Net Strategy Essay

1019 words - 4 pages

Computerised networks and electronic distribution lead the dramatic structural changes within the tourism industry, and become central to the distribution mix and strategy. Computer Reservation Systems (CRS) are clearly regarded as the most important facilitators of these changes as they formulate a new travel marketing and distribution system. In its simplest form, a CRS is a database which enables a tourism organisation, to manage its inventory and makes it accessible to its distribution channel partners. The rapid growth of both tourism demand and supply in the last decades, demonstrated that the tourism industry could only be managed by powerful computerised systems. Airlines were the pioneers of this technology, although international hotel chains and tour operators realised the potentials and followed by developing centralised reservation systems. The need for CRSs arises from both the demand and supply, as well as from the expansion of the tourism industry in the last decades.

From the tourism demand side, the rapid growth of travellers urges the utilisation of powerful CRSs for the administration of the traffic. CRSs satisfy consumer needs for easy access to transparent and easy to compare information on a wide variety of choices of destinations, holiday packages, travel, lodging and leisure services, the actual prices and availability of such services. They also provide immediate confirmation and speedy documentation of reservations providing a greater degree of flexibility and enabling prospective travellers to book at the "last minute". Moreover, "improved access to information covering all aspects of tourist activities provided the framework for offering personalised services at prices levels comparable to those of standard packages" (WTO,1988). Increasingly, tourists' satisfaction depends on the accuracy and relevance of tourism information as well as the promptness of responding to consumers' requests (Buhalis,1994). Tourism supply utilises CRSs to manage its inventory and distribute its capacity. CRSs are utilised to facilitate and manage the drastic expansion of tourism enterprises and destinations globally and can be characterised as the "circulation system" of the tourism product. CRSs enable tourism providers to control, promote and sell their products globally, while assist them to increase their occupancy/load factor levels and to reduce seasonality. They can also contribute to their profitability and long term prosperity as they enhance numerous business functions. In addition, CRSs often charge competitive commission rates in comparison with other distribution options, while enable flexible pricing and capacity alterations, in order to adjust tourism supply to demand fluctuations. CRSs also reduce communication costs, while provide managerial information on tourism demand patterns or competitors' position. Cooper and Buhalis (1992) suggest that principals can enjoy several competitive advantages when represented on CRSs,...

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