Dimitrios Buhalis and Table I
Hilary Main The utilization of ITs by European peripheral SMHOs
Information technology in
peripheral small and medium Mean telephone At least At least At least Videotext/
hospitality enterprises: Region lines (%) one telex (%) one fax (%) one PC (%) Networks (%) Minitel (%)
strategic analysis and critical
factors Greece 4.6 28 67.1 44.7 11.3 n.a.
Wales n.a. n.a. 37.8 30.1 10.0 6.9
International Journal of
Contemporary Hospitality France n.a. 42.0 60.0 70.0 6.7 45.0
Management Note: adapted from Buhalis et al. (1997) and Main (1994)
10/5  198–202
in SMHOs highlighted by this research. In proprietors need to utilize technology in
addition, the perceived cost of software and order to facilitate both their operational and
hardware as well as the feeling of dependency strategic functions. However, often they tend
on IT experts are signiﬁcant deterrents for to lack the expertise in selecting, installing
under-resourced and under-qualiﬁed and operating computerized systems as well
proprietors. as marketing and management skills. There-
fore, they tend to fear that they will lose part
of their control, should they allow external
Stakeholder analysis for small and ITs experts to undertake these jobs for them.
medium hospitality organizations Employees, and in particular managers,
also tend to be interested in the prosperity of
In order to understand the behaviour of
SMHOs, as their employment and quality of
SMHOs towards ITs an analysis of the needs
working life. To the extent that ITs relieve the
and wants of their key stakeholders is
repetitive elements of jobs, employees would
required (Atkins and Lowe, 1994). The stake-
be interested in utilizing more technology
holders’ theory states that, for a ﬁrm to
and, therefore, be able to concentrate on the
remain viable, it needs to satisfy the require- creative elements of their role. Consumers
ments of key stakeholders. Atkins and Lowe are also stakeholders of SMHOs, as they are
detect increased stakeholder involvement in keen to increase the value for money they get
times of technological turbulence, as the from service providers, as well as to maxi-
external environment of organizations mize their satisfaction. ITs improve the effi-
changes shape and both interests and beneﬁts ciency of SMHOs, as well as enable them to
of stakeholders need to be re-addressed. differentiate their product through the
Figure 1 identiﬁes key stakeholders in the provision and promotion of specialized prod-
SMHOs and demonstrates the extent to which ucts. Thus, consumer expectations could
they will be catalysts in the introduction of force the introduction of ITs in SMHOs and
technology by providing push/pull effects. their satisfaction would increasingly depend
Owners/proprietors are the most apparent on this provision. Institutional customers,
stakeholders of SMHOs, as they are often such as travel agencies, tour operators and
main investors and managers. Owners/ other intermediaries are interested in having
Stakeholders and push and pull factors determining the introduction of ITs in hospitality
PUSH FACTORS PULL FACTORS
Education & SMALL AND Customer
European Union, MEDIUM SIZED Interconnectivity,
Government & Intranet/Extranet
Public Agencies Internet
Strategic Partners Travel Trade
[ 199 ]
Dimitrios Buhalis and easy access to up-to-date information on aim to inﬂuence the decision-making process
Hilary Main availability and rates for SMHOs. Thus, the of SMHOs’ stakeholders.
Information technology in utilization of ITs for representation in the
peripheral small and medium electronic marketplace, through global distri-
strategic analysis and critical bution systems and Web technology, is pivotal Push and pull factors
factors for a harmonious and proﬁtable co-operation
This research in the three peripheral destina-
International Journal of
between SMHOs and intermediaries. The
tions demonstrated that, should SMHOs have
Contemporary Hospitality development of extranets in particular will
a choice, they would try to maintain a tradi-
Management enable institutional customers to develop
tional management approach; many man-
10/5  198–202 suitable interfaces with SMHOs and to
agers could not perceive any beneﬁts to utiliz-
enhance their efficiency and connectivity .
ing technology where ITs would only play a
Suppliers of raw and other materials are
peripheral role. However, technology adapta-
interested in the wellbeing of their customers
tion may be critical in their ability to satisfy
and need to ensure that SMHOs operate effi-
their stakeholders, as well as to improve their
ciently and proﬁtably in order to maintain
performance. Research identiﬁed a wide
their custom. Suppliers need to increase their
range of push and pull factors which deter-
own efficiency in order to enhance their
mine whether SMHOs will utilize ITs and the
competitiveness. Communication and
degree of ITs’ future adaptation as illustrated
co-ordination with their customers are there-
in Figure 1. Push factors are external forces
fore pivotal for their ability to deliver the
which oblige enterprises to use ITs in order to
right product at the right time and price. IT,
avoid potential threats or jeopardize some of
and extranets in particular, enable inter-
their functions. Enterprises may not have
connectivity between enterprises and provide
recognized a need that the technology might
opportunities for suppliers to identify and ﬁll. If the need has been recognized, enter-
support the needs of individual customers. prises may not have matched a particular
Thus, suppliers can enhance their inter- technology with the fulﬁlment of that need.
action with SMHOs by utilizing technology Stakeholders seek to promote, garner,
and, hence, increasing the value added support and push a technology .
through the supply chain and establish Pull factors provide incentives for enter-
long-term partnerships. prises to incorporate ITs in order to gain
Increasingly, tourism regions are managed beneﬁts in their operation. In this scenario a
by destination managers, whose personal recognized market need is present and enter-
characteristics, development, and attitudes prises draw on ITs to fulﬁl it. Groth (1993)
are critical for the position they adopt examines the signiﬁcance of the push-pull
towards ITs. However, a rational destination factor in harvesting beneﬁt from technology
manager would probably promote the net- introduction. He deﬁnes the pull factor as
working of destinations in order to facilitate originating in political, social and economic
partnership and interaction between local forces which “pull” on the technology and the
suppliers, as well as improve the communica- push factor as relating to the efforts of the
tion with consumers. Finally, the local com- technology’s proponents. The push-pull
munity tends to be represented as a stake- analysis is critical as it illuminates the atti-
holder through owners and employees in tude of enterprises towards ITs and elabo-
SMHOs, while political parties and other rates on the reasoning for actions
lobby groups may inﬂuence the direction of undertaken.
the local tourism industry Thus, local people
. As far as push factors are concerned,
would gain more beneﬁts if tourism enter- several external inﬂuences force SMHOs to
prises utilize more advanced management re-engineer their business processes and
techniques and new technology These are
. utilize ITs. Education and training push ITs
important stakeholders in terms of in SMHOs, as the incorporation of technology
integrating the SMHOs in the supply chain in the hospitality curricula and training
within peripheral locations. provision provides a catalyst and promotes
The relationships between stakeholders, as ITs to the industry .
well as their interests, are dynamic. They Increasingly, the public sector recognizes
change according to the evolution of the that ITs are critical for the competitiveness of
external environment, while they also reﬂect private ﬁrms. They also recognize that small
the developments of stakeholders’ needs. and medium-sized enterprises are instrumen-
However, the above discussion demonstrates tal for regional development and have a much
that most of the major stakeholders of more signiﬁcant contribution to sustainable
SMHOs could beneﬁt signiﬁcantly from the development than their larger counterparts.
incorporation of ITs in the production and As a result, the European Union (EU), as well
management functions. Consequently, this as national and regional governments, con-
will probably be implemented through the centrate their efforts in providing incentives
effect of several push and pull factors, which for enhancing the utilization of ITs by small
[ 200 ]
Dimitrios Buhalis and ﬁrms (EC, 1996). Strategic partners are other issue, have formulated voluntary marketing
Hilary Main members in the supply chain who are closely organizations or have joined international
Information technology in interrelated with SMHOs, such as inter- hotel consortia in order to improve their
peripheral small and medium mediaries and suppliers. Tour operators have representation in the whole marketplace.
been instrumental in compelling travel The above analysis demonstrates that
strategic analysis and critical
factors agencies and handling agencies to utilize ITs, several push and pull factors force SMHOs to
in order to facilitate co-ordination and incorporate ITs within their operational and
International Journal of
Contemporary Hospitality enhance efficiency Similarly, destination
. strategic management. Although these were
Management management systems need SMHOs to utilize identiﬁed by research at the three destina-
10/5  198–202 ITs in order to be able to participate in the tions to be the most important, a wide range
networking of destinations and the develop- of additional factors emerges and encourages
ment of on-line reservations, and the develop- hospitality organizations to re-engineer their
ment of extranets through Web casting and business processes by incorporating technol-
Web technology Hence, strategic partners,
. ogy Perhaps the most pivotal change is the
such as intermediaries and suppliers, can revolution experienced through the develop-
force SMHOs to incorporate ITs and be repre- ment of the Internet. The Internet is gaining
sented in the electronic commerce. Finally commercial viability and is particularly
ITs suppliers also emerge to promote applica- suited to small business, where it enables the
tions for SMHOs and there is already small business to keep its doors open 24 hours
strategic partnering emerging with IT suppli- a day, at minimal cost to customers all over
ers, e.g. Fexco and the Irish Tourist Board the world. Already, there are some success
and ATOS with the French tourism authority . stories of small businesses enlarging their
Several pull factors can also be identiﬁed, distribution channels on the Web (Hart, 1995).
as they provide incentives for SMHOs to Software is now designed for those extra-,
incorporate technology Perhaps the most
. intra- and Internet connections allowing
important factor is customer demand and the access to internal databases and applications
increasing number of computer-literate con- and secure access from external sources.
sumers who are empowered by the Internet Hence, SMHOs which are not represented
and tend to use networks for identifying and will fail to bridge their distance with con-
purchasing various products. Hence, SMHOs sumers and suffer competitive disadvantages.
should start to realize that, unless they sat-
isfy this need, they will fail to attract con-
sumers. Thus, as SMHOs attempt to increase Conclusions
their market share, they would need to incor-
porate more technology in order to enhance Research in these peripheral regions of
their direct communication with consumers. Wales, France and Greece demonstrates that
This also provides an opportunity for the incorporation of ITs in SMHOs is not
disintermediation within the distribution always a rational managerial decision. It is
channel and empowers innovative SMHOs to often associated with the dynamic relation-
distribute their products directly to ships between stakeholders as well as a
consumers enhancing their proﬁt margins number of other variables which are related
and reducing their dependence on inter- to their characteristics. Figure 1 illustrates
mediaries (Hewson, 1996). Interconnectivity that there are several interested parties in the
within the industry, facilitated by the devel- wellbeing of the SMHOs, mainly owing to
opment of the Internet, as well as extranets their contribution to the local economies and
and intranets, enables and empowers SMHOs regional development. Stakeholders adopt a
to distribute and promote their hospitality number of push and pull factors to force
products at an affordable cost. A cost and SMHOs to utilize ITs. Research demonstrates
beneﬁt analysis should illustrate that they that some key stakeholders exercise a more
can displace some of their current marketing inﬂuential role in forcing SMHOs to utilize
and promotional expenditure to the new ITs, particularly technology partners.
media, as price differentials are offered in the Perhaps most important, the public sector, as
new channels, which promises a much wider a stakeholder, increasingly appreciates the
coverage of the market and an efficient reser- beneﬁts introduced by ITs and undertakes
vation/payment mechanism. initiatives to assist SMHOs to take advantage
Similarly with their strategic partners, by improving their equipment and by formu-
SMHOs realize that in order to co-operate lating networks. Hence, the EU has recently
with the travel trade they will need to utilize offered funding to develop systems to
ITs. The cost of locating and arranging increase the utilization of ITs by SMHOs and
accommodation in hotels not represented in to represent them on the Internet (EC, 1996).
electronic media, as well as attempting to These initiatives will be critical in the adap-
collect their commission afterwards, far tation process. Moreover, consumers may be
exceeds the beneﬁt (Beaver, 1995). Indepen- the key stakeholders in the industry, pulling
dent SMHOs, which appreciate the above technology through to hotels. SMHOs do not
[ 201 ]
Dimitrios Buhalis and have the problem of “legacy” systems. Thus EC (1996), “Call for proposals for the establishment
Hilary Main they can design their systems to take advant- of a European co-ordination structure aimed
Information technology in age of the emerging technologies, particu- at promoting the usage of electronic com-
peripheral small and medium larly Internet, extranets and intranets, with- merce through the Internet network among
hospitality enterprises: small and medium-sized companies operating
strategic analysis and critical out losing valuable data and, if any, technol-
ogy investment. The rapid expansion on the in the tourism sector and located in the less
Internet and the World Wide Web would seem favoured regions of the Union”, Brussels.
International Journal of
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10/5  198–202 ference, Birmingham.
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the tourism industry and to establish net-
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