to consider. Then came cable, then a fourth network called FOX,
followed by a dizzying array of syndicated offerings and yet more new network
entries: Paramount and the WB. New choices continued to fragment traditional
television viewing and advertising budgets soon followed this trend

Television's recent history has demonstrated that media budgets ultimately are
pragmatic. As audiences migrate, media plans follow, acknowledging that the
ultimate goal of any brand is to reach its target audience effectively and efficiently.
The exploding media landscape of the 90s-driven by increased TV audience
fragmentation and the Web's popularity-have put this process into overdrive. Like the
80s and early 90s, media planners are, again, adapting their plans to account for the
ever-growing numbers of people spending increasing amounts of time online at the
expense of other media.
The first evidence of this audience migration appeared last summer in a Forrester
Research report. The researchers asked PC users which activities they were giving up
to spend more time on their computers. And, while 24% did admit giving up eating or
sleeping to pound away on the PC, the activity sacrificed by over three-quarters of the
respondents was television. Shortly after the Forrester findings were published, a
study from The Georgia Institute of Technology's Graphic, Visualization and
Usability Center (GVU) was released. This study, conducted on the Internet, asked

users about their television viewing habits and what impact the Net might have on
them. Their findings indicated a distinct shift in media habits with almost 37% of
respondents claiming that they "use the Web instead of watching TV on a daily basis."
Earlier this year, MSNBC noted the fact that Nielsen's February ratings sweeps found
one million fewer U.S. households watching prime time television versus the same
period last year.
Simultaneously, Nielsen and Commerce-Net released their Internet study, reporting
that the North American online audience had doubled in the past 18 months. Clearly
the conclusions of these two studies are far from coincidence. Taken alone, this
migration of the television viewing audience to the Internet is particularly striking.
This data is made even more impressive by the fact that Internet users are remarkably
upscale. So, not only are we witnessing a fundamental shift in media habits, the
Internet audience represents that hard-to-reach, well-educated, high-income
population most coveted by marketers
Fact: The Net is the Fastest Growing Medium in History
Internet advertising began in 1994, when the first banner ads were sold (Hotwired,
October 1994) and the first commercially available Web browser, Netscape Navigator
1.0, was released (November 1994). In a recent study, Mary Meeker, Managing
Director, Morgan Stanley, and her team of researchers closely examined the adoption
rate of the Internet, contrasted to the three other major "new media" invented this
century: radio, network television and cable TV. As a common metric, they examined
the number of years it took or will take for each media to reach 50 million U.S. users.
With television, cable and radio included for historical context, the growth of the Net
is nothing short of remarkable. Meeker estimates the Internet will capture 50 million
users in just five years. It took TV 13 years and radio 38 years to reach this milestone.

Fact: Internet Demographics are a Marketer's Dream

Every major research organization has studied the demographic composition of the
Internet. While methodologies and approaches vary, the findings are consistent: Net
users are young, well-educated and earn high incomes. And, increasingly, research
shows that both men and women are using the Internet. Some topline findings from
some of the more recent surveys are summarized on the following page
GENDER The March 1997 Commerce-Net/Nielsen survey of Internet Demographics
found that women now represent over 42% of the online population. Source:
Nielsen/Commerce-Net
AGE The average age of Web users is 34.9 years old, according to the 6th GVU
WWW User Survey. This average age has been steadily increasing over the last
several GVU surveys. (Fourth Survey: 32.7 years, Fifth Survey: 33.0 years, Sixth
Survey: 34.9 years) Source: Georgia Institute of Technology, Graphics, Visualization
& Usability Center (GVU), 1997.
INCOME A 1996 survey by the Media Futures Program of SRI Consulting revealed
that more than 65% of Internet users have household incomes of $50,000 or more,
compared with 35% of the U.S. population as a whole (index 186). According to the
sixth GVU study, average household income of Internet users is $60,800 (US). The
distribution of income levels is very similar to the Fifth GVU survey: Less than
$29K: 18.8%, $30-50K: 23.0%, over $50K: 41.1%. Sources: SRI International; GVU,
1997. EDUCATION According to the same SRI study, more than 75% of Internet
users have attended college, as opposed to 46% of the total U.S. population (index
163). Source: SRI International.

Fact: Web ad banners build brand awareness and may be better at generating
awareness than television or print advertising.
Since their first appearance on commercial Web pages, the value of banner ads has
been debated. Many felt they were physically too small to offer much branding and
some advertisers convinced themselves that click-through was the only metric by
which to measure ad effectiveness. They erroneously believed:
- despite the fact that no research existed to support their belief
- that without a click-through, no brand building would occur.
In fall 1996, Millward Brown International set out to test the impact of banners on
brand awareness, the first study of its kind. Millward Brown's objective was to
measure the impact of a single ad banner exposure on brand awareness. The three
brands tested included a men's apparel brand, a telecommunications brand and a
technology company. The findings were significant and conclusive for each brand.
Awareness was significantly greater among the banner-exposed (test) group than the

non-exposed (control) group. Specifically, exposure to the ad banners alone increased

brand awareness from 12% to 200% in a banner-exposed group. The study also
compared the impact of the banner ads in this test to television and magazine norms
from prior Millward Brown studies. The findings were remarkable: Single exposure
to a Web banner generated greater awareness than a single exposure to a television or
print ad. Millward Brown used their FORCE score ("First Opportunity to See

Reaction Created by the Execution") as a means of evaluating the impact of the ad

banners relative to other media.
A FORCE score indicates the effects of time, exposure weight, diminishing returns
and base level. As such, FORCE scores can be directly compared across media types.
As the median FORCE score for television advertisements is 10, the scores reported
in the chart below (with an average score of 20 for the Web banners tested) suggest
that Web banners tested very favorably to most TV ads, in terms of creating brandlinked awareness.
Now You Know the Facts
Every new medium has had to prove its value to advertisers. Just 15 short years ago,
cable television fought to earn the respect of advertisers. Today it is a $6 billion
industry. Those of us in Internet Publishing realize the Internet is no exception. We
accept the challenge to prove the value of this medium and will build the case with
facts-not hype- for including the Internet on your media plans. All these facts in
aggregate create an undeniably compelling case for advertisers today to include the
Internet in their media plans. As Lynn Upshaw, author of Building Brand Identity,
noted recently, "The World Wide Web will be one of the strongest brand building
tools available." Based on the facts at hand, we couldn't agree more.
Business online pros and cons
The whole world is going online. The future of business is clear. The revolution will
not be televised. The battle for the future of business will be fought on the Internet.
In fact, doing business online penetrates every aspect of a company. The nature of
internet technology this development is simply a way to electronically deliver,
obtain and share information with other human beings. The web at its core is a
medium of communication.
The power of web lines in three fundamental features:

1. The web is global

2. The web is a powerful information source.
3.

The web is interactive.

First, the web is a global phenomenon. It was developed from ground up to be an

open standard, accessible by any kind of computer or operating system. Built around
this standard are the servers and browsers that connect businesses with consumers.
This open technology has also allowed the internet to grow globally encompassing
every country and language into the World Wide Web.
Secondly, the web is a powerful information source for both consumer and
businesses. Consumers easily gain access to rich information about

products and

services, comparing offerings from many different companies in real time. A great
web site can provide this type of information instantaneously, without the need for a
customer service operator.
Thirdly, the web is interactive . The true nature of the internet, and the basis of its
power, is in the ability to conduct a dialogue with the consumer. Their input can
affect not only what they seen on the website, but the real operations of company.
This integration becomes partnership whereby buyer and seller work together for
their mutual benefit.
Advertising revenues have

long been an indicator of

good financial growth.

Companies are investing a lot of time, money and marketing efforts on the internet
to target the e-commerce consumer. Many internet exports maintain that every
business should have a presence on the web. The decision of whether to put your
business online should be made only after you are swell you can commit the time
and resources to its development and nurturing. The net is a growing marketplace
and if handled rightly, your website can do more than tell people where you are and
how to reach you.

For the marketers the online services provide a number of benefits:

i)

Establish a presence
Estimating the number of people on the world wide web is nearly impossible.
But internet growth is

exponential, doubling at

fantastic rates. Current

estimates place the number of web users between 200 and 240 million. That
means there are nearly 240 million potential customers using the web for
their shopping and information gathering needs. The

demographics of a

typical web user are perfect for an online business. One of the biggest
reasons companies establish web sites is to get their name in front of these
high potential customers. Thus the online shorefront is available to anyone,
anytime, anywhere in the world and is always working for the marketer.
ii)

Improved customer service

In recent years, a lot of attention has been given to the service a company
provides. More and more, customers are looking beyond just low prices or
excellent stock to the feeling they get from the company they are doing
business with good customer service leads to repeat customers and repeat
customers can be a large portion of companys business. A company website
can help build relationships that will help satisfy customers desire for
efficient, effective customer service. There are many ways to

enhance

customer service by using a web site. The very first being is to make the
business information available whenever the customer may need it. Having
a web site also makes it easy for the customers to send feedback on anything
from their latest purchase to the look of your last marketing campaign. It is
the directness and immediacy makes it perfect for consumer feedback. Thus
it is the twenty four hour nature of the web that makes a site attractive for
customer service. The site
convenience

will serve clients or customer at

which is the hallmark good

customer is a repeat customer.

customer service.

their

A happy

iii)

Foster employer relations :

The world wide web makes it easy for employers to staying touch with
home office, without tying up home office resources. With secure employee
section, on can post work schedules and newsletters. One can even offer
downloadable insurance information and forms that let employees change
their company

health care, investment and tax choices at their own

convenience. Website is also an excellent way to recruit the best and

brightest employees from all over the country. The web is an especially
popular resource for candidates looking to relocate to anew city.
iv)

Reduce costs
A penny you have not spent is a penny you do not need to earn back. The
web can lower costs in many different areas. businesses that have
implemented

internet based solutions have seen lower costs in printing,

postage, order taking, market research and in customer service while seeing
the amount of items purchased in single transaction increase: Recent studies
include that online orders can be as much as four percent more profitable
than orders placed over the phone via a catalog. The business web site can
also keep save money on labour costs by making information available to
customers without taking up a lot of staffs precious time. Businesses are
also going online so that they can offer more products to the customer than
they could even if in an ordinary catalog or in a traditional brick and moral
store.
V)

Increase sales
The number one reason for building a business website is to sell products
and services. Besides just the increased sales that one can achieve from online
orders, increasing customers level of satisfaction is one of the biggest keys to
providing effective and excellent customer service.

Hence, clearly, marketers are adding on line channels to find, reach, communicative
and sell. On line marketing has at least five great advantages. Firstly, both small and
lavege firms can afford it. Secondly

there is not real limit on advertising space in

contrast to print and broadcast media. Thirdly, information access and retrieval are
fast, compared to overnight mail and even fax. Fourthly, the site can be visited by
anyone , anyplace in the world at anytime. Lastly, shopping can be done privately
and shiftily.
However online marketing is not for every company nor for every product. The
internet is useful for products and services where the shopper seeks greater ordering
convenience, or lower cot. The internet is also useful where buyers need information
about feature and value differences. The internet is less useful for products that must
be touched or examined in advance.
At the same time for potential buyers the online services provide a number of
benefits:
i)

Convenience: The customers can order products 24 hours a day wherever

they are. They dont have to sit in traffic, find a parking space and walk
through countless airles to find and examine goods.

ii)

Information : customers can find reams of comparative information about

companies, products, competitors and prices without leaving their office or
home.

iii)

Fewer habbles : customers dont have to face sales people or open themselves
up to preseason and emotional factors they also dont have to wait in line.

The buyers have gained the following capabilities

in the new information rich

regime as firstly they can get objective information for multiple brands, including
costs, prices, features and quality without relying on the manufacturer. Secondly ,
they can initiate

requiests for advertising and information from manufacturers.

Thirdly they can design the offerings they want. Fourthly, they can use the software
agents to search for and chirte offers from multiple sellers.

Thus the new buyer capabilities

mean that the exchange process in the age of

information has become customer initiated and customer controlled.

Customers

define what information they need, what offerings they are interested in and what
prices they are willing to pay.
At the same the online marketers face a number of challenges which are as:
i)

Consumer exposure and buying : Web users are doing more surfing than
buying. Only an estimated 18 percent of surfers actually for shopping or to
obtain commercial services such as travel information. The major online
buyers today are businesses rather than individual consumers.

ii)

Skewed user demographics and psychographics : The online uses are more
upscale and technically oriented than the general population, making them
ideal for computers, electronics

and

financial services but less for

mainstream products.
iii)

Chaos and clutter: The internet offices million of websites and a staggering
volume of information navigating volume of information navigating the web
can be frustrating. Many sites go in noticed and even visited sites must
capture visitors attention within eight seconds or lose them to another site.

iv)

Security : The internet is becoming more secure, but there is a continuous

race between the pace of new code breaking measures.

Web Advertising A Year of Growth

With online demographics becoming more diverse and targeting becoming more
precise, advertiser spending on the Web clearly moved out of its experimental stage
during the past year. Internet advertising recorded the highest level of revenues during
the third quarter of 1997, totaling $227.1 million, and year-to-date revenues of $571
million through September are already more than twice that of 1996 total annual
revenues of $267 million.

Factors contributing to this growth include an increase in budgets devoted to online

advertising, improvements in Web content and entertainment, growth in crosspromotion of Web sites in other media (e.g., TV, print and radio) and the emergence
of "cyberbrands."
Key Trends-Consumer brand advertisers are now the largest category of
spenders on the Web.
In the latest IAB Advertising Survey, consumer brand advertisers accounted for 32%
of total ad revenues during the third quarter of 1997, up significantly from 17%
reported in the first quarter of that year. In contrast, computer-related advertisers
accounted for 22% of total revenues in Q3, down from 38% in 1996. Underscoring
this trend is Yahoo!s recent report that its mix of advertisers has changed from 85%

ONLINE SPENDERS

24%

27%

CONSUMER
GOODS
OTHERS
NEW MEDIA
TELECOM

16%

15%
11%

7%

FINANCIAL
SERVICES
COMPUTERS

computer-related in 1995 to approximately 80% consumer brands in 1997. Leading

consumer categories in the IAB third-quarter report include mail order catalog and
retail advertisers and, combined with the financial services category (20% of total
revenues), suggests the marketplace is increasingly recognizing the value of online
transactions.

Use of non-banner advertising is rising.

While ad banners remain the predominant advertising vehicle on the Web
accounting for approximately 54% of total online advertising revenues the
increased use of content sponsorships (and interstitials, micro-sites, etc.) almost
doubled during last years second quarter, marking a shift towards more creative
advertising on the Web.
Obviously, the type of advertising used is directly tied to the marketing objective.
Banners have proven to be the most effective direct marketing tool, producing
quantifiable units to which an advertiser can apply readable metrics and make real
conclusions with real numbers about the effectiveness of their campaign.
The use of sponsorships is not new to online; in fact, it was the first means by which
advertisers could get real estate online. Sponsorships of online content are much like
event sponsorships: the hope is that users will more closely associate the content with
the advertiser (e.g., Advils sponsorship of ESPN Sportszones Injury Report,
Oldsmobiles sponsorship of AOLs Celebrity Circle). If an advertiser has a strictly
branding/awareness goal, sponsorships are an efficient way to achieve this marketing
objective for a lower cost than traditional print. In addition, sponsorships typically
offer the advertiser exclusivity and right of first refusal for future opportunities.
Going forward, online advertisers will continue to demand more powerful advertising
models that better capture and sustain user attention, like the emergence of real digital
video approaching the standard-setting slickness of television commercials.
The growing presence of local advertisers and classifieds on the Web.
According to the third quarter IAB report, approximately 12% of total advertising
revenues of $227.1 million represented local advertisers, up from less than 5%
reported in Q2. Driving the growth of local advertising spending has been the use of

online classifieds, directory listings and local businesses advertising on local-content

Web sites (e.g., Sidewalk).
The growth of online classifieds poses the largest threat to newspapers, which derive
a significant portion of their revenues and profits from print classifieds. Classifieds
translate well online, leveraging the inherent strengths of the medium, including
searchability and database functionality, faster updated listings and more flexible
word-and-line spacing relative to print.
Major Web sites and consumer online services are moving toward business models
driven by multiple revenue streams. While content providers have tested a number of
revenue models during the past several years (e.g., subscription, syndication,
licensing, transaction), advertising has remained the most predominant for online
publishers. Nevertheless, successful online and Web strategies are increasingly
incorporating multiple revenue streams focused on brand leverage or brand
development, while adapting to the unique characteristics of online users.
The Wall Street Journal Interactive appears to be one of the most successful
subscription-based content sites on the Web with a reported 150,000 subscribers
pricing their service at $29 annually for existing subscribers to the print version and
$49 per year for non-print subscribers. Other leading online publishers that have
announced their intent or that have launched subscription-based services include
Disney and Time Inc. New Media.

WHAT ADVERTISING WORKS?

Advertisers are rolling up their sleeves to figure out how to make advertising work on
the Web. They are torn about what to spend and who to hire. But as Web advertising
becomes a significant portion of marketing budgets, advertisers will need to adopt a
set of best practices for this new medium.
Advertisers are searching for the formula that will unlock the potential of the Web.
Forrester interviewed 51 companies that currently advertise on the Web and found
that:

Spending patterns vary. Consumer brands spend a small fraction of their

budgets on the Web.

Technology companies spend five times more of their brand dollars there.
Spending on sites

still exceeds spending on ads.

Banner campaigns run the gamut. There is no such thing as a typical Web
advertising campaign.

Ad pricing frustrates advertisers. Nearly three-quarters of the respondents

want pricing to be based on results rather that CPM.

Personalized targeting has not yet taken hold. Advertisers target mainly on
content.

Web advertising needs best practices. As Web advertising becomes a

significant portion of marketing budgets over the next four years, advertisers
need to develop a set of best practices around what to build and what to pay.

WHAT TO BUILD
Advertisers on the Web have three choices. They can build: 1) destination sites, which
use information, entertainment, and high production values to pull users in and bring

them back again; 2) micro-sites, small clusters of brand pages hosted by content sites
or networks; or 3) banner campaigns and other low-overhead Web advertising-like
sponsorships (see Figure 1). To understand which is best, advertisers need to ask:

Can it be sold online? Products that can be sold online and shipped
economically or delivered digitally-such as music, tickets, books, software,
and mutual funds-can use a destination site to support everything from brand
awareness and consideration, through post-sales support. But if the Net
doesn't enable your company to offer a product faster, cheaper, or better, rule
out a destination site.

Is it a considered purchase? Sellers of complex products like computers,

cars, and industrial coatings can use a Web site to squeeze costs, allowing
prospects to check specifications, configure their purchase, and get product
support on-line (see Figure 2). But if your customers are more likely to ask
their neighbors than you about your product, you don't need a Web site.

Destination Sites Create A New Channel

Destination sites are right only for companies that can use the Net as a full-fledged
channel for exchanging information with customers, in order to book a sale (See the
September/October, 1996 Leadership Strategies Report, "The Fourth Channel:
Vision.") Advertisers that do build destination sites should:

Do a gut check beforehand. A company must be willing to spend $3 million or

more to build a destination site and then more to maintain it. A half-baked site
actually will erode a brand. Don't underestimate the volume of customer

interactions. L.L. Bean dedicates a team of customer service reps to reply to e-mail
seven days a week.

License, don't produce content. True content providers always will outpublish

advertisers. When Toyota first moved onto the Web, it created seven different
lifestyle 'zines. Today only Car Culture remains-and that will soon be
produced by one of the big auto publishers.

Get found. Once a site exists, marketers need to promote it. Smart companies
dedicate at least 20% of their overall interactive budgets to promoting the site
online. They also sneak URLs into print and TV ads and become experts in

such Web guerrilla marketing techniques as getting found by search engines and
trading links with other sites.
Micro-Sites Are Sufficient For Considered-Purchase Products
Micro-sites enable advertisers to communicate deeper product benefits and collect
customer information without the cost of a full-blown Web site. Advertisers of
considered purchases like clothes and appliances should:

THE ADVANTAGES OF THE INTERNET AS A

MARKETING TOOL

Addressability
The Internet has transformed the well-known marketing communication model from
one-to-many to one-on-one or from broadcasting to narrowcasting. The traditional
print, radio and television, follow the passive one-to-many communication model.
This way a company reaches many current and potential customers through repeated
broadcasts of the same message. This approach has three problems:
1. Generic message to every consumer,
2. Wasted exposures to uninterested audiences,
3. Competing and conflicting messages being sent to consumers.
The Internet gives the ability to address each consumer personally. Each time a user
visits a web site its server has a record of the user's electronic address. This
information will help, to send a personalised message to a smaller target audience or
an individual consumer.
Though mail, telephone and personal selling have been in existence for many years,
the internet however offers high-speed information transmission and retrieval at a low
cost. The addressability of the web provides the ability to customize and tailor the
product and/or the marketing effort to one consumer at a time. The internet makes it
possible to squeeze one-on-one marketings well-known four Ps into one element the relationship. It represents the ultimate expression of target marketing. Welldesigned web sites, emails and news-groups, can be as effective as personal selling.
Internet marketers can do the job of a sales-force with more flexibility, better memory
and at a fraction of the cost.

Interactivity
Another element of the net that makes it different from traditional communication
media is its ability to interact. The internet enables feedback. Dialog forms an
important element of relationship marketing, and is a vital factor in building customer
loyalty. Customers are empowered to communicate with companies, research
information and conduct transactions at the press of a few buttons. Companies too can
easily contact customers to clarify their needs or inform them of new products. Unlike
in the conventional communication channels like newspapers or television, the
customer is in greater control of choosing and processing information about the firm.
The internet makes the exchange of information between consumers as well as
between companies possible. Information exchanges between companies will provide
competitive intelligence and will enhance alliances and co-operation. Information
exchanges between the consumers establish virtual communities. Such virtual
communities will have significant implications for market segmentation, customer
service and understanding consumer behavior.
Flexibility
The web offers more flexibility than the conventional mass media. A website is like
an electronic brochure where visitors can read information on products or services. A
webpage is more flexible than a physical advertisement or catalogue. It can be
updated with fresh and current information gathered through feedback from
consumers. A virtual catalogue can be kept in sync with the requirements of the
consumers and inform them about new products and price changes.
As an industry heavily reliant on brochures the web's flexibility and immediacy in
information transmission is invaluable. The preparation and distribution of holiday
brochures is a costly and lengthy process during which the demand conditions and
competition situation could change greatly. In print media, any price and availability
changes can only be notified through supplementary brochures. With the web this can

be done instantly at little cost. A webpage can be linked to inventory data to show the
availability of any holiday tours. A website can be indexed in many ways and be
equipped with search facilities to locate items quickly.
Accessibility
The internet has an edge over any other media in its ability to permanently expose
information to a global audience. The net vastly improves the information availability
and user interaction. An effective web site keeps a company in business 24 hours a
day, 365 days a year in a global market place. Anybody in any part of the world can
access its marketing information at any time they desire. This ability will greatly
reduce place and time utility woes. Accessibility is vital in international trade where
business spans across different time zones.
Global exposure is of prime importance for tourism destinations. Till the mid-1990s
destination promotions were entirely reliant on travel agencies to market its products.
The web has enabled tourism destinations to market themselves through well
designed and well promoted websites. Doing business on the web has helped avoid
regulations and restrictions that companies must follow when physically doing
business in other countries. For example in some countries, foreign travel companies
are forbidden to operate. Finally, compared with the traditional media, the web allows
unlimited access for hundreds of millions users to an unlimited amount of
information.
Improved service
The Web makes it possible for companies to improve the service quality at all levels
of customer interaction i.e. pre-sale, during and post sale. The web provides four
tangible improvements in customer service.
1. A wider choice for the consumers: A website can display an array of products and
services

2. Quick processing of payments: Automatic processing of cyber-cash or credit card

charges.
3. Faster delivery: Especially for products like online software and music distribution
4. Making available a wealth of information that can be quickly and easily accessed.
In tourism the web-based distribution systems can help satisfy the consumer needs of
easy access to a wide choice of information and hassle free reservations. Increasingly
tourist satisfaction depends on the timely availability of accurate and relevant
information. Improved access to information on all aspects of tourist activities has
made it possible for marketers to offer personalized services at the same prices as
standard packages.
Cost Savings
There are mainly five areas where costs can be minimized on the internet
1. Automation of the reservation processing and the payment system cuts down sales
costs.
2. Implementing a menu-driven web-based travel reservation system as opposed to a
command driven system where a sales clerk has to remember commands and airport
codes.
3. Implementing direct links between the producer and the consumer, saving on huge
distribution costs.
4. Saving on promotional costs due to the nets ability to send customized messages
through electronic communication.
5. Reduced rental costs on office and sales space, and on administrative overheads.
Setting up a promotional web site without booking facilities, costs relatively less. An
averagely skilled person with the use of a proper software package, such as Microsoft
FrontPage can build a basic company web site in days. However a more

comprehensive and powerful web-site offering in depth information such as virtual

multimedia brochure including cataloguing products offerings and reservation and
transaction facilities, will cost more and take longer to develop. Eve though such a
site will cost more to build, the cost is considerably less than tens of millions of
dollars spent by airlines, tour operators and hotel chains on TV and magazine ads. By
providing information on a website, customers feel empowered to find answers to
their inquiries themselves, cutting costs on telephone charges on toll-free numbers.

Using the internet can help save on distribution costs. Promotion and distribution of
tickets, is a big cost factor in the airline industry. Selling tickets on the internet can
eliminate travel agent commission and GDS fees paid by the airlines. An internet
based supply channel management can also save procurement costs for businesses.

THE MAIN APPLICATIONS OF THE INTERNET

IN TOURISM MARKETING
The Internet as a marketing media can be of great benefit to virtual all areas of
marketing, from marketing research, through market segmentation, targeting and
positioning, to the effective use of the marketing mix, and marketing organisation and
control. The following discussion does not attempt to provide an exhaustive list of the
Net's use in tourism; rather, it simply intends to exemplify its common applications in
and main implications for tourism marketing.
Marketing Research
The Internet does more than automating online business transaction, it can
"informate" in that it provides a vast amount of information which was previously
unavailable. Marketing is essentially an information-processing activity which links
an organisation to the external environment in which it operates. The Internet is an
invaluable source of low cost but up-to-date marketing intelligence which can be
sourced through a company's own site (for details of its customers) and other web
sites (for information on competition situations, market conditions and the general
environment). The Internet is extremely useful in build a customer information
database. With the use of proper software such as Aurum Software's Web-Trak (and
even with simple means like cookies, web forms and email feedback) it is easy to
gather systematic data about all users who visited the company's web site. This
information can be used to identify prospects, understand customer needs and
customise resources to give greater levels of service to customers (Heinen 1996). A
database of online transaction histories can be the primary marketing resource of
tourism companies, determining what kind of travel products they can deliver, what
market segments they serve best, and what is the lifetime value of each customer to
the firm.

By searching other web sites, a company can get valuable information about market
demand, supply, competition and economic, demographic, legislation and
technological changes in the domestic and international markets. Web sites of
government agencies, media companies and non-profit organisations usually
provide large amount of information free on general issues; while commercial sites
are good sources of information on new technologies, best business practices, and
industry initiatives. Scanning competitors' home pages helps companies to track
competitors' marketing strategies and tactics. For example, from hotel chains' web
sites, one can easily locate information about the chains' main business activities,
financial performance, new hotel openings and investment plans, and key marketing
strategies; whereas airlines' web sites often show such useful data as business and
financial analysis, strategic alliance groups, new routes development and fleet
expansion plans, frequent flyer programmes and (where a online GDS is available)
the fares and availability of flights between any two destinations.
Market Targeting
An important feature of the Web as a medium is that it is the consumer who is
actively searching for information about products or brands in which they are
interested. In effect the consumer is "pre-screened" and shows both interest and
involvement in visiting the web site. While on the Web, the consumer can also
provide instantaneous feedback to the marketer (Stern, 1995). All the feedback, and
indeed, every "click" or "hit" the user makes can be memorised by the web server.
Through the application of the IT data mining technique, companies can find patterns
within their internal customer data and make sense of data or turn data into
meaningful marketing information. For instance, the visitation record of an online
brochure may show the total number of hits, the distribution of the hits among the
pages and across time, the order of the pages been accessed. The user's visitation data
can be easily combined with user profile information from user registrations through
online visit cards or questionnaires and used to uncover the consumers 'interest and

the patterns of demand and buying behaviour. This in turn leads to identification of
likely target segments, often niches based on specific benefit sought. Armed with
such information, organisations can refine their targets and develop specific means to
achieve true one - to- one marketing (Pitta 1998).
The appropriate use of user profile and surfing behaviour data can improve the
effectiveness and efficiency of market segmentation and targeting. This is because the
traditional approach to market segmentation is often based simplistically on
geographical, demographic and economic variables while the psycho, behavioural or
lifestyle data is costly to collect and difficult to measure and compare. In Internet
marketing, it is easier to collect these data from potentially each and every user of the
company web site, though tangible rewards such as free prize draws and free
membership, are often needed to attract users to fill in web forms. It is even a great
deal simpler and more effective in market targeting as the email messages and even
tailor-made web-pages can reach the intended receiver with little cost. It is possible to
set up 'virtual" or cyber - communities for each target market niche in the form of
news-groups through which consumers with similar interest and behaviour patterns
can be sent with relevant product offering and other information from the marketer.
Members of such Internet communities can regularly exchange information between
them and strengthen a sense of belonging.
Product
One of the major advantages of the Internet in marketing is that the tourist can here be
a value creator for tourism companies through redefining the labour division between
the marketer and the tourist in providing tourist experiences (Dellaert 1999). This is
because, on the one hand, tourists can provide individual preferences for or
specifications of holiday packages through feedback in the forms of web forms, email
messages or simply the 'clicking' patterns, which the tourism marketer can use to
development new products or tailor-make existing products to suit the needs of

particular consumer(s). In this sense, the Internet has accelerated a shift in the nature
of products from mass produced and tangible to customised and information based.
On the other hand, the self-servicing tourist can not only conduct transactions online
and reduce costs of sales for the supplier but also actively participate in the
production process itself. Provided with choices, a tourist can now assemble his own
product according to the specifications desired. This is especially useful in the
production and marketing of package holidays. Tour operators, for example, can offer
modular products or services, such as flights, rooms, tours, car hire and performances
on their web sites, and allow the user to participate in the development of the specific
holiday packages using a menu of options, ie., 'pick and mix" his own package. As
tour operators negotiate with the providers of these separate holiday items and buy in
bulk, The economies of scale will enable the operators to offer lower "parts" prices to
individual consumers than they buy directly from the different producers of the travel
products. At the meantime, since the booking engine is integrated with the product
inventory, it is easy for the operator to adjust in real-time the prices of different
holiday components in response to their relative popularity and demand patterns. In
this way, tour operators can effectively provide the market with low cost and flexible
(rather than the conventional rigid) package tours This is what both marketers and
consumers have long dreamed for - high quality products made individually at a unit
cost level of mass production -all enabled by the power of the Internet.
Internet technologies can also contribute to the improvement of current products on
offer or development of new products and services that redefine the company's
strategic position. For instance, Boeing announced on 27 April 2000 plans for a
network which will allow passengers to use the internet, watch TV and receive other
data while flying. Called Connexion by Boeing, it will use satellite technology to
provide broadband services to aircraft, which could greatly improve passengers' flight
experiences. The introduction of electronic ticketing (e-ticketing) and flight

information exchange through mobile phones by many airlines in recent years also
improve customer services. The Internet also give tourist attractions such as museums
and galleries wider format options for electronic presentation and show web
collections which are physically impossible to construct (Taylor and Ran 1995). Zoos
and aquariums can improve its product offering through 'live" camera links using web
sites like whale-watching to show views of animals not in captivity (Benhow 1997).
Pricing
The role of the Internet in pricing is based on its ability in processing and exchanging
large amount of data instantaneously with a great number of people. This information
processing capacity enables a company to analyze relevant pricing data effectively
and quickly. The information exchange capacity enables firms to set and change
prices in real time and also facilitates online bidding and flexible pricing. Both of
these qualities of the Net are extremely useful in tourism marketing.
The major tour operators in the UK, for example, produce some 2,000 to 3,000
brochure pages annually, most pages feature a price panel with perhaps 100 separate
prices, making a total of about a quarter of a million individual prices (Holloway and
Robinson 1995). The sheer number of prices, together with the fact that most
brochures are launched 10 months in advance of the holiday season, mean that pricing
in the travel industry is extremely difficult Since it is unpractical to set the
prices for such a great number of holidays on the bases on demand analysis or
competition research, most operators simply follow a cost-plus policy with little
regard to the market changes in the months to follow. Even an operator wishes to
adjust its holidays prices it is a costly and cumbersome process as new price panels
have to be printed and distributed to the travel agencies. With the help of a web-based
reservation system, the task can be a great deal easier. A tour operator can make realtime adjustment to its thousands of holiday prices at a touch of a button in response to
competition moves and demand changes. A special late-booking section can also be

included in the main web site to promote 'left-over" holidays at the last minute to
solve the problems of over-supply or under-demand in the package tour industry
which has become a chronic issue in the UK during the last decade or so.
In Internet marketing, the potential for price discrimination is diminished given the
enhanced capability of consumers to identity the least expensive source, regardless of
supplier or location. The skilled consumer could have the "perfect knowledge" of
market prices, which could facilitate the realization, to certain extent, of 'perfection
competition" at the national and global markets. This will lead to the increasing
standardisation of prices across companies or even borders, especially for the
undifferentiated products such as airline seats, beach holidays and city breaks. Other
applications of pricing on the Web including bidding and flexible pricing - many webbased businesses allow customers to bid for products on their sites. Customers
commit to the sale if the price is agreed upon. The bidding locks in customers to the
sale and the committed price. This is a flexible pricing strategy where the buying
capacity of the customer reflects in the eventual price. Companies such as Ebay.com
and Bid.com have developed a model where other vendors can place products up for
bids (De and Mathew 1999). Airlines could sell seats on over-demanded flights or
routes through online bidding to the highest bidders to generate extra revenue. Tour
operators may use online bidding in a different manner to market special holidays the
demand for which may be extremely difficult to estimate in advance. For example, a
tour operator can put on its web site the details of a package holiday to the moon and
the total cost (including profit margins) for a group, say 50 travellers, the more people
bid the lower the price for each traveller. This way of pricing could well enhance the
operator's image and profitability, as it is both an innovative marketing and sound
financial approach.
Place
The uniqueness of the Internet as a means of distribution is based on the fact that it

exists in "cyberspace" thus physical phenomena such as location and distance are less
significant or even irrelevant. For the producer, the Web enables it to have direct links
with consumers at a low cost therefore provides it with the opportunity of
"disintermediation". For the retailer, the Web threatens its livelihood and changes its
critical success factor from location, location, location to access, access, access. For
the wholesaler, web-based business means it can bypass retailers while at the same
time risk being bypassed by the producers.
The foremost role of the Web in tourism distribution is the direct electronic
reservation and transactions between tourism product supplier and consumers.
AIdridge et al (1997) argues that direct marketing is the name of the game on the
Internet, offering both consumers and marketers greater control and lower potential
costs of access due to the conveniences of the Net. Because direct channels may be
producer-direct or intermediary-direct, the potential for channel conflict will be
magnified. In order to assuage channel conflict and price competition between
direct-sellers and retailers, both producers and intermediaries will have to develop
augmented product features and unique benefits. For example, direct online booking
of airline tickets often carries special benefits not available from travel agents, such as
extra frequent-flyer miles; while purchasing an airline ticket from an online travel
agency may also benefit from such services as hotel reservations and travel insurance.
Airlines are among the first industry to invest in and develop CRSs and GDSs to
exploit the potentials of IT. The Web offers the airlines even greater opportunities in
streamlining and shortening the distribution channel. The no-frills or low-cost airlines
emerged in the last few years are already heavily relying on the Web to distribute
flight tickets directly to customers. The major global airlines have also started to
believe that the Internet offers a unique opportunity to drive down costs and restore
profitability to the sector which is troubled with financial losses across the globe (e.g.,
the 266 IATA member airlines as a whole made an accumulated loss of US $800

million during the first 8 years of the 1990s) (IATA 2000). British Airways, for
example, launched an e-business strategy recently which places the Internet at the
centre of its efforts to transform relationships with both customers and suppliers. It is
planning to invest 90 million during the next two years to develop its web-based
operations with the aim of increasing the share of tickets sold over the Internet from
less than 1% in 1999 to 50% by 2004. It is also preparing to operate via mobile
phones and interactive television. Major airlines have also started to use the Internet
to manage the supply channel and reduce procurement costs. For instance
American Airlines, Air France, British Airways, Continental Airlines, Delta Airlines
and United Airlines have agreed to jointly create and operate a web site that will
handle supply purchases with US$32 billion a year (CNET News 2000).
The biggest change to tourism distribution brought by the Web could, in the next 5 to
10 years, be the noticeable shrinking of the travel agent sector. Agents are squeezed
by both a decreasing market as more and more consumers go online and book directly
from airlines and operators and by airlines' declining commission levels. The
Association of British Travel Agents (ABTA) believes that the Internet will not cut
out the middleman, but it will certainly put their added value under scrutiny. It warns
that High Street travel agents that do not excel in what they do may not survive the
competition. Nevertheless, the travel agent sector will not be doomed to extinction.
How far and how soon the role of travel agent will diminish in the future is dependent
upon how flexible and innovative the travel agents can be and how fast the Web can
dominate both business and everyday life (Liu and Jones 1995). The Travel agency
will have to reinvent itself to suit the new Internet era by transforming from a travel
ticket seller to a travel information manager.
For tour operators, the potential disintermediation has a dual effect. On the one hand,
they can be bypassed by the producer as airlines and hotels that directly sell their
products to the travel agencies and consumers; on the other, tour operators could

benefit from its own direct sell operation by eliminating the travel retailers. It is hard
to estimate the full impacts of the two. But one thing is sure to say that the tour
operators, more than travel agencies, have a future in the Internet era. This is based on
the understanding that tour operators are not purely intermediaries as they do perform
some production function in assembling the various parts of tourism products into a
marketable package. Through this value-creating activities, tour operators can provide
convenience and better value for consumers, by passing on to them some cost savings
gained through bulk buying the separate components of the package, than they would
otherwise get from the individual tourist product providers. The major tour operators
(in the UK) are also 'backward" integrated and have their own charter airlines thus
major schedule airlines' direct selling is not much as a threat to them as to travel
agents.
Promotion
Arguably, the component of the marketing mix being most quickly transformed as a
result of Internet usage is promotion. The Internet provides a labour-efficient and
cost-effective way of distributing information almost instantaneously to millions of
potential clients in the global markets. Internet promotion combines mass media's
reach with the personalization inherent in two-way dialogue -previously only possible
in personal selling. It can be used for corporate visibility, brand name recognition,
advertising, public relations, corporate sponsorship, direct sales, sales promotion,
customer support and technical assistance. There are three main issues in the
application of the Internet to tourism promotion.
First, present the promotional information on the company's web site. The Web
enables more information to be transmitted to (potentially) more people cheaply,
instantly and with multimedia effect. The key to achieve these benefits is a welldesigned and maintained web site which is attractive, informative and interactive.
Through its multimedia capability, a good web site can and should incorporate

information as accurate and detailed as brochures or timetables, photos and graphs as

glossy as magazine ads, and videos as entertaining as TV commercials. The site can
and supply as much promotional information as possible as there is virtually no
capacity constraints or advertising space limits on the Web. By hyper-'inking pages
together in an appropriate fashion, the Web marketer can create an ultracomprehensive brochure to include everything a user wishes to know. For instance, a
tourism destination web site may become a 'information mall" which provides the
users with all the basic information about it such as the exchange rates, local
traditions, weather, what to buy, etc. and, through the hyperlinks to the sites of
tourism firms, details of flight schedules, tour prices, park opening times, late offers,
and so on. A company web site with email links or even telephone numbers and
address will enable users to contact it for further and often more personalised
information.
Second, promote the web site itself to increase its exposure and visitation since a
company's web site has to compete in the clutter of thousands of other web sites
selling similar products and services. This can be achieved through a number of ways.
A memorable Internet address to help user locate it on the Web, usually the company
or brand name or a catchy word or phrase. Links "from" other web sites, by
registering with search engines and online directories and paying relevant sites for
click-through links or banners ads, are particularly important if the company's site is
not well known. Links 'to" other sites, such as those offer news or entertainment
services and those offer complementary products can also make the site more
interesting as well as providing more relevant and up-to-date information for the
users. Promoting the web site through the traditional media is also important,
especially when it was first set up. For example, expedia.co.uk launched a 4 million
promotion campaign on British TV and Press recently. The company's web address
should also be included on all its media messages "to drive consumers to the Web".

Third, use the company's web site as a platform for advertising sites or products of
other businesses. Through "banners" and banner linked web pages, a company's web
site can also generate revenues by becoming an advertising medium for other
organisations. Indeed, the effectiveness of the Web as a medium for advertising has
already made online advertising a boom business itself. The Internet Advertising
Bureau's research shows that online advertising revenue reached US$4.62 billion in
1999. It also finds that banner advertisements is the predominate type of advertising,
accounting for 56%, sponsorships at 27%, interstitials at 4%, email at 2%, and other
rounding out the category at 11% (IAB 2000). Increased Web advertising will reduce
the attractiveness and spending on some traditional forms of promotion such as direct
mail, outdoor displays and radio advertising. Fletcher Research (2000) predicted that
the online advertising spending in the UK would soar from 50 million in 1999 to
625 million by 2004, while expenditures on direct mail could see a 33% fall in the
same period.

CURRENT CONSTRAINTS ON INTERNET

TOURISM ADVERTISING
The Internet has created great opportunities for tourism marketing. However, the
current level of online travel sales is low though most researchers expect it to increase
rapidly in the next few years. For example, it was estimated that purchases of travel
products represent just 6% of overall Internet sales and 0.5% of all travel and tourism
spending (Smith and Jenner 1998). In the US, Jupiter Communications forecasts that
online travel bookings will grow from US$2.2 billion in 1998 to US$ 16.6 billion by
2003, representing a market share of total travel sales of 1.7% and 9.6% respectively
(Bates 2000, Tyler 2000). In the UK, Thomas Cook predicts that one in five package
holidays and 40% of all flights will be sold via the internet or digital television in the
next three years (Banerjee and Mayling 2000). Obviously, the comparative
advantages of using the Internet in tourism marketing is compelling but its full
potential as a marketing tool will only be realised if a number of well-documented
limitations are successfully addressed.
Demand Factors
Consumer demand is the fundamental determinant of all forms of businesses.
Whether an industry is initially supply-led or demand-driven, consumers are the key
force in deciding the scale, structure, style and speed of its development. The small
size of Internet business transactions in the world economy at present is caused to a
great extent by insufficient demand, though more limited by consumers' willingness
than their ability to shop on the Net.
First, the penetration rate of computer using and Internet connections is still low
worldwide. In the main developed countries, about 30-50% of the adult population
are Internet users while the global average is about 1-2%. One estimate shows that in

1997, there were 50.2 million web-users, of which 60% were in US and 20% in
Europe; the world total web-population in 2001 was predicted to be 174.5 million, the
US and Europe account for 54% and 18% respectively (Juliussen and PetskaJuliussen
1998). Although people with Internet access tend to be more affluent, better educated
and younger than the average consumer, the small number of web-population does
reveal that globally it is still a relatively small market. Furthermore not all web-user
are frequent users. In the UK for example, a quarter of the 15 million adults with
Internet access surf the Web less than once a week, and only a fifth of web-users have
actually ordered something via the Internet (Fletcher Research 1999). At the well
publicised travel web cite - lastminute.com - only 6% of its 1.5 million register users
have ever purchased anything there.
Second, the low frequency of web surfing is mainly caused by high access cost,
especially in countries outside of North America. In the UK for example, local
telephone charges are still metered, though the Internet subscription fees has largely
gone from last year. Most consumers find it is an expensive hobby to surf the Web,
especially when the search task is complicated by low speed and difficulties in
locating the desired information. The main UK Internet service providers (ISPs) have
recently launched unmetered packages which will be available from mid-2000. This
new development could see a surge in web visitation in the country.
Third, The vast majority of users access web sites for information or entertainment
purposes rather than for online shopping. Among the Net resources, email is the most
frequently used, news and sports sites attract more visitors than commercial sites, and
sex and MP3 are for many years the most searched key words. Although Internet
transactions offer the potential benefits of convenience and cost savings, due to
factors discussed later, consumers still believe traditional shopping methods are more
reliable and sometimes more economical. A recent survey of 50,000 Internet users in

the UK show that 80% used the Web to access email while less than a third had
bought online (Fletcher Research 1999)
Fourth, concerns over privacy, information abuse, web crime, payment security and
undelivery or late delivery, are often cited as the main inhibitor to online shopping.
There is a lot of trust involved in online shopping. A web users has to trust that he
receives the product he orders as well as trust its quality to be as described. He also
wants to be sure that his private information such as address and credit card numbers
is handled sensitively (Ratnasingham 1998). However, there is at present no special
legal provision to protect consumers' interest in web transactions and according to a
Consumers International survey: 6% of the items ordered took more than a month to
arrive and at least 8% never did; many sites did not give clear information about
delivery charges; only 13% of sites promised that they would not sell customers'
personal information on to a third party; and only 53% of the companies had a policy
on returning goods (BBC 1999a). As a result, in average less than 1% of those
'looking" are actually 'booking" at the web site. A recent MORI survey of package
holidaymakers in the UK also found that only 45% of the respondents answered 'Yes"
to the question of "In principle (if you had access) would you be prepared to book a
holiday through the Internet?" while 46% answered "No"; and 9% answered "Don't
know" (Martin 1999). A report on travellers' use of the Internet in the US, which has
the most advanced Internet businesses and Internet users, shows that 52.2 million
people used the Internet for researching travel in 1999 but only 16.5 million (32%) of
which actually made their travel reservations online (Tyler 2000).
Finally, consumers' anxiety over safety and security in online shopping is further
exacerbated by frequent media reports about web security breaches and frauds, and
insufficient knowledge of the matter itself. Most of the security worries are caused by
people who are not sufficiently aware of the possible protection that exists (Furnell
and Karweni 1999). Although the Web is generally considered to be user friendly and

even 'foolproof", a user without the proper IT knowledge and skills will certainly
encounter more problems and feel less confident in conducting web-based
transactions.
Technological Factors
Many of the current constraints and problems of conducting web-based business are
caused by the Web technology itself. 'Web technologies consist of the hardware,
software and networks that enable individuals and organisations to connect with and
interact with the World Wide Web. Hardware consists of the client terminals, the
server, the gateway, the router, and hubs. The software consists of operating and
application software, including the browsers and application software on the client
side, database servers, web servers and other application servers on the server side,
and network operating systems and managers on the network side. The networks
consist of cables, either leased or proprietary, and message carrier services" (Dc and
Mathew 1999:432). The main causes for concern over the ability of the Web in
implementing c-commerce are as follows:
The Web's slow speed, often dubbed as the 'world wide wait", slows down the growth
of the web-based businesses as users are often not prepared to wait for too long to see
the information appears on the screen. The slowness of the Web is a combined results
of three factors: the increasing number of Internet users, the increasing frequency of
use, and the increasing richness of the information (from simple text to full colour
pictures and videos) being transferred over the Internet (O'Conner 1999). Technology
will not reduce these growing demands on the Web, on the contrary, technology will
constantly expand the Web's capacity for accommodate and even stimulate the
increasing demand. For example, the new digital broadband service, due to be
introduced in the UK this year, could offer instant and always-on high-speed (10
times faster) Internet access. It will not only enable much faster Internet access but
also enhance facilities such as interactive digital TV and video e-mail. The advent of

broadband and mobile accessibility is creating a second wave in Internet development

(after the WWW in 1993). Research shows that a broadband customer will stay online
four times as long as a narrowband customer, and spend nearly three times as much
on c-commerce BBC 2000).
Functionally, the Internet is close to fully operational for commercial purposes. The
main remaining impediment to maximum use of the Internet for c-commerce is the
concerns for information security. The securing of information includes the protection
of: (1) confidentiality -providing confidentiality in the transmission (and sometimes
the storage) of data; (2) authentication -proving the identification of the individuals
both transmitting and receiving the data; certifying that all parties to a transaction are
indeed who they claim to be; and (3) non-repudiation - providing proof that the
transaction actually took place, establishing an irrefutable time stamp on the sending
and receiving of the message. In particular, there is an urgent need for an integrated
financial transaction system that is suitable for an open electronic marketplace such as
the Internet. How the consumer will pay for goods and services and how the provider
will receive the payment securely over the Internet are issues which are being seen as
some of the most important success factors for Internet commerce. A survey of US
corporations revealed that 75% of the executives lacked confidence in the Internet as
a vehicle for electronic commerce, primarily because of the vulnerabilities. The risks
in electronic commerce are shown in poor security such as: from the short-cuts in the
software development process, shortcomings in the popular operating system,
deficiencies in the Internet protocols and problems inherent in managing the Internet.
Related to security is the issue of 'cyber' crimes. Internet crimes include not only
fraud and theft-related activities, which simply represented the extension of
traditional crimes into the electronic environment, but also new and more advanced
forms of abuse such as hacking and computer viruses Furnell and Warren 1997). Web
scam and online credit card fraud are also increasing rapidly. Visa International says

that half of all credit-card disputes are about Internet transactions, despite online
transactions making up just 2% of Visa's overall business. Visa found that across the
EU only 5% of consumers trust e-commerce. Web technology does not cause the web
crimes but these cyber crimes are more difficult to prevent and detect as they are
committed in a virtual space. Unless the IT industry can come up with some effective
solutions to the security problems in web-commerce, consumers will have to either
take a high risk in or stay away from Net-shopping.
Furthermore, the 'unorganised" nature of the Web, makes it difficult to locate the
information users desired. The Web offers an uncontrolled and vast universe of
information: there are now about 5 million web sites with some 1 billion web pages.
However, there is no overriding structure and control over information, no single
entry point to the Web, and no centralized directory of content. Although the
development of search engines and online directories has made finding information
somewhat simpler, it i~ still easy to get distracted or lost during a search and much
precious time can be wasted in gathering information.
The other problems of the Web can be seen from Internet Industry Almanac's "Top 10
pain in the Net" - junk email, slow web sites with too many images to load, web sites
with white text that you can't print, cookies, broken links, interstitial ads, hard-to-read
tiny text, web sites with no basic company information, old forgotten web sites, and
the server is not responding.
Organisational Factors
The low level of web-based business is also attributable to the failure of business
organisations in implementing the Web technologies in operation and marketing.
Most business leaders did not realise the potential impacts of the Web on commerce
until very recently (some still do not). A survey of US hotel managers found that they
believe the Internet will 'someday" become an effective marketing and
communication tool but not at the present time. Ironically, respondents with greater

exposure to the Net rated its present usefulness lower than those with no net
experience. On the other hand, those same experienced users gave the Net's future
prospects a much higher rating than the inexperienced respondents.
Many companies, even with recognition of the advantages of the Internet in
marketing, failed to exploit its full potential due to the lack of management
commitment, investment capital and the qualified technical and managerial personnel.
This is particularly the case for small tourism businesses. In the UK for example,
travel agents are not using the Internet to provide better service to customers because
of perceived investment and access costs and fear of new technology. Sabre (UK)
recently discovered that fewer than half of its agency customers had an email address.
On the other hand, some large travel corporations failed to develop web-based
operations wholeheartedly due to both complacency about their market leader
positions and the vested interest in their highly vertically integrated business
structure. The top three tour operators in the UK - Thomson, Airtours and First
Choice - for instance, did not have a formal Internet strategy until March 2000. They
probably overlooked the potential of the new Internet start-ups since the Netcommerce had a slow start and the travel web sites were mainly selling airline seats
instead of package tours. The major tour operators were also concerned with the
impacts of web-based operation on their own travel agent chains because the
"disintermediation" in travel distribution saves operator side cost at the expense of
losing businesses at the agency side.
As a result, not all tourism companies are on the Web. When they are on the Web,
most of their web sites are PR or promotion sites that provide merely the companies a
presence on the Net or little more than advertisements for their products and services.
With the few comprehensive sales and transactions web sites, users were often asked
to phone an operator or offered a brochure in the post. Just a fifth of the UK's top 40
tour operators have a real-time booking facility on their Internet sites. A recent survey

also shows that 62% of the travel companies which have facilities to sell via the Web
or email have less than 1% of its total business is conducted through online booking.
Even when web sites are fully operational in real-time transactions, such as many
airlines owned sites, they often offer limited choice. Consumers increasingly want to
use the web, and they want the convenience to see all the options in one place, no
matter which airlines or tour operator is involved. However, most of the travel
products on sale over the Net are stored at various web sites owned and operated by
individual companies, such as airlines, tour operators, travel agencies and ferry
companies. Another problem is that the Web does not always offer the lowest prices
compared with the traditional distribution outlets. Research by Express Money (1999)
shows that booking holidays and flights through the Internet is not cheaper and
traditional, low-cost outlets offer lower prices for several popular destinations. This is
particularly the case for airlines as where a single flight could have over 50 different
fares, the cheapest fares are usually given to flight-brokers or consolidators. Since
most web users consider 'price" as the most important factor in buying an airline
ticket, they will certainly be discouraged from booking directly on the Web when they
realise that the traditional agents offer better deals.
Governmental Factors
The nature of the Internet enables no one to control its structure and content, while as
a recent phenomenon, laws and standards are yet to be developed and adopted to
facilitate and regulate its commercial use. Some of the problems highlighted above
are partly attributable to or greatly escalated by the lack of effective government
involvement in promoting, facilitating and regulating e-commerce on the Internet.
Governments across the world have been slow in realising the potential of the Internet
for economic growth and even slower in providing the necessary regulatory
framework appropriate for conducting Net-based business. Although existing
business laws and regulations are applicable to e-commerce, the particular nature of

Internet-based business does requires special treatment, especially in the areas of

security, fraud, sabotage, and data and consumer protection. Without the confidence
and trust of those participating in the process, it will be impossible to achieve
sustainable growth in e-commerce. However, censoring indecent and potentially
criminal material on the Internet were often the main reasons chosen for regulation. In
the UK, one of the advanced Net-economies, the Government put forward a draft
Electronic Communications bill last year which deals with a wide range of issues
central to the healthy development of e-commerce, including consumer protection,
information security, authentication and digital

signatures,

confidentiality,

encryption, taxation issues, intellectual property rights, technical standards, illegal

content and so on. The problem is, the bill remains to be a draft bill until the
Parliament passes it through a lengthy process that could last for years.
As the Internet is a global computer network and e-commerce is essentially global
business, the establishment of international standards and legal provisions for its
smooth function is also critical. International bodies like the Organisation for
Economic Cooperation and Development (OECD) and the European Union (EU)
started to address some of the key issues in e-commerce from 1998, such as building
trust in electronic commerce by ensuring the security and privacy of information and
the protection of consumers; establishing ground rules for electronic transactions; and
enhancing the information infrastructure through common interoperable standards,
and access to open networks. However, progress is lamentably slow. It appears that
each country will have to create their own Internet acceptable use policies, and figure
out how to enforce them. Until then, the Internet will be a lawless frontier where
anarchy and vigilantism are alive and well.
Legislation is of fundamental importance, but legal provisions only mark the
boundary of unacceptable business practices and protect the consumer by redressing
any illegal treatment. Consumers want to buy from companies that are not only law-

abiding but more importantly are reliable and offer quality and value. Nevertheless, it
is extremely difficult, if not impossible, to judge a company by its web site.
Therefore, other (non-legal) measures must also be taken to boost consumer
confidence in online shopping. The Indian Government is trying to promote the ideas
of 'e-hallmarks" which will guarantee that its users are legitimate traders offering
assurances on security of payments and communications and giving accurate
information on goods, prices and a returns policy. A new body -Trust - will be set up
to accredit c-commerce codes and there are plans to market the c-hallmark
internationally. However, many business organisations oppose the idea, wanting
instead to rely on self-regulation without government intervention. For example,
ABTA aims to clamp down on Internet sales by creating regulations for online travel
transactions. It plans to publish a single revised code of conduct for agents and
operators in May 2000, with a new section on Internet sales. It will require members
to have a secure payment system if using the Internet to take bookings, and to observe
the same ABTA rules as for other types of advertising.

ANALYSIS AND FINDINGS

THE NATURE OF YOUR TRAVEL TO INDIA
Tourism Package

10

Independent

Business

12

Sports

Medical tourism

Religious

Others

12

12
10
10
8

6
4

2
2

Others

Religious

Medical
tourism

Sports

Business

Independent

Tourism
Package

FREQUENCY OF TRAVEL TO INDIA

Once in an year

18

2-3 times in an year

20

>5 times in an year

17

20

20
19

18

18

17

17
16
15

Once in an year

2-3 times in an year

>5 times in an year

SOURCE OF INFORMATION
Marketing by Indian Ministry of tourism

Marketing by your travel agent

21

From your friend

Internet

17

Others

21

25

17

20
15
10

0
Marketing by
Marketing by From your friend
Indian Ministry of your travel agent
tourism

Internet

EFFECTIVENESS OF INTERNET IN TOURISM INDUSTRY

Attributes

No. of respondents

Others

Yes

36

No

No
10%

Yes
90%

The graphs shows that 90% of respondents, internet really affects the increase of
tourists. 10% respondents disagreed with the fact.

INFLUENCE OF E-COMMERCE STIMULATE THE DECISIONS OF

TOURISTS
Attributes

No. of respondents

Yes

30

No

Cant say

Cant say
13%
No
13%

Yes
74%

From the above table, we can understand that E-commerce really affecting the
decision making power of tourists.

ADVERTISING EFFECTIVENESS
While the study told potential respondents that the research was designed to "learn
more about them", control was sought for a multitude of factors that could influence a
test of advertising effectiveness. The classic experimental research design, the most
rigorous study methodology available, was applied by randomly assigning users to be
part of either the test or exposed cells. Because Web ad banners are served
individually one at a time to Web users, this assignment was invisible to the
respondent. Importantly, both the exposed and test cells were treated identically in all
respects, except for the exposure to a test Web banner.
Online advertising has tremendous communications power; a single exposure can
generate increases in:

Advertisement awareness

Service awareness

Product attribute communication

Purchase intent

Nearly all of the impact measured was generated without a 'click-through' to the
advertiser's site, - proving the power of the ubiquitous banner.
Selected highlights of the report follow, while the document provides the results in
full.

Consumer acceptance of online advertising is comparable to that of

traditional media.

MBinteractive asked comparable questions for the Web, Print, and Television in a
separate survey of its recently established US nationally representative panel of Web
users. On a five point scale ranging from "Strongly in favor of" to "Strongly against,"

between 60% and 70% of Web users report top-two box scores in favor of Web,
Television, and Print advertising. Web users are less supportive of Radio advertising
and are somewhat opposed to outdoor signage/billboards (only one third report a toptwo box score in favor of such marketing vehicles).

Online Advertising dramatically increases advertisement awareness after

only one exposure.

Advertisement Awareness is measured by a question asking respondents if they recall

seeing an ad on a particular Web site in the past seven days. Those who respond "no"
are prompted with the tested ad and then re-asked the question.
By the criterion of getting noticed by consumers, the twelve ad banners tested by the
IAB demonstrate unequivocal success after a single additional ad exposure. Eleven
out of the twelve show marked improvement in advertisement awareness. An
additional exposure to the advertisement boosted advertisement awareness by 30% on
average (from 34.0% to 44.1%), statistically significant at the 95% confidence level.

Web advertising boosts awareness of advertised brands

Eight of the twelve ad banners we tested showed positive increases in brand

awareness (three of the brands tested already enjoyed nearly universal levels of
awareness at 100%, 99% and 92% respectively and could not go much higher). For
two relatively new brands, the increase was dramatic. Web ad banners not only have
the ability to remind consumers about brands for which they are already aware, Web
ad banners can and do inform users about products that were not previously on the
consumer's radar. Across the 12 brands tested, we observed an increase of 5%, on
average, in awareness of the services.

Online advertising provides significant service communications power.

The research investigated attitudinal shifts on a brand-by-brand, questionnaire itemby-item basis.

Six of the twelve Web ad banners meet the statistically significant threshold of
90% on brand perception items

Five out of six demonstrate clear positive change while the sixth shows a
polarization of positive and negative attitudes, with a positive net effect on
purchase intent

In general, Web advertising can positively impact brand perceptions.

A closer look at the time spent, in comparison, on other media reveals that in urban
areas:
WeekDays

Weekends

Thus Internet audience increased during weekdays, gaining 8 percentage points from
TV. Specifically in the A1 cities of Mumbai and Delhi it was found:
Mumbai

Delhi

Thus average time spent during weekdays was 252 minutes on all three forms of
media together, and 318 minutes on weekends in the urban areas. The time spent on
the Net averaged more than 60% of that on TV, especially during weekdays the trend
being the same in the core cities.
Specifically, urban areas were found to spend on an average per week:

180 minutes on watching TV on weekends, 120 minutes on weekdays

66 minutes on weekends on the Press, 54 minutes on weekdays

72 minutes on the Net on weekends, 78 minutes on weekdays.

In Mumbai:

186 minutes on TV on weekends, 144 minutes on weekdays

54 minutes on weekends on the Press, 42 minutes on weekdays

84 minutes on the Net on weekends, 96 minutes on weekdays

In Delhi:

156 minutes on TV on weekends, 114 minutes on weekdays

78 minutes on the Press on weekends, 60 minutes on weekdays

78 minutes on the Net on weekends, 90 minutes on weekdays.

The study also found that Net users spent more time on TV and Press on weekdays
and weekends than non-users. For instance, on weekends:
Net users were found to spend an average of 180 minutes on TV on Sundays and 66
minutes on the press. Non users spent 158 minutes on TV, 50 minutes on the press.
On weekdays:

Net users spent 120 minutes watching TV, 58 minutes on the Press.

Non users spent 118 minutes on weekdays on TV, 40 minutes on press.

In the U.S., on the other hand, where the Internet has been growing rapidly since
1995 and is currently available in 35% of households, Net users were found to be
lighter TV viewers, according to a Nielsen Media Research survey conducted in May
1999.
Though light TV viewers even before they had access to the Net, they tended to
watch certain types of show more than those without access. They were also found to
be more affluent than the latter.
A survey by the Washington-based Strategis Group, on the other hand, found that
64% of the respondents watched less TV in order to surf the Net and 48% read less,
thanks to the Net.

HOW TO TARGET TRAVELLERS ONLINE?

Internet advertising allows for more personalization, creativity and interactivity as a

result of the technological edge it enjoys over traditional media like print and TV. As
televisions' reach expanded, brands gained instant exposure to millions of consumers.
But 'how best I reach them' is a question better answered by the Internet.
It's just the nature of the Internet. The interactivity of enables a greater ability to
identify the interests of consumers enabling marketers to target their audience on the
dot.
Only competent online solutions provide the key to efficient and effective online
advertising, and give the publisher and advertiser total control to define their TA,
track them, deliver the message and report the effectiveness across the site - all in real
time.
Some of the targeting parameters used are:

Keyword search targeting: This is based on the visitor's usage of key words
in the search engine of the site. This process allows, on the search results page
for eg., to post an ad relevant to the search contents.

Content targeting: Based on the site content which matches the target
audience profiles. For eg. To reach a youth audience, you can post ads only on
youth sites and youth sections only, maximizing the impact.

Time targeting: The advertiser would have products to be targeted to office

goers or home users. The user is identified from the time he visits the site. It
helps evaluate when a message for a holiday would be most relevant. For
instance, it makes sense to show a pizza ad during lunch hour as it could
prompt a purchase.

System targeting: The visitor is identified from his usage of operating system
and browser and targets the visitor with a suitable advertisement. For eg., the
probability of a person using a Mac and being in a creative field is much
higher than he being in any other field. To cater to the entire gamut of IT

professionals, you need to target only the Windows NT, SUN and UNIX
operating systems. A flash banner can be posted to only a high end browser
like IE 5 and a static Jpg banner to a lower end browser etc.

Domain targeting: The advertiser can choose the domain he is targeting and
select his type of audience, who will be interested in his products or services.
Targeting can be by domain type (.com,.ernet), company name etc.

Geographic targeting: Based on specific location of the target audience

(Cities, towns etc.). For eg. Within the Rediff portal, ads can be posted to
Indian audiences and NRI's separately. Different promo ads can be posted to
different locations, which in turn drive creatives. If KBC is being watched
across India at the same time, a different ad. can be shown to different
audiences from different cities at the same time.

The availability of such targeting parameters defines the strength of the Internet as a
means to reach the target audience of your choice precisely and without any wastage.
Apart from these strengths, what makes this medium so powerful, is the availability
of post campaign evaluation and optimization tools which support superior
planning.
These tools allow:

To activate online changes to the campaign. Correct sub-performing creatives

within the planned period, assign higher weights to better performing
creatives, increasing effectiveness, make mid-course corrections to the
planned activity etc.

To assign different weights to parts of the entire communication mix.

Re-assign target markets to maximize effectiveness

Reset campaign objectives based on performance at the optimal time,

through the course of the campaign

Re-assign distribution of impression by content. Eg. An ad. for a

finance company will be given more weightage on business/ finance
web sites coupled with base presence in other relevant sites.

To drop non-performing sites/ cities from the mix.

Thus enhancing efficiencies of the campaign.

In short apart from the inherent strengths of Internet as a medium, a great online
support service can help reach your target audience efficiently and effectively using
targeting, evaluation and optimization parameters exclusive to the Internet.

CONCLUSION AND RECOMMENDATIONS

The survey findings might suggest that it is not picking up as yet with the customers
as they usually prefer not to click on the ads. This might be due to the fact that the
traditional forms of advertising are positioned in their minds and the concept of
Internet advertising might take some time catching on. Even the high rates and low
accessibility of Internet would be the hindering factor. But on the other hand the
increase in the spending on the Internet advertising clearly indicate that marketers are
willing to spend a significant part of their ad budgets on Internet advertising which in
turn is a sign of the emerging days of Internet advertising.
Love it of loathe it, Internet is here to stay and the marketers who will adapt to the
needs of the net users and communicate properly with the customers as regards their
products will make it big else they will perish. On the other hand the customers will
have a better access to information and will have a variety of products to choose from
with the Internet advertising gaining importance.
India has not lagged behind with respect to the general decibel level
generated on e-business. Unprecedented attention has been given to Tourism,
especially the connected environment and the benefits it can bring to the
common citizen. Several sites
such as Rediff on The Net offers sales over the Internet. Several state governments
have announced plans to set up kiosks for allowing citizens easier
access/transactions with the Government, and the list reads on. Yet, there is plenty we
need to do to catch up. The toughest challenge is not

technological but cultural. E-business will have real momentum when every
businessman, civil servant, common citizen begins to grasp its significance
and starts adapting it. For e-business is not a mere extension of the existing
ordernot a tool to improve a step here, and a process there. Electronic
business promises to displace the current economic model and rebuild it
from the core. Its going to change the business model fundamentally. This
will be a time of great opportunity for some, and a great threat to others, but
a period of great change for everyone.
As a nation, we are at a stage where awareness level of e-business is rising
rapidly. There is unprecedented interest in the Internet and computers. But
that is not enough. The real imperative is to fathom the true implications of
this brave new world, and to be prepared to respond proactively. The
media, academia, and the tourism industry are all, perhaps, doing their bit to help.
However, one of the biggest drivers for change is experience of the new
way. And that is happening too.
With tourism promotion, upto date and convenient facilities and enormous online
advertising effort by the tourist science enterprises the tourism industry is booming.
No doubt as the developing components of tourism will stand more efficiently for
supporting potential tourists, the scope of movement of general people will increase
drastically making tourist industry a larger, unique and dynamic industry.

This paper has so far examined some of the key issues related to the marketing of
tourism on the Internet. In particular, it has highlighted the main features of the
Internet as an effective and efficient communication medium, including its
addressability, interactivity, flexibility and accessibility, and its role in improving
customer service and reducing costs. It has also analysed the unique characteristics of
tourism which make it perfect to be marketed on the Internet and further explored the
main areas in tourism marketing where the Internet could play a significant role and
provide substantial benefits for both the marketer and the consumer. In an
investigation of the key forces which drive Internet commerce, it has found that a
wide variety of factors, grouped conveniently in four broad categories

demand,

organisational, technological and governmental - could both enable and restrict the
application of the Internet in tourism marketing.
With regard to the future of Internet tourism marketing, there appears to be little
question that the Internet will permeate into every aspect of tourism business and
every area of marketing activities. Indeed, the Net could become the dominant
platform and instrument for tourism promotion and distribution in five years' time.
This is based on the author's belief that Internet marketing has now survived its
infancy and is ready to accelerate the transition from the introduction to the growth
stage as more and more people and organisations are recognising its unique and great
potential for marketing. The increasing power of computers, decreasing surfing cost,
and higher level of computer literary and web skills will make web surfing as a
necessity in everyday life to an increasingly large population, especially in the
developed world. Many of the current technological constraints could also be
overcome (though new problems will inevitably emerge) in the next few years with
the high quality broadband access via optical fiber or satellites to improve speed; the
wide application of constantly improving firewalls, encryption and digital signature
software to enhance security; the development of more sophisticated search engines
and 'intelligent agents" to simplify web search task; and the Wireless Application

Protocol (WAP) technology linking mobiles to the Internet to extend the range of
services available to the public. At the same time, governments are increasingly
involved in the expanding e-commerce through providing incentives to small
businesses, facilitating infrastructure development and establishing the regulatory
framework which supports and protects all those concerned.
It is obvious to the current writer that the key to the future growth and improvement
in Internet tourism marketing lies in tourism organisations. The market conditions and
web technologies are improving steadily and a conducive legal and social
environment is starting to take shape, it is now up to tourism organisations to seize
and exploit the opportunities created by such changes to its full potential. Therefore,
the crucial question for academic researchers and practitioners in future research is
how tourism organisations can take advantage of the changes and opportunities
brought about by the Internet. To offer a prescriptive list of policy recommendations
is neither feasible, because it requires a thorough understanding of all relevant issues
including expertise in technology, tourism, marketing and a keen awareness of all
new developments in both IT and tourism, nor necessary since different tourism
businesses have different resources and operate in different settings. Instead, an
attempt is made here to discuss issues that are both important and with wide
applicability. Three interwoven cognitive issues are highlighted below to emphasise
the significance of changing the mentality of tourism organisations to preparing for
the new virtual business environment.
In order to market tourism products successfully on the Internet, a tourism
organisation must first of all have a strategic vision whereby it can fully comprehend
the changing market space, from physical to both physical and virtual, and the
underlying forces shaping this new marketing space. The Internet has altered forever
the tourism marketing system and its environment, no tourism business can escape its
impacts but companies willing to become engaged in Internet and embrace Net

commerce should find more opportunities while those still pretend that the internet is
a bad dream, such as some travel agencies, will be left with all the threats. Whether a
organisation likes it or not, the Internet is here to stay and is going to dominate
tourism marketing. Andy Grove, the Chairman of Intel, has been widely quoted as
saying that in five years' time all companies will be Internet companies or they won't
be companies at all.
Second, the Internet must not be treated as just a promotion aid or distribution device,
but be seen as a major force in itself that profoundly changes the way tourist business
is conducted. 'Marketers will need to rethink fundamentally the processes by which
they identify, communicate, and deliver customer value. They will need to improve
their skills in managing individual customers and allies. They will need to involve
their customers in the act of codesigning their desired products" (Kotler 1999:206).
Indeed, tourism marketers should change their business paradigm and marketing
practices to suit the new Internet era.
Third, as the Internet alters the critical success factors in many businesses, tourism
organisations must use it effectively to create new competitive advantages. For
example, tour operators (in the UK) were obsessed with gaining control of
distribution through vertical integration with travel agencies in the last decade, but
with the emerging web-based online sales companies, control of how they let the
product be distributed now supersedes control of actual distribution. In responding to
the threats from airlines direct sale, the major GDSs have been using the Internet to
develop web-based GDSs and to diversify their product base to include hotels, car
rental, cruise lines, tour operators, etc. Clearly, tourism organisations have to adopt a
technology management policy that will assist their competitive strategy and usefully
leverage the technology innovations to their advantage. Strategic Internet partnerships
or alliances, especially those between tourism companies, and between tourism and
IT companies, are also a major source of competitive advantage.

BIBLIOGRAPHY
Bender, D. (2005). Marketing on the Web: Internet Strategies for Hospitality Travel
and Tourism. Washington, DC: Hospitality Sales and Marketing Association.
Inkpen, G. (2004) Information Technology for Travel and Tourism (2nd edn). Harlow:
Longman.
Kumar, Arun and Meenakshi N., Marketing Management Comprehensive Text,
Vikas Publications, New Delhi, 2006.
Pran Nath Seth and Sushma Seth Bhat (2007), An introduction to Travel and Tourism,
Sterling Publications
www.advent.co.in/online-advertising.html
www.bitpipe.com/rlist/term/Online-Advertising.html www.agencyfaqs.com
www.domain-b.com

ANNEXURE
QUESTIONNAIRE
1. What is the nature of your travel to India?
Tourism Package
Independent
Business
Sports
Medical tourism
Religious
Others
2. How often do you travel to India?
Once in an year
2-3 times in an year
>5 times in an year
3. How did you get to know about India as a tourist destination?
Marketing by Indian Ministry of tourism
Marketing by your travel agent
From your friend
Internet advertising
Others
4. Can ecommece affect the increase of tourist?
Yes
No
5. Rate Importance e-commerce has tremendous communications power; a
single exposure can generate increases in:
Advertisement awareness
Brand awareness

 Product attribute communication

Purchase intent
6. Which media is more effective?
Newspaper
Television
Internet

7. Does e-commerce stimulate the decisions of tourists?

Yes
No
Cant say
8. Any suggestions to improve marketing effectiveness of Tourism industry