Tourism and Technology
Business Insights Series 2011/2012
January 2012
Tourism and Technology
TOURISM AND TECHNOLOGY
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Introduction................................................................................................................................ 3
Setting the scene ....................................................................................................................... 3
Fact Finding ................................................................................................................................ 4
Booking ........................................................................................................................................ 5
Technologies for the tourist .................................................................................................... 6
Technologies for providers ...................................................................................................... 7
Some suggestions ..................................................................................................................... 7
Conclusion ................................................................................................................................... 8
Tourism and Technology
1. Introduction
This article examines some of the technology trends that are impacting on the tourism sector worldwide,
and their implications for tourism in NI. It will review how technology is influencing tourists and tourist
operators, sorting out short term fads from developments with real long-term potential to enhance visitor
experiences.
Specifically this article examines key trends in online technologies, and how consumers have responded to
them. These include online search engines, booking systems, social media, and how these can be leveraged
to enhance the tourism offer for individual operators and for the NI tourism industry as a whole.
This article also examines more novel innovations and technologies which are being employed by
individual operators and by tourists, from Global Positioning Systems (GPS) to green technologies which
are aiding the development of the sustainable tourism agenda.
Providing an inventory of all technological advances in the tourism industry would be a difficult task, but
this paper aims to highlight some examples to highlight how technology has been leveraged by the tourism
sector and by tourists, and some of the advantages and pitfalls that these bring. The aim of this article is to
help tourism providers assess how technology can impact them and what types of questions they should
ask before deciding to adopt such technologies.
2. Setting the scene
The use of internet has become an increasingly integral part of everyday life for consumers in Ireland and
across the world. Some 60% of NI and 73% of RoI consumers have a broadband connection in 2011, with
penetration increasing from 8% in NI and 21% in RoI in 2005 (Mintel/TGI). By comparison, around 69% of
GB consumers have a broadband connection (Mintel/TGI, 2011). This makes the internet one of the, if not
the, strongest channel for tourism companies to reach consumers and potential visitors. There are many
related trends which are affecting the way in which we reach consumers. One of the most prominent of
these is social networking.
The technologies which consumers are embracing are also changing the way in which we reach potential
visitors. For example, desktop and laptop computers are still the most popular way for consumers to access
the internet in 2011 with some 62% of NI consumers and 76% of RoI consumers using a computer to access
the internet (Mintel/TGI, 2011). However, consumers now have more options and increased mobility when
it comes to browsing. For example 17% of NI and 18% of RoI consumers access the internet via their mobile
phones (Mintel/TGI, 2011). This can involve areas such as browsing online maps, researching holiday
destinations and downloading apps while on the go, while also helping tourists already on their trip find out
more information about their destination. How tourism operators leverage these trends to maximise their
visibility is a key question.
From the point of view of the tourism provider there are a whole other range of technological issues. Much
of the technological developments have opened up new channels for reaching consumers. These include
the growth of online booking sites and in-house booking management systems. There are also technology
options which offer potential new efficiencies for tourism providers. These involve everything from
investment in green technologies to inventory management systems. With the economic downturn
creating a relatively challenging period for the NI tourism sector, it is necessary to examine whether
investing in new technology is worth it and if they will yield a sufficient return in a short enough period of
time.
All of these developments present a myriad of challenges and opportunities for the tourism sector. It is in
this context that we examine some of the technological developments related to the tourism sector, and
assess their potential importance and longevity of impact on the tourism sector.
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3. Fact Finding
Internet sources have become a core aspect when visitors are planning their holidays, and planning visits to
NI is no exception. According to the NITB Visitor Attitudes Survey (2009) 79% of visitors used the internet to
plan their holiday to NI, making it a more popular source of information than guide books, personal
recommendations and even travel agents.
The same survey found that tourist board operated websites were the most important sources of
information when using the internet, including Discovernorthernireland.com and Discoverireland.com.
Some 47% and 37% of visitors to NI used these respective websites to plan their holidays in 2009.
Airline websites, hotel websites, and online travel agents/booking sites also saw high usage among visitors
to NI. Contrary to expectations, the social network Facebook was only used by 2% of visitors in planning
their holiday. However, as noted further on in this article, social networking sites have an important role to
play in getting noticed and promoting tourism enterprises.
3.1 All publicity is good publicity?
Online reviews are a highly utilised method for visitors to plan their holiday with 73% of visitors to NI who
read online reviews citing these as very important or quite important when deciding on accommodation.
High numbers of visitors also regarded reviews as important for deciding on sites and attractions (Visitor
Attitudes Survey, 2009). One of the key websites for tourists planning their holiday is TripAdvisor, with 19%
of NI visitors using this to plan their trip. In fact Alexa (a leading web ranking company) rank TripAdvisor as
the second most popular travel website in the world (January, 2012). This website allows visitors to review
their experiences of accommodation providers, activities and restaurants and rank them on a five point
scale from “Excellent” to “Terrible”. It also allows visitors to post photos of their room/experience. An
average rating is shown for each hotel and website visitors can go straight to reviews of hotels to explore
the detail highlighted by the visitor.
This offers opportunities for NI to highlight its key tourism assets. For example, the Black Cab Tours of
Belfast are ranked as NI’s top tour attraction (out of 40) on the website, achieving 158 excellent reviews out
of 168, with no reviewers rating it as “poor” or “terrible” (correct as of January 2012). Though this website
brings with it many advantages for the tourists and for operators, it can lead to visitors posting negative
reviews. However, the website does allow providers to respond to individual comments which can also be
seen by those visiting the website. With internet enabled, and high quality camera phones reviewers can
post reviews during their stay so being alert to new reviews is imperative.
3.2 Social Networking
Word of mouth is as important for the tourism industry as ever, but it is how the word is spread which has
changed. Social networking is a key aspect of this. The two websites which have had the greatest impact in
this area are Facebook and Twitter. According to Alexa, Facebook is the second most popular website in the
world, only topped by search engine Google (January, 2012). According to the Mintel report Online Social
Networking – Ireland (October, 2011) Facebook is the most popular social networking site among NI and RoI
consumers, with 77% and 86% of internet users accessing the site, respectively. This compares to 73% for
GB (Mintel UK, 2011).
According to Mintel Ireland the most popular feature of social network sites is to keep in touch with friends
and family and reconnect with old friends. Following this the most popular feature is posting photos, which
is used by 39% of NI and 50% of RoI consumers respectively. This can often involve posting photos of places
visited and can be used to spread word of tourist amenities and providers.
How consumers access these social networks is also important. According to Mintel’s Online Social
Networking – Ireland (October, 2011) report some 40% of NI and 38% of RoI internet users access social
networks via their mobile phone. A feature of Facebook which ties in with this is “checking in”. Users of the
network who also have a smart phone can log their position using their smart phone and it will post to their
profile page on Facebook, to let their friends know where they are. This can often be accompanied by
photos or posts. Some tourism providers have taken the initiative and used this to their advantage to gain
publicity. For example, US low cost airline JetBlue offers loyalty points to those who check in to their
Facebook page when at an airport that they serve.
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Tourism and Technology
Novel uses of social networks, as highlighted above, may have some impact, but advertising can have
negative impacts. For example according to the Mintel report Online Social Networking – Ireland (October,
2011) some 38% of NI and 44% of RoI internet users claim that they never pay attention to advertising on
social networks, while 32% of NI and 39% of RoI internet users claim that advertising on Social Networks
annoys them. By comparison 17% of NI and 27% of RoI internet users have visited a company’s website as a
result of social network advertising, while 11% of NI and 23% of RoI internet users are “friends” with a
corporation/brand on a social network site.
Undoubtedly social network provides many unique opportunities to engage with consumers and potential
visitors, but how this is done may influence its effectiveness. Further information on Social Networking and
Tourism is available in the NITB article “The importance of social media in tourism” from the 2010/11
Insight Series.
4. Booking
The proliferation of the internet has not only opened up opportunities for promotion and information
sharing, but also for sales. According to the NITB Visitor Attitudes Survey (2009) some 60% of NI visitors
used online channels to book accommodation. According to the Mintel report Online Retailing (June, 2011)
some 60% of NI internet users have booked flights/travel online while 54% have booked accommodation
online (Toluna 2011), making these the third and fourth most popular categories for online shopping. This
was topped by books/CDs/DVDs (71%) and clothing/footwear/accessories (67%) By comparison, travel
and accommodation these were the first and second most popular categories for RoI consumers (65% and
58% respectively).
Much of the popularity of this has been due to the growth of Online Travel Agents (OTAs) and booking
websites. Previously, accommodation providers were quite limited in selling their offer online due to not
having the technology to do so. This was not as much of an issue for large chains (for example Hilton Group)
or consortia (such as Best Western), but was for smaller independent hotels which could not afford to invest
in technologies such as Central Reservation Systems. However, OTAs have acted as new channels for
independent accommodation providers and these have proved highly popular with tourists. For example
booking.com is the most popular travel website in the world (Source: Alexa, January 2012). There is quite a
high level of competition among OTAs, and many have adopted different operating models, as highlighted
below.
FIGURE 1: OTA BUSINESS MODELS, 2011
Model
Description
Typical example
Typical cost to hotel
Agent
OTA sells supplier product in return
for commission
Supplier provides allocation of
product at net rates, which are
subsequently marked up by OTA
and sold publicly
Supplier provides allocation of
product at net rates, which are
subsequently incorporated into
packages by the OTA
Supplier’s product is sold by OTA
with one element of the product (eg
the hotel name) hidden until sale is
complete
Product is offered for a limited time
to a closed user group
Booking.com
Hotels.com
10-15% of gross
revenues
25-30% of gross
revenues
ThomasCook.co
m
35-40% of gross
revenues
Priceline.com
60-70% of gross
revenues
GroupOn
75% of gross revenues
Merchant
Packaged
Opaque
Club
SOURCE: MINTEL (THE FUTURE OF TECHNOLOGY IN TRAVEL – INTERNATIONAL – JUNE 2011)
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Tourism and Technology
Some of the newer innovations in this area have seen the introduction of opaque selling. One of the key
examples of this is the “mystery hotels” on lastminute.com which offers consumers heavily discounted
rates on a hotel in a selected location. The name of the hotel is not revealed until the purchase is made. This
has proved highly popular with North American travellers in particular (Source Euromonitor, 2011)
Similarly coupons are also on the rise, driven by challenging economic conditions where consumer
confidence is low. This has seen websites such as GroupOn and Pigsback.com perform well, and act as
channels for providers willing to offer promotional rates.
5. Technologies for the tourist
The rise of smart phones has been one of the biggest technological advances for the tourist. A significant
proportion of Irish and UK consumers now own a smart phone. According to Silicon Republic (2010)
approximately one fifth (600,000) RoI consumers have a Smart phone. By comparison, 27% of UK adults
and 47% of UK teenagers also have a smartphone (Ofcom, 2011).
As mentioned previously, features such as checking-in on social network websites provide opportunities for
tourists to share their experiences. However there are many other features which are enriching the tourist
experience. One of the most popular of categories of these is GPS (Global Positioning Systems) and maps.
GPS on phones is growing in popularity and has almost become as standard as the integrated camera. This
is highly important for the NI tourism sector in particular, given that the majority of domestic and RoI
visitors use their own cars, while nearly half of international visitors use a hire car while visiting NI (NITB
Visitor Attitude Survey, 2009). Furthermore, many of the most popular activities engaged in by visitors to
NI include walking and cycling, both of which are complemented by GPS.
There are many other mobile applications (apps) which are having an impact on tourists and travel. For
example, translation apps are replacing the phrase book and allowing visitors to overcome language
barriers. This also has benefits for those providers which may have felt obliged to provide menus and signs
in multiple languages. Games are also highly popular and can help alleviate boredom in airports or while
travelling. This may have more negative connotations for the tourist oriented retail sector, particularly in
airside locations of airports.
There are even apps for those who are environmentally conscious about their holidays. For example there is
an app available on the iPhone which calculates a user’s carbon footprint based on distance travelled by air
or by driving.
Among the most popular app for use on smart phones however is one that allows consumers to access
Facebook which, as previously mentioned, offers an opportunity for tourists to share their experiences, and
potentially opportunity for NI tourism to benefit from word of mouth.
Other technologies are also bring benefits to consumers. GPS for luggage is a relatively niche area, but
some companies have brought out products to serve this market. One example is from GPS market leader
Garmin. They produce a generic GPS device which can be used to track luggage (or other possessions).
Users can also access a smart phone app that allows them to track their bags. This is just one example,
however with a recommended retail price of £179.99 this may not fit into the budget of many consumers.
These advances have the potential to enrich the visitor experience, but their impact will depend on how
much an area or the tourism sector engages with them. For example mobile apps which offer walking tours
of cities or historic sites may be popular, but these need to be developed in the first place if they are to be
adopted. Some have already been developed for the NI market. For example the Literary Belfast iPhone app
guides tourists around literary sites.
As with many technological advances, there is potential to take business from some tourism operators. In
the example of walking tour apps to guide tourists, this may take business from existing providers of this
service. This may in turn place an emphasis on those providers to offer a more enriched, better value service
or provide some sort of differentiation in their offer.
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Tourism and Technology
6.Technologies for providers
There are many technological developments which are occurring in the tourism sector and existing
technologies which have yet to be embraced in a mainstream way. The challenge for any provider is to
assess what is essential, what will add value, and what is simply a fad or gimmick.
For example, US company Linen Technology Tracking offers towels (and other linens) with integrated Radio
Frequency Identification (RFID) tags. This allows accommodation providers to identify when a towel is
being stolen and to prevent theft. According to the founder of the company, between 5% and 20% of linens
in hotels go missing. With a RFID fitted linen costing approximately US$1 more than other linen, there is a
potential to save on the cost of replacing up to a fifth of linens (USA Today, 2011). This is having particular
savings for hotels with outdoor pools in the US where it is common for towels to be removed from rooms.
Similarly, the previously mentioned GPS device which can be used on luggage, has also been used (in one
anonymous UK example) by a bicycle rental company. The issue however is cost versus risk. For many
smaller providers, such systems may not be feasible, and furthermore may be unnecessary. For example,
Dublin City Council introduced the Dublinbikes scheme. This allowed visitors and local residents to rent
bicycles from various locations around the city and has proven to be a popular attraction. Within the first
year, these had been used for the 1 millionth time and out of the 450 bicycles, only two had been stolen
(both of which were recovered). For higher value bikes and where there is a high degree of theft investment
in GPS may yield a return, but in many cases this may be an unnecessary investment.
Contrary to this, some “green technologies” offer the potential for a return to tourism providers,
particularly those in the accommodation sector. Some of these have been highlighted in the NITB paper
Sustainable Tourism and the Green Agenda (2010/11 Insight Series). Technologies range from switching to
CFL (compact fluorescent lamp) light-bulbs, to more complex and expensive installations such as solar
panels, wind turbines and rainwater collection systems. Providers of these systems and devices all claim
that they offer savings over more conventional methods, albeit these savings are only typically realised in
the long term. However, in this instance there is potentially more to be gained from promoting a providers
use of green technologies.
Sustainable tourism has become quite prominent. For example in the NITB Visitor Attitudes Survey (2009)
visitors were asked if a Green Award would make accommodation more appealing. Some 28% agreed that it
would make accommodation much more appealing, while a further 45% agreed that it would be slightly
more appealing. Similar sentiment was echoed in the NITB paper Sustainable Tourism and the Green
Agenda.
7. Some suggestions
7.1 Assessing need
As already mentioned, some technologies introduced for the tourism sector may not be worth the
investment, yet others may yield a return. It is important for providers to assess the true savings/benefits
and if there are perhaps simpler solutions. For example gauging if a clear and simple sign in each room
reading “Guests will be charged for towels removed from the hotel” be as effective as placing RFID tags in
each piece of linen. However, the implications for the visitor must also be considered, and if there is any
appeal that may be gained by a provider by investing in new technologies.
7.2 App development
Apps are becoming increasingly prominent in almost every sector as smart phones grow in popularity.
Developing apps is relatively inexpensive for those that are familiar with the process and have the
technological know-how. However, it can be a tricky process for those that are not so technology-savvy.
Regardless, these have the potential to enrich the visitor experience by offering features such as guides for
individual attractions or for whole regions. Developing apps around clusters of particular activities (for
example hillwalking or water-sports areas), for areas of historical or cultural interest (for example Belfast’s
Titanic heritage), foreign language guides for overseas visitors, or for other popular features such as
shopping, have the potential to bring increased business to providers operating in these areas.
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Tourism and Technology
7.3 Match positioning with technologies
As mentioned, investment in technology has the potential to save money and also appeal to tourists (for
example Green technology). However, the benefits of these may not be fully realised by a provider if they do
not position their product or service to highlight their environmental awareness to visitors. In the example
of green technology, investing in energy efficiency and conservation may become redundant if some form
of Green credentials/award are not applied for and received. Following on from this, further promotion is
required to highlight this achievement to the visitor/potential visitor.
7.4 The best things in life are free
Investing in technologies can be expensive but there are many ways of engaging in technological
development at little to no cost. For example setting up a Facebook (or other social network page) is free of
charge, while running competitions on these can be a cost effective way for a provider to get publicity. Other
popular sites also allow for free uploading. For example a photo of a hotel, bar or other provider can be
uploaded onto Google Maps, while promotional videos can be uploaded to YouTube also at no cost.
7.5 Rewarding technology use
In this article the use of “checking-in” using a smart phone and Facebook was highlighted, and the uses of it
as a promotional tool were used. This is a relatively simple process and can be adopted by operators of any
size. For example, a restaurant could offer loyalty points, a free drink, side order or discount when a patron
checks in. This would allow that customer’s friends to see the name of the restaurant. Furthermore, the
customer getting something for free may enhance their experience and encourage them to post something
positive about the restaurant online.
7.6 Damage Limitation
The posting of reviews by visitors has become more very prominent and is a strong influencer on future
potential visitors. It is important for providers to monitor any postings and respond to any negative
comments with some form of apology or mitigating statement, without sounding overly defensive or
aggressive. On a more positive note, good reviews can be used to mitigate any potential negative response
and furthermore could potentially be used in other promotional materials. On this latter point it is
important to make any comments anonymous if re-posting/re-publishing to protect the privacy of the
writer and also to avoid any negative publicity regarding privacy invasion.
8. Conclusion
There are many ways that technology is impacting on both visitors and providers within the tourism sector.
Some of these have already established themselves as integral part of peoples’ lives and have further
potential to be an integral part of the tourism sector. Others have yet to take hold and may never form a
core part of the tourism offer or the visitor experience. Just as MySpace was expected to maintain a strong
share of the social network market, no-one can ever be entirely sure how technologies will take hold and
how much longevity they will have, but keeping in touch with these developments can yield opportunities
to grow businesses and attract new visitors.
This report has been compiled by Mintel Ireland and OCO Global on behalf of NITB. Every care has been
taken to ensure accuracy in the composition of this paper. NITB cannot accept responsibility for omission or
errors but these will be rectified in future publications when brought to our attention. Please direct any
queries to insights@nitb.com.
January 2012