Technological Factors Affecting Tourism Demand
Technology has completely transformed how we plan, book and experience travel over the past few decades. From the early days of computer reservation systems to today's smartphone apps and virtual reality experiences, technological advancements continue to shape tourism demand in significant ways.
Key Definitions:
- Technology: The application of scientific knowledge for practical purposes, especially in industry.
- Tourism demand: The total number of people who travel or wish to travel to use tourist facilities and services away from their places of work and residence.
- Computer Reservation System (CRS): Electronic systems used by travel companies to store and retrieve information and conduct transactions related to travel.
- Global Distribution System (GDS): Worldwide computerised reservation network used as a single point of access for travel agents and other travel companies to book airline tickets, hotel rooms, car rentals and other travel services.
Evolution of Booking Technology
The way tourists book their holidays has changed dramatically due to technological advancements. Let's explore this evolution:
💻 Computer Reservation Systems (CRS)
In the 1960s, airlines developed the first computer reservation systems to manage flight bookings. These systems revolutionised the industry by:
- Allowing travel agents to check flight availability in real-time
- Reducing booking errors and paperwork
- Enabling airlines to manage their inventory more efficiently
- Examples include American Airlines' SABRE system and United Airlines' Apollo
🌐 Global Distribution Systems (GDS)
By the 1980s, CRS evolved into Global Distribution Systems, expanding beyond airlines to include:
- Hotel bookings
- Car rentals
- Cruise reservations
- Package holidays
Major GDS providers like Amadeus, Sabre and Travelport connect thousands of travel providers with travel agencies worldwide.
The Internet Revolution in Tourism
The rise of the internet in the 1990s and 2000s fundamentally changed how tourists research, plan and book their travel experiences.
Online Travel Agencies (OTAs)
Companies like Expedia, Booking.com and Lastminute.com emerged, allowing tourists to:
- Compare prices across multiple providers
- Read reviews from other travellers
- Book entire holidays without using a traditional travel agent
- Access last-minute deals and special offers
Case Study Focus: Booking.com
Founded in 1996 in Amsterdam, Booking.com has grown to become one of the world's largest online travel agencies. The company lists more than 28 million accommodation options in over 228 countries and is available in 43 languages. Its success demonstrates how technology has shifted power from traditional travel agents to online platforms that connect tourists directly with service providers.
Direct Booking and Disintermediation
Technology has enabled tourism suppliers (airlines, hotels, attractions) to sell directly to customers, bypassing traditional intermediaries like travel agents. This process, known as disintermediation, has:
- Reduced commission costs for suppliers
- Given tourists more control over their bookings
- Allowed for personalised service and loyalty programmes
- Created competition that has often lowered prices for consumers
Social Media and User-Generated Content
Social media platforms have become powerful forces in shaping tourism demand by influencing where people choose to travel.
📷 Instagram Effect
Visually stunning destinations gain popularity through photo sharing. Places like Santorini in Greece and Bali's beach clubs have seen tourism booms partly due to Instagram exposure.
⭐ Review Platforms
TripAdvisor, Yelp and Google Reviews allow tourists to share experiences, influencing others' decisions. 93% of travellers say online reviews impact their booking decisions.
🎥 Video Content
YouTube travel vlogs and TikTok videos showcase destinations, creating new tourism trends and sometimes causing "overtourism" in previously quiet locations.
Mobile Technology and Tourism
Smartphones have become essential travel companions, changing how tourists interact with destinations:
📱 Mobile Apps
Tourism-related apps have transformed the travel experience:
- Navigation: Google Maps, Citymapper
- Translation: Google Translate, iTranslate
- Booking: Airline apps, Booking.com, Airbnb
- Experience: TripAdvisor, local attraction apps
💰 Mobile Payments
Digital payment systems have made travel easier:
- Contactless payments reducing need for local currency
- Apps like Revolut and Monzo offering better exchange rates
- Mobile wallets (Apple Pay, Google Pay) enabling quick transactions
- QR code payments becoming standard in many destinations
Transportation Technology
Advancements in transportation technology have expanded tourism possibilities by making travel faster, cheaper and more comfortable.
Key Transportation Developments
- High-speed rail: Networks in Europe, Japan and China have created new tourism corridors and reduced domestic air travel
- Fuel-efficient aircraft: Modern planes like the Boeing 787 and Airbus A350 have made long-haul travel more affordable and comfortable
- Low-cost carriers: Airlines like Ryanair and easyJet have used technology to reduce costs and open up new destinations to mass tourism
- Electric vehicles: Growing networks of charging points are making sustainable road trips more viable
Case Study Focus: Eurostar
The Eurostar high-speed rail service connecting London with Paris, Brussels and Amsterdam has transformed tourism between these cities. Since opening in 1994, it has carried over 190 million passengers and significantly reduced air travel between these destinations. The train journey from London to Paris takes just 2 hours 15 minutes, city centre to city centre, making day trips possible and boosting weekend tourism. This demonstrates how transportation technology can create entirely new patterns of tourism demand.
Emerging Technologies Affecting Tourism
New technologies continue to emerge that will shape the future of tourism demand:
👁 Virtual Reality (VR)
VR allows potential tourists to "try before they buy" by experiencing destinations virtually. Hotels, cruise lines and destinations are using VR for marketing. Some attractions now offer VR experiences to enhance visits or showcase inaccessible areas.
🔬 Augmented Reality (AR)
AR enhances real-world experiences by overlaying digital information. Tourism apps use AR to provide historical information at heritage sites, translate signs, or create interactive city tours. This technology makes destinations more accessible and engaging.
📊 Big Data & AI
Tourism companies use artificial intelligence to analyse vast amounts of customer data to personalise offerings. Airlines and hotels use dynamic pricing algorithms. Chatbots provide 24/7 customer service. AI helps predict tourism trends and manage visitor flows.
Impacts of Technology on Tourism Demand
Technology has had several major impacts on tourism demand:
- Increased accessibility: Technology has made it easier for people to research, book and experience travel, expanding the potential market
- Greater transparency: Price comparison sites and reviews have given tourists more information, often driving down prices
- Changed expectations: Tourists now expect seamless digital experiences, from booking to check-out
- New destinations: Social media has put previously unknown places on the tourism map
- Personalisation: Data collection allows for highly targeted marketing and customised experiences
- Sustainability concerns: Technology has raised awareness of tourism's environmental impact, affecting demand patterns
Exam Tip
When discussing technological factors in your exam, always consider both positive and negative impacts. For example, while online booking has made travel more accessible, it has also created challenges for traditional travel agencies and increased competition. Remember to use specific examples and case studies to support your points.