Intelligent Systems in Travel and Tourism Hannes Werthner e-Commerce and Tourism Research Lab (eCTRL) ITC-irst and University of Trento, Italy werthner@itc.it Abstract Travel and tourism is the leading application field in the b2c e-commerce, it represents nearly 50% of the total b2c turnover. Already in the past travel applications were at the forefront of Information Technology, i.e., the airline Computerized Reservation Systems in the early 60s. The industry and its product have rather specific features which explain this circumstance: the product is a confidence good, consumer decisions are solely based on information beforehand; and the industry is highly networked, based on world-wide cooperation of very different types of stakeholders. Consequently, this industry depends on advanced IT applications. As such travel and tourism may serve as an example of what happens and will happen in the emerging e-markets, pointing at structural changes as well as challenging application scenarios. The paper provides an overview about the industry, describes ongoing structural changes, outlines domain-specific requirements and discusses achievements and challenges in the field, following an AI and e-commerce point of view. It finishes with considerations regarding a future IT scenario. 1 1 Introduction Despite unfulfilled business and stock market expectations, in some sectors such as the travel and tourism industry online transactions are rapidly increasing. This industry is the leading application in the b2c arena. The travel and tourism industry is witnessing an acceptance of e-commerce to the extent that the structure of the industry and the way business is conducted, is changing. The Internet is used not only for information gathering; there is an obvious acceptance of ordering services over the Internet. A new type of user is emerging; they become their own travel agents and build their travel packages themselves. In the year 2002 European online bookings increased by 53 percent, accounting for about 3,5 % of all consumer spending in this domain, whereas in the US this number is 1 This work is partially funded by the CARITRO foundation and the European FP5 projects Dietorecs and Harmonise. about 11 % (according to the Danish Center for Regional and Tourism Research). 64 Mio. Americans researched their travel options online (Travel Industry Association of America); and 32 percent of US travelers have used the Internet to book travel arrangements (see www.nua.com/surveys/ ). Forecasts state that by 2007 30% of all transactions in the European tourism domain will be done via the Internet, at least in the German speaking countries [Schuster, 1998]. This importance of e-commerce can be explained by the features of the industry, but it highlights also another issue, not less important: e-commerce and especially the Web are not only transaction and business oriented, it is also a medium of curiosity, of creating communities or having just fun, all of which may or may not result into business. Especially the tourism product has to do with emotional experiences; it is not just business [Werthner, 2001]. The paper is organized as follows: the following two sections describe the industry and look at the changing business environment. Section 4 provides an overview on the emerging IT landscape, it discusses domain specific requirements and related application examples, pointing at open research issues. 2 The Industry The travel and tourism industry is a global (and a globalization) industry, with very specific features: • Travel and tourism represents approx. 11% of the world wide GDP (following the tourism satellite account method of the World Travel & Tourism Council). • There will be one Billion international arrivals in the year 2010 (following the World Tourism Organization). And tourism grows faster than the other economic sectors. • It represents a cross-sectoral industry, including many related economic sectors such as culture, sport or agriculture, where over 30 different industrial components have been identified that serve travelers. • This explains the industry’s heterogeneity, and due to its SME structure it has a huge importance for regional development. For example, in the EU there are around 1.3 Mio. hotels and restaurants (9 % of all enterprises). And 95 % of them are very small, i.e., 1-9 employees.