Impact of Internet on Chinese Tourism Industry Chain

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Impact of Internet on Chinese Tourism Industry Chain
WU Heng, SUN Xiaoke School of Economics and Management, Wuhan University, Wuhan, 430072, China Abstract With the rapid development of Internet, tourism industry is enforced and promoted by the development of E-commerce in great extent. However, traditional tourism industry chain cannot be seasoned with the new way of commerce. So it is urgent to regulate the tourism chain. In this paper we first discuss the possibility of integration of tourism and E-commerce and its effect on tourism development; then analyze the features and problems of traditional and tourism industry chain; and at last put forward the situation and changes of tourism industry chain in present Net-world. This will help tourism suppliers and dealers to overcome their weakness and go into larger market. Key words E-commerce, Tourist products Consumers Tourism industry chain Integration

1 Introduction

Internet has developed very fast in recent years. There are 14,200,000 people going to internet in 1998, 19,600,000 in 1999, and 50,200,000 in 2003. It was estimated that there will be more than 12 billion network users in 2006, and market scale will reach 2,000 billion dollars. The income generating from Internet will increase from $8000, 000 in 1994 to 12340 billions in 2002 and the increasing rate is 90% from 2000 to 2001, and 72% from 2001 to 2002. This rapid development of Internet has impacts on almost every industry, which has to enter into E-commerce. Tourism industry is one of most promising ones among them. Tourism is growing very fast in integrating with E-commerce e.g. Tourism E-commerce sale is 270 billion dollars in 1990, and 670 billion in 2000. Global tourism E-commerce increased by 350% in continuous 5 years (UNCTAD, 2001).

2 Tourism and E-commerce
2.1 The characteristics of tourism products make it suitable to develop E-commerce Network itself has the function of both delivering and conducting messages. The information products, such as messages, computer software and videos can be provided directly to customers through Internet. Tourism products, as far as it sales concerned, have no difference from information products. Consumers obtain product information from media, friends and travel services. Information providing is based on the questions and interests of consumers, which is personal information. Then consumers pay in advance, or provide information of their credit cards. In return, consumers get receipts or contracts, which determine all the accommodation, travel and other services in details. So taking payment as a way of exchange, consumers get much more information. Tourism products and services are intangible. Its product, sale and consumption occur at the same time, so it doesn’t need any transportation, which is the advantage of tourism in developing E-commerce. Tourist products, such as scenic spots, cannot transfer from one place to another place. There are only information of accommodation, transportation, travel, shopping and activities provided in market. So the sale of tourist products is a process of information delivering. Meanwhile, tourist products are complex, its producing and sales involve many departments and industries, so it becomes more corresponding and effective to apply Interment technique into tourism . (Wu and Yang, 2004) 2.2 Tourism E-commerce helps to solve the problem of information dissymmetry in tourism consumption Different from other products, tourist products cannot be seen before consuming. Consumption happen when it produces and sales. So there is serious information dissymmetry existing between tour 790







operators and customers. In traditional sale process, because of the side effect, the benefit of customer cannot be protected, which not only has effect on sale of products, but also restrain the development of Chinese tourism. E-commerce can change the situation in ways by providing a brand new technique to deliver...
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