RISE OF ONLINE PLATFORMS IN TOURISM. ARE WE THERE YET?

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Given the accessibility of the internet to the masses, almost all business sectors are exploring ways to attract new customer segments. While many businesses are being largely affected by the emerging technologies, perhaps, the tourism and hospitality sector is one of those few which have been completely technology-driven. This transformation is mainly due to the online platforms facilitating interaction and transactions in matching demand and supply in the tourism business. From the demand perspective, the internet has become an essential tool in tourism and hospitality, facilitating potential tourists to search for information on products and services, compare and evaluate the alternatives and, eventually selecting and buying the finalized alternative. United Nations World Tourism Organization (UNWTO) confirmed in its report that 95 percent of users exploited web channels to gather travel-related information and about 93 percent indicated that they visited tourism web sites while planning for vacations. This increase in the number of potential tourists exploring the internet has led the tourism businesses to adopt the latest technologies for reaching out to their buyers. Similar to the demand side, the suppliers have also been largely affected by online platforms and digitization. The entire process has resulted in the emergence of e-tourism reflecting digitization of all processes and value chains in tourism, travel, hospitality and catering industries. European Travel Commission identified the web as the main primary source of information for searching or booking suitable travel destinations. This increase in the number of potential tourists exploring the internet has led the tourism businesses to adopt the latest technologies for reaching out to their buyers.

In the last decade, the tourism and hospitality sector is characterized by a wide range of electronic applications (e.g. social networks, review Web sites, blogs, interactive websites and photo- and video-sharing platforms), facilitating interactions among the web-users. The influence of these applications is crucial in tourism and hospitality where there is a tendency to share experiences with other people through publishing recommendations, opinions, photos or videos on the Internet. The users’ reviews on social media are found to be more effective in changing both their shopping activity and the way to share the consumption experience. Since the comments posted online are coming directly from the users, they are considered more trustworthy than the information provided by the firms or vendors.

However, the future of online platforms in tourism like any other sector is not without challenges. The dynamics of e-commerce will lead to the adoption of emerging technologies such as AI and chatbots to enhance the booking experience. Achieving personalization and customer engagement in the crowded e-marketplace will be the major challenges. Personalization technology tools will be required to gauge the visitors’ online behavior such as search queries, page visits, purchase history, brand loyalty, repeat visits and so on. Also, the visuals of the destinations/attractions/hotel rooms will be taken over by the virtual and augmented reality. Given their infinite reach, online platforms also pose challenges to the regulatory bodies who struggle to design a comprehensive, uniform legal for such kind of businesses. At least five cities in the USA recently banned a popular tourism online platform Airbnb on various grounds. Dubai and Ras AL Khaimah in the UAE have, however, legalized AnrBnB with policy and procedure. Many opine that such platforms and technologies will lead to societal and employment issues. However, effective integration of technology in online platforms will let the AI handle mundane tasks, freeing humans to focus on bigger issues and creativity. 

Online platforms in tourism and hospitality will continue to evolve followed by interesting repercussions. While many online platforms in hospitality are in their maturity stages, the industry still lacks bigger platforms in other services such as rent a car, chauffeur service, catering, attractions booking, and event management and so on. I am sure while we are discussing this, more of such competitive and promising platforms are being developed to benefit all the stakeholders.

Author: Dr. Mohit Vij
ASSOCIATE PROFESSOR
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