CHAPTER TWO
2.0 Literature Review
This chapter reviews related literature. Based on the research problem; hotel industry and the internet, advantages and challenges of internet marketing are presented. Finally Internet marketing models and internet tools are presented.
2.1 Hotel Industry and the Internet
Currently, there are 1.96 billion Internet users in the world, up 444.6% from the year 2000 Africa has 110 million internet users while Ghana has 1.29 million users growing at 4,223.3% since the year 2000 (Internet World Stats, 2010).
The internet has increased the productivity and efficiency of hotels’ marketing effort (Porter, 2001).Hotels will lose their competitive edge where they do not have a significant presence on the internet (Van Hoof & Combrink, 1998). According to Anckar & Walden, (2001) hotels that do not have a web presence cannot bridge the gap between their existing and potential customers and also become competitively disadvantaged. It is argued by Migiro & Ochalla, (2005) that the advantages that the internet offers such as cost reduction, improved efficiency among other things can be equally enjoyed by smaller accommodation facilities in developing countries.
Armijos, et al., (2002) contend that technology applications and Internet usage have assisted hotel companies in the realization of increases in most major industry indicators, such as gross revenue, average daily rate, revenue per available room, and net profitability. Older British travelers are increasingly using the Internet and prefer an online relationship rather than offline interactions (Graeupl & McCabe, 2003).
The International Hotel and Restaurant Association (IH&RA) has discussed the importance of technologically-induced changes in hospitality in its “Think Tank” sessions at their annual conference (Connolly & Olsen, 2000). The findings suggest that e-commerce and information technology would be the most important competitive advantage for any hospitality company to compete successfully and create value for both the customer and the firm (Connolly & Olsen, 2000; Dev & Olsen, 2000; Elliott-White & Finn, 1998).
The use of the Internet is becoming a positive trend and an important core competency for hospitality businesses (Connolly, Olsen,&Moore,1998; Van Hoof & Combrink, 1998; Vanucci & Kerstetter, 2001).
For hospitality practitioners, the establishment of an effective company web site will provide their company a competitive position in a global environment (Gregory & Breiter, 2001)
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