Information technology and new business models in the tourism industry

Abstract This paper aims to analyze the impact of Information Technology on business models adopted by firms in the tourist industry and on strategic decision making within organizations. The spread of Information Technology is enabling companies to take advantage of new opportunities and to build new capabilities, but it is also threatening the survival of more traditional companies. The tourist industry, especially, has seen some very significant changes, particularly regarding distribution processes. The main reason is the development of the Internet, but the changes are also due to the widespread adoption of modern techniques in e.mail marketing and customer relations management. Multichannel distribution means that traditional businesses, such as bricks and mortar travel agencies, have to face new forms of Knowledge-based competition and that they have to find new strategies if they are to survive. After discussing the general framework of the distribution structure, including both traditional business models and the new networked models, the analysis focuses on the evolution of travel agencies. Business models are studied from three different but interrelated perspectives: 1.Changes in business concepts, so as to define defensive and aggressive strategies to cope with the challenges of the new economy; 2.Reviewing of the value creation process through the re-engineering of operations, and changing a sequential value chain in a “value costellation” (Normann and Ramirez, (1995), based on information and knowledge. 3.Evolution of entrepreneurial resources, competences and capabilities which are necessary for a business to be competitive and to develop sustainable advantages. The impact of Information Technology has been tested on a sample of travel agencies in and around Florence, which were selected on the basis of their size and whether they were independent or affiliated to a network. The research methodology, implying the use of a resource-based and competence-based view, leads to outline dynamic capabilities and paths towards new business models. New technologies are seen to determine changes in entrepreneurial models and in relationships among organisations, with special reference to “business to business” distribution systems. A positive correlation is found to exist between the development of technical competence, product innovation and flexible forms of cooperation. This research is part of a wider project involving different types of tourist industry firms and extending to different territorial areas.