Cross culture management

Projects: “How theories of culture help us to understand and practise cross cultural management?”

Projects: “How theories of culture help us to understand and practise cross cultural management?”

E-commerce in tourism in Nepal

Ecommerce in travel and tourism industry and the challenges for adopting it in Nepal

This thesis is submitted to Irish American University (American college Dublin)

For the degree of

MBS in International Business

Bishal Bhattarai

2060301

June 2011

(Words Count: 17433)

Head of Department: Stephen Chandler

Supervisor of Research: Enda Murphy

Declaration of Originality

I, Mr. Bishal Bhattarai, declare that the dissertation titled “Ecommerce in travel and tourism industry and the challenges for adopting it in Nepal” is entirely my own work and any sources that I have used is being duly cited and credited.

I hereby declare that any sources published or unpublished for my work quoted or drawn reference fully in the text and in the contents list.  And I understand that failure to do so will result as plagiarism and will lead to failure. 

I know, I may be called for viva if required by the faculty of department, if necessary. I acknowledge that it is my responsibility that I must be available during the period.

Signed: ………………………………

Date: ………………………………..

Name of the supervisor: Enda Murphy

Abstract

This study explores the company’s perception towards ecommerce in tourism and challenges to adopt it.  Due to change in Information technology, ecommerce is emerged in travel and tourism industry and companies are now heading toward e-business through website, internet and different online software. 

This research study is empirical research in nature but also has some exploratory element on it. It uses the quantitative research method using close-ended questionnaires to get in-depth information from the participants.

The main finding of this study is Nepalese tourism industry is still preferring traditional way of doing business. However, there is a positive indication of ecommerce way of doing business by Nepalese travel and tourism industry will surpass traditional way. Moving from traditional business way to e-commerce way is quite challenging as lack of IT structure, electricity and communication, legal systems , Government policy and political stability are standing as a barrier for companies to adopt e-commerce. Similarly, consumer’s perceptions, their loyalty, lack of trust towards ecommerce, resistance to adopt ecommerce in business are also challenges for adopting ecommerce. Ecommerce in travel and tourism industry in Nepal is adopted due to innovation adoption, top management, new market entry, instant service global coverage. The results from data in this research paper mention that ecommerce adoption is expensive, lacks improved customer services. Furthermore, smaller travel companies adopt ecommerce way of doing business in Nepal more than big companies and majority of respondents agreed that traditional way of doing business is still preferred in Nepal.

Key words: Ecommerce; travel and tourism; online travel; internet; technology; service; trust; 

Acknowledgement

First of all I would like to thank all the people who have helped me through this dissertation, giving me their insights and guidance throughout.

I am grateful to my supervisor, Mr. Enda Murphy for giving his valuable inputs, advice and guidance to complete my work. Without him, this dissertation would not been possible. His efforts and time spent on me is really appreciable. I am also grateful to Dr. Padaric Regan for his valuable suggestions, methods and techniques to complete dissertation.

Special thanks to my friends Anita, Anjan, Prabin, Santosh, Rajib and my ex-colleagues from Intertours Nepal for collecting data on my behalf. I am obliged to Mr. Sukendra Gurubachayra from Nepal and Beyond tours and travels, Nepal for insight information of ecommerce in Nepal and very special thanks to Mr. Graham Jeffery for valuable suggestions, corrections and recommendation in my thesis.

I would like to thanks all the people who helped me to fill up emailed questionnaire. Without their support this research would not have been successful.

Last but not least, very special thanks to my beloved wife Sunita Kc Bhattarai for moral support and encouragement to complete this dissertation.

Table of contents

Chapters                                                                                 Page no.

Abstract………………………………………………………   III

Acknowledgements…………………………………………..   IV

1.     Research background……………………………………   1

1.1  Profile of Nepal and Tourism facts……………………........... 2

1.2  Ecommerce in Nepal………………………………………… 4

1.3  Research questions…………………………………………... 4

1.4  Research objectives………………………………………….  5

1.5  Research structure…………………………………………… 5 

1.6  Limitations………………………………………………....... 6

1.7  Conclusion………………………………………………….... 7

2.     Literature review…………………………………………. 8

2.1  Introduction………………………………………………….. 8

2.2  Adoption of ecommerce…………………………………...... 10

2.3  Factors for adopting ecommerce strategy……………………11

2.4  Benefits from adopting ecommerce in tourism………………13

2.5  Challenges of adopting ecommerce in tourism………………14

2.6  Limitations and barriers to adopt e-commerce in tourism……21

2.7  Conclusion………………………………………………….......21

3.     Hypothesis development…………………………………..24

3.1  Research questions……………………………………….……24

4.     Research methodology, objective and scope………… …. 27

4.1  Objective of the research………………………………………28

4.2  Scope of the research…………………………………………. 28

4.3  Rationale of the research……………………………………….29

4.4  Research onion…………………………………………………30

4.5  Research philosophies…………………………………………30

4.6  Research design………………………………………………..31

4.6.1       Structure of the questionnaire………………………….32

4.6.2       Introduction of the questionnaire………………………32

4.6.3       Sequence of the questionnaire………………………….32

4.7  Measurement of scale………………………………………….32

4.8  Sampling……………………………………………………... 33

4.9  Research choice……………………………………………… 34

4.10                   Distribution and data collection method……………… 35

4.10.1  Email and internet (mail survey)……………………….36

4.11                   Time horizon……………………………………………36

4.12                   Access and ethics………………………………………36

4.13                   Conclusion……………………………………………. 37

5.     Data analysis……………………………………………  38

5.1  Introduction…………………………………………………. 38

5.2  Data analysis……………………………………………….. 38

5.2.1       Nominal data analysis……………………………….  40

5.2.2       Ordinal data analysis: variables affecting adoption

of e-commerce in travel and tourism in Nepal……… 44

5.2.3       Ordinal data analysis:  factors effecting ecommerce

Strategies in Nepal…………………………………… 48

5.2.4       Ordinal data analysis: reasons for adopting factors

Ecommerce…………………………………………… 52

5.3  Normality test for ratio data………………………………….61

5.4  Ratio data analysis……………………………………………65

5.5  Hypothesis test………………………………………………. 66

5.6  Conclusion…………………………………………………… 69

6.     Conclusion and recommendation………………………   71

6.1  Introduction…………………………………………………  71

6.2  Discussion of major findings………………………………   72

6.3  Research implications………………………………………. 73

6.4  Limitations of the research…………………………………   73

6.5  Future research and recommendations……………………… 73

6.6  Conclusion…………………………………………………… 73

References………………………………………………………. 75

Appendix………………………………………………………… 78

List of Figures & Tables                                                                   Page No.

 1:       Nepal Key facts……………………………………………………….. 3

 2:       World key facts at glance…………………………………………… 9

3:        Security assurance …………………………………………………. 16

4:        User friendly website …………………………………………………18

5:        The Research Onion ………………………………………………….30

6:        Descriptive analysis table ………………………………………….. 39

 7:       Age analysis…………………………………………………………… 40

 8:       Gender………………………………………………………………… 41

9:          Education Level………………………………………………………42

10:      Reasons for adopting e-commerce………………………………… 43

11:      Variables effecting ecommerce………………………………………44

12:         Consumer comparing service and price…………………………45

13:         Traditional way of doing business……………………………… 46

14:         Lack of skill human resource…………………………………… 47

15:        Factors affecting e- commerce strategy………………………… 48

16:       Communication and electricity…………………………………… 48

17:       Top Management Support………………………………………… 49

18:       IT structure………………………………………………………….. 50

19:      Government policy and Strategy………………………………….. 51

20:      Reasons for adopting e-commerce…………………………………52

21:     Create New Market………………………………………………… 53

22:     Global Coverage…………………………………………………… 54

23:     Cheaper communication………………………………………….. 55

24:      Reduce Operational cost…………………………………………… 56

25:      Improved Customer Service……………………………………….. 57

26:     Instant Service…………………………………………………………58

27:    Reduce Cost of Advertising………………………………………… 59

28:    Global Coverage through online…………………………….……… 60

29:    Website modification………………………………….………………. 61

30:   Normality test of online Business…………………………………….. 61

31:     Normality test of online fraud………………………………………... 62

32:    Normality test of online business possibility………………………   62

33:    Normality test of no of employees……………………………………. 63

34:    Normality test of number of years using internet …………………. 63

35:   Normality test of website modification………………………………. 64

36:   Normality of number of years in travel …………………………….. 64

37:   Ratio data analysis……………………………………………………… 65

38:   Hypothesis test 1…………………………………………………………66

39:   Hypothesis test 2.………………………………………………………. 67

40:   Hypothesis test 3……………………………………………………….. 68

41: Hypothesis test  4……………………………………………………….. 68

CHAPTER I

1.     RESEARCH BACKGROUND

The tourism Industry is one of the fundamental back bones of economies throughout the developed, developing and underdeveloped countries and one of the major sources of the foreign exchequer. This industry is rapidly growing and is responsible for the creation of millions of jobs as well as indirectly generating multiple revenue streams throughout economies worldwide. As per World Travel and Tourism council, this industry represents accounts for 9.1 percent of global GDP, 8.8 percentage of global employment, and 4.5percent of world investment in 2011.

E-commerce is defined as the process of buying and selling or exchanging products, services and information via computer networks including the internet. (Turban et. al, 2000). There are various advantages of implementing e-commerce to develop the tourism industry due to the ease and speed it can provide information such as; destination choices, local information, costs, exchange rates and reviews from tour operators and previous visitors. It also allows the individual the ability to search popular destinations and get information about possible destinations and available accommodation. This process generates substantial income for many people and businesses around the world. 

With the rise of internet usage in people's daily life, tourism industries are creating business through e-commerce. E-commerce refers to both financial and informational transactions through electronic media between an organization, between people or to third parties (Chaffey et.al, 2006). Through e-commerce, these industries are trying to reach global populations to enhance their business through different e-commerce tools and there will be more and more challenges to these sectors in the coming days for adopting e-commerce. 

Adoption of e-commerce in tourism has always been a big challenge for the Nepalese tourism industry. They do not have as much experience as other tour/travel companies using ecommerce in developed countries. Weak IT and communication infrastructure, lack of human resources and finance and political instability have clearly contributed to the difficulties facing Nepalese travel and tourism firms to adapt ecommerce in tourism.  In the context of Nepal, there has not been any systematic research on ecommerce in tourism and challenges to adopt it.   In order to fill the gap of this topic, this research consists of adoption of ecommerce and challenges faced by travel/tourism firms to adopt it.

1.1  PROFILE OF NEPAL & TOURISM FACTS

Nepal is a landlocked Himalayan country located in South Asia. The country lies in 26⁰ 22' N to 30⁰ 27' N latitude and 80⁰ 4' E to 88⁰12' E longitude. It covers 0.03% area of the earth’s land and 0.3% of the total land of Asia.  The total land area covered by Nepal is 1, 47,181sq. Km  (CBS Nepal, 2008).It is bordered on the north by Tibet, an autonomous  region of China and to the east, west and south by India. Ecological Nepal is divided into three different regions:, Mountain region, Hill region and Terai region (plain region). Of the ten highest peaks in the world, eight are in Nepal which includes the highest peak in the world Mt. Everest with the height of 8848 ft.

On 28 May 2008, the kingdom of Nepal was transformed into the new republic of Nepal. Nepal is one of the least developed countries in the world. With the population of 28.1 million it has a per capita income of US$ 465 of dollar (UN, 2009). It is believed that more than 80% of the population live in the rural areas. Despite of its economic factor it has rich natural beauty. Agriculture and tourism is the main source of income for people because of that industrial sector is dominated by agricultural products.  The country has high a potential for tourism as well due to it’s geographical and cultural diversification. Cultural tours, trekking, mountain expeditions, white water rafting, jungle safari, bungee jumping, leisure holiday etc are the major tourism activities offered by the firms in the tourism industry. Detailed facts of tourism in Nepal by the World Travel and Tourism council are stated below.

Fig 1. Nepal Key facts

Source: (World Travel and Tourism Council, 2011)

1.2  ECOMMERCE IN NEPAL

Actual statistics are scarce, but application of Information Technology in Nepal had been particularly slow until the late eighties. Things are however changing at a relatively faster pace. There has been remarkable rise in the number of personal computers and related equipment sold and installed in Nepal especially after 1992 and of late, Nepal has seen an emergence of ISPs (Internet Service Providers) which has resulted in increased use of the Internet and World Wide Web.  The number of Internet accounts in Nepal is estimated to be around 62,550 as of June 2010 (Internet World Stats, 2011) and the majority of the users are within the Kathmandu valley. Since the potential for electronic commerce within and outside Nepal will also depend on the number of users who have access to the Internet, one of the priorities must obviously be in increasing this number.  But this alone will not be sufficient to guarantee the development of ecommerce in the country. E-commerce development is dependent upon factors like the number of Internet users internationally who could have a prima facie interest in Nepal, quality and types of products and services offered by Nepalese companies, the skills and creativity employed in designing web sites and the bandwidth available for users and service providers.  Some trading houses like Muncha.com, thamel .com, hotels, different export houses (especially pashmina, carpets and garments exporters), travel agencies etc are prime industries which are adopting ecommerce. There is no actual statistics, for when these companies have actually adopted ecommerce but it is believed that ecommerce is adopted by Nepal from 2004 onwards. There have been some limited initiatives on the front of e-commerce in Nepal; the country has yet to see an organized and concerted effort towards this direction. (Bhattarai, 2000)

1.3  RESEARCH QUESTIONS

The research topic for my MBS in International Business Management dissertation is “Ecommerce in travel and tourism industry and the challenges for adopting it in Nepal”

My research will be focused using the following research questions:

·         What are companies’ perceptions toward Ecommerce in travel and tourism business?

·         Do companies find any resistance in adopting ecommerce?

·         What are the factors for adopting ecommerce in travel and tourism?

·         What are the major challenges in adopting e-commerce in travel and tourism?

·         What are the major benefits and limitations of ecommerce in travel and tourism?

·         Are there other reasons why companies are adapting to ecommerce in travel and tourism?

1.4  RESEARCH OBJECTIVES

In exploring the above research questions, the following objectives will be met:

·         To identify the benefits and limitations of e-commerce in the travel and tourism industry

·         To highlight the major challenges in adopting e-commerce in the travel and tourism industry

·         To examine companies’ perceptions of e-commerce in the travel and tourism industry

1.5  RESEARCH STRUCTURE

The research has been divided into five chapters and they are:

·         Chapter 1: Introduction

·         Chapter 2:Literature review

·         Chapter 3: Hypothesis Development

·         Chapter 4: Research methodology

·         Chapter 5: Findings and analysis

·         Chapter 6: Conclusion and recommendation

Chapter 1 provides an introduction to tourism and ecommerce along with profiling Nepal and facts of Nepal. Furthermore it is an overview of the whole research paper; based on the research topic “Ecommerce in travel and tourism industry and the challenges for adopting it in Nepal”

Chapter 2 provides an analysis of previous research done in the area of ecommerce and tourism and challenges to adopt it. This chapter helps to transform the issues of the study in more depth and scope, which will provide an aid to meet the research objectives.

Chapter 3 hypothesis is developed based on literature review. This hypothesis will be tested to get the facts on the current scenario of ecommerce in travel and tourism industry of Nepal.

Chapter 4 provides details on the research methodology that will be applied and followed to meet the research objectives and to complete the dissertation topic. Even though some exploratory elements are present in the research study, it is more descriptive and quantitative in nature. So questionnaires will be sent to the respondents through email to collect the required data for the research.

Chapter 5 outlines the various findings of the research and also analysis them in the same chapter.

Finally chapter 6 is the last chapter of the dissertation. It gives conclusion to the research study. An overall summary of the research will be provided. Similarly recommendations will also be provided in the last chapter.

1.6  LIMITATIONS

The research poses some limitations which are as follow:

Ø  It will be difficult to collect the data from all the travel and tourism industry of Nepal.

Ø  Generalization will be done adopting the sample method, so the result may not be one hundred percent valid. However I will try to take a larger number of sample so that there will be higher probability of getting the right result.

Ø  We also have to complete our research within 20 weeks, so it may create some obstacle to doing in depth research and study.

Despite the limitations listed above, the descriptive study will provide an insight into how firms in the travel/tourism industry view ecommerce and what are the major benefits and limitations of ecommerce. Similarly what are the challenges faced by them when they adopt ecommerce in their business. The results from this dissertation are beneficial to the managers/firms who may adapt ecommerce. Similarly, results will also benefit the Nepal Tourism Board as well as the government of Nepal in implementing friendly ecommerce policies.

1.7  CONCLUSION

This chapter outlines the background to the research questions by introducing ecommerce in the travel and tourism industry of Nepal and its rapid growth in the internet marketplace. Since ecommerce in the travel and tourism industry is a new phenomenon, little research is done in the developing countries like Nepal. Thus this research explores firms’ perception towards ecommerce in travel and tourism industry. Similarly the overall structure of the research and the limitations are also outlined in this chapter. In the next chapter, we will go in depth on this topic through various peer reviewed journals which are done on ecommerce on tourism.

CHAPTER 2

LITERATURE REVIEW

Different writers have defined challenges and adaption of ecommerce in tourism in their journals, my literature review below  will slightly introduce tourism and ecommerce in tourism at the beginning and later move on to the interpretation of variables associated with adaption and challenges. The main objective of my literature review is to analyse the variables of adaption and challenges of ecommerce in tourism, so that I could find their significance and effects on travel and tourism businesses which ultimately benefits tour companies.

2.1  INTRODUCTION

The tourism Industry is one of the fundamental back bones of the economies throughout developed, developing and underdeveloped countries and one of the major sources of the foreign exchequer. This industry is rapidly growing and is responsible for the creation of millions of jobs as well as indirectly generating multiple revenue streams throughout economies worldwide. As per World Travel and Tourism council, this industry represents accounts for 9.1 percent of global GDP, 8.8 percentage of global employment, and 4.5percent of world investment in 2011.

WORLD - KEY FACTS AT A GLANCE

 

GDP: DIRECT CONTRIBUTION

The direct contribution of Travel &Tourism to GDP is expected to be US$1,850.0bn (2.8% of total GDP) in 2011, rising by 4.2% pa to US$2,860.5bn (2.9%) in 2021 (in constant 2011 prices).

GDP: Total Contribution
The total contribution of Travel &Tourism to GDP, including its wider economic impacts, is forecast to rise by 4.2% pa from US$5,991.9bn (9.1% of GDP) in 2011 to US$9,226.9bn (9.6%) by 2021.

Employment: Direct Contribution
Travel & Tourism is expected to support directly 99,048,000 jobs (3.4% of total employment) in 2011, rising by 2.0% pa to 120,427,000 jobs (3.6%) by 2021.

Employment: Total Contribution
The total contribution of Travel & Tourism to employment, including jobs indirectly supported by the industry, is forecast to rise by 2.3% pa from 258,592,000 jobs (8.8% of total employment) in 2011 to 323,826,000 jobs (9.7%) by 2021.

Visitor Exports
Travel & Tourism visitor exports are expected to generate US$1,162.7bn (5.8% of total exports) in 2011, growing by 6.6% pa (in nominal terms) to US$1,789.2bn (4.7%) in 2021.

Investment
Travel & Tourism investment is estimated at US$652.4bn or 4.5% of total investment in 2011. It should rise by 5.4% pa to reach US$1,487.9bn (or 4.6%) of total investment in 2021.

Fig 2: World key facts at glance

Source: (World Travel and Tourism Council, 2011)

The use of the internet is rapidly growing day by day and as per International Telecommunication union (2009), around 2 billion people will be online by the end of 2010.

E-commerce is defined as the process of buying and selling or exchanging products, services and information via computer networks including the internet. (Turban et. al, 2000). There are various advantages of implementing e-commerce to develop the tourism industry due to the ease and speed it can provide information such as; destination choices, local information, costs, exchange rates and reviews from tour operators and previous visitors. It also allows the individual the ability to search popular destinations and get information about possible destinations and available accommodation. This process generates substantial income for many people and businesses around the globe. 

With the rise of internet usage in people's daily life, tourism industries are developing business through e-commerce. E-commerce refers both financial and informational transaction through electronic media between in organization, people or to third parties (Chaffey et.al, 2006). Through e-commerce, these industries are trying to reach global populations to enhance their business through different e-commerce tools and there will be more and more challenges for these sectors in coming days for adopting e-commerce.

2.2  ADOPTION OF E-COMMERCE

As per Werthner and Ricci, e-commerce in travel and tourism industries is continuously increasing despite tough economic problems. (Werthner  & Ricci, 2004). As per them, this industry is adopting application of B2B (business to business) and B2C (business to consumer).  This industry has changed the way of doing business from traditional ways to modern ways, i.e. e-commerce via web and other online transaction software where as other industries are still adopting the traditional way.  Web is changing the behaviour of consumers as well, they are becoming less loyal, take less time choosing and consuming the products. As this industry is a service oriented business industry, companies are implementing various new techniques to satisfy consumer needs and providing information to them through web and different value generating strategies like value extraction, value capture, value addition value creation (Werthner & Ricci, 2004). Travel and tourism is an information based service orientated business and the product is termed as “confidence good” (Werthner & Ricci, 2004) and prior comprehensive assessment of quality is impossible however due to use of e-commerce feeds backs from consumers can be obtained in a short span of time and this services can be enhanced accordingly.  Due to adoption of e-commerce in travel and tourism industry consumers are becoming more powerful players as they can choose their destination and sites in a few minutes whereas travel agents, travel websites etc. see diminishing power in sales however they are providing new market functionality using new technologies to attract more consumers. Many tour operator, travel agents, online travel agents are using these strategies to attract more consumers however using more high-tech technologies requires huge investments and need more high skill human resources.

Ecommerce in travel and tourisms is vague topic and there are various factors that effects ecommerce strategy and various challenges to adopt it however I have analysed  important factors that leads ecommerce  adoption and various important challenges after adopting it only through peer reviewed journals as I am inspired by Whetten (1989). In his journal, for theoretical contribution for research paper, we have to choose right factors that contribute to theoretical aspect and omit unrelated factors.  Here are some factors and challenges that lead ecommerce strategies.

2.3 FACTORS FOR ADOPTING E-COMMERCE STRATEGY

There are various factors that lead organizations to adopt e-commerce strategy. Those factors are discussed below:

·         Innovation adaption

Regarding the business style and owner’s decision making play an important role while adopting and using new technology that requires some changes in the business operation systems. Managers and small owners play a vital role for facilitating these adoptions as they hold certain decision making power. Internet adoption is mainly due to the mangers or owners perception of the internet and benefits which it may provide to influence market forces. (Karanasios & Burgess, 2008) One of the important themes in the literature of innovation adoption is; factors which adapt innovation is their awareness and perceived benefits of a technology. (Cloete et. al, 2003). Innovation diffusion theory (Rogers, 1995), mentioned that characteristics of technologies, the nature of communication channels, passage of time and organizational external environment determines whether to adopt new innovation or not. If the character fits as per their organization nature and other external environment supports than they adopt new innovations. Limitation to innovation diffusion theory is that it does not mention the characteristic of people involved in it and dynamics of small business, (Tatnall & Burgess, 2003). In journal of Elliot & Boschoff (2007), they have mentioned that some level of technical knowledge by owner-manager will be a critical factor in success adoption and implementation of information technology. They further elaborated that some level of technical knowledge does not necessarily mean they will fully implement all the technical elements but at least appreciates the fundamental issues pertaining to management and its utilization which may lead to innovation adoption.

·         Top Management support

Top management support plays vital role as per Kim (2004) as they are the decision makers and their support and decision will direct the company to use the strategy. “Top management support act as critical to project success, yet there is no understanding as to what it is or, indeed, how it is enacted.” (Loonam & McDonagh, 2005, pg 170). Top management need to be well informed about the new innovation/technological changes, e-commence ways, finance needed by knowing these details top managements take decisions which lead towards new strategy adoptions. The level of implementation totally depends upon how top management support the idea as well how much they are enacted with the vision of idea. (Loonam & McDonagh, 2005). In the tourism industry top management’s role is extremely crucial, their decision determines if firms adopt e-commerce or to do business in the traditional way.

·         Government Initiatives & Political conditions

Government initiatives are important in the adoption of e-commerce in general (Molla 2005). They can be in terms of promotion of information and communication technologies (ICT)usage, education systems and the establishment of adequate regulatory  and legal framework for e-commerce. However government initiatives are affected by many factors including the country’s political condition, economic condition, and external influence from other countries as well. Political situation is a key factor for e-commerce growth. In a country with an unstable political condition, it is less likely that government will give enough attention.  (Dedrick et al., 1995)  For example, in a current scenario, the political condition of Nepal is very unstable and there are not any initiatives from the government to enhance e-commerce in the tourism industry.

·         IT & Communication Structure

One of the major factors that lead to ecommerce adaption is IT & Communication structure. Lack of these structures is the overriding factor that leads to unsuccessful adoption and adaption of e-commerce in tourism. (Adam & Urquhart, 2007). As tourism is a service oriented industry while adapting e-commence by companies must have sound IT structure and sound communication structure. The cost of accessing the IT infrastructures also induces the growth of e-commerce and the level of acceptance. It also relies on efficient logistic infrastructures within a country. IT & Communication structure includes computers, scanners, telephone, fax, internet connections, software, backups for communication, security systems & IT, data storage etc. Considering these structures in hand, companies are able to move forward with the adaption of e-commerce.

2.4   BENEFITS FROM ADOPTING E-COMMERCE IN TOURISM

There are various benefits for small and medium sized tourism enterprises to use e-commerce. In the journal of Kim (2004) & Purcell et al. (2004), they pointed to a few benefits of using e-commerce in tourism which are as follows;-

Ø  Providing easy access to information on tourism products and services

Ø  Providing better information on tourism products and services

Ø  Providing convenience for customers

Ø  Expanding choices by customers

Ø  Creating new markets

Ø  Establishing interactive relationship with customers

Ø  Improving customer services

Ø  Improving image and public recognition of the small & medium sized tourism enterprises

Ø  Saving time for providing tourism services

Ø  Providing customized & specialized tourism products & services

Ø  Reducing operating cost

Ø  Simplifying the business process

Ø  Interacting with business partners

Ø  Founding new business partners

Ø  Reducing cost of advertising

Ø  Effective and  cheaper communication

Ø  Exposure to global market

Ø  Possibility of attracting multinational companies

The adaption of e-commerce by small and medium sized enterprises is beneficial in various aspects.  In Kim’s research, he explained by adopting e-commerce companies can interact with customers frequently which will enhance their customer service, and the use of ecommerce also reduce their operating costs as substantial human resource is no longer needed and new opportunities for finding new agents, creating new markets etc. Due to use of ecommerce by small and medium enterprises they can save time as well.

2.5   CHALLENGES TO ADOPT E-COMMERCE IN TOURISM

The companies face different challenges to adopt e-commerce in tourism. Those challenges are discussed below:

·         Finance and Human capital

Most of the large tourism operators like hotels , car rentals, tour and travel agents have adopted ecommerce in tourism to distribute their products online through websites, software etc however small tour operators are lagging behind their large counterparts due to financial and human resources. In order to adapt an e-commerce strategy investment in technology and skilled human resource is necessary. A skilled labour force is required to redefining new business models, rejuvenate business processes, change corporate cultures, and raise relationships with customers and suppliers. In order to modify or adopt a new business model, initial investment is necessary, depending upon the means of adopting e-commerce, investment ranges from medium to huge (Karanasios & Burgess, 2008).   Any upgrade in technology might become a huge barrier to tourism firms in developing countries because of high switching costs involved and indirect operation costs involved in continuous operation of the system (Fleming, 2003). Hence, these are the primary challenges faced by small tourism enterprises in developing country.

·         Security assurance

As per Kim (2004), one of the main factors for conducting a successful e-commerce strategy is the security of the e-commerce system. Security means not only securing one’s own system but also providing security assurance to users who are using the sites or online software. In recent time internet frauds has risen and companies have to provide confidence to their users and their partners when browsing their sites and buying products and services through their online system. Consumers may believe that new internet-based processing methods expose them to new potential risks and dangers of online fraud , identity theft  and phishing swindles are schemes which steal confidential information using fake web sites, have become commonplace, and are likely to cause alarm and fear to consumers (Wolfe et. al, 2004).  When booking through online travel websites (where consumers have to provide bank or card details) customers feel unsecure as internet does not provide the same assurance as of physical store. Thus it is difficult for companies to gain the trust from people in developing countries where they still prefer face to face interaction. (Khare & Khare, 2010)

To build trust among people, companies can try to capture a part of the traditional travel agent and client market by focusing on different advertisements, emphasizing online agents’ knowledge (Wolfe et. al, 2004). They have mentioned that companies can lure their customers by providing personalized service through email, web texts and customized web sites that are built “on the fly” based on users’ specific profiles and needs. The main theme of the writers is to gain customer confidence and trust toward the website. The challenge is determining how a web site can exude trust and good service. To build customer trust, Wolfe et al have suggested online travel agencies have to provide telephone numbers or e-mail contact information. These phone numbers and email addresses can be useful for customers who want proper information about destinations, services and more specific questions. An e-mail reply or telephone call allows companies to respond to inquiries with politeness in a professional way which of course provide sense of old fashioned postal mail. In this way a browser may be transformed to a buyer.  (Law & Bai, 2008).  In context of Nepal, certain travel agencies are using this strategy to attract customers. Here is an example of website of Nepal and Beyond tours and travels in which they have provided security assurance to customers by providing information about them as well as they physical location too.

Fig 3: Security assurance

Source: Nepal and Beyond, 2011 (www.nepalandbeyond.com)

·         User Friendly web

A user friendly web interface gives the consumer trust and is easy to use and convenient for customers  (Kim, 2004). One of the factors he explained is customer acceptance; customer acceptance means the way the customer accepts the web or online software of the company. It should have very rich contents and be extremely easy to use.  These factors will decide whether the business will get more customers.  Customers intend to use websites due to content richness and ease of use (Law & Bai, 2008).

Law and Bai in their research paper mentioned there are two types of customers who use travel company websites, those are buyers and browsers. Buyers are those people who actually intend to buy the services whereas browsers are those who intend to surf and get information only. Those browsers can be converted to buyers by improving the website content, making it attractive and making it user friendly. As more and more travel companies are applying these strategies, the increase in percentage of website buyers and browsers are also increasing day by day. This is due to the adaption of e-commerce technology in the travel and tourism industry.  Some travel agencies in Nepal have updated all necessary information’s like visa formalities, places to visit, tailor made holidays, time, temperature etc. This information creates positive impact on consumers’ mind. For example,  website of intertours-nepal (figure below)  have included necessary information about places of Nepal, time, visa formalities, picture gallery, festival details etc. This information in some extent gives picture of Nepal and lure customers as well.

Fig 4: User friendly website

Source: Intertours Nepal, 2010 (www.intertours-nepal.com)

·         Lack of Trust & Resistance to change

Trust is a major issue in the online business environment especially in tourism business as people in this business work on trust and relationships. Wolfe et. al,( 2004) in their journal have mentioned that  people in the developing nations are not confident with the online way of doing business as they still have no confident in using internet or doing business online. Because Ecommerce is not a practice in developing countries, and business is usually done on face-to-face basis, people usually raise trust issues. Further, people in developing countries hardly like to change their working style; it means they have some sort of resistance to adopt new technologies. Besides, because there are no good ecommerce policies and laws in most developing countries, they might feel that if any dispute arises during business deals, they have no place to settle.

·         Lack of training institutions

Firms in developing countries are less likely to have the latest IT and IT training centres.  If technology is adapted, firms in developing counties face the problem of operating them due to a lack of IT skills and training. (Adam & Urquhart, 2007). Montealegre ‘s journal (1998) pointed out that in developing countries there is need to develop skilled human resources and provide facilities for IT training . For this government has a key role for making good policy, IT infrastructure, Tourism training centres in which development of skilled human resource is possible. Further, shortage of skilled trainers in developing countries is one of the major issues for not having proper training institutions. This issue is becoming more important in tourism firms as the complexity of IT applications increases. Another problem for developing countries is that the quality of curriculum taught is either out of date or inappropriate. This is particularly problematic for IT and Tourism personal as workers need to be trained and knowledge about the products and how to use them. For example, Shakya and Raunier (2002), mentioned that in Nepal, IT curriculum of most universities and training institutions did not cater to the demands of the local IT industry and were not in line with curriculum of comparable courses in international studies.

·         Consumer perceptions

There are several challenges to adopting e-commerce in the travel and tourism industry.  As per Mamaghani (2009), the behaviour of customers is changing and due to e-commerce they swap agencies in few seconds if they are not happy.  Customers expect the same service and treatment as offered by travel agencies through their outlet or through the web.  Customers have different ways of surfing the internet as per their level of internet knowledge so easy of use and rich content are essential. To adapt e-commerce by company, they have to focus on their service details, product availability, special offers, personalized information which are important factors when consumers search the web for a product.   He further mentioned that Individual e-commerce customers have been known to be demanding and unforgiving As such, regular maintenance, upgrade of technologies and continuous improvement of customer service are the core factors for enhancing business and attracting more customers. Consumers these days are far more demanding and want convenience, speed and a seamless buying experience. Main challenges as per Mamaghani is to create awareness among customers about your product and to make them loyal. 

Kharke & Kharke (2010) in their journal mentioned that consumers are more demanding these days and they focus on buying products through secured online companies who have service quality and information available at an instant. In their journal they mentioned that customer satisfaction is categorized under after sales service, purchase result, price attractiveness, site information and log on convenience. Furthermore they have mentioned that in developing countries consumers might find difficult to navigate web and prefer face to face interaction rather than buying online.

Due to drastic change in technology, Internet, mobile and handheld portals available, consumers access the Internet for travel planning in many different ways and companies have to grasp these changes in technology, which of course is expensive and needs skilled human resource manpower. Some countries have a weak Information technology structure and people from these countries might have problems using e-commerce.  One of the main challenges as per Mamaghaini that adaptation of e-commerce in travel and tourism is to build trust of people in the internet system so that they will choose e-commerce instead of the traditional way.

·         Legal system

One of the major challenges and barriers to adapting e-commerce in developing countries is legal systems. Firms are willing to adapt e-commerce however due to legal systems; they are still lagging behind. For example, contracts made electronically might not be valid in jurisdiction in many cases in developing countries like Nepal.

The information transferred by electronic means which culminates into a contract raises many legal issues which cannot be answered within the existing provisions of the contract act. The IT act does not form a complete code for the electronic contracts in developing countries. There are proper cyber laws like validation of e-contracts, contracts of e-data interchange, validity of e-transactions, communication of offer and acceptance, mistakes in e-commerce etc., these are not clearly defined in existing laws in developing countries. (Farooq, 2001). Governments in developing countries have to update their legal systems and ensure effective cyber contract laws, e-data contracts, security contracts etc . This will make it easier for firms to adopt e-commerce as they know the pros and cons of e-contracts and its termination when legal systems we defined.

2.6  LIMITATIONS & BARRIERS TO ADOPT E-COMMERCE IN TOURISM

E- Commerce is a huge leap in the travel and tourism industry moving from traditional ways to technological ways and there are various barriers for travel and tourism companies to adopt e-commerce in their business. As mentioned by Kim (2004), include limited knowledge of available technology, lack of awareness, cost of initial investment, lack of confidence in the benefits of e-commerce and cost of system maintenance. These barriers also include shortage of skilled human resources and ‘resistance to adoption of e-commerce. Further he mentioned insufficient e-commerce infrastructure and small e-commerce market size might be barrier factors depending upon the market size (Kim, 2004).

Moving from traditional way to technological way is not easy so in order to adapt e-commerce huge investment in Information Technological (IT) is needed along with this staff have to be trained accordingly. It is not always possible for small and medium size companies to invest huge amounts and to get skilled human resource staff. Some countries have different rules and regulations for e-commerce business rather than traditional ways.  Government rules and regulations also play a vital role for adapting e-commerce.  Further, websites and software must be rich in content, very easy to use, updated frequently. If these factors are ignored than these factors will be a barrier to e-commerce in tourism.

2.7  CONCLUSION

Tourism is the backbone of a country's economy. Due to the increase on internet usage as well as people’s income, more and more people are travelling and using e commerce to buy tourism products. Many travel and tour companies are adapting e-commerce to increase their business, they are moving from traditional ways to e-business ways to grasp markets as people are using the internet and other online software more often. E-commerce is the new way for promoting and selling tourism products through the web.

It is not easy to adapt e-commerce at once from traditional ways, investment in information technologies costs huge amount and furthermore it needs skilled human resources. There are certain factors for adaption of ecommerce strategies such as innovation adaption by firms, top management support, government polices and IT and communication structure. These factors are very crucial in developing countries context as some factors can be controlled however some factors cannot be controlled.

 After the adaption of e-commerce in business, it will face many challenges; one of the main challenges is to attract traditional buyers who prefer buying products from travel agencies rather than booking through the web. To lure these customers, awareness towards e-commerce is necessary; website should be user friendly, informative, should have very rich content. Furthermore, major challenges for adopting commerce are finance & Human capital, security assurance provided by travel companies, lack of trust and resistance to adopt ecommerce by travel companies. Similarly lack of IT training institutions is also regarded as one of the challenges faced by tour and travel firms.

There are several benefits as well as barriers for adaption of e-commerce in travel and tourism, benefits are low operating costs, interaction with customers, customer can choose products using the internet, fast, speed of service, easy to find new business partners,  communication with customers during holidays in case of any problems etc however key barriers for adopting e-commerce are huge investment, consumer's loyalty, lack of human skill resources, government policies for e-commerce, customer confidence etc . Due to e-commerce in travel and tourism, the behaviour of the consumer has changed, they are less loyal towards the company and it's easy for them to change companies in a few seconds. To retain customers, companies have to provide excellent service and offer loyalty programs to customers.

While going through the above literature, I have found many things in common. Writers have found that companies have to consider various factors while adopting e-commerce although it is beneficial for them as it reduces costs, saves time, their brand presence is worldwide  however they admired that companies can lose that personal touch with customers and their loyalty as it is very easy to switch companies due to variety of choices offered online.

To conclude, adaption of e-commerce is very fruitful to tour and travel companies however along with adoption of e-commerce, companies have to focus on changing behaviour of customers as well, what the customer expects while booking and buying through the web. What will be customer’s perception of using e-commerce in travel and tourism? Research on customer perception, customer acceptation, level of customer satisfaction, compensation in cases of bad services, secured online payment system etc should be deeply researched while adopting e-commerce in travel and tourism in context of developing countries.

In next chapter, we will develop hypothesis on the basis of above discussed literature reviews.

CHAPTER 3

HYPOTHESIS DEVELOPMENT

In last chapter, researcher discussed about factors, reasons for adapting ecommerce and challenge to adopt it through different peer reviewed journals. In this chapter, hypothesis is developed in accordance to the journals, hypothesis is developed. 

3.1  RESEARCH QUESTIONS

Hypotheses are developed according to research questions and objectives. Researcher’s prime research questions are as follows:-

·         What are the companies’ perceptions toward Ecommerce in travel and tourism business?

·         Do companies find any resistance to adopt ecommerce?

·         What are the factors to adapt ecommerce in travel and tourism?

·         What are the major challenges to adopt e-commerce in travel and tourism?

·         What are the major benefits and limitations of ecommerce in travel and tourism?

As from the literature review, researcher found that ecommerce had both benefits and limitations after adaption in travel/tourism business and it is quite challenging and firms face different barriers to adapt it. Hypothesis is based on the literature review which is relevant to the adaption and challenges to adopt it.

• Hypothesis 1 (H1): Big travel/tourism companies tend to adapt more ecommerce in Nepal?

The first hypothesis can be tested with the help of number of employees and volume of total online of business. Based on the literature review (Karanasios & Burgess, 2008) & (Fleming, 2003) in which they have defined Finance and Human capitals are the major challenges to adapt e-commerce in tourism.

Assumption: In Nepal, big firms have huge finance and human capital which enables them to adapt ecommerce easily as finance and human capital are vital things to adapt ecommerce.

• Hypothesis 2 (H2): Older Travel agencies in Nepal prefer to do business in traditional way rather than adopting ecommerce.

This hypothesis can be tested with no of years in business and future predictions of ecommerce in travel/tourism.  In the literature review, lack of trust and resistance to change are the challenges mentioned by Wolfe et. al (2004), in their journal they have mentioned that  people  are not confident with online way of doing business as they still have no trust using internet or doing business through online and happy to do business in old traditional way.

Assumption: Older travels agencies in Nepal tend to stick on their traditional business pattern rather than adopting ecommerce as Ecommerce is not a practice in their working style, and business is usually done on face-to-face bases, people usually raise trust issues. Further, people on older travel agencies hardly like to change their working style; it means they have some sort of resistance to adapt new technologies.

• Hypothesis 3 (H3): There is significant relationship between website modification & increment in online business queries in Nepal.

This hypothesis can be analysed with number of times companies or firm modifies website and increment in online business with. In research paper by Law & Bai (2008) & Kim (2004) have mentioned that website richness, user friendly and frequent modification attracts more customers and results increment in online queries.

Assumption:  In Nepal, travel/tourism companies often changes their website to attract more clients. Further, they make user friendly website to attract more customers.

• Hypothesis 4 (H4):  Government of Nepal is unable to support with infrastructure and legal system for travel tourism industry to adopt ecommerce.

This hypothesis can be analysed with government policy, legal system and infrastructure development. In research paper by Farooq (2001), he had mentioned , cyber laws like validation of e-contracts, contracts of e-data interchange, validity of e-transactions, communication of offer and acceptance, mistakes in e-commerce etc., these are not clearly defined in existing laws in developing countries like Nepal. Similarly Adam & Urquhart (2007) mentioned that Lack of infrastructure structure like IT & Communication is the overriding factor that leads to unsuccessful adoption and adaption of e-commerce in tourism.

Assumption:  As Nepal is one of the developing countries in the world and do not have any proper infrastructure like good telecommunication, electricity and IT structure, there factors are barriers for adopting ecommerce and Nepalese government is unable to address these issue. Similarly, Nepalese government do not have friendly ecommerce law which is one of the major challenges travel/tourism industry face to adopt e commerce.

In next chapter, research methodology will be discussed.

CHAPTER 4

RESEARCH METHODOLOGY OBJECTIVES AND SCOPE

           

In the last chapter, researcher reviewed academic journals and made the literature review. With the help of literature review, hypotheses were built to see in the context of Nepal. The chapter will explain research philosophies and the approach of my research and it will further discuss how it was planed and designed.

There have been a number of studies done in the field of ecommerce in tourism however most of the research was based on developed countries. While reviewing the literature, researcher found some journals were written in context of developing countries and most the journals were focusing on airlines and hotel industry as these industries are the first industries adopting ecommerce. To match literature review, researcher has focused literature based on south Asian countries and developing counties as researcher could not get any solid research based on Nepal. As researcher found there is a need of research to be done in the field of ecommerce in tourism and challenge to adopt in Nepal and which in researcher’s view is a research gap which researcher will try to full with my research findings.

On initial stage while starting the literature researcher hardly imagine few factors for adopting ecommerce in strategy however while going through different journals, researcher found many factors that leads to adapt ecommerce in tourism.  Researcher chooses four main factors that lead ecommerce adaption as researcher believes these factors are the prime factors. Similarly in case of challenges of adopting ecommerce, researcher chooses seven main challenges which travel and tourism companies face while adopting it in the context of Nepal.

Prime focus is to find out factors and benefits of adopting ecommerce in tourism and what are the challenges occurred while adapting it. Researcher drafted questionnaire based on literature review interpretation. The research is based on quantitative type of questionnaire and the questionnaires are closed and the limited options are available. All the collected data will be input in SPSS software for the statistical analysis. The reason for choosing quantitative data is that, it is the best way to analyse the numeric data and results can be interpreted quite easily.

4.1  OBJECTIVE OF THE RESEARCH

Main objectives on doing dissertation on the topic “Ecommerce in travel and tourism industry and the challenges for adopting it in Nepal” are as follows: 

·         To identify the benefits and limitations of e-commerce in the travel and tourism industry

·         To highlight the major challenges in adopting e-commerce in the travel and tourism industry

·         To identify the factors that leads e-commerce adaption in travel and tourism industry

•  To do an in-depth research on the available literature on the ecommerce in tourism. All the literatures are academic and done by highly qualified researchers.
• To make a report on the hypothesis from the literature review which is built by doing deep study in the previous research on the ecommerce in tourism?
• To present a compressive and critical analysis on the adaption and challenge of e-commerce in tourism industry in terms of Nepal as this is the main theme of my dissertation.
• Finally to reach at the conclusion on reasons for adapting ecommerce and challenges occurred while adapting ecommerce by travel and tourism industries in Nepal through the analysis of the data which is collected from Nepal.

4.2  SCOPE OF THE RESEARCH

The research will cover these following areas to identify the benefits as well barriers for the Nepalese travel and tourism industry after adapting ecommerce and challenges they face to adopt it. To achieve the objective which is set for this dissertation is widened in following areas:

Ø  The study covers the tourism history of Nepal and the main tourism products of Nepal.

Ø  The study also covers different kind of ecommerce challenges when adapted by travel and tourism industry could face in both developing and the developed nations

Ø  The study extends the scope of the adapting ecommerce in travel and tourism industry in Nepal developing nation (Nepal) which could be useful for other researchers who are interested doing their research on the developing nations.

Ø  In addition the study results and finding benefits managers and owners who are willing to adapt ecommerce and for them who are have already adapted ecommerce in tourism in Nepal.

4.3  RATIONALE OF THE RESEARCH

Various writers have done various searches on ecommerce and tourism I saw Mamaghani, Werthner & Ricci are the researchers who have been doing continuous research on ecommerce and tourism. It is believed that the research is like a spider web which is well big but at the same time there are lots of whole on it. Even after being too much of research done in this field there are lots of gap.

As researcher’s dissertation proves itself unique because it defines ecommerce adaption and of a least developing nation and challenges to adopt it and as far as researcher is concerned there is no survey is done in the prospect of Nepal on ecommerce in tourism.

           

4.4  RESEARCH ONION

The research ‘onion’ developed by Saunders et al. (2009) is widely used by researchers to design their research methodology. The same research onion is used to design research methodology for this study.

                                                                                      Fig 5: The Research Onion

Source: Saunders et. al., 2009, pg 108

4.5  RESEARCH PHILOSOPHIES           

This part will explain the research philosophies which are related with the development of my knowledge in the field of export barriers. Research philosophies are an assumption the way we see things as Saunder et. al (2009) says. In this research, researcher has applied only one research philosophy which is:

Epistemology: With the principle thought of positivism and the evidence of that is hypothesis which is developed and those hypothesis will be tested and confirmed.

In this research, researcher has used deductive approach. This research approach is going to fill research gap. After reading all the relevant journals in the field of ecommerce in tourism and its challenges, the research questions and the literature review were built. On the basis of research questions and literature review hypothesis are developed which will be further tested in the data analysis. The hypotheses are mainly based on the research question and the literature review because in literature review researchers have done survey in the developing nations.

In terms of research strategy, researcher found email survey as the best option to give the answer of my research question. This research strategy makes possible to analyze quantitative data by using descriptive and inferential statistics. (Saunders et. al, 2009). In this research, researcher has used only mono method of the research choice, because researcher is inspired by the survey as strategy for the research. This research is done as an academic requirement with the limitation of time in a particular place (Nepal) and in specific tourism companies only and it will be collected in a short period of particular time, so that’s why in terms of time horizon this research is cross-sectional study.

4.6  RESEARCH DESIGN

Of the most important part of this research is the design of the questionnaire because it is the best way to collect data to analyze and to get to the conclusion of the research. So the questionnaire made very simple and understandable for the respondents. In the questionnaire quantitative questioners are used and in all together 27 questions is used and the questionnaire is based on self administrative questions as questionnaire is sent through email to respondents.

The questionnaire is made in English and not translated in Nepalese language as English is used while corresponding to travel agents or clients by travel agencies in Nepal. Furthermore, it is a second language and the most of the people in the managerial position in travel/tourism industry in Nepal are familiar with English language. Questionnaire contains four pages with the first page having administrative questions, second and third contains investigative questions and the socio demographic questions.

4.6.1        Structure of the questionnaire

The questionnaire starts with the title of the questionnaire which is “E-commerce in travel and tourism in Nepal and challenges to adopt it”.

4.6.2        Introduction of the questionnaire

The questionnaire starts up with the welcome message and researcher introduction. Respondents are well motivated to response by giving all personal detail, contact information and the purpose of the research and further more respondents are given the chance to get the result of the research to improve the response rate.

4.6.3        Sequence of the questionnaire

The questionnaire has been divided in three parts. It goes through from easy starts towards the targeted questions. This is how the questionnaire is divided:-

Ø  Administrative questions: The administrative questions asking the personal information of the respondent such date, title of respondent and the company name.

Ø  Investigative questions: This is the main section of the questionnaire and it comes right after the administrative questions. These are the main questions which target the ecommerce in tourism and challenges to adopt it. All together researcher drafted twenty five questions in this section and all questions are qualitative questions. While designing the questionnaire in this section difficult terms and words were avoided to make respondents easier to understand the area.

Ø  Socio-demographic questions: The question section starts up with the socio- demographic questions such as age, highest level of studies obtained and gender. In this section, researcher drafted three questions.

4.7  MEASUREMENT OF SCALE

Multiple item scale has been used to find company’s perception on ecommerce in travel/tourism in Nepal because of it is easier to analyze the data’s through this method, so for that reason four types of scale has been used:

• Nominal or categorical data:  Few nominal questions are asked to respondents to categorize the company in different section. Such as age bar, gender and level of education. These categorical data are easy to respond by respondent.

• Ordinal or scale data: The respondents were asked to tick a five point scale with 5 as the most significantly agree and one as very insignificantly disagree was used.

Example 5 point scale:

1 = strongly agree

2 = agree

3        = neither agree nor disagree

4        = disagree

5        = strongly disagree

• Interval scale: In this research, researcher has not used the interval scale questions.

• Ratio scale: In the questionnaire, researcher has used 8 ratio scales such as number of years in tourism business, no of employees, perception about online business etc. This kind of scale can be used in central tendency and dispersion as they are the ready to used kind of scale and regarded as the most powerful scale in the questionnaire.

Moving forward from the design of the questionnaire researcher has clarified him in sampling and chooses the correct distribution of the questionnaire and the data collection method which is mentioned below:

4.8  SAMPLING

Saunders et al., (2009) sampling technique is helpful to reduce the number of data which is needed to be collected by collecting only from the subgroup which is more likely to represent the whole group. So in this research, researcher has used sampling technique to collect the important data.

Ø  Population:

Travel agents, tour operators are the population to be targeted on this research. Most of them are using online services to enhance their business as well. Many of those have clients from different part of the world.

Ø  Sampling frame:

From the beginning of this research, travel agency and tour operators were focused. Most of these firms are hugely concentrated in the capital city of Nepal (Kathmandu) although there are few numbers in other cities like Pokhara, Chitwan and Biratnagar. To get the least of the companies operating in Nepal, two main organizations have been approached for data, Nepal Tourism Board and Nepal Association of Travel and Tour Agents.

Ø  Sampling method:

In this research, researcher avoided non-probability sampling because of its lack of accuracy. That’s why researcher used probability sampling, it is not only the best method to generalize the result but also it is highly effective, fast in speed and has low cost.

Ø  Sample size:

While doing the literature review, researcher found few researchers did their research with the sample size of 40-60. With the limitation of time, speed, cost and accessibility researcher thinks, he will manage to get around 30-40 data’s. Which researcher thinks will be enough to do his analysis.

Ø  Sample selection:

Out of many companies a list of 90 companies were selected and tried best to produce the sample which represent the population of these companies.

4.9  RESEARCH CHOICE

Research Choices can be of two types, viz. Mono Method and Multiple Method. These choices are the composite of the data collection techniques and analysis methodologies. Mono Method involves the usage of either qualitative or quantitative data collection, and Multiple Method can be used if you wish to adopt both qualitative and quantitative data collection techniques through multi-method and mixed methodologies.

This research study has chosen the Mono Method as the Research Choice, simply because it is based on quantitative data collection through our questionnaire and uses statistical tool ‘SPSS’ as a medium for data analysis procedures.

4.10          DISTRIBUTION AND DATA COLLECTION METHOD

According to Daft (1983, pg 539) the qualities of a good research are that which is “exemplified by precise definition, objective data collection, systematic procedures and replicable findings” In order to make this research a good research, special attention to data collection techniques and procedures is given. For this survey, researcher has decided to use email survey collect in self-administrative method. Interviewer administrative data collection method is expensive, although it can clarifies respondent’s difficulties in understanding question, it is highly unlikely for me to go to Nepal to collect data because of cost and time aspect. That’s why interviewer administrative was rejected such as telephone and interview.

Further more out of many self-administrative data collection method post was rejected. Post is highly expensive and it is believed that the response rate is very low in this method and it is much time consuming. Further postal system in Nepal is very poor, my posts to travel companies might be lost on the way and it is expensive to sent post from Ireland to Nepal and further it is expensive to receive from Nepal as well.

While distributing and collecting data; the researcher should consider CAST concept. CAST stands for cost, access, speed and time. One should never forget the concept of cast while doing research in any field. So looking at the concept of CAST, the researcher used email & internet (mail survey) with administrative data type as it is has more potential to reach target population with cheapest cost per response. Further, it can easily preserve organization confidentiality which may be prime concern for executives of companies. (Cycyota & Harisson, 2006)

4.10.1    Email & internet (Mail Survey)

Out of 200 companies, 90 companies were selected to email the questionnaire and this also justifies the concept of CAST and on top of that researcher can target the odd companies that are out of the Kathmandu valley. Questionnaire were attached in email and sent to the respondents. It is a very easy way to send the questionnaire and the cheapest way to collect the data and it is very timely efficient. And it justifies the concept of cast.

Cheap: It is one of the cheapest modes for me rather than post, face to face as well as telephone interview based survey as researcher can send email instantly with attached questionnaire to different travel/tourism companies without any extra cost

Access: Because of the collectivism nature it is not a big task to get access in those company and my previous experience on this field help me to access data as well as researcher does have good contacts with travel agents and associations of travel agents in Nepal.

Speed:  Speed is very high in this method as researcher can send email just in a click.

Time:  This method is time efficient as replies from respondent are faster than reply from post.

4.11          TIME HORIZON

An important question to be asked in planning in any research is “do I want my research to be snapshot; means taken at a particular time which is also called cross sectional?” or “do I need my research to be done over a period of time or diary perspective, also called longitudinal studies?” (Saunders et al., 2009). The researcher is doing this research for the academic purpose; therefore is under a time constraint. This research paper has selected the Cross-Sectional Study due to time constraints and dead line give for the submission of this research task.

4.12          ACCESS AND ETHICS

To access the company data, company employees and the director himself will be contacted and the following steps will be taken:

·         Email attachment with questionnaires  with College Logo, College Name  will be sent to different tour, travel companies in Nepal

·         Nepal tourism board and Nepal association of tour and travel agent will be contacted for further information and contacts of tour companies.

Ethics in terms of my research is also highly taken into consideration. Statement mentioning the data collected by the companies will be on academic purpose not for commercial purpose will be mentioned to companies. The results of this report will not be shown to any third party rather than the company itself and the college. The data containing company policies will be kept confidential.

There are some ethical issues that will be considered while conducting the research (Kimmel, 2007) which are as follows:

• The participants are fully protected from psychological and physical harm.
• Personal nature information is not asked.
• The participants can withdraw from the research without the fear of penalty anytime they want.
• The participant’s responses will be properly and accurately recorded.

4.13          CONCLUSION

This research approach is conducted with the help of research onion (Saunders et al. 2009) which includes research philosophies, approach, strategies, choice, time horizon and further more questionnaire design, sample collection, data distribution and the collection method and objective, scope and rational of the research is added to start with the methodology.

In the next chapter, all the data which is received will be analyzed

CHAPTER 5

DATA ANALYSIS

5.1                          INTRODUCTION

In earlier chapter, research methodology was discussed.  In this chapter, researcher will discuss data analysis techniques and findings from our data. This chapter contains report from SPSS interpretation and is based on survey of “Ecommerce in tourism and challenges to adopt in developing countries like Nepal”.  The main idea of this survey is to find out what are the factors that lead ecommerce strategy by travel/tourism industry and what are the major challenges to adopt it. Researcher has used deductive approach and mono method (Saunders et. at, 2009) as research strategy as mentioned earlier in research methodology (chapter 4) as well.   Questionnaires are self administrative and sample were selected randomly in Nepal. There are three types of questions on the questionnaire which are nominal, ordinal and ratio. Different statistical tools are used as per the type of the questions with help of SPSS survival manual book by Julie Pallent (2006)

5.2                         DATA ANALYSIS

To interpret our data, researcher will be using two types of data analysis which are descriptive statics and another one is parametric statics and Non-Parametric statics.

·         Descriptive statistics: They are used to describe the basic features of the data and help us to compare data numerically. Descriptive statics measures variables on two aspects: Measure of central tendency and Dispersion (Saunders et al, 2009)

Ø  Measure of central tendency:  There are three ways of measuring the central tendency which are Mode, Mean and Median.  Mode only measures the value that occurs frequently and it is used to analyze Nominal data.  Median is the middle value of the data. Median and mode are used in Ordinal data. Mean is the average value of quantitative data however the lowest and highest data may change the value if mean. All three ways of measuring data like mode, median and mean are used to analyze Ratio data.

Ø  Dispersion:  Central of tendency of data measures data how data are move toward the centre whereas measure of dispersion allows us to understand how data are dispersed around the centre. There are two main measure of dispersion which is Inter quartile range difference and standard deviation. The data scales for measure for measure of Nominal (no measure), Ordinal (Min/Max  and Range) and ratio measures all  (Min/Max, Variance and Standard Deviation)

Descriptive analysis Table

Statistical methods	Nominal data	Ordinal data	Ratio data
Central Tendency includes; Mean, Median and Mode	Mode only.	Mode and Median.	Mode, Mean, Median.
Dispersion includes; Standard deviation, Range, Variance, Minimum and Maximum	None	Minimum, Maximum and Range.	Standard deviation, Variance, Range, Minimum and Maximum.
Distribution value includes; Skewness	None	None	Skewness.
Power measures (parametric)	None	None	Pearson Correlation

Fig 6: Descriptive analysis table

Source: (Saunders et. al, 2009)

·         Parametric and Non Parametric Statistics: Parametric statistics are used when data are normally distributed and data are continuous data. Correlation is the main tool, we use to check our Hypothesis. Correlation measures whether data are co-related with other or not. Correlation measures dependent of one variable to other, it means when there is change in one variable will it affects other variable is not. Correlation coefficient (r)  measures the strength of the liner relationship between two variables and it take the value between -1 to +1.If Correlation Coefficient is +1 than the data are perfectly related with each other if -1 than the date are represent there is  negative significant relation between them. Similarly it also shows the direction of variables as well as it predictive in nature.

Parametric Statistics are used to analyze data when data are not normally distributed, i.e. nominal data. Chi Square technique is used to analyze non Parametric Statics data.

5.3  CONCLUSION

The findings of the research survey show that male participants were more than the female participants. Altogether there were 27 participants, from whom 78.8% were male and remaining 22.2% were female participants. This may be because most of the executives in travel trade industry were male and it may be because more male were ready to fill in the questionnaire and participate in the survey. There was no any age limit in the survey. Thus to make it easy, the age group was classified into five groups: Less than 20, 21-30, 31-40, 41 -50 and more than 50. And more people from the age category 21-30 participated in the survey. 33.3% participants fall under the age category 21-30, 29.65 % participants’ fall under the age category 31-40 and rest others. Similarly 51.9% were college graduate and 48.1% have studied masters/doctorate. 

The main aim of this study is to find out the travel and tour companies perception’s about adopting ecommerce in tourism and challenges to face it in Nepal. The finding showed that 59.3% participants agreed that traditional ways of doing business is still preferred in tourism business. Average Internet usage by travel/tourism companies in Nepal is 9 years and websites were modified thrice in year (Average). Customer behaviour is changing and they are less loyal to the companies which are agreed by 77.8% of respondent. Similarly there are lacks of skilled human resources for adopting ecommerce in Nepal, 59.3% respondent agreed on.  The literature showed these are the major variables that lead ecommerce adoption which the findings of the survey showed as well.

There are various reasons for adopting ecommerce such as global coverage, cheaper communication, reduces operation costs, improved customer service, instant service etc. There are mixed response from respondents, respondents have agreed that benefits of ecommerce are global coverage, instant service, new market entry however respondent have disagreed that benefits of ecommerce are cheaper communication, reduce operation costs and improved customer service. In hypothesis, researcher assumed that big companies tend to adopt ecommerce rather than smaller one which was not justified. Data analysis showed that smaller companies tend to adopt ecommerce rather than big companies. Similarly, older companies are also adopting ecommerce in Nepal along with new companies and one of the major barriers to adopt ecommerce in Nepal is government policy and infrastructure.

CHAPTER 6

CONCLUSION AND RECOMMENDATIONS

6.1 INTRODUCTION

The research was conducted on the Ecommerce in travel and tourism and challenges to adopt in Nepal. The main objectives of this research study are:

·         To identify the benefits and limitations of e-commerce in the travel and tourism industry

·         To highlight the major challenges in adopting e-commerce in the travel and tourism industry

·         To examine companies’ perceptions of e-commerce in the travel and tourism industry

The overall analysis and findings of the study was already discussed in detail in previous chapter 5. So this chapter will provide the conclusion of major findings in support of the research objectives listed above. Likewise, the recommendations and research limitations of the study are also presented in this chapter. The chapter will proceeds with the discussion of the major findings from the research study.

6.2 DISCUSSION OF MAJOR FINDINGS

The findings of the study are linked with the research objectives listed above. The major findings in relation to each objective are discussed in this chapter.

The findings of the study are linked with the research objectives listed above. The major findings in relation to each objective are discussed in this chapter.

Objective 1: To identify the benefits and limitations of e-commerce in the travel and tourism industry

The findings of the research show that there are various benefits from ecommerce as 100% of the respondents mentioned global coverage, 88.2% respondent mentioned new market entry, 44.4% of the respondents have mentioned instant services which are the  benefits of ecommerce. Similarly, cheaper communication, reduced operation costs, improved customer services were the limitations of ecommerce in travel and tourism industry in Nepal.

Objective 2: To highlight the major challenges in adopting e-commerce in the travel and tourism industry

The findings of the research show that there are various challenges to adopt ecommerce in travel and tourism as 59.3% of the respondents agreed lack of trust & resistance to change as well as lack of skilled human resources are major challenge. Similarly, 51.9% of respondents have mentioned that consumers are less loyal these days and need better services and rates to attract them.

Objective 3: To examine companies’ perceptions of e-commerce in the travel and tourism industry

The findings of the research show that traditional way of doing business is still accepted in context of Nepalese tourism industry however 47.5% of respondent mentioned that ecommerce will surpass traditional business in future. Further results from hypothesis shows that smaller travel/tourism companies tend to adopt ecommerce easily than bigger companies as well.

6.3 RESEARCH IMPLICATION

This research has contributed to the travel/tourism industry as well as Government of Nepal by identifying major issues related to ecommerce in travel and tourism and challenges to adopt it as many studies have not been done in this area in context of developing context like Nepal. Benefits, limitations, pros and cons after adopting ecommerce in travel tourism field were researched.  This will guide travel/tourism industry to adopt ecommerce in travel tourism industry. Results and finding from this research will help Nepal Tourism Board, Government of Nepal to apply new ecommerce rules and regulations for tourism industries.

6.4 LIMITATIONS OF THE RESEARCH

The researcher tried to explore the companies’ perception towards ecommerce in travel and tourism industry general and the research was conducted in Nepal on travel/tourism industry. But the researcher could not include sufficient number of participants from different age group, gender and nationality. Even the questionnaires were sent to 90 companies; only 29 participants completed the questionnaire and were sent back to the researcher. Out of 29, only 27 were fully filled. Since the research study was focusing on ecommerce in travel and tourism, the sample size is only 27 for this research study. The researcher draws a conclusion after studying only 29 sample size. Thus the conclusion drawn may not be exactly true because generalization is done after studying small sample size.

Similarly, the time span to complete the research was limited. The researcher has to complete the research within 20 weeks of time period. So the researcher started doing analysis even few participants had responded. This is also one of the main reasons of conducting research with small sample size.

6.5 FUTURE RESEARCH AND RECOMMENDATION

Researcher suggest to collect a larger no of sample size based on all tourism industry components are hotel, airlines, trekking industry as this research is based on travel industry only and also researcher suggest to do empirical research  customers’ perception as well.

6.6 CONCLUSION

This chapter has provided the discussion into the findings of the research study that was collected from the use of quantitative questionnaires. These findings were related with the main objectives of this research study which are:

·         To identify the benefits and limitations of e-commerce in the travel and tourism industry

·         To highlight the major challenges in adopting e-commerce in the travel and tourism industry

·         To examine companies’ perceptions of e-commerce in the travel and tourism industry

REFERENCES

Adam M. S., & Urquhart C., (2007), IT Capacity Building in Developing Countries: A Model of the Maldivian Tourism Sector, Information Technology for Development, V.13 (4) , 315-335, Wiley Periodicals Inc.

Bhattarai, M K, 2000, Formulation Of Information & Communications Technology Policy And Strategy, Nepal: A position Paper on E commerce in Nepal  Retrieved June 2, 2011, from http://www.ict.mn/midas/eng/Download/ICT_Docs/E-Com%20Nepal.pdf

Central Bureau of Statistic of Nepal, Retrieved June 2, 2011, from  http://www.cbs.gov.np/statistical_pocket_book.php

Chaffy D., & Chadwick E. F., Johnston K, Mayer R., (2006), Internet Marketing Strategy, Implementation and Practice, FT Prentice Hall, V (3), 10-11 

Cho Y-H., Wang Y., & Fesenmaier D.R., (2002), Searching for Experiences: The Web –Based Virtual Tour in Tourism Marketing, Journal of Travel & Tourism Marketing, Haworth Press, V.12 (4), 1-14 

Cloete E., Courtney S., Fintz J., (2002), Small businesses acceptance and adoption of e-commerce in the Western-Cape Province of South Africa, The Electronic Journal on Information Systems in Developing countries, V 10 (4), 1-13

Cycyota C.S. & Harisson D. A, (2006), What (Not) to Expect When Surveying Executives: A Meta-Analysis of Top Manager Response Rates and Techniques over time, Organizational Research Methods, V.9 (2), Sage Publications

Daft R.L., (1983), Learning the craft of Organizational Research, Academy of Management Review, V. 8 (4), 539-536

Dedrick J., Goodman, S. & Kraemer, K. (1995), “Little Engines that could: Computing in Small Energetic Countries”, Association of Computing Machinery, (35), .21-26.

Farooq A., (2001),  Electronic Commerce : An Indian perspective; International Journal of Law and Information Technology; V.9, (2), .133-170.

Fleming S. T., (2003), The leapfrog effect: Information needs for developing nations; Managing globally with information technology, Hershey, PA, Idea Group Publishing

Karanasios S. & Burgess S., (2008), Tourism and Internet Adoption: a Developing World Perspective: International Journal of Tourism Research, V. 10, p 169-182

Khare A., Khare A, 2010, Travel and Tourism industry yet to exploit the internet fully in India, Journal of Database Marketing & Customer Strategy Management, V. 17 (2), 106-119, Macmillian publishers

Kim C., (2004), "E-Tourism: An Innovative Approach for the Small and Medium-Sized Tourism Enterprises (SMTES) in Korea", OECD Publishing

Kimmel, A.J., 2007. Ethical issues in behavioral research: basic and applied perspectives, Wiley-Blackwell.

Law R. & Bai B., 2008, "How do the preferences of online buyers and browsers differ on the design and content of travel websites?" International Journal of Contemporary Hospitality Management, V. 20 (4), 388 – 400

 Loonam J. A. &  McDonagh J.,(2005), Exploring Top Management Support for the Introduction of Enterprise Information Systems; A Literature Review , Irish Journal of Management,  V. 26, (1), p163-178,

Mamaghaini F., (2009), Impact of E-commerce on Travel and Tourism: An Historical Analysis, International Journal of Management, V. 26 (3), 365-375

Molla A., (2005),  Exploring the Reality of Ecommerce Benefits Among Businesses in a Developing Country, University of Manchester, Precinct Centre, Manchester, UK, available at: URL: http://www.sed.manchester.ac.uk/idpm/publications/wp/di/index.htm

Pallent J., (2006), SPSS Survival Manual, (2^nd Ed), Open University Press,

Purcell F., Toland J. & Huff S.L., (2004), The potential of e-commerce for remotely located SMEs: case studies from Samoa, In the Electronic Commerce  in small to Medium –Sized Enterprises: Frameworks, issues and Implications, Al-Qirim Nay (ed). Idea Group: Hershey,  86-105

Rogers E. M, (1995), Diffusion of Innovations, 4^th Edn, Free Press, New York

Saunders M., Lewis P. & Thonhill, A., , (2009), Research methods for Business Students (5^th Ed). FT, Prentice Hall

Shakya S., Rauniar D., (2002), Information technology education in Nepal, An inner perspective, Electronic Journal on Information Systems in Developing Countries, V. 8 (5), 1-11

Tatnall A. & Burgess S., (2003), Using actor network theory to identify factors affecting the adoption of e-commerce in SMEs, In E-business innovation and Change Management, Idea Group Publishing, Hersshey, 152-169

Turban E., Lee J., King, D., & Chung H.M, (2000), Electronic Commerce: A Managerial Perspective, Pearson Prentice Hall, 451-452.

UN, Retrieved June 2, 2011, from  http://data.un.org/CountryProfile.aspx?crName=Nepal

Werthner H. & Ricci F, (2004), E-commerce and Tourism, Communication of the ACM, V. 47(12), 101-105 

Whetten, D. A, (1989), What Constitutes a Theoretical Contribution? Academy of Management Review, V.14 (4), 490-495

Wolfe K., Hsu C. H. C. & Kang S.K, (2004), Buyer Characteristics Among Users of Various Travel Intermediaries, Journal of Travel & Tourism Marketing, V.17 (2), 51-62

World Travel & Tourism Council. (n.d.). . Retrieved June 2, 2011, from http://www.wttc.org/eng/Tourism_Research/Economic_Research/

Appendix

Research Topic:  Ecommerce in tourism and challenge to adopt it.

I am conducting a survey to find out factors affecting ecommerce strategy and challenge to adopt it by travel and tour companies in developing countries like Nepal as a part of my dissertation in Masters in International Business in Irish American University (American college, Dublin). The result of this survey will be only used for academic purpose within American College Dublin, and not for any commercial purposes. All information that you provide will be used in the strictest confidence. It will take less than 7 minutes to complete it. Your participation will add great value to my study.

Date: _________________                      

Title of respondent (designation): ___________________

Company name: ___________________

1.      How long have you been associated in tourism business?...............

2.      No of employees in your organization............

3.      How long has your company using internet?

_____________ Years. (Please specify)

4.      How often your company modifies website? (Approx in a year)………….

5.      In terms of percentage (%), Is there any increment in queries after modifying your online website? ....... (min 0,max 100 )

6.      What is the main reason for adopting e-commerce by your company? (Choose only one, which you prefer most)

a.       Innovation adaption

b.      Top management decision to adopt

c.       Government friendly policies

d.      IT & Communication structures

e.       Benefits from ecommerce

f.       Others………… …… (please specify)

            

7.      How much online business accounts in total to your regular business through travel agents or partners (Approx in percentage)?

_______________________

8.      In terms of percentage, is there any significant raise in fraud due to online?  ……….

9.      In terms of %, what are the chances of online business could surpass the traditional business in your opinion in future? ………………..

10.    In recent days consumers are comparing services and prices through internet and are less loyal to companies. To what extent, do you agree or disagree with this statement.

a.      Strongly agree

b.      Agree

c.       Neither agree nor disagree

d.      Disagree

e.       Strongly disagree

11.  Tour/travel agents in Nepal still prefer doing business in traditional way (travel agent to travel agent) as they still do not trust on online business model. To what extent, do you agree or disagree with this statement.

a.      Strongly agree

b.      Agree

c.       Neither agree nor disagree

d.      Disagree

e.       Strongly disagree

12.  There are still lacks of skilled human resources (IT professionals, tour planners) in Nepal.  To what extent, do you agree or disagree with this statement.

a.      Strongly agree

b.      Agree

c.       Neither agree nor disagree

d.      Disagree

e.       Strongly disagree

13.  Nepalese government is unable to support tourism industry in context of infrastructure development and friendly cyber laws. To what extent, do you agree or disagree with this statement.

a.      Strongly agree

b.      Agree

c.       Neither agree nor disagree

d.      Disagree

e.       Strongly disagree

Factors affecting ecommerce strategies are mentioned below. Please tick the following question with respect to the following scale

		Very important		important	Neither important or unimportant	Unimportant	Very unimportant
14	Communication and electricity
15	Top Management support for new technology/innovation
16	IT Structure
17	Government policies & Political stability

Ecommerce have various benefits while adapting. To what extent, do you agree or disagree with this statement

		Strongly Agree	Agree	Neither agree nor disagree	Disagree	Strongly Disagree
18	Create New Markets
19	Global Coverage
20	Cheaper communication
21	Reduce operation costs
22	Improved customer service
23	Instant service
24	Reduce costs of advertisement
25	Global coverage through online

26.  What range of age are you in? 

a. Less than 20   b. 21-30   c. 31-40   d. 41-50   e. More than 51

27.  What is your gender?

a. Male______        b. Female______

28.  What is the highest level of education you have reached?

a. Less than elementary school             b. Junior high school              c. High school   d. technical or trade school    e. college graduate   f. Master/doctorate   

 

Thank You for Your Help!