The cost and benefits of Information Technology and the Internet for small and medium-sized tourism enterprises

Abstract

Small and medium-sized tourism enterprises (SMTEs) have always suffered from the distribution function of their marketing. Distribution and intermediation are increasingly recognised as critical factors for the competitiveness and success of the tourism industry in general, and SMTEs in particular. In Northern European countries SMTEs need to develop effective distribution channels to approach their independent clientele, while Southern European SMTEs need to provide direct booking mechanisms to reduce their dependency on Tour Operators. Hospitality organisations receive a growing percentage of their customers through the Internet. Hotel chains have demonstrated their commitment to exploit the Internet as a prime distribution tool and have already allocated a significant proportion of their gross annual revenue for technological development. It is reported that in a recent survey 51% of the hotel chains already receive reservations from the Internet, whilst another 33% are planning to do so in the next 12 months. Unless SMTEs improve their visibility on the electronic marketplace they will lose significant market share and perhaps will be unable to survive in the long term.