Note: Because this case involves concepts from both this chapter and from Chapter 9, it is continued at the end of that chapter. Tourism Holdings Limited (THL) is a publicly listed New Zealand corporation that owns multiple brands and businesses in the tourism industry. THL's principal holdings include:
• New Zealand tourist attractions, including Waitomo Black Water Rafting and Waitomo Glowworm Caves
• Kiwi Experience and Feejee Experience, hop-on, hopoff tourist bus services
• Four brands of holiday rental vehicles
• Ci Munro, a van-customization manufacturing facility In 2009, THL earned $5 million in profit before interest and taxes on $170 million in revenue. It operates in New Zealand, Australia, and Fiji and has sales offices in Germany and the United Kingdom as well. THL originated as The Helicopter Line, which provided scenic helicopter flights over New Zealand.
Over the years, THL sold the helicopter business and has since owned and operated numerous tourism organizations and brands. THL continues to frequently buy and sell tourism businesses. For the current list of businesses. According to Grant Webster, THL's CEO, "THL is a house of brands and not a branded house."
Thus, in the holiday rental business, THL owns and operates four different van rental brands: Maui, Britz, Backpacker, and Explore More. These brands are differentiated on price; Maui is the most expensive line, whereas Explore More appeals to the most budget-conscious traveler. Britz is the next step down in price from Maui, and Backpacker falls between Britz and Explore More.
Tourism Market In 2008, an estimated 866 million international visitors toured the world. That number is expected to grow to more than 1.6 billion by 2020, according to Tourism Business Magazine. In 2008, travel and tourism was the world's largest business sector, accounting for 230 million jobs and over 10 percent of the world's GDP. In spite of these long-term growth prospects, international tourism has contracted recently, following the financial crisis of fall 2008.
As of June 2009, an annual total of 1.15 million international travelers visited New Zealand, a decrease of 5 percent from the year before, and 5.5 million international travelers visited Australia, a decline of 2 percent. According to Webster, "While we believe the long term prospects of tourism in our traditional markets of New Zealand, Australia, and Fiji will remain strong, THL's substantial growth opportunities will be achieved by expanding to other countries, possibly the United States, or Europe." Investment in Information Systems THL considers information systems and technology as a core component of its business value and has invested in a variety of innovative information systems and Web 2.0 technologies.
Webster speaks knowledgeably about information technologies, including SharePoint, Microsoft Office SharePoint Services (MOSS), Microsoft Report Server, OLAP, and data mining (discussed in Chapter 9). Because of its acquisition of multiple brands and companies, THL accumulated a disparate set of information systems, based on a variety of different technologies.
These disparate technologies created excessive software maintenance activity and costs. To reduce costs and simplify IS management, THL converted its customer-facing Web sites to use Microsoft SharePoint and MOSS. "Having a single development platform reduced our maintenance expenses and enabled us to focus management attention, development, and personnel training on a single set of technologies," according to Steve Pickering, manager of Interactive Information Systems.THL uses SharePoint not for collaboration, as discussed in Chapter 2, but rather as a development and hosting platform for sophisticated, highly interactive Web sites. You can find an example of such sophisticated capability. Click "Design Your Own Trip . . ." and the Web site will display a map of New Zealand as well as a menu of instructions. You can then select different locations, experiences, and sites from a menu, and the Web site will recommend particular tours, as shown in the right-hand pane . Visit the site to get a sense of the interactivity and sophistication of processing. Web 2.0 technologies enable the tourism industry to disintermediate sales channels. According to the New Zealand Ministry of Tourism, in 2006 the Internet was used by 49 percent of international travelers to research travel options.
That percentage has increased dramatically, and it is likely well over 50 percent today. As with all disintermediation, when THL sells directly to the consumer it saves substantial distribution costs. To facilitate direct sales, THL actively uses Google AdWords and Google Analytics, a Google-supplied information system that enables AdWords customers to better understand how their sites are processed.
THL is also experimenting with online chat, both voice and video. "A camper rental can cost $5,000 to $10,000 or more, and we believe our customers want a trusted relationship with a salesperson in order to commit," according to Webster. "We think that video online chat might give us that relationship with our customers." Sources: Tourism Business Magazine, November 2009, p. 20; (accessed July 2010); New Zealand Ministry of Tourism, (accessed July 2010); Tourism of Australia, (accessed July 2010).
Questions
1. This case implies that the frequent acquisition and disposition of tourism brands poses problems for information systems. Summarize what you think those problems might be. Consider all five components of an information system. To what extent does standardizing on a single development platform solve those problems? Which of the five components does such standardization help the most?
2. Summarize the ways in which IS gives THL a competitive advantage. Discuss each of the elements .
3. Visit kiwiexperience and click "Design Your Own Trip." Select a variety of locations in the Adrenalin, Nature, and Kiwi Culture menus. Select several locations in each category and then select a pass that fits your destinations.
a. Evaluate this user interface. Describe its strengths and weaknesses.
b. Evaluate the Map Instructions. Do you find these instructions to be adequate? Explain why or why not. c. Summarize the ways in which this site uses social networking. d. Explain why this site is an example of a mashup.
4. Consider the Kiwi Experience site in the context of social CRM.
a. Identify the customer touch points.
b. Which of the elements of the SLATES model does this site contain?
c. Consider the SLATES model elements that this site does not contain. Which ones do you think might be appropriate?
d. Explain one way to implement each of the elements you identified in part c.
e. Describe how your recommended social CRM capabilities would help to generate a trusted relationship.