Dublin Institute of Technology

ARROW@DIT
Conference papers

School of Hospitality Management and Tourism

1996-11-01

Virtual Reality Applications in the Hospitality /

Tourism Industry
Patrick Horan
Dublin Institute of Technology, patrick.horan@dit.ie

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Recommended Citation
Horan, P., Virtual Reality Applications in the Hospitality / Tourism Industry. Hospitality Information Technology Association
Electronic Journal, November 1996.

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The World is What You Make It An Application of Virtual Reality to the Tourism Industry.

Patrick Horan,
Lecturer in Computer Applications,
DIT, Cathal Brugha St.

Dr. Ciaran Mac Donaill,

DMC,
DIT, Aungier St.
1.1.

Introduction.

In this paper the possible applications of VR to the Tourism Industry are discussed. In order to develop an
application for any industry one must first get a clear understanding of that industry. Once this is achieved
the next step is to develop an application to suit the needs of the Industry. The Industry in question here is
the Tourism Industry and this paper begins by discussing the Tourism Industry and more specifically the
relationship between Tourism and technology. This is absolutely essential in order to understand how the
use of VR will impact on the Tourism Industry in the future.

1.2.

The Tourism Industry.

The Tourism Industry is comprised of many sectors, groups and organisations, and to date there is no
internationally accepted definition. However, the United Nations Conference on International Travel and
Tourism defined Tourism as:

the consumption, production and distribution of services for travellers who dwell in some
place other than their domiciles or workplace for at least twenty four hours. Shorter
sojourns are regarded as mere excursions1.

The Tourism Industry is gaining increasing attention as a major growth sector with great potential. As the
largest contributor to the global economy, Tourism employs 255 million people world-wide which
accounts for 11% of the global workforce 2. It is estimated that Tourism will sustain a 5% growth rate over
the next decade resulting in an estimated 385 million jobs by the year 2006 3. The Tourism Industry
produces 10.7% of the worlds gross national product (GNP) which is estimated to increase to 11.5% by
the year 20064. In 1995, international Tourism receipts rose by 7.2% to almost US$372 billion 5. This
increase follows a relatively constant trend established since 1985. Despite the recession in other
industries the Tourism Industry is still growing at a faster rate than international economic growth 6.
Between 1970 and 1990 Tourism grew by nearly 300% and it is expected to grow by half as much again
by the end of the century. With such economic growth predicted, Tourism is set to enjoy a further
increase and the future long-term growth of the Tourism Industry, from a demand point of view, looks
promising.

Despite the importance of the Tourism Industry to the global economy it is still very dispersed in its
structure, comprising of many dispersed groups and services. In fact, Tourism is probably the ultimately
dispersed industry7, Tourisms relatively low degree of integration, further reinforcing the fragmented
nature of the Tourism Industry8. Furthermore, there are several changes in the Tourism demand which are
causing the Tourism product to become increasingly difficult to control and manage. Firstly, potential
customers are becoming more discerning when choosing their Tourism destination. They require better
value for money from Tourism providers. Secondly, customers are travelling more frequently and to far
greater distances throughout the world, largely due to the advances in airline and communication
technologies. Thirdly, Tourists are becoming more knowledgeable and adventurous in their choice of
Tourism destination9. As such, customers are becoming more global, which means they travel on a worldwide basis beyond normal travel patterns10. And finally, customers are demanding a more individualised
service and not those packaged by travel agents or tour operators11.

The development of new transport technologies has allowed us to travel further, faster. Each new
technological breakthrough has allowed us to make another leap forward in our travel patterns 12.
However, it is already clear that the worlds Tourism infrastructure is being increasingly stretched and
overloaded. The scale of growth in Tourism will place great pressure on the facilities and amenities
required by Tourists13. It is clear that future infrastructure projects will be developed at a slower rate than
in the past. It will also not be at a pace that will keep up with the projected growth of Tourism. Therefore,
looking into the future, the growth of the Tourism Industry is likely to face more constraints from the
supply side than the demand side14.

1.3.

Information Technology in the Tourism Industry.

Tourism is a very information intensive activity. In few other areas of activity are the generation,
gathering, processing, application and communication of information as important for day-to-day
operations as they are for the Tourism Industry 15. Unlike durable and industrial goods, the intangible
Tourism product cannot be displayed or inspected at the point of sale before it is purchased. Furthermore,
the Tourism product is normally bought long before the time of use and away from the place of
consumption. Information is the way the product is presented to the potential Tourist. Consequently,
Tourists require a wide variety of specific information on the area, accessibility, facilities, attractions, and
activities at the destinations as the provision of timely and accurate information relevant to the potential
Tourists needs is often the key to successful satisfaction of the Tourism demand 16.

Therefore, largely due to the amount of information necessary the Tourism Industry has been significantly
influenced by advances in Information Technology (IT)17. The original Tourism applications were
designed to make improvements in clerical and administrative efficiency, and as Gamble18 noted, the
only difference being that computers work at electronic speeds. Despite the technology playing an
essentially passive role, operators gained substantial improvements in efficiency and in many cases this
resulted in competitive advantage over other Tourism providers. A new generation of systems has
evolved, which are now playing a more active role in operations and management of the Tourism
Industry. Broadly, current applications of computer technology in the Tourism Industry can be grouped
into three main areas, operational, guest services and management information 19. IT is permeating all
1

sectors of the Tourism Industry to varying degrees. The Tourism product is becoming more dependent on
IT, and it is predicted to be more so in the future. More cross-sector alliances, direct links between the
provider and the Tourist and the drive towards efficiency will require access to, processing of, and the
communication of, large amounts of information. This information will need to be processed faster, more
reliably and in more executive format to enable prompt decision-making.

The Tourism product has many interrelated but separate components: the market demand; travel to and
from the destination; destination services, attractions and facilities; and the marketing of the product20. To
these components a fifth could be added, the management of the Tourism product, since the
interrelationship between the four traditional components are becoming increasingly complex and IT is
playing a more executive role in their management.

1.3.1.

Tourism Market Demand.

The key to successfully satisfying Tourism demand is the provision of information to the customer. This
information must be timely, accurate and relevant to the customers needs. In Tourism, the product is
largely intangible, perishable, heterogeneous and volatile, and as such, it is the information provided to
the potential Tourist which is recognised as being the product21. Potential Tourist, therefore, rely on a
wealth of information before making a decision.

In providing this information, there is a series of interdependencies evident. The travel agent is often the
key link between the Tourism provider and the potential Tourist, since the potential Tourist relies on the
travel agent to provide the broad range of information at the point of sale, and the Tourism provider relies
on the travel agent to provide the desired information to the Tourist. The travel agent must, therefore,
have instant access to the information required if he wishes to satisfy Tourists demands. In order to
provide this information travel agents are installing central reservation system (CRS) terminals of the
airlines who have realised the potential of the powerful travel agency network for distributing its product
through CRS. Although originally developed to control reservations inventory and efficiently manage
airline scheduling, the CRS industry is now much more complex with links to other sectors of the
Tourism Industry, such as hotels, car hire companies and Tourist organisations.

1.3.2.

Travelling To and From a Destination.

Travelling to and from the destination is the second element of the Tourism product and is often the
largest proportion of the expenditure in the purchase of the whole Tourism product 22. IT investment has
been significant in terms of organisation and scheduling of the trip, but minimal in terms of improving the
travel experience in its own right.

1.3.3.

The Tourism Destination.

The third component in the Tourism product is the Tourism destination. The Tourism destination uses IT
to plan, manage and service its Tourism product at the destination. The future success of the destination is
dependent on the utilisation of IT. The main focus of IT in this area has been in the improvement of the
tangible facilities offered.

1.3.4.

Marketing of the Tourism Product.

The fourth component of the Tourism product has received the most attention in terms of investment and
research. In the Tourism Industry, potential Tourists are unable to sample the product prior to purchase
and must, therefore, learn about the product through the information provided. The better the quality of
this information the more likely the potential Tourist will formulate a more realistic impression. In an
increasingly global market, both Tourism providers and potential Tourists are dependent on the
information provided. Therefore, the effective marketing of Tourism is becoming increasingly dependent
on IT. Marketing distribution channels which exist now and in the future can not survive without
investment in IT.

1.3.5.

Management of the Tourism Product.

With many different sectors and cross-sector alliances forming, a very tight control of the Tourism
product is required. Computers and other communication technologies are assisting management to coordinate and control the many inter-dependent sectors of the Tourism product. Management and coordination of the Tourism product through increased investment in IT is improving the efficiency in many
sectors of the Tourism Industry.

1.4. Applications of Virtual Reality in the Tourism Industry.

The Tourism Industry has benefited tremendously from the implementation of IT. IT systems govern
many aspects of the Tourism product from airline and hotel reservations to multimedia packages designed
to market Tourism destinations. It would not be surprising to add VR to the ways that IT affects the
Tourism product. This may be due to the fact that the features of the Tourism Industry lend themselves
readily to VR23 or because VR employs a vastly different approach to the representation of information.
With VR the participants find themselves in the same dimension as, and are immersed within, the
information. The Virtual Environment is augmented by various sensory simulations such as sight, sound,
and even touch, together with their respective feedback. Therefore, becoming a excellent way to access,
conceptualise, and manipulate Tourism information.

The relationship between Tourism and technology has been rapidly evolving. The use of computers
within the Tourism Industry has evolved, in a very short period of time, from a simple back-office system
to playing an indispensable role in management, marketing and financial analysis. But through VR this
relationship has moved one step further to being a tool capable of helping both management and
customers to make well-informed decisions. In the field of Tourism, images have been used to promote
destinations for a considerable time, either in the form of video films 24 or more recently electronic
brochures25. Coates26 imagines travel agents taking their customers on VR tours to any part of the world,
exploring in depth the experience before the real trip and reviewing it afterwards. VR has been identified
as one of the most exciting technological developments of the future, where different experiences can be
created through the use of computer-mediated imaging and graphical environments. Potentially, there is
an infinite number of Tourism experiences which VR can simulate. The benefits engendered by VR
applications at present manifest themselves in two distinct levels:
3

1. Macro Level - concerning Tourism policy and planning.

2. Micro Level - concerning the provision of information and the marketing of the Tourism product.

1.4.1.

Tourism Policy and Planning.

The process of developing a Tourist destination is a long and tedious one. Tourism master plans
encompass numerous detailed physical layouts of the destination together with the proposed Tourism
infrastructure such as roads, hotels, restaurants, and other service facilities. These amenities are often
depicted on paper as 2D representations that do not facilitate the Tourism planners conceptualisation of
the destination27. Although digitised representations of the proposed site can be subjected to numerous
operations, such as image rotation and enlargement, by CAD programs to achieve conceptual versatility,
they are still perceived as 2D28.

When planning a proposed Tourism destination, a 3D representation is necessary in order to obtain a

correct perspective of the site. Undesirable elements of the destinations design may not be obvious from
2D representations and, therefore, may be overlooked in the design of such a location. These limitations
and drawbacks can be alleviated with the use of VR. All relevant information with regards to the
proposed Tourism destination can be incorporated into the computer system. Utilising information such
as the geographical layout of the site, the infrastructure and Tourist activities, a designer can generate a
Virtual Tourist destination which Tourism planners can enter and, more importantly, interact with in realtime. With these tools planners can analyse the layout of the proposed infrastructure. Each destination
can, therefore, be changed or adapted in order to determine the most appropriate layout for the proposed
destination. With this approach to Tourism destination development previously unforeseen discrepancies
can now be discovered prior to any real expenditure. Therefore, VR has the potential to serve as an
invaluable tool in the formulation of Tourism policy and in the Tourism planning process.

1.4.2.

Information Provision and Marketing of the Tourism Product.

Traditional methods of Tourist information could be enhanced by VR. VR can serve as an invaluable
method of providing necessary information to potential Tourists and, therefore, act as a marketing tool for
the Tourism Industry. VR systems have the ability to provide potential Tourists with the opportunity to
experience destinations and their respective attractions and facilities. Traditional sources of Tourism
information only provide potential Tourists with short and often rather limited glimpses of Tourism
destinations which may be inadequate to enable them to make informed decisions. The underlying
significance of VR is its ability to bring the experience to the customer and this virtual experience of the
destination will further increase the customers desire to actually visit the location 29. The traditional
methods of Tourism information possess no involvement on the part of the potential Tourist. This, to an
extent, limits their effectiveness as a means of encouraging a potential Tourist to a particular destination.

Most of the exciting developments in destination and product presentation, such as multimedia and VR,
are mostly relevant at the information stage, within the search process for a suitable holiday destination as
described in Goodall30 as pull factors31. It is in the area of the provision of information and the
marketing of the Tourism destination that VR is most useful at present. Therefore, the proposed
4

application of VR in this dissertation is as a Tourism Information System (TIS) which will include the
traditional types of Tourism Information, images, text, sound, animation and video, but will also
incorporate a Virtual Environment which will allow the potential Tourist the opportunity to walkthrough
the Tourism destination at their own leisure as well as interact with their surroundings. This Virtual
Environment will help the Tourist generate realistic impressions and expectations of what to expect at
such a destination and, thus, provide them with extra information to make an informed decision on their
Tourism destination.

1.5. Summary.
In this paper the importance of Tourism to the global economy, its growth rate, and its dependence on
information have been discussed. The Tourism Industry has many interrelated but separate components
and these components which becoming increasingly complex have to be managed effectively 32. IT is
playing an ever increasing role in this management.

Tourists are dependent on accurate, relevant and timely information in order to aid them in their travel
decisions. In addition, the Tourism product is largely intangible, perishable, heterogeneous and volatile,
and it is, therefore, the information provided to the potential Tourist which is recognised as being the
product. The provision of some tangible elements, such as video clips, animation and virtual
walkthroughs of Tourism destinations, hotels attractions and local environment can reduce some of the
intangibility of the Tourism product, especially for destination-nave Tourists. For this reason, VR
technology is likely to have a major impact on the future of the Tourism Industry. Finally, the uses of VR
in the Tourism Industry were discussed.

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