http://ijopaar.com; 2016 Vol. 3(1); pp.

112-117
ECommerce as Key Factor for Tourism Development in India
Jay Prakash Kant
Faculty CIHM Chandigarh (Chandigarh Administration)
&
Manish Sharma
Principal UIHM, Chandigarh University

Date of revised paper submission: 05th August 2016; Date of acceptance: 10th August 2016
Date of publication: 14th August 2016; Impact Factor: 3.598; Quality Factor: 4.39
*First Author / Corresponding Author; Paper ID: C16308

Abstract

There are a number of challenges that the travel and tourism sector in India face. The upcoming
challenge is of handling the technological advancements in the commerce sector. The advanced and
ever evolving trends in the electronic commerce sector has left the tourism sector a challenge, to be
up to date and prepared to inculcate the new trends in order to have a healthy competition with the
other sectors of commerce and management world of trading. The corporate world has taken over the
majority of skilled labour providing them with the maximum salaries, hence leaving another
challenge in the travel sector of rather small number of skilled labourers interested to seek
employment in the field. Although there is great progress with even greater demand for tourism
services in the country, the service provision to its best depends on how well the aspect of e
commerce is managed and incorporated with efficiency in the travel sector, by using advanced e-
commerce practices makes them superior sector in travel industry. The paper analyses the
significance of e commerce as a key factor for tourism development in India. The paper also tries to
examine the following factors.
Role of e commerce in promoting tourist destination in India.
The benefits of e commerce on the number of incoming tourists and on the life of local
service providers.
Keywords: E-Commerce, Tourism.
1. Introduction
Tourism is commonly associated with international travel, but may also refer to travel to another place
within the same country. According to the World Tourism Organization, tourists are people travelling
to and staying in places outside their usual environment for not more than one consecutive year for
leisure, business and other purposes. Tourism has become a popular global activity for business, trade,
education, medical treatments, agricultural need, raw materials, historical studies, cuisine,
entertainment and many more evolving with the tick of the clock for every second. Today, tourism is
a major source of income for many countries, and affects the economy of both the source and host
countries; in some cases being of vital importance. Tourism is a dynamic and aggressive industry that
requires the capacity t adjust continually to clients changing needs and wishes, as the consumer
loyalties, security and satisfaction are especially the centre of tourism organization. Tourism is a
social, cultural and economic phenomenon which entails the movement of people from one country to
another or from place to another; outside their usual environment for numerous reasons. Tourism has

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to do with their activities, some of which imply tourism expenditure, advancements, trends,
sustenance, history, hospitality and many more.
2. E Commerce and E Business
In the emerging global economy, e commerce and e business have increasingly become a
necessary component of business strategy and a strong catalyst for economic development. The
integration of information and communications technology (ICT) in business has revolutionized
relationships within organizations and those between and among organizations and individuals.
Specifically, the use of ICT in business has enhanced productivity, encouraged greater customer
participation, and enabled mass customization, besides reducing costs.
With developments in the Internet and Web-based technologies, distinctions between traditional
markets and the global electronic marketplace - such as business capital size, among others are
gradually being narrowed down. The name of the game is strategic positioning, the ability of a
company to determine emerging opportunities and utilize the necessary human capital skills to make
the most of these opportunities through an e business strategy that is simple, workable and
practicable within the context of global information milieu and new economic environment. With its
effects small and medium scale enterprises can compete with large and capital - -rich business.
It is recognized that in the information age, internet commerce is a powerful tool in the economic
growth of developing countries. While there are indications of e commerce patronage among large
firms in development countries, there seems to be little and negligible use of internet for commerce
among small and medium sized firms. E Commerce promises better business for SMEs and
sustainable development for developing countries.
E Commerce the conceptual framework Electronic commerce or E commerce refers to a wide
range of online business activities for products and services (Anita Rosen, 2000). It also pertains to
any form of business transaction in which the parties interact electronically rather than by physical
exchanges or direct physical contact. E- Commerce is usually associated with buying and selling
over the internet, or conducting any transaction involving the transfer of ownership or rights to use
good or services through a computer - mediated network. A more complete definition is E
commerce is the use of electronic communications and digital information processing technology in
business transaction to create, transform, and redefine relationship for value creation between
organizations and individuals (Emmanuel Lallana, 2000).
The major different types of e - commerce are: business to business (B2B); business to
consumer (B2C); business to government (B2G); consumer to consumer (C2C); and mobile
commerce (m - commerce).
To manage the chain of networks linking customers, workers, suppliers, distributers and even
competitors, an integrated or extended supply chain management solution is needed. Supply Chain
Management (SCM) is defined as the supervision of materials, information, and finances as they
move from supplier to manufacturer to wholesaler to retailer to consumer. It involves the coordination
and integration of these flows both within and among companies. The goal of any effective supply
chain management system is timely provision of goods or services to the next link in the chain.
3. Global Perspective of E Commerce in Travel and Tourism
The travel technology is the application of Information Technology (IT) or Information and
Communication Technology (ICT) in the travel, tourism and hospitality industry. One form of travel
technology is flight tracking. Since travel implies locomotion, t ravel technology was originally
associated with the computer reservations system (CRS). Travel technology may also be referred to as

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e - travel: electronic travel or electronic tourism. E Tourism can be defined as the analysis,
design, implementation and application of IT and e commerce solution in the travel and tourism
industry; as well as the analysis of the respective economic processes and market structures and
customer relationship management. E Tourism can also be defined as every application of
Information and Communication Technologies (ICTs) within both the hospitality and tourism
industry, as well as with the tourism experiences. In other contexts , the term travel technology can
refer to the technology intended for use by travellers, such as light weight laptops computers with
universal power supplies or satellite internet connections. The biometric passport may also be
included as travel technology in the broad sense. XML based technologies have become
increasingly important for the travel industry. The biggest challenge imposed upon the tourism
industry in adopting technology is the lack of accurate education of the right technology that is
suitable for their business. There is a very big gap between the tourism and technology industry. Some
organizations have been able to tap into this gap and have turned them to Online Travel Agents
(OTA). However, it is not needed for every tourism business to become an OTA to successfully
utilize technology. Even though the growth of travellers using technology to source information is
increasing at rapid pace, the business operators and workforce within the industry do not have
sufficient knowledge, tools or strategy to utilize technology correctly. Other factors such as
infrastructures and investments are not considered as big challenges any more, as the cost to acquire
hardware and connectivity have dropped significantly over the years.
4. Technology in Travel and Tourism Sector in India
Technology assumes a critical part in the accommodation and tourism industry; both clients and
organizations can profit by advances in correspondence, reservations and visitors administration
frameworks. Innovation permits ceaseless corresponding and streamlines the visitors experience, from
reservation to checkout. The internet has a drastic effect on accommodation and tourism.
For some organizations and areas, the experience begins much sooner than an explorer arrives it starts
with the first visit to the site, where man sees photographs of the area and gets a feeling of whats in
the store. Mainly because numerous tourists companies are significant and distributed, these people
make use of desktops to stay related. Personal computers allow verbal exchanges between branches
and locations rendering it better to improve reservations and cross company procedures. There are
also employed in house to help keep all the employees on a single site and make it better to gain
access to data which could improve the visitor expertise: visitor personal preferences, cleaning data
and booking details can certainly be managed on a single process.
5. Significance of e commerce practice in India
E Commerce practices in the travel and tourism sector in India is not entirely new, although fast
growing in the past few years. The developments in computer and communication technologies have
made it possible to have rented cars with computerized driving directions and self service, video
terminals at renting counters in high traffic ports. The dawn of the age of personal computers (PCs)
coupled with the advent of multimedia content, thereby spurring the interactivity between suppliers
and consumers (Bubly & Bennett, 1994). The I.T. revolution has induced Business Process
Reengineering (BPR) in virtually all sectors of the economy and tourism is no exception. This new
application developed by the tourists in seeking services from government of India recognized service
providers and receive quality and reliable services from them. The app demonstrates ministry of
tourisms commitment towards the use of technology for service delivery. Incredible India Mobile
application (IMA) is available for the Android Phones on the Google Play store and for i-phones inn
App Stores

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Since tourism is a multi dimensional activity, basically a service industry; it would be necessary that
all wings of the central and state governments, private sectors become active partners in the
endeavour to attain escalating growth in the travel and tourism sectors of India and make it to be a
world players in the tourist industry, which would be possible only if the challenges are met by and
solutions are arrived at to curb the situation.
6. E Commerce in Travel and Tourism Sector
The growing technology and the information technology sector has taken the commerce and
management sector of the world to a global perspective, to generate a simplified yet adversely
challenging tech knowledge and advancement of each other sector with reference to trade and
commerce. The travel and tourism sector is also a part of this global phenomenon. The tourism
industry contributes a rather heavy chunk of the GDP to every nation. It would contribute over 75 %
of the GDP over the next decade. There are many advances booking e commerce systems that are
unaware of by the small travel business opportunities to the global travel and tourism industry.
Tourism related institutions and internet companies are joining to tap the potential market created by
e commerce.
E Commerce being an efficient portal to sell tour products has lead to complications such as fraud
and fake identities. E Commerce has reduced the success rates of small travel agencies. E
Commerce ha lead to the demand for the tourism employees to be well versed in the advancements in
technologies. Although this being a good factor which would develop the nations employee skills; in
India most tourism staff of minimum qualification require monetary support to pursue the required
education with reference to e commerce even though their knowledge about the travel destinations
and hospitality in providing best services range well above the trained staff. The easy accessibility of
information with the e commerce applications has made the present generation of travel providers
narrow minded with reference to geographical knowledge. There are numerous portals that offer
services in a very detailed and simplified manner that the customers prefer to make their own travel
plans instead of availing tour agents aid. False and improper information lead to the negative
experiences and wrong notions about a place.
7. Factors Impacting E Commerce Recognition In Tourism Industry
With the expansion of the tourism industry and growing logistical complexity in reaching out to the
large base of domestic and international travellers, e commerce based on marketing through
information systems can assist the tourism industry to achieve cost reductions and greater productivity
(Buhlias 2011). The industry is benefiting from greater computational speeds, and depths of
understanding from research supporting theories that can be modelled and implemented for social and
economic development (Berne et al. 2012). The rise of business technology, according to Schneider
(2008), Turban et al. (2010) and Zwass (1996), occurred in the early 1970s when the development of
Electronic Data Interchange and Electronic Funds Transfer facilitated electronic commerce
transactions. These earlier technologies and then the emergence f internet late in the 20th century
contributed to the phenomenon of e commerce, especially in marketing (Goel 2008, Shareef et al.
2009). Zwass (1996, p.2) defines e commerce as sharing of business information, maintaining
business relationship, and conducting business transaction by means of telecommunications network.
Nowadays, tourism is a field where new technologies are being used to a great extent. The advantages
are that Internet and e commerce offer to travellers as well as to tourism organizations have made
their use very popular. Such advantages are the direct communication between tourism suppliers and
travellers, the revolutionizing distribution of tourism information and sales. In addition, tourism
organizations due to the use of new technologies have the potential to sell their services to customers

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24 hours a day. Moreover, new technologies enable potential travellers to plan their trips according to
their wishes.
8. E Commerce as a Key Factor for Tourism Development in India
During the last two decade new technologies caused a major breakthrough in the world economy as
well as in many aspects of modern life. The rapid development of the information and communication
technologies (ICTs) and of the Internet has caused significant changes in the society and the business
environment worldwide. As a consequence, companies were forced due to the changes caused by
the rapid development of the ICTs and the continually growing number of internet users to redefine
the procedures they use in order to perform their transactions with their customers, suppliers and the
state.
As explained above the findings and suggestions with reference to the challenges faced by the travel
and tourism sector in India would be to attain the objectives and turn them into real life
implementation. A culmination of ideas to enhance the sector has been laid down by the government
authorities as well as other tourism organisations. This can accompany by looking into the needs and
measures that have to be levied to the staff and small companies. Also the present generation of
students pursuing studies in the travel industry need to be enlightened in this aspect and must given
the opportunity to elucidate the various practices in real life. A great point to be added to this would
be that the students be given the opportunity to work and learn on the e commerce practices during
their internship projects.
The ICTs and the internet have offered and continue to offer companies and organizations facilities,
new opportunities and possibilities they can exploit in order to make profit. However, new
technologies have also induced new threats and risks that companies have to face in the new
technological environment they conduct business in. New technologies offered significant advantages
to companies; the most significant advantage is the cost reduction in transactions. E Commerce is an
important tool for the companies that effectively use it. It s said that e commerce is one of the most
important innovations in the field of the new technologies and the internet. E commerce offered to
companies the major advantage of worldwide access to international and national markets with low
cost, increasing as a result their sales and consequently their profits. E Commerce and new
technologies offer to tourism companies. An advantage that customers gain is the fact that the
customer is able to buy products and services at any time of the day directly from the tourism
companies challenging the role of the intermediates.
Tourism companies also gain important advantages by the ICts and ecommerce. Tourism companies
offer to their customers information, services and products 24/7.
The function of marketing improves through cheaper and more effective advertising of products and
services through the internet compared to the traditional means of advertising like television and
radio. In addition, tourism companies interact directly with their customers saving time and money.
However, the most important advantage that marketing gained by the new technologies and e
commerce is the personalization of services and products that the tourism companies are able to offer
to their customers. The key to success is the rapid recognition of new customers through personalized
and modern products and services that satisfy their needs.
9. Conclusion
The technological development that occurred due to the development of the new technologies and e
commerce changed to a great extent the market conditions in the tourism industry. The development
of the ICTs and e commerce offered new tools to tourism marketing and management. Furthermore,

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new technologies enabled companies to increase their efficiency and to redesign their communication
strategy with customers and suppliers. However, it must be pointed out that companies can exploit the
advantage that new technologies offer to them only if managers contribute to the integration of ICTs
into daily business functions until new technologies are incorporated into the businesss mission.
This paper showcase an in depth view into the challenges faced by the travel and tourism sector in
India and they need to be addressed immediately to make changes to see evident results in the level of
progress. It is of high essence to avoid the decline of many small travel companies and to help
generate more employment opportunities; hence directly more contributing t greater service providers
in the field and lead to the development and progress of tourism in India with reference to service
provision. The past data help analyse how the process of evolution of IT over time and how much
potential it has in the future. Many of the other countries have already taken steps on this aspect,
leaving the challenges in India unattended as it faces a different target market to tend. Further research
analysis is required.
Finally, it worth mentioning that customers gained great power through the development of new
technologies. As a result, customers can determine the elements of the tourist package they want to
purchase. Moreover, the easy access to information that customers have gained through Internet,
resulted in them becoming more sophisticated and experienced and therefore harder to please.
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