Apple, Exhibit 1021, Page 1
`
`Apple, Exhibit 1021, Page 1
`
`

`
`Inf
`fo
`
`ation Technology
`avel and Tourism
`
`éVmAL”Q~/\ WM
`
`Apple, Exhibit 1021, Page 2
`
`

`
`Information
`‘(Technology
`Trav_e| and
`TOUFISITI
`
`I
`
`SECOND EDITION
`
`Apple, Exhibit 1021, Page 3
`
`

`
`Information on the products and services presented in this book has been supplied by the companies concerned, and the author
`has made every effort to ensure that this material is accurate and is presented correctly. Most of the companies concerned have
`reviewed the text and have had an opportunity to modify the material written about them. It must also be stressed that the book
`does not represent any kind of survey of all available products on the market. The items that have been included are simply
`examples of systems available to travel agents in the UK at the time of writing.
`It is for these reasons that the author and publisher cannot be held responsible for any errors or misrepresentations concerning
`the descriptions of products and services mentioned in this book. Products described here may have changed since they were
`originally documented; for up-to-date information and pricing details the reader is advised to contact any company in which they
`are interested directly.
`
`Addison Wesley Longman Limited
`Edinburgh Gate, Harlow
`Essex CM2O 2JE, England
`and Associated Companies throughout the world
`
`© Gary lnkpen 1994, 1998
`
`The right of Gary lnkpen to be identified as author of this work has
`been asserted by him in accordance with the Copyright, Designs
`and Patents Act 1988
`
`All rights reserved; no part of this publication may be reproduced,
`stored in any retrieval system, or transmitted in any form or by any
`means, electronic, mechanical, photocopying, recording, or
`otherwise without either the prior written permission of the
`Publishers or a licence permitting restricted copying in the
`United Kingdom issued by the Copyright Licensing Agency Ltd,
`90 Tottenham Court Road, London W1P 9HE.
`
`First published by Pitman Publishing 1994
`Second edition published by Addison Wesley Longman 1998
`
`British Library Cataloguing in Publication Data
`A catalogue entry for this title is available from the British Library
`
`ISBN 0 —582—31002—4
`
`Set by 35 in Sabon 10/12 and News Gothic
`Produced by Addison Wesley Longman Singapore lPte) Ltd
`Printed in Singapore
`
`Apple, Exhibit 1021, Page 4
`
`

`
`Contents
`
`Preface
`
`Acknowledgements
`
`1 The travel and tourism environment
`Introduction
`
`The industry players
`Governments
`
`Suppliers
`GDSs
`
`Retail outlets
`Consumers
`
`Types of travel and tourism
`Leisure travel
`Business travel
`
`Payment and funding
`Bureau—de—change
`Legal and regulatory
`The European Community
`GDS and CRS regulatory issues
`Trade bodies
`ABTA’s ABTECH
`IATA
`TTI
`
`UNICORN
`TTI’s RESCON
`HEDNA
`GBTA
`GEBTA
`NAITA
`ENTER and IFITT
`Structural environmental issues
`
`2 Tourism
`
`Introduction
`The United Kingdom
`
`"
`
`The BTA
`
`NNNNNHHHHHHoou1<.»JoJl\J\0\lml\.>>—\om\lC7\ChCr\U1bu-I:-I:-Ix-ikl\JNNNHH
`
`TICs
`The Canterbury TIC
`Ireland
`
`The original Gulliver system
`The new Gulliver
`
`Other tourism support systems
`Australia’s ETAS visa system
`
`3 Suppliers
`Introduction
`Airlines
`The airline business
`The airline CRS
`Fares and fare distribution
`
`Ticketing
`Hotels
`
`Tour operators
`Cosmos
`
`Rail companies
`Rail travel in the UK
`
`Information Suppliers
`Reed Travel Group
`Product distribution
`
`4 Distribution systems
`Introduction
`What is a GDS?
`Airline GDSS
`Amadeus
`Galileo
`Sabre’s Travel Information Network
`
`Worldspan
`The INFINI GDS
`HDSs
`
`Pegasus Systems
`Utell
`
`31
`
`39
`40
`44
`
`44
`48
`
`52
`52
`
`56
`5 6
`56
`56
`57
`65
`
`68
`77
`
`83
`84
`
`86
`86
`
`97
`97
`103
`
`106
`106
`107
`107
`109
`115
`131
`
`151
`162
`162
`
`162
`166
`
`CONTENTS
`
`V
`
`Apple, Exhibit 1021, Page 5
`
`

`
`Marketing on the GDSs
`Static information
`
`Dynamic information
`Hotel Systems Support Services
`Limited (HSSS)
`
`5 The Internet
`Introduction
`
`Marketing on the Internet
`Web site presence
`Booking engine
`Targeted marketing
`Internet marketing related issues
`Disintermediation
`
`Travel agents
`Tour operators
`Distribution systems
`Tourism
`The new intermediaries
`
`Expedia
`Travelocity
`Worldspan
`Travelweb
`
`Suppliers’ Web sites
`British Midland
`Marriott
`Utell’s Hotelbook
`
`Interfacing supplier systems to
`the Internet
`Business travel on the Internet
`
`American Express’ AXI
`ResAssist
`Travelnet
`Tourism on the Internet
`
`The British Tourist Authority
`Gulliver
`Travel information on the Internet
`
`World travel guide on-line
`Weissmann travel reports
`
`6 Networks
`Introduction
`
`Video—conferencing
`Meetings management
`Techniques
`The standards
`
`Conclusion
`The future
`Electronic mail
`
`Electronic data interchange (EDI)
`Teletext
`Videotex
`
`Why Videotex?
`Suppliers’ Videotex Systems
`The problem with Viewdata
`Communications networks
`Concert
`AT8CT
`Imminus
`
`Conclusions
`
`7 Travel agents
`Types of travel agents
`The business travel centre (BTC)
`The high street travel agency
`Inplant
`Bureau
`
`Bureau—de—change
`The independent high street
`travel agent
`Automation of agencies
`Front—office systems
`Back-office systems
`The bank settlement plan (ESP)
`Financial systems
`Administration services for
`hotel commission
`
`Functions of the agency management
`system
`Accounting
`Management information
`Marketing
`Agency management systems
`Sabre’s Travel Information Network
`
`(STIN)
`Icanos
`
`Voyager
`ICC’s travel systems
`TARSC
`
`Other agency management systems
`Conclusions
`
`The equipment
`Video—conferencing communications
`The benefits
`
`Epilogue
`Appendix
`Index
`
`vi CONTENTS
`
`Apple, Exhibit 1021, Page 6
`
`

`
`Preface
`
`Although this book is called a new edition, in fact
`it more closely resembles a complete re—write; little
`of the first edition of Information Technology for
`Travel and Tourism has survived. The reason for
`
`this has been the rapid developments in the three
`key subject areas: travel, tourism and technology.
`For example, the Internet was not even mentioned
`in the first edition, yet here it has a chapter all of
`its own. Also, the term ‘disintermediation’ was hardly
`talked about back in the early 1990s, whereas in
`this edition it is a thread which runs throughout
`the entire text. As a result of some excellent feed-
`
`back, the new edition has also been expanded in
`scope. It therefore now includes material on tour-
`ism, and has a greater emphasis on hospitality related
`technology and the strategic use of IT within travel
`and tourism.
`No doubt
`
`the reader of this second edition
`
`will detect some recent traVel—related technologies
`which are not discussed.
`I’m afraid that
`this
`
`is unavoidable, given the nature of the subject;
`new technologies and industry developments are
`constantly being introduced. However,
`I believe
`that much of the information contained in the
`
`book will remain relevant and pertinent to your
`chosen study areas — at least until the next edition
`arrives!
`
`The book is written primarily for those study-
`ing an undergraduate course in travel, tourism or
`some other leisure—related subject. It could also be
`of interest to post—graduates and students of other
`courses who are interested in how IT can be
`
`applied within a specific industry. In addition to
`its academic readership, it would also allow prac-
`titioners in the industry to gain an overall under-
`standing of the technologies used to support travel
`
`and tourism. In particular it would be an effective
`way for someone working in one sector of the
`industry to learn about how IT is used in another
`sector, outside of their own. Ideally,
`the book
`should be read cover—to—cover
`if a good under-
`standing of the subject is to be gained. However,
`it could equally well be used as a source of refer-
`ence material for specific course topics, and I
`have included a comprehensive index to support
`this.
`I have to admit that the book is written from
`
`a UK perspective. Having said this, many of the
`systems and technologies described in the book
`are becoming increasingly global in nature. For
`example, at least one of the four main global dis-
`tribution systems (GDSs)
`included in the book
`(Amadeus, Galileo, Sabre and Worldspan) should
`be applicable in most countries of the world.
`Wherever possible I have tried to include systems
`which have either been developed in other coun-
`tries or which have global applicability (e.g.
`the Australian ETAS system,
`Ireland’s Gulliver
`and the travel agents’ Voyager system which is
`also distributed in the Asia—Pacific region). Other
`deployments of technologies such as the UK’s BSP
`exist in a similar form in other countries. So, for
`these reasons, I hope the book will be useful to
`students in other countries and international edu-
`cational establishments.
`
`The book is organized around my View of the
`industry’s structure, which I have shown pictorially
`in Figure 1.1 (page 3). This sets the scene for the
`text by positioning within the supply chain the
`regulatory bodies, travel suppliers, intermediaries,
`delivery mechanisms and different types of con-
`sumer. The book therefore progresses from a
`
`PREFACE vii
`
`Apple, Exhibit 1021, Page 7
`
`

`
`general description of the industry, through tour-
`ism and, via travel supplier systems, into the Inter-
`net and other means of distribution. It finishes up
`with an analysis of travel agency systems. A chap-
`ter summary is as follows:
`
`° Chapter 1 — I think one of the least under-
`stood areas, from the viewpoint of both the
`technological and business sectors, is the struc-
`ture of the industry. In the first chapter I have
`therefore tried to set the scene for the remain-
`
`der of the book by creating a structure within
`which the new technology fits. This chapter
`also includes some information on the leading
`standards’ bodies and other travel organiza-
`tions which are so essential to the successful
`
`development, direction and application of new
`technologies in travel and tourism.
`
`Chapter 2 — This is a completely new chapter
`which specifically addresses how technology
`has been successfully applied by tourist offices
`and destination service organizations. This is
`a rapidly developing area and I have used the
`experiences of the British Tourist Authority
`and the Irish Tourist Board to illustrate how
`the innovative use of IT can make destination
`
`service organizations more effective, support
`the promotion of in-bound tourism and help
`travellers plan their trips better.
`
`Chapter 3 — In my View it is essential to under-
`stand how the suppliers of travel products
`and services have used technology for their
`own in—house automation purposes, before
`evaluating the more challenging topic of dis-
`tribution. So, this chapter focuses on the Var-
`ious technologies which different suppliers in
`each of the major areas have used. Where rele-
`vant, I have provided some limited historical
`background.
`
`Chapter 4 — This chapter analyses the world’s
`major travel distribution systems, which in the
`main are the GDSs. However, many other types
`of distribution system are also discussed, in-
`cluding HDSs (hotel distribution systems) and
`CRSS (central reservation systems).
`I begin
`my exploration of the marketing aspects of
`distribution technologies at
`the end of this
`
`viii
`
`PREFACE
`
`chapter, with an analysis of marketing on the
`GDSS.
`
`Chapter 5 — I hope you will agree that the
`Internet deserves a chapter of its own. It has
`had a profound impact on the travel and tour-
`ism markets already and is set to further revo-
`lutionize travel and tourism distribution in the
`
`future. So, I start this chapter with a general
`discussion of
`Internet marketing,
`sectoral
`disintermediation and other
`Internet—related
`
`issues. I then explore some leading new inter-
`mediaries such as Expedia and Travelweb be-
`fore analysing several innovative supplier Web
`sites including British Midland and Marriott.
`Finally, I investigate how the Internet is being
`used to support destination service organiza-
`tions in the context of tourism by looking at
`the VisitBritain site and the revamped Gulliver.
`
`Chapter 6 — This chapter examines the vari-
`ous communications technologies, other than
`the Internet, which are used to distribute travel
`and tourism information to end users. It covers
`
`video—conferencing, EDI, e—mail, teletext, video-
`tex and Value—added network services such as
`
`those run by Imminus and AT8CT.
`
`Chapter 7 — This chapter actually bears a pass-
`ing resemblance to material in the first edition!
`Basic terminology is defined,
`including such
`terms as back—office systems, the front office,
`accounting, consumer marketing for travel and
`MIS. However, it has been completely updated
`to include a new POS technology (such as soft-
`ware robots and point—of—sale assistants), the
`latest changes to the UK’s BSP, and examples
`of four travel agency system products.
`
`It is always difficult to achieve a good balance
`between quantitative definitions of what certain
`technologies are and how they work, and the more
`qualitative discussions concerning issues and strat-
`egies. In this context, I have tried to focus on how
`the new technologies are being deployed rather
`than describe the intricacies of how they work.
`When considering new technologies such as the
`Internet I have included discussion of the tmajor
`issues and the factors which may influence their
`future directions. I think this should help lectur-
`ers and other thought—leaders to set the scene for
`
`Apple, Exhibit 1021, Page 8
`
`

`
`further in—depth debate on subjects related to tech-
`nology in travel and tourism.
`Finally,
`I would like to thank my family,
`friends, publisher and business colleagues (see
`long list of acknowledgements!) for their help and
`support. Without them I would not have been
`
`able to write this book. I hope you enjoy it and
`that
`it helps to stimulate new and innovative
`ways of using IT within the world of travel and
`tourism.
`
`Gary Inkpen
`Hove, March 1998
`
`PREFACE ix
`
`Apple, Exhibit 1021, Page 9
`
`

`
`Acknowledgements
`
`It would not have been possible for me to write this book without the participation of some leading
`industry figures. These individuals gave me their time, their views and some very interesting material.
`I would therefore like to publicly acknowledge and thank the following people for their help:
`
`Sea Container Services (and
`TTI)
`BTA
`
`Gail Gillogaley
`Terri Godwin
`Neil Goram
`
`ABTECH (and The LINK
`Initiative)
`Worldspan
`HSSS
`
`ICC Travel Systems
`Bord Failte Eireann {and
`Gulliver)
`American Express
`University of Westminster
`(and IFITT)
`British Midland
`GBTA
`MCA
`
`Equinus
`TARSC
`
`Worldspan (now with
`Gradient Solutions)
`BT
`
`Canterbury TIC
`American Express
`Imminus
`TravelWeb
`
`Marriott (now with Time}
`Partners in Marketing
`BR Business Systems
`Country Wide Porter Novelli
`Voyager
`Addison Wesley Longman
`
`Martin Gregg
`Peter Grover
`
`Phillip Hart
`Trevor Heley
`Peter Horder
`
`Peter ]oel
`Karsten Karcher
`
`john Levene
`Ron Muir
`K
`Howard Needham
`
`Daryl Nurthen
`Peter O’Conner
`
`Peter O’Shea
`
`Julian Palmer
`Ashvin Pathak
`
`Alison Pickering
`Terry Rattray
`Natalie Rawlinson
`Linda Richards
`Mike Ruck
`
`Lynn Sugars
`Sarah Taylor
`Bob Teerink
`Mark Walker
`Hannes Werthner
`
`Alan West
`
`Teletext
`Galileo UK
`Cosmos
`
`Microsoft
`Amadeus
`TravelWeb
`Novus
`
`HBC Consulting
`Murray and Company
`Imminus
`
`American Express
`NAITA
`BTA
`ABTA
`
`Institut de Management
`Hotelier International
`BT
`AT<’9‘T
`
`ICC Travel Systems
`Reed Travel Group
`Utell
`Icanos
`HSSS
`Imminus
`BTA
`Teletext
`Sabre
`Sabre
`
`University of Vienna (and
`IFITT)
`IATA (and BSP UK)
`
`Tony Allen
`
`Barbara Austin
`Graham Barnes
`
`Neil Beck
`
`Alan Boyce
`Guy Briggs
`Victor Brophy
`
`Sally Brown
`Dimitrious Buhalis
`
`Des Butler
`
`Philip Carlisle
`Michael Cleeve
`
`Mike Cogan
`Kerry Costello
`Stuart Coulson
`
`Peter Cowan
`
`Hiliary Cox
`Alex Dalgleish
`Chris Dawes
`Gideon Dean
`Peter Dennis
`
`Alyson Dombey
`Bob Dunbar
`
`Ray Eglington
`Dennis Eyre
`Brett Gilbert
`
`x ACKNOWLEDGEMENTS
`
`Apple, Exhibit 1021, Page 10
`
`

`
`1 T
`
`he travel and tourism environment
`
`This chapter discusses the structure of the travel
`and tourism industry and the regulatory frame-
`work in which it operates. Although the focus is
`very much on the UK, I have also included some
`examples of overseas organizations. In many coun-
`tries, the trade and industry structures and bodies
`are similar to the UK.
`
`Introduction
`
`People travel for many reasons. Some need to travel
`for business purposes, some for leisure or recrea-
`tional purposes. But whatever the reason for trav-
`elling, people are doing more of it now than they
`ever used to and what is more, the trend is upwards
`yet further. Future growth is due to socioeconomic
`reasons including more leisure time, increased levels
`of disposable income, the globalization of business
`and the natural attraction of travelling around the
`world to see new sites or visit old friends in far
`
`away places.
`If you want tangible evidence of our desire to
`travel then just ask any person in one of the fol-
`lowing situations: a big lottery winner, a student
`who has just finished a degree course, someone
`who is about to retire from work or a business-
`
`person who needs to export a product in order
`to expand the company. They will all invariably
`include travel in their plans. So, it’s a big and fast
`growing industry and one in which a large amount
`of effort goes into making those travel plans; and
`plans are generated from the communication of
`information. Travel and tourism is therefore an
`information business. A business in which access
`
`to up—to—date information on an extremely wide
`range of topics is required instantly.
`Now,
`if you put this highly visible, rapidly
`growing and complex activity into the context of
`rapid change in distribution channels caused largely
`by technology, then you have an interesting story.
`A story that in many ways has been told by techno-
`logical
`innovation in the way information is
`accessed and used by travel suppliers. From the
`use of computers by airlines to automate the book-
`ing of seat sales in the 19505 to the travel agency
`use of personal computers (PCS) linked to those
`airline systems in the 19905, the change has been
`dramatic: and today, we are at the beginning of
`an even more revolutionary era that could see the
`boundaries of the booking process pushed right out
`to the travellers themselves via the latest Informa-
`
`tion technology (IT) paradigm, the Internet.
`The Internet
`is both an opportunity and a
`threat.
`It
`is an opportunity for people to use
`technology to make travel planning and execution
`easier and more informed. However, it is a threat
`to intermediaries such as travel agents and tour
`operators. It’s a big subject, the Internet, and I’ll
`discuss it in more detail later in the forthcoming
`chapters. For the moment though, it is sufficient
`to say that the Internet is one of the most power-
`ful movers and shapers of the travel and tourism
`industry both at the present time and, no doubt,
`in the future.
`
`However, before we dive into some of the issues
`that surround IT in travel and tourism, 1 would
`like to spend a few pages and a little of your time
`discussing the environment in which the business
`operates. It is essential that you understand who
`
`THE TRAVEL AND TOURISM ENVIRONMENT l
`
`Apple, Exhibit 1021, Page 11
`
`

`
`the key players are, what the current distribution
`channels are and how the whole lot is regulated
`by government and trade bodies. Although it may
`sound boring, the legal and regulatory aspects of
`the industry are key to how IT is used to support
`it. Only by gaining a clear understanding of the
`industry’s structure and the environment in which
`it exists can you hope to gain a clear perception
`of the pivotal role that IT has to play within the
`field of travel and tourism.
`
`The industry players
`
`I think a vital first step in gaining an insight into
`IT for travel and tourism is to understand the over-
`
`all structure of the industry: the supply—side travel
`companies, the types of demand—side consumers
`and the distribution channels that support it all.
`Figure 1.1 shows the major structural elements of
`the travel and tourism industry, as I see it from an
`IT perspective. The architecture of this diagram is
`important and I need to define the major elements
`in greater depth, chiefly because I have structured
`a large portion of the book around it! So,
`let’s
`examine each of the players in a little more detail.
`
`GOVERNMENTS
`
`Governments have two main areas of influence
`
`within the field of travel and tourism. First, they
`set the regulatory structure of the industry and,
`second, they promote inbound tourism to their
`areas as a means of growing the local economy;
`and this applies at all levels of government: at the
`trading block level (e.g. the European Community),
`at the national level and at the local government
`level.
`
`have a significant impact on how technology
`is used within the industry. Most of us have
`heard of the data protection act; well this is
`just one example. I’ll discuss this act and other
`regulations that have an impact on IT in more
`detail in the latter part of this chapter.
`Tourist authorities Governments at virtually
`all levels have an interest in promoting inbound
`tourism. This is because tourism is a powerful
`factor in developing and growing an economy.
`It is a means of bringing foreign currency into
`an area, supporting and growing infrastructure,
`strengthening national suppliers and boosting
`local trade. There are many ways in which govern-
`ments can encourage the growth of tourism and
`besides advertising and promotion, one of the
`most cost effective means is the use of modern
`
`technology. Applications of IT in tourism are
`covered in more detail in Chapter 2.
`
`SUPPLIERS
`
`Travel suppliers provide the actual services required
`by individuals and groups as they move around
`the globe. Examples of these suppliers include
`transportation companies, sightseeing services and
`accommodation properties; but there are many
`other variations. Each travel supplier company will
`invariably operate its own technology: firstly, to
`automate its in—house operations and, secondly, to
`use this as a platform for distributing its product
`to retailers and consumers. It is the precise way
`in which these systems are made available to end
`users, whether they be individual travel consumers
`or travel agents, that is at the very heart of IT in
`travel and tourism. Consequently Chapter 3, which
`examines this topic in detail, covers a great deal
`of ground.
`
`0 Regulatory structure Much of the regulatory
`structure within which travel and tourism
`
`GDSs
`
`operates, is set by governments at the trading
`block and national levels. A primary role of
`most governments is to protect
`the citizens
`of its country by setting the ground rules for
`the travel and tourism businesses. Although
`such regulations are usually focused on con-
`trolling the safety of travel and protecting the
`commercial interests of travellers, they often
`
`Global distribution systems (GDSs) distribute reser-
`vation and information services to sales outlets
`
`around the world. Incidentally, in my terminology,
`a computerized reservation system (CRS) is used
`solely by an airline or a hotel chain and is quite
`different from a GDS, which distributes more than
`one CRS to users who are usually travel agents.
`However, more of that in Chapter 3, which deals
`
`2
`
`INFORMATION TECHNOLOGY FOR TRAVEL AND TOURISM
`
`Apple, Exhibit 1021, Page 12
`
`

`
`Regulatory
`
`Legal and regulatory
`
`National government
`
`Local government
`
`Information
`0 Books
`0 CD-ROM
`0 On-line
`
`Transport
`0 Air
`0 Car
`O Rail
`
`is
`
`Travel industry suppliers
`Hospitality
`Holidays
`0 Hotel
`0 Tours
`0 B&B
`0 Visits to
`friends and
`relatives
`
`i
`i
`
`Tourism
`0 Events
`0 Places
`0 Attractions
`
`Finance
`0 Commission
`tracking
`0 Bureau-de-
`change
`
`_
`_
`Intermediaries
`
`Global
`distribution
`systems
`
`New
`intermediaries
`
`Corporate networks
`
`Consumer networks
`
`0 The Internet
`0 DigitaITV
`I Teletext
`
`_
`_
`Intermediaries
`
`._
`-3
`'
`
`3 j
`‘
`
`Tourist
`information
`centre
`
`Self-service
`kiosk
`
`Consumers
`
`Figure 1.1 The structure of IT in travel and tourism
`
`The consumer
`
`Corporate
`
`Individual
`
`THE TRAVEL AND TOURISM ENVIRONMENT 3
`
`Apple, Exhibit 1021, Page 13
`
`

`
`with suppliers. GDSs are companies that are invari-
`ably owned by groups of travel suppliers, each
`of which shares a common business interest. The
`
`objective is to encourage inbound visitors to
`their area. Private organizations, by contrast, are
`often the owners of attractions such as theme
`
`principal GDSS are owned by airlines, although
`there are also a few that focus entirely on distrib-
`uting hotel booking facilities and these are known
`as hotel distribution systems (HDSS). GDSs and
`HDSs provide their users with links to many types
`of travel supplier and travel—related services. At
`present
`the GDSs distribute their
`reservations
`and information systems to travel agents, using
`a variety of computer and telecommunications
`technologies. However, as we shall see later, this
`infrastructure is shifting rapidly and both the
`means of distribution and the ultimate end users
`
`parks and their focus is on persuading people
`to visit them. This whole area is covered in
`
`more detail in Chapter 2. Both types of tourism
`organization are nowadays heavily reliant on
`IT. For example, they rely on large data bases
`of factual information and communication net-
`works to disseminate the information to their
`
`customers that are invariably actual or poten-
`tial tourists; and increasingly, self—service kiosks
`are being used to interface these information
`sources with people.
`
`are changing very rapidly.
`
`CONSUMERS
`
`RETAIL OUTLETS
`
`The retail outlet, in terms of the travel industry,
`is where the rubber meets the road.
`It’s where
`
`the consumer physically comes face—to—face with a
`seller or purveyor of travel products and services.
`Although some suppliers operate their own direct
`customer retail locations in city high streets, the
`majority of face—to—face selling outlets fall into two
`broad categories: travel agents and tourist offices.
`
`0 Travel agents Travel agents are the inter-
`mediaries between the travel suppliers and the
`travel consumers. They position themselves as
`experts on a wide range of travel service com-
`panies and areas of the world. They give advice
`to travel consumers on, for example, where are
`the best places to go on holiday, what are the
`best travel suppliers for an individual’s specific
`needs and how airlines and hotels can best meet
`
`the needs of business travellers. Travel agents
`derive their income largely from commissions
`paid by the travel suppliers. So, travel agents
`use IT for two main purposes:
`(a) to access
`travel supplier systems for their customers, and
`(b) to automate in—house operations, thus min-
`imizing costs in a low margin business.
`Tourist offices There are two main types of
`tourist organizations: public and private. The
`public organizations usually concentrate on pro-
`moting a Country or region to the general pub-
`lic and other interested parties. Their principal
`
`4
`
`INFORMATION TECHNOLOGY FOR TRAVEL AND TOURISM
`
`These are the individual travellers like you and
`me. These travellers may be travelling for leisure
`purposes, i.e. going on holiday, they may be trav-
`elling on business for their employer or they may
`simply be travelling to visit a location for some
`other purpose, e.g. to visit friends and/or relatives.
`Travel consumers may either:
`(a) purchase their
`travel arrangements from travel agents, or (b) obtain
`them direct from travel suppliers. Likewise, they
`may obtain their advice from tourist organizations
`or from travel agents; and increasingly these days,
`they may obtain both travel advice and booking
`services via the Internet. There are many related
`issues here and these are discussed in more detail
`
`in Chapter 5.
`
`Types of travel and tourism
`
`There are two main types of travel and tourism that
`are worth exploring and defining, if only so that
`we can all use some common terminology through-
`out the remainder of the book. These distinctions
`
`in the types of travel are important because each
`is often supported by a different type of techno-
`logy. The two main types are leisure travel and
`business travel.
`
`LEISURE TRAVEL
`
`Leisure travel
`
`is the term used to describe the
`
`type of travel undertaken by an individual either
`
`Apple, Exhibit 1021, Page 14
`
`

`
`on holiday or at least, travelling for pleasure. A
`category known as visits to friends and relatives
`(VFR), is playing an ever increasing role in leisure
`travel. The main leisure product is, however, the
`packaged holiday that is assembled and marketed
`by specialist tour operators. However, the pro-
`duct range is vast and covers anything a personal
`traveller might demand of a travel agent. Leisure
`travel is remarkably different from business travel
`in many ways and so is the technology used to
`support it. Generally speaking leisure travel is less
`automated than business travel although, as we
`shall see during the course of this book, the situ-
`ation is changing rapidly. The main characteristics
`of leisure travel are as follows:
`
`Lower transaction volumes.
`
`Highly seasonal.
`Personal customer contact.
`
`Higher margins.
`Wide product range.
`More complex bookings.
`Variety of bookings.
`Positive cash flow.
`
`Late booking trend.
`Brochure racking is key.
`Multiple payments from customers.
`Timetable controlled booking process.
`Long booking period prior to departure.
`High—street location is key.
`Unsophisticated travellers as customers.
`Long booking time.
`
`BUSINESS TRAVEL
`
`Business travel is the provision of travel products
`and services to companies. The individual employ-
`ees of these companies travel as part of their jobs;
`jobs like sales representatives, mining and explora-
`tion engineers, buyers and senior management. The
`main products sold by business travel agents to
`companies are airline tickets, hotel arrangements
`and car hire. There are some important character-
`istics of business travel that have a bearing on the
`technologies used to support it, for example:
`
`High volume of air sales.
`Low margin.
`Remote customer contact.
`
`Highly automated.
`
`High pressure.
`Travel policy.
`Management information.
`Repetitive itineraries.
`Negative cash flow.
`Step function growth.
`Price sensitive.
`
`Sophisticated travellers as customers.
`
`You may also have heard of a market known as
`‘travel and entertainment’. This is really another
`term for business travel but
`includes company
`expenditure; including, for instance, fuel on com-
`pany cars, business entertainment expenses and
`meals incurred while away on business. The T8cE
`market, as it is known, is alone worth approxim-
`ately £18 billion in the UK.
`
`PAYMENT AND FUNDING
`
`As with any business, the way in which the cus-
`tomer pays is very significant; and nowhere is
`this more so than in travel. Leisure travel is more
`
`straightforward in that the payment methods fol-
`low similar lines as used throughout the retail
`sector. However, business travel uses one or two
`special instruments of its own.
`The classic method is for the agent to send the
`customer an invoice and a monthly statement that
`is eventually paid. However, what does ‘eventually’
`mean? It usually means that the travel agent will
`not be paid for at least one month. Well, with
`a reasonable size company with staff who travel
`extensively,
`the resulting negative cash flow is
`therefore a major problem for the agent. If the
`outstanding balance is not monitored carefully,
`then the funding costs can become prohibitive for
`the agent.
`Also, from the customer’s viewpoint, i.e. the
`company that employs the business traveller, it is
`often necessary to provide a cash advance for each
`trip. This is needed to cover local miscellaneous
`expenses such as taxis, tips and snacks.
`The T&E market has therefore been identified
`
`as a prime target for the major credit and charge
`card companies. These card issuers see an oppor-
`tunity to sell their cards to companies as a solution
`to the agents billing problems and as a means of
`channelling a lot more spending onto their cards.
`
`THE TRAVEL AND TOURISM ENVIRONMENT 5
`
`Apple, Exhibit 1021, Page 15
`
`

`
`They therefore developed card products especially
`for this area. For example:
`
`0 Corporate card A plastic card that is carried
`by individuals who travel on business or who at
`least incur business expenses. The plastic card
`may be either a credit card or a charge card.
`A credit card gives the holder the option of
`spreading the payments for billed amounts over
`a period of several months (with the applica-
`tion of an interest charge). By contrast, a charge
`card stipulates that the entire month’s billings
`must be paid in full, with nothing carried for-
`ward to the next month (otherwise a penalty
`fee is imposed).
`The card fees for a corporate card are set-
`tled by the company who also often guarantees
`liability for expenditure,
`to the card issuing
`company. There are several ways in which com-
`panies can be billed for expenditure on the
`card including, for example: (i) central billing
`to an accounting department, or (ii) individual
`billing to cardholders themselves.
`Lodge card A credit or charge card for which
`only a single card is issued and