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

  • Dimitrios Buhalis


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.

This paper builds on research undertaken in Greece, France, England and Wales. Most of the research was based on personal interviews and this qualitative analysis of the research results attempts to illuminate the cost and benefits of the SMTEs representation on the Internet and the usage of ITs. This paper demonstrates that gradually SMTEs start to take advantage of the Internet proliferation and gradually develop their presence in the electronic marketplace. This enables them to compete with their larger counterparts at affordable costs. Exploratory research illustrates the factors often considered by SMTEs in adopting ITs and the Internet, whilst a comprehensive cost and benefit analysis is demonstrated. The paper also argues that there is some evidence that investment on electronic presence and distribution through the Internet represents good value for money, as bookings start to materialise for innovative operators. Hence, innovative entrepreneurs who re-engineer their business processes and take advantage of the emerging opportunities will gain major benefits and enhance their profitability and viability in the global marketplace.


Innovative Operator Hospitality Organisation Tourism Management Electronic Marketplace Strategic Tool 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Springer-Verlag Wein 1999

Authors and Affiliations

  • Dimitrios Buhalis
    • 1
  1. 1.Department of TourismUniversity of WestminsterUK

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