COPYRIGHT © 2012 IJCIT, ISSN 2078-5828 (PRINT), ISSN 2218-5224 (ONLINE), VOLUME 03, ISSUE 01, MANUSCRIPT CODE:

120705

Business Model of E-Tourism for Developing

Countries
Mohammod Akbar Kabir, Kawsar Jahan, Md. Nasim Adnan, and Nargis Khan

 This paper attempts to investigate current E-Commerce

Abstract— With the usage of modern computer technology models in tourism industry and aims to find the suitable
especially the Internet, tourism sector is growing rapidly all E-Commerce model for the development of tourism in
over the world. E-Tourism is one of the most important sectors developing countries of the world. This paper identifies the
in today’s business world. The Internet is revolutionizing the barriers of B2C and B2B2C models in tourism industries and
distribution of tourism information and products. In this discusses the possible approach or model that international
paper, we investigate the existing E-Tourism business models travel service providers should emphasize to develop their
e.g. B2C, B2B, B2B2C etc and propose an optimized business E-Tourism market.
model G2B2C. We also forecast that this model could be a The remainder of this paper is organized as follows.
prime business model to promote tourism in developing or
Section II starts with literature review. In the section III, we
under developed countries of the world.
provide some statistical data on tourism of developed
countries and developing countries. Section IV briefly
Index Terms—B2B, B2B2C, E-Tourism, E-Commerce,
G2B2C.
discusses the value chain of tourism and section V discusses
some existing business models of E-Tourism. In the section
VI some problems in the tourism sector of the developing or
underdeveloped countries are discussed and based on these
I. INTRODUCTION
problems a new business model for these countries is
In Electronic Commerce (E-Commerce) business proposed in section VII. Finally the paper ends with
transactions take place via telecommunications networks, conclusion in section VIII.
especially the Internet. Electronic Commerce is a process of
buying and selling or exchanging of products, services, and II. RESEARCH ON E-COMMERCE IN TOURISM INDUSTRY
information via computer networks including the Internet The study of E-Commerce in the tourism industry has
[1]. With the advent of Internet, businesses have developed in emerged as a ‘frontier area’ for information technology.
almost every sector. Internet decentralizes and democratizes E-commerce deals with the process of buying and selling or
access to the customer; there are cost savings in distribution, exchanging products, services and information via computer
service, marketing and promotion. Internet has a tremendous network including the Internet [1]. However, adoption of
impact on today's travel and tourism industry. Thus new business model with the help of Information and
E-Tourism (see Fig. 1) is considered as one of the most Communication Technology (ICT) is only focus of this
important sectors in today’ business world. In the past few dissertation. We focus on a number of ways in which the
years, travel and tourism industry are growing with the structure and performance of the tourism industry is being
explosion of E-Commerce. In E-Tourism, new and efficient influenced by the adoption and development of ICT [3], [4].
Internet business models, including B2B, B2C and B2B2C However, study on Electronic Commerce done by APEC
have gained a strong foothold [2]. reported that “Small and medium enterprises are significant
players in business-to-business and
business-to-business-to-customer electronic commerce,
which constitutes more than 80 percent of all E-Commerce
activities.”
Now, how E-Commerce can help tourism? A number of
problems have been identified in the tourism sector of the
developing or under-developed countries [5], [6]. Most
research suggested that government plays an important role
Fig. 1. E-Tourism in facilitating the use of E-Commerce for the tourism
industry and in increasing their ability to reap the benefits,
Manuscript received April 11, 2012 (e.g. via awareness building and related training programs).
Mohammod Akbar kabir is with the Department of Economics, University Governments in partnership with the private sector should
of Dhaka, E-mail: akbar_kabir03@yahoo.com
Kawsar Jahan is with the Department of Accounting and Information establish a more comprehensive and consistent policy
Systems, University of Dhaka, E-mail: kjshumi@yahoo.com approach to the tourism industry and E-Commerce [7], [8].
Md. Nasim Adnan is with the Department of Computer Science & Considering this, we propose a new E-Business model in this
Engineering, University of Liberal Arts, E-mail: nasim_1547@yahoo.co.uk
Nargis Khan is with the Department of Computer Science, Daffodil paper for tourism industry for any developing or
International University, Bangladesh, Email: nargis_ju@yahoo.com

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COPYRIGHT © 2012 IJCIT, ISSN 2078-5828 (PRINT), ISSN 2218-5224 (ONLINE), VOLUME 03, ISSUE 01, MANUSCRIPT CODE: 120705

underdeveloped country like Bangladesh. and offers them as a packaged service through travel agent.
Here, travel agent is the retailer of travel service which ties
prospective travelers and service providers together by
III. STATISTICAL INFORMATION ON TOURISM controlling the information flow among the different
Statistics provided in this section represent the developed participants in the value chain, and selling the information to
countries where tourism is one the most promising and travelers [9], [10]. The value chain is based on the
revenue earning sectors [2], [ 9]. co-operation among travel service provider, travel operator
More than 64 million Americans i.e. 30% of the U.S. and travel agent. In developing countries the intermediary
adult population used the Internet to look for information function of travel operator is weaker compared to that of
about destinations, check prices and schedules in 2003. Two travel agent and most travel agents take the responsibilities
thirds of them (i.e. 42 million) booked travel via the Internet of the travel operators [11].
and it is a gain about 8% over 2002 according to the Travel
Industry Association of America (www.tia.org). During this
same time European online travel sales increased by 44%,
reaching over $14 billion. V. EXISTING BUSINESS MODEL IN E-TOURISM
Some statistics about travel and tourism industry is as A business model is the method of doing business - it is the

 According to the World Travel & Tourism Council,

follows: method that allows a company to generate revenue and to
sustain itself [12]. On the Internet, services are often realized
travel and tourism represent approximately 11% of the by huge networks and at the onset it is not always clear who
 The World Tourism Organization predicts 1.5 billion
world’s GDP.
makes the money and how much. This is especially true in
the field of E-Tourism where many different companies
 Tourism is related to many other sectors such as culture
international arrivals in the year 2012.
co-operate in order to produce the final customers' service.
or sports. Over 30 different industrial components have Fig. 3 represents general business model in E-Tourism. The
Internet has given rise to new kinds of business models. This
 Due to its SME-like structure, tourism has a great
been identified that serve tourism.
section will give an overview of the most popular business

 The tourism product is perishable and complex. For

importance for community development. models observable in the arena of E-Tourism [11], [12].

example, an unsold hotel room reflects lost income. A. Business to Customer Model (B2C)
The risk of loss can be reduced if information access is In B2C Business, Tourist service providers sell their
available. Use of the Internet or Information products directly to the tourists or customers. It is the most

 The tourism product itself is a bundle of some basic

Technology is hence greatly required. common model in E-Tourism. In this model tourist service
providers have a direct communication with tourists.
products. Products must have well-defined interfaces
with respect to consumer needs, prices, and
distribution channels.
Though Bangladesh is a developing country, yet she has
many beautiful tourist places including the beach of Cox’s
Bazar (largest continuous beach in the world), the
Sundarbans (largest mangrove forest in the world) etc. both
of them were contestant to be the seven natural wonders of
the world. However, tourism is not a developed sector in
Bangladesh due to lack of many essential requirements.
According to the World Travel & Tourism Council, travel
and tourism of Bangladesh represents approximately only
1.5% of the GDP. Here, we try to investigate the reasons why
tourism industry of Bangladesh is not flourishing. Based on
the outcome we devise a business model that could promote
this sector to a great extent.

IV. VALUE CHAIN IN EXISTING TOURISM BUSINESS Fig. 2. Value chain in Tourism

The typical value chain in tourism consists of four

components: travel services provider, travel operator, travel
agent and traveler. The travel services provided by travel
service providers can be distributed by the joint operation of
travel operator and travel agent, or just by travel operator to
traveler (see Fig. 2) [9]. On the intermediary level, normally
the travel operator plays the role as a wholesaler of travel
service which integrates a number of different travel services

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COPYRIGHT © 2012 IJCIT, ISSN 2078-5828 (PRINT), ISSN 2218-5224 (ONLINE), VOLUME 03, ISSUE 01, MANUSCRIPT CODE: 120705

B. Lack of Knowledge on Information Technology

Bangladesh government officials working in different
embassies are not well trained with the uses of the Internet
and other technologies. Most of the embassies do not have a
website from where the tourists can fill visa application form
and also submit their visa application online.
C. Cost of Initial Investment
For better E-Tourism services a good communication
Fig. 3. Tourism Business Model infrastructure is needed. To develop communication
infrastructure a huge amount of investment is required. Poor
B. Business to Business Model (B2B)
public communication infrastructure creates negative impact
Tourist Service Providers (business) like airlines, hotel on E-Tourism.
sells their products to other business like tour operators e.g.
expedia.com. To promote tourism, this model works with the
collaboration of different businesses (i.e. Airlines, Hotels,
Tour Operators, Agents etc.) and can provide dynamic
packages to the tourists (Fig. 4). Fig. 4. B2B Business Model in Tourism
C. Customer to Customer Model (C2C) D. Government Officials Negligence to Provide
In this model, a tourist can communicate with other tourists Information
through the Internet (forums, blogs and email groups etc.) It has been reported that many tourists send e-mails to
and can develop a tourist community. Thus a tourist can Bangladesh embassies abroad to know the rules of getting
make his travel plan by discussing with other tourists in the Bangladeshi visa. As they do not get any reply they just
community and also can get help regarding booking hotels, cancel their Bangladesh trip [5].
airline tickets, sites etc.
E. Shortage of Skilled Human Resources
D. Government to Business Model (G2B) A good number of skilled IT-experts and trained people
In this model, Government (G) plays a role by interacting, are required to power E-Tourism. Underdeveloped countries
co-operating, imposing rules or giving permission to tourist have started use of IT recently. They do not have a good
service providers/agents (Businesses) so that they can work number of IT professional who are expert enough to support
freely to promote tourism. E-Tourism.
E. Business to Business to Customer Model (B2B2C) F. Higher Visa Fee
B2B2C describes companies that sell products or services If any citizen of the USA wants to get Bangladeshi visa,
to companies that in turn sell to consumers, all via the he/she has to pay USD 100 which is a big amount. Many US
Internet. In another word, it describes transactions in which a tourists cancel their trip to Bangladesh just hearing the visa
business sells a service or product to a consumer using fee. Whereas they can get the visa and stay India at least one
another business as an intermediary. B2B2C E-Commerce is week with 100 Dollars. So, why should they go to
potentially the matched business model courted by many Bangladesh spending USD 100 only for visa? Visa fee for the
tourists of United Kingdom is 65 USD and Canada is 50
industries, especially the tourism. For example,
USD.
Travelocity.com sells tickets and room reservations on behalf To increase the number of tourists and promote tourism in
of major airlines and hotels respectively. Developed Bangladesh, our government should decrease the visa fee.
countries generally follow this business model. We should sacrifice a small amount as the visa fee aiming to
increase the number of tourists in Bangladesh.

VI. SOME PROBLEMS IN TOURISM G. Government Rules

Most of the embassies of Bangladesh (in Germany, United
A. Lack of Communication Infrastructure and Common Kingdom and also in some other countries) ask the hotel
Web Portal reservation letter to apply for Bangladeshi visa. But they
Most of the developing or underdeveloped countries still should know that most of the hotels in Bangladesh do not
does not have a good communication infrastructure i.e. have the facility of advance booking. They also do not have
Internet/e-mail facility, websites etc. For example, there is no any dynamic website. So, many tourists refrain themselves
common web portal for Bangladesh from where tourists can from pursuing Bangladeshi visa.
get information about destinations, hotels, cultural events, H. Border Hassles
sight-seeing spots etc. Thus tourists do not get necessary A good number of tourists in Bangladesh come from India
information of the important tourist destinations of through Benapole, Burimari, and other land ports. Benapole
Bangladesh and so, they do not get interest to visit. land port has a little good image among the tourists from
India. But Akhaura, Burimari and other land port are
miserable. It has been reported that some tourists pay USD

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COPYRIGHT © 2012 IJCIT, ISSN 2078-5828 (PRINT), ISSN 2218-5224 (ONLINE), VOLUME 03, ISSUE 01, MANUSCRIPT CODE: 120705

50-100 as bribe for some minor reasons (e.g. lose of government.

embankment cards, not having route permit etc). These
tourists may think for the second time to visit Bangladesh
again.
I. Bad Image
There is a bad image about Bangladesh as a whole in the
world. Some of tourists express their views about Bangladesh

 Is it safe to exchange the money in front of the people?

in the following ways:

 Is there any English-speaking tourist guide in

Bangladesh?
J. Political Instability
Political instability is the main problem of Bangladesh. Fig. 5. Proposed G2B2C E-Tourism Model
Nobody wants to visit Bangladesh because of strike, human
rights abuse and other related problems. If these problems
could be sorted, Bangladesh could be one of the popular C. Airlines
tourist destinations.  To transport tourist from home to destination and back.
From the discussion in the previous sections, it is clear that  To provide visa worthiness assessment on behalf of
governments of the developing or under developed countries government.
can play an important role in E-Tourism business model. As
D. Hotels & Resorts
 To provide accommodation and security to tourist.
these countries have a bad image all over the world due to

 To organize contact tour operators

some corrupt government officials, it is government who
 To provide security information to government in case
should take initiatives to revive the image. Moreover, due to
some rules imposed by the government, tourist service
of suspicious tourists.
providers cannot operate independently. Tourist service
providers need government permissions in certain cases. Our E. Tourist
proposed business model considering all scenarios will be  To use government portal to identify viable tour

 To process visa through the airline or tour operator.

discussed in the next section. operators, hotels and airlines.

VII. OUR PROPOSED E-TOURISM BUSINESS MODEL  To provide security information to operators about
suspicious cases.
Our proposed E-Commerce model in E-Tourism for the
developing or under developed countries is Government to F. Security Issues
Business to Customer (G2B2C). We functionally eliminate The decentralization of visa processing to the airlines and
the agents from our model as the tourists in our model can tour operators adds a challenging dimension to the area of
easily communicate with the tourist service providers (As a security. However it should be remembered that banks deal
result, the need for a middleman as the tourist agent is no with a variety of customers yet they manage to enforce a level
of security. Thus, government must implement strict
longer required). In our model, tourist service providers/tour
licensing regulations to prevent security breach in the visa
operators play the central role. Here, government (G) processing service.
renders necessary support to tourist service
providers/operators (B) to operate seamlessly and thus, G. Potential bottlenecks
tourist service providers can provide better service to the Government bureaucracy may delay electronic payment
tourists (C) to promote tourism (Fig. 5). processing and thus, a backup model may be suggested in
case of such an occurrence. Also, benefits from our proposed
model cannot be realized in those places where the Internet is
A. Government not available.
 To provide visa and other services to tourists through

 To provide electronic payment support for businesses

the businesses like Tour operators and Airlines.
VIII. CONCLUSION

 To provide security for tourists and other participants in

with limited ability to implement this model. Travel and tourism demonstrate how E-Commerce may
change the structure of an industry and create new business
 To provide a central information point about tour
the industry.
opportunities. The underlying pervasive Information
operators and packages available for tourists (web Technology enables as well as enforces this development,
portal). demonstrating that tourism is an interesting field of
application as well as research. In this paper, we have
B. Tour Operator
 To arranges viable and attractive tour packages for the
discussed existing business models in tourism and also
proposed a new business model G2B2C which can promote

 To arrange bookings for airlines and hotels.

tourists. tourism in developing or underdeveloped countries of the
 To provide visa worthiness assessment on behalf of
world.

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COPYRIGHT © 2012 IJCIT, ISSN 2078-5828 (PRINT), ISSN 2218-5224 (ONLINE), VOLUME 03, ISSUE 01, MANUSCRIPT CODE: 120705

REFERENCES Nargis Khan worked as a faculty member in

Daffodil International University (DIU) and
[1] E. Turban, j. Lee, D. King, and H. M. Chung, Electronic Commerce: A University of Development Alternatives
Managerial Perspective. p 451, 2000. (UODA) in Bangladesh for about 4 year after
completing Bachelor in Computer Science and
[2] P.T Joseph, E-Commerce: An Indian Perspective. PHI Publications
Engineering from Jahangirnagar University,
2005. Bangladesh in 2004. She published several
[3] D. Buhalis, and W. Schertler, Information Communication Technologies refereed conference and journal papers. Her
in Tourism 1999, SpringerWien. NewYork, 1999. research interest includes Wireless
Communications and Networks, Mobile
[4] A. J. Frew, “Information technology and tourism: a research agenda,”
Computing, Computer Networks and Security.
Information Technology and Tourism, vol 3, no. 2, pp. 99–110, 2000.
[5] www.lonelyplanet.com (accessed on November 2009)
[6] www.letsgo.com (accessed on November 2009)s
[7] “E-commerce and Development 2001,” United Nations Conference on
Trade and Development (UNCTAD), 2001.
[8] “SME Electronic Commerce Study,” Asia-Pacific Economic
Cooperation (APEC), 1999.
[9] S. Liu, “A Theoretic Discussion of Tourism E-Commerce,” in
Proceedings of ICEC Conference, China, pp. 1–5, 2005.
[10] H. Werthner and F. Ricci, “E-Commerce and Tourism,”
Communications of the ACM, vol. 47, no. 12, pp. 101-105, 2004.
[11] J. Seigel, "While Nasdaq Burns," The New York Times,
http://www.wordspy.com/words/B2B2C.asp, April 23, 2000.
[12] A. Schuster, “A Delphi survey on electronic distribution channels for
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Mohammod Akbar Kabir received his M.Sc.

and B.Sc. (Hons.) in Computer Science from
the University of Dhaka in 2000 and 1998
Respectively. Currently he is working as an
Assistant Professor in the Dept. of Economics,
University of Dhaka. He also served as an
Assistant Programmer in the Dept. of ITOCD,
Bangladesh Bank and as a Lecturer in the Dept.
of computer Science, Dhaka City College. His
research interest includes VLSI design and
E-Commerce.

Kawsar Jahan received his M.Sc. and B.Sc.

(Hons.) in Statistics from the University of
Dhaka in 2001 and 1999 respectively.
Currently he is working as a lecturer in the
Dept. of AIS, University of Dhaka, Bangladesh.
He also served as a lecturer in the dept. of MNS,
BRAC University and Dept. of BBA, Daffodil
International University, Bangladesh. Her
research interest is in the area of Bio Statistics.

Md. Nasim Adnan received M.Sc. in CSE

from Bangladesh University of Engineering and
Technology (BUET) and B.Sc. in CSE from
Khulna University. Currently he is working as
an Assistant Professor in the Dept. of Computer
Science and Engineering, University of Liberal
Arts Bangladesh (ULAB). He also served as a
Deputy Director in the Dept. of ITOCD,
Bangladesh Bank. His research interest
includes Data Mining, Database Systems,
Software Engineering, Software and Systems
Testing, and E-Commerce.

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