Analysis of using Internet technology in hospitality marketing.

Ruzic, Drago ; Andrlic, Berislav

1. INTRODUCTION

The modern marketing for hospitality and tourism means a business activity which connects production and consumption in such a way that fully and with maximum profit meets the needs of tourists that are usually referred to as hospitality and tourism market demand. Hotels nowadays cope with greater difficulties and problems arising from challenges of growing e-markets and rapidly changing factor of tourists' behaviour.

There is insufficient number of papers on the subject of research on the influence of the Internet marketing strategy in the tourism and hospitality industry. (Law & Hsu, 2005; Abdinnour-Helm & Chaparro 2007). Following the above assumptions paper will analyze the available data on secondary-level of marketing opportunities using the technology in hotel business, using scientific methods of analysis and synthesis, comparison and compilation. Also, paper presents future directions and suggestions which could develop e-marketing strategies of hospitality companies, especially using Web 2.0 technologies.

2. E-MARKETING IN HOSPITALITY

Changing economic conditions, new forms of consumer behaviour, and especially new technologies is likely to cause the emergence of new or growth of existing tourist market. In developed economies all the more attention is attached to the study of the role of new technologies in the field of hospitality and tourism. It is necessary to point out that technological progress is a key factor of modern world of tourism. Development of modern telecommunication and digital technologies, and ultimately the Internet, provide many new marketing opportunities. The simplest show, traditional marketing activities will receive an e-features, but can also talk about a new, special kind of - e-marketing in tourism. According to the existing considerations, the main focus of this paper is on the one part of e- business, called e- marketing. There are several definitions of electronic marketing. One of possible definitions is suggested: "Electronic marketing (e-marketing, telemarketing) is a means of realizing company's marketing activities through intensive application of information and telecommunication (internet) technology. (Panian, 2000). A further focus of research will be directed towards the marketing of tourist hospitality industry. Internet, as one of the most important phenomena of today's technology, offers the tourist catering entities of a completely new competitive opportunities, of which the most important was certainly the possibility of providing current and always open access to information throughout the world. Internet provides a whole range of support functions and processes in the company in order to develop products and provide services for consumers. Then, represents a powerful communications medium that can effectively link the subjects of supply and demand in tourism. Marketing activities of companies on the Internet may not be possible without the web site is independent of the business model being implemented because the necessary initial contact that is carried on the website. Each web site therefore has the duty (Ruzic, 2007):

* Attract visitors to the web site

* Retention of visitors to the web-site

* Attract visitors to come back to the web site that had previously visited

* The conclusion of purchase - for sale

* After-sale services.

As a result, these activities lead to the appearance of new habits changed in the behavior of consumers-tourists, which is mainly marked by the use of the Internet as infomation, communication and transaction channel. The specified category is looking prospectively, on a broader global level in a continuous progression. Research on the European and world practices in the tourism hospitality industry evident show of greater competition with the business subjects that their operations are based on modern Internet technology. The Travel Industry Association's (TIA) latest survey predicts a drop of at least 1.3% in overall leisure travel in 2009. Corporate travel is already down as a result of massive layoffs and economic contraction. There are visible signs of decline in the corporate and association meetings and group travel business. Unfortunately, these declines are expected to accelerate in 2009. Yet, even with this expected decline in travel, online travel bookings in 2009 are projected to grow by 10.5% and reach $116.1 Billion, primarily as a result of the dramatic shift from the offline to online channel. (The Travel Industry Association, 2009)

3. RESEARCH OF TECHNOLOGICAL SYSTEMS USE IN HOSPITALITY MARKETING

The research proceeds from the influence of Internet technology, which is becoming increasingly important means of creating competitive advantages of tourism and hospitality companies in the market and leads to better way of promotions and sales. Today, at the time of globalization and the growth of Internet users, it is necessary to use modern technology to companies existed in increasingly challenging market. Although owning Internet sites considered to be strategic preconditions for increased market competitiveness, the assumption is that is the insufficient level of benefits in the Croatian practice. In the appendix to the hypothesis, is the following research. (Horwath Consulting Zagreb, 2008). The results of this survey should be interpreted in the context of its sample (105 hotels).The survey sample includes [5.sup.*] and [4.sup.*] hotels as well as [3.sup.*] hotels which continuously invest in product upgrading, management and marketing. All data of this research, were collected in the period from May to October 2008.

Tourists often use Internet for researching travel options, price comparison and booking of contracts for certain services such as plane tickets, hotel rooms, rental cars, etc. However, regardless of the growing importance of the Internet as an information source for tourists, there is generally low degree of Internet technology use on Croatian market, in the process of making decisions about buying.

4. INTRODUCING WEB 2.0 TECHNOLOGY IN

HOSPITALITY MARKETING

Precisely because of dependence of supply and information exchange in the production and distribution chain, hospitality proved suitable for the rapid adoption of information technologies and interactive media. However, certain companies are still not developed a marketing strategy through the Internet pages. Adjustment trends must be timely and possible, so it is necessary to intensify investment in that direction. As a result, it is assumed that the possibility of information and purchase via the Internet to stimulate the future purchase of tourists and change their previous spending habits.

To make hotel companies improve their e-marketing strategy, it is necessary to use the following Web 2.0 tools:

* Instant Messaging

* Internet Relay Chat

* Internet Forums

* Social Network Services

* Social Guides

* Social Bookmarking

* Social Reputation Network

* Weblogs

* Social Citations

* Peer-to-peer Social Networks

* Virtual Presence

* Virtual Worlds & Massively Multiplayer Online Games

* VOIP--Internet Telephony

* Mobile Internet, etc.

General characteristics of Web 2.0 tools are openness, freedom and collective intelligence. Users can use the application in full through a Web browser - in other words the web is defined as a platform and have control over the information on a page. Furthermore there are some aspects of social networking (social software within the social networking), and higher quality graphics than the arrangement of Web 1.0. Using these Web 2.0 applications and services bring significant progress in the hospitality sector. (Lew, 2009). Investments in the development of such systems very quickly generate a refund (ROI-return on equity). Therefore it is necessary to increase their use of the Croatian hospitality.

5. CONCLUSION

The hospitality industry appears exceptionally interesting in terms of the possibilities offered by e-marketing strategies. The emergence of global electronic markets on the Internet has been seen as an opportunity for hospitality companies to improve their competitive position. The Internet has become one of the most important communication channels in the world in recent years due to the vast increase of people with ready access to it. Unfortunately, research in the Croatian hospitality practice is not sufficiently aligned with the trends, what is the performance challenge and task for the e-marketing strategies in the future. Subject of further research will be the level of use of the Internet with tourists depending on factors of consumer behaviour.

6. REFERENCES

Abdinnour-Helm, S. & Chaparro, B.S. (2007). A Balanced Usability Checklist Approach to Evaluate Palestinian Hotel Websites, The Electronic Journal on Information Systems in Developing Countries, Vol. 31. No.2., 2007., pp. 1-12, ISSN 1681-4835

Law, R. & Hsu H.C. (2005). Customers' perceptions on the importance of hotel web site dimensions and attributes, International Journal of Contemporary Hospitality Management, Vol. 17.No. 6 Number 6, 2005. pp. 493-503, ISSN 0959-6119

Panian, Z. (2000). Internet and Small Businesses, Informator, ISBN 953-170-087-7, Zagreb Ruzic, D. (2007). Marketing for hospitality and tourism, Ekonomski fakultet, ISBN 978-953-253-022-3, Osijek

*** (2009) http://www.hospitalitynet.org/--The Travel Industry Association, Industry News, Accesed on:2008-04-08

*** (2009) http://www.horwath.hr/--Horwath Consulting Zagreb, Horwath Hotel Industry Survey 2008, Accesed on: 2008-04-10

*** (2009) http:// www.besteducationnetwork.org/, Lew, A.A--Web 2.0 tools, Accesed on: 2008-04-11

Tab. 1. Use of technological systems in
Croatian hotels

 Use of technological systems Share
 (%) in Croatian hotels

1. Own web site 94,9
2. System to access the Internet 93,9
3. Points of sale (POS) 92,9
4. System of calculating
 the telephone calls 91,8
5. Local area network (LAN) 89,8
6. Uniform system of accounts 71,4
 for lodging Industry (USALI)
7. Intranet system 70,4
8. Central reservation system (CRS) 68,4
9. Marketing infprmation system (MIS) 66,3
10. Wide area network (WAN) 55,1
11. Data warehousing 46,9
12. Energy management system (EMS) 27,6
13. Object management system (PMS) 26,5
14. Yield management (YM) 20,4
15. Global distribution system (GDS) 12,2

Tab. 2. Sources of advance made reservations

 Sources of advance made Share
 reservations (%)

1. Turoperator 38,7
2. Travel agency 28,6
3. Direct enquiry 13,8
4. Own reservation system 7,5
5. Own web site 6,5
6. Global distribution system (GDS) 1,4
7. Other web sites 1,4
8. A representative of the hotel 1,1
9. Independent reservation system 0,7
10. Transport company 0,3
11. Total 100