E-Commerce

With the astonishing growth of the Internet, many companies are finding new and ways to expand upon their business opportunities. There are very few successful companies that do not use computers in their everyday business activities, which also means there are few companies that do not use E-commerce. To emphasize the point that the effect of the Internet is so widespread in today’s business communities, one online article stated that more than 100,000 companies have Internet addresses, and 20,000 companies have Web-sites on the Internet as of February 1999 (DataQuest, 1999). These numbers have more than tripled since 1995, and the trend shows no signs of slowing. But, what exactly is E-commerce? To most casual Internet surfers, E-commerce means online shopping; “for workaholics pointing their web browser to Amazon.com to order an emergency present because they forgot someone’s birthday again.” (Weiss, 1999) This is far from the case.

E-commerce is the exchange of business information between two or more organizations. An example of this would be buying and selling products or services over the Internet. E-commerce became very popular soon after it proved to be an efficient means to conduct long distance transactions. The purpose of this report is to discuss some of the advantages and disadvantages of E-commerce for hotels and resorts, as well as examining its potential for the future of business.

E-commerce has developed very rapidly in the last few years "Most people think E-commerce is just about buying and selling things over the Internet." (Wareham, 2000) E-commerce is a broad term describing the electronic exchange of business data between two or more organizations’ computers. Like the electronic filing of your income tax return, on-line services like Prodigy, and on-line billing for services or products received. E-commerce also includes buying and selling any item over the Internet, electronic fund transfer, smart cards, and all other methods of conducting business over digital networks. The primary technological goal of E-commerce is to integrate businesses, government agencies, and contractors into a single community with the ability to communicate with one another across any computer platform.” (Edwards, 1998)

E-commerce will change the face of business forever. Hotels that are thousands of miles away can complete business transactions and exchange information in a matter of seconds. As one online article explained: “Expedia sells more than $14 million worth of hotel and airline reservations a day from its web-site. By taking their customer service department to the web, Federal Express began saving $10,000 a day. The Internet provides businesses with the opportunity to sell their products to millions of people, 24 hours a day.” (Baxton, 1999)

"Without a doubt, the Internet is ushering in an era of sweeping change that will leave no business or industry untouched. In just three years, the Net has gone from a playground for nerds into a vast communications and trading center where some 90 million people swap information or do deals around the world. Imagine: It took radio more than 30 years to reach 60 million people, and television 15 years. Never has a technology caught fire so fast.” (Edwards, 1998)

The number one advantage that E-commerce possesses is its speed. The Internet and World Wide Web give businesses opportunities to exchange messages or complete transactions almost instantaneously. Even with the slowest connections, doing business electronically is much faster than traditional modes. With increased speeds of communication, the delivery time is reduced and that makes the whole transaction from start to finish more efficiently. In addition, you can find practically any product available for sale on the Internet, as one author put it “from books and specialty items to French bread (Buskin, 1998). Even more significant is the fact that information appearing on the Internet can be updated continuously and rapidly. This gives business owners the ability to inform customers of any changes to the service that they are offering. This also allows them to update marketing and promotional materials as often and as frequently as possible.

The second advantage of the electronic commerce is the opportunity it offers to save on costs. As an advertising medium for hotels or resorts, promotion using a web site results in the sale of ten times the number of units of one-tenth of advertising budget. In addition, web based promotion cost roughly one quarter of direct mail expenditures. Colorful, graphical are always less expensive than four color printing and distributing printed materials. A resort company, once printed its catalogues at a cost of 2 million dollars. By putting its list of locations and amenities items on the web, such costs have been