Use of Technological Development and its Link to Tourism Industry - ICT

Question :

Technology plays an important role in giving shape to the tourism industry. The project is based on the use of technology development, particularly the information and communication technology. It covers the following points-

  • Historical development of technologies mainly ICT.
  • Technological development and its link to tourism industry.
  • Key theories on technological innovation, porters five forces, diffusion of innovation
  • changing nature of tourism industry
  • competitiveness of the tourism sector.
Answer :
Organization Selected : ICT


This project discuss about overall development of ICT in tourism industry. Technology has adverse effect on tourism industry. Earlier reservation was done manually, because of technological advancement customers can do reservation online. Website give information hotel and destination. further it discuss about Technological development in tourism industry, porters five force theory in tourism industry, Value chain key concept in tour and travel industry Changing nature of tourism industry Evaluating competitive


Overall historical development of technologies and particularly ICT

This sector is growing continuously. ICT has developed a lot from last decade. Every business is affected by this sector. This facilitates communication with the shareholders. They provide customers with different facilities. Work is done according to customer’s convenience. This provides an effective platform for communication. This has a great impact on the tour and travel industry. ICT is the backbone of travel companies (Waterton and Watson, 2015). This provides online reservation facilitates for customers. This reduces the cost of operations and maximises savings of industry. Earlier, reservation was done manually and now, these services are available online. Hospitality sector has developed because of this technological advancement. This also provide competitive advantages to companies. This sector has drastically changed and improved from the past decades. This helps the business to organise different marketing campaign. It reduces the complexity that management is facing at different levels.

This provides managers with alternative solutions to problems. Small and medium sized businesses do not have enough capital to invest in the ICT sector. This is beneficial to only large business organisation. These firms invest a large amount of capital in technological advancement which leads to profit maximisation of firm. Managers of small and medium sized businesses do not understand the advantage of technology. Many small and medium sized companies merge to derive benefit of this sector. This integration promotes the growth and development in industry. They provide effective tools for communication. Social networking provides platform to communicate with shareholders and customers. Internet is the fastest source that helps to deliver information and ideas (Aitchison and, 2014). This has a wide impact on the business process. Website is designed to attract the customers. This facilitates sale in tour and travel industry. Company can upload different types of offers on these websites. They provide the column of feedback which encourages customers to share their opinions and ideas. It helps in increasing the profit of firm. Website of company reflects the image of hospitality firm. Many visitors make decisions on the basis of these websites. This targets a wide range of people. These websites deliver the message to visitors. Social networking sites are formed on the basis of social groups and mutual interest. It has become easy to target specific group through these sites. These networks support the marketing strategy of company (Cohen and, 2014). Business needs to maintain their ranking in search engine. Ranking attracts more customers. Technological advancement plays an important role in the tour and travel industry.

The way technological development is related to tourism industry

Technology is the limelight of tourism industry. It controls and monitors every activity of tourism industry. It help in achieving the goals of business effectually. It provides guidelines to meet the customer’s requirements. They provide effective solutions to problems faced by their clients. Profit of business is increasing with effective rate. Social networking sites help in building strong relations with customers. Technological development reduces the cost and maximizes profit of business. Development in ICT sector makes communication process easy. This saves the time and money (Hall and Gössling 2016). People can utilize their time and money on other important work. Managers can easily stay in touch with their employees. They can easily monitor different activities of the workers. Information is delivered to traders with the help of networking sites.

Inappropriate use of technology can affect the inner and outer communication. This increases the process of globalization. Improvement in technology has a positive effect in tour and travel industry. This facilitates the online reservation of hotel rooms and tickets. These websites have feedback options. Customers can share their views and opinions about trip. People visiting websites can view the comments to get an idea about place and restaurants. Majority of customers plan their trip online with the help of website. They search hotel online and make reservation. Customers can compare different hotels (Colantonio, 2017). All information about hotels are available online. Websites promote different destinations to attract the travellers. Visitors can make instant reservation. Website communicates relevant information about the destination.

Technological development has a significant role in the growth and development of tourism industry. Travellers do not have to do hard labour to plan trip. People can easily plan their trips with the help of these technologies. They can grab the best hotel that deals with website. Different packages are available online ( Roca, 2016). This provides freedom of choice to the customers. Packages are designed according to the needs of travellers. Technology increases the customer base and profit of firm. It helps in reaching at customers across world. People have access to different destinations of the world. Technology has changed the way of thinking towards tourism. All activities depend upon the technology. Social media helps in exploring different destinations. Technology increases the quality of services provided by tourism industry. This provides advantages to tour and hotel industry.

Critical review of key theories

Porter’s five force model in tourism industry

It is a tool that helps in identifying the level of competition in market. There are different forces that company face to survive in the market. Profitable and attractive industry will attract more customers. This theory is applied to most of the industries. This helps in analysing the future threats. Firm applies different strategies to the business model. It provide access to different market conditions. It is an effective competitive theory which is used by many tourism industries. This plays an important role in the growth and development of industry. There is moderate level of competition in these types of industries. This industries are identified according to their services they rendered (Benur and Bramwell 2015). This theory helps in increasing the profitability of industry. Theory suggests that every firm should have competitive strategies. Tourism industry has unique business environment. This theory shows the importance of bargaining power of customers.

According to this theory, buyers have control over their suppliers. Customers have control over the price of product. If suppliers influence the price of products, this will be known as bargaining power of suppliers. They increase the price of product to maximise profits. Suppliers have the control over supply of service. Tourism industry supplies services according to the demand of customers. Industry has threat from new business entrants in market. Increase in profits will attract new suppliers or producers. Entrance of new firm will increase competition in the market. These industries do not have any barriers. A firm can easily enter and exit market. This helps in reducing the operating cost and increasing profit (Sharpley and Telfer, 2015).

Customers will have a large range of products. Tourism industry has low barriers which means that a company can freely enter and exit the market. This helps to operate in economies of scale. This industry has threat from their competitors. There are many industries competing with each other. Tourism sector has different substitutes. There are similar types of services available in market that provide customers with equal level of satisfaction. Advancement of technology minimises the threats. This strategy improves the quality of services. Tourism industry makes different cooperate strategies to deal with their competitors. This is applied to a wide range of problems. Potters theory enhance the value and quality of services in tourism industry (Parsons, Maclaran and Chatzidakis, 2017).

Critical evaluation of value chain

Value chain key concept in tour and travel industry : this process divide business process in different departments. Mangers are required at every level of business process. They control manage different business activities. This concept ignore functional boundaries. Manger deal with customers and suppliers. They control whole business process. functions like marketing, selling, advertisement are not included in value chain. Organisation can achieve competitive advantage by delivering quality products to customers. They take step to improve quality of product. Mangers are required to understand desire of customers. Value chain describe different category of activities that are held in organisation (Smith, 2015).

Profit of firm depend upon effectiveness of business activities. Firm can earn profit if they keep price above cost. In this process firm generate competitive advantage. Efficiency of service can be measured by customers satisfaction. Customers satisfaction is main motive of company. Company can satisfy customers by offering them quality services. They are required to have good communication with customers. They must work as a team to achieve target. Customers should be treated as end means. Value chain offer cost advantage to firm. They can minimise cost by performing business activities. Tourism industry can develop cost advantage by controlling different cost drivers. This strategy is adopted by tourism industry to increase value of there services. They believe in delivering valuable services to there customers. This strategy even provide various advantages to firm. Value chain generally consist of two parts that are primary and support activities (Ihannam, Butler and Paris, 2014).

This theory suggest to build interpersonal relationship with there customers. Providing customers with better services can increase scale of operation. Value chain strategy play important role in delivering quality services to customers. Differentiation is other advantage derived from this strategy. Market offer similar services and products to customers. It become difficult for customers to differentiate between products and services. This strategy help in improving quality of product. Differentiation advantage can be achieved with help of this strategy. Value chain help in creating unique identity of product. This help to differentiate particular products from different products in market. There are different drivers for uniqueness of products. Tourism industry adopts different techniques to create uniqueness in there services. Value chain is powerful tool for strategic management. This approach is successfully used by tourism industry. They make strategies to improve value chain (Wachowiak, 2016).

Discussion on Changing Nature of Tourism

Changing nature of tourism industry : from past few years tourism industry has undertake different changes. These changes has huge impacts on different business activities. These changes play major role in development of tourism industry. This sector has transformed globally. Tourism industries have large range of new opportunities. Tourism industry merge with hospitality industry to provide good services to there customers. Both companies go hand in hand. People plan vacations to relax. Hospitality business look after need and desire of there customers. Tourism industry cover large part of economy.

Earlier reservations were done manually. Now they have developed websites which give facility of online booking to customer. These industry focus on satisfying customers want and desires. Competitions are continuously increasing in this industry (Waterton and Watson, 2015). Tourism sectors are continuously rising. Tourism industry has increased awareness among customers. They make people aware about environment. They motivate people to protect environment. Travel operators spread awareness to travellers. It Is there responsibility to protect environment. Travellers are suggested dump wastage in dustbin or recycle bin. With increase in tourism pollution is also increasing. Tourism industry has taken actions to control pollution in environment. Travellers are requested not to harm animals.

They spread awareness about environment. They have increased there security check. Security means maintaining of safety for society or community. Increase in tourism has identified need of safety and security (Aitchison and 2014). Tourist has increased rapidly in past few years. Improving of security system has become major challenge for government. People spend large part of there income on tours and travels. Terrorism has high impact on growth and development of tourism industry. Government adopt different measures to maintain safety of people. This has adverse effect on tour and travel industry. security and safety of tourist are in hands of government. Tourism industry has developed and improved from last few decades. They have become more concerned about travellers. With help of technological advancement these industries have improved quality of there services. Tourism industry perform maximum of there activities online. They provide facility t to explore different destination of world. Tour operator design package to satisfied need customer. Virtually tourism industry has developed in past few years.

Evaluation of Competitiveness of Tourism Industry

Evaluating competitiveness in tourism industry : tourism cover large market share. Competitions has increased rapidly in past few years. Competitiveness is responsible for increase and decrease of tourism in country (Cohen and, 2014). There are different indicators on which competitiveness depend. This is very complicated process. Government play an important role in evaluation of this strategies. If price of air tickets increase this will lead to fall of tourism in that country. This can be advantage for other competitive country.

This will result in loss of valuable income of particular country. Tourist will compare price of tour. They will prefer to go for tour cheap company. To increase competition other country will lower there ticket fare. Government should be in charge of these important decisions. They must carefully monitor tax rate and fare of tickets. Government should take necessary actions to control competitiveness. They should take some measures in favour of tourism industry to make them profitable. There are no barriers on entrance. New firms will enter market and competition will rise in market (Hall and Gössling 2016). To maintain sustainability government implement different strategies. They engage public to increase public financing. Bigger financing will be profitable to public. It is important to monitor every activity in tourism sectors. Competitive intelligence can be improved by increasing finance. Government should be aware of all policies and strategies. Government tourism can strengthen market. There are different factors that affect competitiveness in tourism industry. It is necessary for government to monitor every factor. To maintain sustainability they supply services that are demanded by public. They must consider environment before making any strategy.

Environmental friendly services must be delivered to client. Government must provide tourism sector with all requisites. Tourism sector is finding new resources from public and private companies. This will increase level of competitiveness in market. Tourism sector guide local business of country. They form partnership with theses business to meet requirement of clients. Tourism industry consist of wide range of opportunities. They offer economic packages to customers. Competition in tourism industry is continuously increasing (Colantonio, 2017). Tourism industry form new alliances to deliver services. Tourism industry favourably support global economy.


This project conclude about significance of tourism industry. Technology play an important role in growth and development of tourism industry. Technological development provide customers with different facilities. This sector look after desire of customers. Technology remove complexity of management. This facilities communication between employees and mangers. Traveller can now plan there holiday online. This give customer's flexibility to choose from different options. Tourism industry follow concept of value chain. According to this concept they render valuable services to customers. This maximises cost of production with increase in profit. Customer satisfaction is main motive of this industry. Value chain is useful tool for strategic management. Tourism industry has undergone changes from last few years. They offer online reservation services to there customer. Earlier customers make reservations manually. There are more concerned about safety of customers. Competition in tourism industry has increased. They form new alliances to deliver quality services.


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