Chapter 2 Internet fundamentals.
LEARNING OBJECTIVESAfter you complete your study of this chapter, you should be able to:
* Define the Internet.
* Explain the history of the Internet.
* Define HTM L.
* Understand the basic communication tools for the Internet.
2.1 DEFINING THE INTERNET
The Internet is a global network of computers that communicate using a common language. It is a huge network that contains thousands of small networks. Therefore, we can also say that the Internet is a network of networks. For example, when you view Dr. Zhou's home page (http:// faculty.niagara.edu/zhou), you are connected to the Internet. Dr. Zhou's home page resides on Niagara University's network server, which in turn is connected to the Internet. It is similar to the international telephone system--no one owns or controls the whole thing, but it is connected in a way that makes it work like one big network. It provides a physical infrastructure through which all forms of communications are made possible. It is just like highway system on which all kinds of transportation vehicles pass through. Therefore, the Internet is sometimes referred to as an Information Super highway.
With the Internet, time and geographic locations are no longer relevant. As long as your computer is connected to the Internet, you can communicate with anyone in the world who has a computer that is also connected to the Internet any time of the day. It is just like using your telephone. As long as the party you try to reach has access to a phone, you can always ring up that person, no matter where the person is located.
In everyday life, the Internet has been called different names that often are interchangeable to a lay person. It has been called the Net, the Web, the Information Superhighway and the World Wide Web. Technically, however, these terms contain specific reference to various aspects of the Internet in different settings. In the following sections, we explain the differences.
The Internet is composed of two major parts: the infrastructure, or the hardware, and the software, or the applications and protocols. The infrastructure includes things like telephone networks, cables, routers, computers, servers, and satellites. The software consists of programs, applications, and protocols that make communication, publication, and transaction online possible. For example, you need a Web browser in order to read a Web home page. You need an e-mail client to send and receive e-mails. The Web browser and the e-mail client are software. The idea that the Internet is free is really a misconception. Someone is paying for the hardware and software even though that "someone" might not be you.
2.2 HISTORY OF THE INTERNET
In the early 1960s, during the Cold War, the Rand Corporation was entrusted to developing a strategic communications system that would continue to operate during and after a nuclear war (www.rand.org). The idea was that in the aftermath of nuclear attack, the U.S. military command would still be able to function and remain in control.
To accomplish this task, it was necessary to build a system of very loosely connected command networks--a system without a central command and without any hierarchical organization at all. Any point of the communication in the network could send and receive a message as much as any other (Figure 2.1). This is the foundation of the peer-to-peer system and the beginning of what has come to be called the Internet.
It was not until the late 1960s that the construction of such a system was funded by the Pentagon's Advanced Research Projects Agency or, ARPA. A communication network called ARPANET was established, and communication between the networks was made possible through a common communication language, the Internet Protocol or IP. The IP enables communications between computers such as transferring data, using each other's computers, and even programming each other's computers remotely. As ARPANET expanded with more supercomputers joining in, scientists created a feature that allowed for multiple transmissions of the same message to several or all of the linked computers at once. These became the foundations for some of the most popular features of the Internet, namely, e-mail and group Mailing Lists.
[FIGURE 2-1 OMITTED]
The ability to communicate with each other electronically in the Internet soon generated interest in personal communication and collaborative research using ARPANET. Initially, only large organizations that could afford the investment and technical know-how and that saw the potential for research and better communication joined the network. These organizations typically were government agencies, universities, and research organizations.
To connect a wide variety of networks developed to meet different standards and by different vendors, ARPA developed the transmission control protocol/Internet protocol (TCP/IP). These protocols were used to connect incompatible computers and networks used by government agencies, the military, government suppliers, and research institutions. TCP converts data into packets that are sent across transmission lines to the next computer, whose TCP reconverts the packets into data it can read. TCP ensures that entire messages are delivered error-free with no loss or duplication. On the receiving side, it's also up to TCP to put the packets back in the right order. IP's task is to deliver the divided packets. To use an analogy, IP is the envelope, stamp and address of the message.
Use of the Internet spread quickly after its first demonstration to the public in October 1972 (Leiner et al. 2003). The introduction of a popular application in the same year, e-mail, generated great interest among ordinary people and prompted the rapid growth of the Internet, as described in the previous chapter. By the end of 1991, the Internet had grown to include some 5,000 networks in over three dozen countries, serving more than 700,000 host computers used by over 4,000,000 people (Internet Society 2003). In 1990, ARPANET, the first Internet network, ceased to exist (Zakon 2000).
2.3 INTERNET BASICS
THE WORLD WIDE WEB
The World Wide Web was first invented in 1989 by Tim Berners-Lee, a graduate of Oxford University in England, while he was working at CERN (http://cern.web.cern.ch/CERN), the European Particle Physics Laboratory. However, it was not until 1994 that the World Wide Web (WWW) caught the imagination of the public and gained widespread popularity. There are several reasons why WWW was an instant hit. It adds a graphical interface to what previously had been pretty much text-only capability, which, in turn, makes searching and retrieving information much easier. In addition, it makes presention of voice, data, graphics, video possible and attractive. Its hyperlink capability enhances the potentials of the Internet.
Before the birth of the Web, communication and publication on the Internet were achieved by the use of text, or ASCII (American Standard Code for Information Interchange) files. There was no color, pictures, or graphics, and you used commands rather than the icons you see today in a Windows environment. You can still see some of this in the offices of travel agencies where reservations and bookings are still mostly made by issuing commands.
Just like a highway can accommodate all types of vehicles, the Internet may be used to send and receive different types of information. However, before programs were developed to make these formats accessible, graphics, sound, voice and other multimedia information could not be presented online. To use the highway analogy, before automobiles were invented, a road could be used only for bicycles and carriages.
The Web is an abstract, imaginary cyberspace that enables hypertext information. The main components of the Web are Web servers and browsers. Web servers are computers that store data in Hypertext Markup Language (HTML) format to be retrieved by the Web users as Web pages. HTML is a very capable formatting tool that allows the author of a Web page to specify colors, fonts, the inclusion of voice, video, images and photographs and to define links. Web browsers between computers on Internet, will be discussed in the next section.
THE BROWSER
A browser is the interface that allows you to see the graphic and text files that make up the Web and the Internet. An interface is a program that translates and presents information on your computer screen. To put it simply, an interface is a graphically rich area of the screen allowing human-machine communication.
To communicate with each other on the Internet, you need applications to help you get connected to the Internet and send and receive information. Before the World Wide Web, one of the first applications developed and made publicly available was telnet, a terminal emulator that would allow your computer to dial a phone number and then act as a terminal to the computer you contacted. Telnet was the interface for text-based communications between computers on the Internet. The telnet command is used to log on to another computer on the Internet. A valid user ID and password for the remote computer is required to complete the login process. For communications to take place between the user and the Web, you would need a different interface than telnet: a browser.
Although Berners-Lee created the first browser, called the World Wide Web, the first commercialized browser that was capable of reading graphic images was developed by the National Center for Supercomputing Applications and commercially released in 1993 under the name Mosaic. Many browsers have been developed since then, the leading ones being Microsoft Internet Explorer and Netscape Navigator. Most Internet Service Providers (ISPs) provide their subscribers with the software and installation packet for one of these commercial browsers, but subscribers are free to use any compatible browser they choose.
There are two important concepts to understanding how the Web works. The first is the universal resource locator (URL), which is the address of a Web page located anywhere on the Web. For example, to locate the homepage of the College of Hospitality and Tourism Management at Niagara University, you will need to use URL, http://www.niagara.edu/hospitality/. The second concept is the hypertext transfer protocol (HTTP), a method of accesses to the Internet. HTTP is the protocol used to transport WWW information between a computer and the WWW server being accessed.
HYPERTEXT AND HTML
One of the reasons the Web is so popular is its ability to utilize a very old activity: cross-referencing. A footnote in a book is an example of a hypertext. Hypertext on the Web, however, means that the item designated as a hyperlink, when clicked, will send the user to another location. This location could be somewhere else on the same page, on another page within the same Web site, or on someone else's Web site.
Not all hyperlinks are words. They can be image maps in which the links are embedded in various parts of the graphics. Hypertext may join two entirely different kinds of entities. Instead of sending you to another Web site, a hyperlink may send you to an FTP (File Transfer Protocol) site or to a newsgroup. It may activate an e-mail form for you to fill out and send to a Webmaster. It could offer a download of a graphic file, run a QuickTime movie, or link you to an IRC (Internet relay chat room), allowing you to conduct live conversations with real people in an imaginary world.
HTML (Hypertext Markup Language) is a collection of platform-independent styles indicated by markup tags that define the various components of a Web document (NCSA 2001). It is platform independent in that it offers a language style that all types of computers can understand and thus breaks communication barriers between computers. When Berners-Lee invented the Web, he also invented HTML. HTML documents are plain-text (ASCII) files that can be created using any text editor, such as Emacs on Unix machines, SimpleText on a Macintosh, or Notepad on a Windows machine. You can also use word-processing software, such as Microsoft Word or WordPerfect, if you remember to save your document as "text only with line breaks."
Simply put, HTML is a hypertext document format used on the Web. In an HTML document, different codes and symbols are used to indicate different text styles and appearance when viewed by a browser. For example, "tags" are embedded in the text. A tag consists of a "<", a symbol "directive" (case insensitive), zero or more parameters, and a ">" symbol. Matched pairs of directives, like "<TITLE>" and "</TITLE>," are used to delimit text that is to appear in a special place or style. The World Wide Web Consortium, (W3C) is the international standards body for HTML. Table 2.1 explains some of the common tags used in HTML.
A simple, convenient way to see what an HTML file looks like is go to your browser. For example, in Microsoft Internet Explorer, go to View and then click on Source. You will see the HTML text file that you cannot see in a normal browser window. Today, with so many HTML authoring programs on the market, you no longer need to learn how to write codes and tags. Programs such as Microsoft FrontPage provides you with many functions that in the past only HTML programmers could dream of. These programs provide what is called WYSIWYG "what you see is what you get" interface; that is, whatever you type and see on your computer screen is what you will see and get when displayed on a browser. The following is a list of the major Web authoring programs on the market:
* Claris Home Page
* Corel Web Designer
* Microsoft Frontpage
* Hotdog Pro
* Hotmetal Pro
* Internet Creator
* Micromedia Backstage Designer
* Netobjects Fusion
* Pagemill
* Visual Page
There are other ways to write an HTML document. If you do not own one of the commercial HTML authoring programs, you can either use a word-processing program such as Microsoft Word or WordPerfect, or a Web browser, such as Microsoft Internet Explorer or Netscape Navigator, to write simple HTML documents.
E-mail consists of the electronic transmission of digital messages over the Internet. The messages can be letters, notes, or documents--or in some cases, files, images and software--sent to any other user on the Internet. Every e-mail address is composed of three elements:
* A screen name
* A domain
* An extension
The most common extensions are "com," for "commercial"; "edu," for "education"; "org," for "nonprofit organization"; "mil," for "military"; and "gov," for "government". Suppose your e-mail address is Johndoe@ niagara. edu. "Johndoe" is your screen name; "niagara" is the domain, referring to Niagara University; and "edu" is its extension. The domain and the extension are commonly referred to as the domain name. Countries other than the United States assign similar domain names but often add a country code. For example, a typical Chinese Internet address would look like this: peace @ sina.com.cn. Cn indicates China.
MAILING LIST
A Mailing List, sometimes referred to as e-mail discussion groups, is a list of e-mail addresses that is used to send messages to many people at once. These are usually subscribers to the list who are expected to share a common interest in the contents of the message. E-mail discussion groups are often associated with academic institutions as well as with scholars and experts in a specific field of interest. A Mailing List is different from a traditional mailing list, which is simply a collection of names and addresses used for mailing purposes that are managed by a software program. Three of the most popular Mailing Lists are Listserv, Majordomo and Listproc. All these programs have similar functions and operations. You can find many Mailing Lists at www.liszt.com.
Perhaps the most widely used Mailing List programs is Listserv. This software program allows you to create, manage, and control electronic Mailing Lists on your corporate network or on the Internet (see www.lsoft.com). These common-interest groups form what we have come to call virtual communities; they are virtual since they exist only in cyberspace. These are different from real-world communities in that they have no country or neighborhood boundaries and you are not required to reveal your true identity. Therefore, you can usually join and leave the list as you see fit without feeling guilty. Table 2.2 shows a sample Mailing List and its basic elements.
A list owner, or sometimes several owners for large lists, manages a Mailing List. The list owner is responsible for the operation of the list and serves as a kind of moderator or referee. The list owner establishes the list's goals and objectives and sets up rules and policies for the subscribers. By subscribing to the list, the subscriber is expected to abide by the list's rules and policies. The list owner is also responsible for all administrative matters and for answering questions from the subscribers.
Mailing Lists are highly interactive and can be either moderated or unmoderated. When you send a message to a Mailing List, the list server will distribute it immediately to all the subscribers in an unmoderated situation. In this situation, every message that is sent to the list will be redistributed to every subscriber. In a moderated situation, the list owner decides which message received gets to be sent out to the subscribers. Since moderating a list is almost a full-time job, most Mailing Lists operate in an unmoderated mode.
Mailing Lists can become an annoyance to the subscriber if too many messages get sent to the list each day. Being a subscriber means that your e-mail inbox can be flooded with hundreds of e-mail messages each day. Fortunately, most list programs provide digest subscriptions for those subscribers who do not want to receive so many messages every day. A digest is simply a larger file with everything that was sent to the list in a particular day or week and condensed into a low-volume list. These digests are typically not edited and contain the same information as a normal subscription, but put together in a single message so that the list subscribers who choose the digest form will not be flooded with many individual messages.
Mailing Lists can be regarded as a virtual encyclopedia that is always up to date on the topic you are interested in. Today, there are nearly 10,000 public Mailing Lists, covering virtually any imaginable topic (see www.lsoft.com). No matter what your interests are, chances are that you will be able to find a list that meets your need.
To show you how a Mailing List works, a real Mailing List is presented in Table 2.3, the INFOTEC-TRAVEL Mailing List owned by Maucus Mendicott (www.infotec-travel.com). You can subscribe to the list by sending a message to [email protected] with only "subscribe infotec-travel" and your name after it in the message body. To send a message to all the people currently subscribed to the list, just send mail to [email protected]. This is called "sending mail to the List" because you send mail to a single address, and the list makes copies for all the people who have subscribed. The address [email protected] is also called the "list address." You should never try to send any Mailing List command, such as "unsubscribe," to that address, as it will be distributed to all the people who have subscribed to the list.
USENET, NEWSGROUPS, AND DISCUSSION FORUMS
Usenet is a distributed bulletin board system (BBS). As its name suggests, it is really a users' network. A bulletin board is a computer and associated software that provide an electronic message database where people can log in, post, and/or read messages, just like you can use a pin to post a message on a bulletin board. Usenet existed before the World Wide Web was born. In the beginning, not all Usenet hosts were on the Internet. It was originally implemented in 1979-1980 by Steve Bellovin, Jim Ellis, Tom Truscott, and Steve Daniel at Duke University and supported mainly by Unix machines (www.foldoc.org 2003). It has grown now to be perhaps the largest decentralized information database on the Internet.
Usenet is usually maintained and used by government agencies, universities, high schools, businesses of all sizes and home computers of all descriptions. In 1993, it hosted over 1,200 newsgroups and an average of 40 megabytes (the equivalent of several thousand paper pages) of technical articles, news, discussion, chatter and flamage every day. By the end of 1999, the number of newsgroups had grown to over 37,000 (see www.foldoc.org 2003).
Newsgroups are more broadly based than Mailing Lists. There are thousands of such groups, covering thousands of topics that can be found on any server maintaining a master list known as Usenet. The topics include virtually everything, and the discussions range from silly to highly serious to paranoid delusional. Another difference between the newsgroup and the Mailing List is that with a Mailing List, you send and receive e-mail messages, while with a newsgroup, you have to log in to the site to post a message for others to read or to read messages posted by others.
Before the advent of the Web, you needed a newsreader program to participate in a newsgroup. In 1995, a Web gateway company, Deja.com, began to offer a user-friendly Web interface to newsgroups. As a result, you do not need a newsreader to sign in, post or read the news. Deja.com was acquired in February, 2001 by Google Inc. (www.google.com), renaming www.deja.com to http://groups.google.com.
A newsgroup is one of Usenet's huge collection of topic groups. For this reason, newsgroups are sometimes referred to as discussion forums. Just like Listserv, Usenet groups can be unmoderated or moderated. In an unmoderated mode, anyone can post with permission, while in a moderated mode, your submissions are automatically directed to a moderator, who edits or filters and then posts the results.
Usenet uses a traditional indexing and cataloging system. The top level of the discussion is called a category, such as "alt." The next level will be indexed with a period, such as "alt.travel," The next level will contain messages divided into even more specific topics, such as "alt.travel.Canada," "alt.travel.marketplace," "alt.travel.road-trip," and "alt.travel.uk." Ultimately, you can create small index, such as "alt.travel.uk.marketplace."
JAVA AND JAVASCRIPT
Java is a simple object-oriented, distributed and general-purpose programming language developed by Sun Microsystems (www.sun.com). It was named after the Indonesian island of Java Island for its reputation of natural stimulants. When Java was first developed by Sun, it was hailed as a revolution in computer programming. Java is similar to C ++, a Microsoft programming language, but is much simpler and as powerful. Java supports the creation of virus-free, tamper-free systems with authentication based on public-key encryption, an online security system for transferring messages. According to Sun, Java offers some major benefits over Microsoft C ++:
* Get started quickly: Although the Java programming language is a
powerful object-oriented language, it is easy to learn, especially for programmers already familiar with C or C ++.
* Write less code: Comparisons of program metrics--class counts, method counts, and so on--suggest that a program written in the Java programming language can be four times smaller than the same program in C ++.
* Write better code: The Java programming language encourages good coding practices, and its garbage collection helps you avoid memory leaks. Its object orientation, JavaBeans component architecture, and wide-ranging, easily extendible API let you reuse other people's tested code and introduce fewer bugs.
* Develop programs more quickly: Your development time with Java may be twice as fast as writing the same program in C ++. Why? You write fewer lines of code, and Java is a simpler programming language.
* Avoid platform dependencies with 100% Pure Java: You can keep your program portable by avoiding the use of libraries written in other languages. The 100% Pure Java[TM] Product Certification Program has a repository of historical process manuals, white papers, brochures, and similar materials online.
* Write once, run anywhere: Because 100% Pure Java programs are compiled into machine-independent byte codes, they run consistently on any Java platform.
* Distribute software more easily: You can upgrade applets easily from a central server. Applets take advantage of the feature of allowing new classes to be loaded "on the fly," without recompiling the entire program.
The most common Java programs are applications and applets. Applications are stand-alone programs, such as the HotJava browser from Sun Microsystems that can execute programs written in the Java programming language. Applets are similar to applications but do not run stand-alone. Instead, applets adhere to a set of conventions that let them run within a Java-compatible browser, such as Microsoft Internet Explorer versions 5 and higher or Netscape Communicator versions 4.7 and higher. If you are using a browser that can view applets, you should see small windows (Java applets or programs) popping up right in front of you. That is because an applet can be embedded in an HTML document, and when you open that document, the applet will execute.
JavaScript is only vaguely related to Java and was developed by Netscape. It is a simple cross-platform Web scripting language. JavaScript can be thought of as an extension to HTML, allowing authors to incorporate some functionality into their Web pages, and thus is intimately tied to the World Wide Web. It currently runs in only three environments--as a server-side scripting language, as an embedded language in HTML and as an embedded language run in browsers. Commercial Web sites make frequent use of Java and other similar technologies to give visitors access to a wide variety of functions online such as stock tickers, shopping carts, and other enablers of e-commerce.
JavaScript is even simpler than Java, though it runs slower than Java. Its simplicity makes it easier to learn and program. Initially, only Netscape products supported JavaScript. Now Microsoft also supports it but calls it JScript. This inconsistency makes it difficult to write JavaScript that behaves the same in both Netscape Navigator and Microsoft Internet Explorer.
2.4 CONCLUSION
The Internet has been compared to a superhighway, and not without good reason. Highways can be built with different materials and with different widths and shapes as well as different road signs and directions. Similarly, the decentralized Internet allows for the imagination and creation of its users to build and expand it with all kinds of equipment and infrastructures that suit the needs of the organizations. Just like a superhighway that can accommodate all types of vehicles, the Internet welcomes all types of information distribution and communication tools to be used to transfer data and information. The only barrier to this flow of information is the carrying capacity of the Internet: the bandwidth. We discuss bandwidth in the next chapter.
KEY WORDS AND TERMS
Network
Information Superhighway
World Wide Web
Hardware
Software
ARPA
Internet Protocol (IP)
TCP/IP
Packets
ASCII
Web Servers
Web Browsers
Interface
Telnet
URL
HTTP
Hypertext
FTP
IRC
HTML
Platform Independent
WYSIWYG
Mailing List
Virtual Communities
List Owner
Usenet
Discussion Forum
Public-Key Encryption
Applications
Applets
SUMMARY
The need to create a military communication system in the early 1960s that would continue to operate during and after a nuclear war led to the development of what has come to be called the Internet. The Internet is composed of two major parts: the infrastructure, or the hardware, and the software, or the applications. There are many communication tools to help people communicate with each other. These tools include, but are not limited to, browsers, e-mail, newsgroups, Usenet, mailing lists, HTML, Java, and JavaScript.
WEB RESOURCES
* http://e-comm.webopedia.com
* http://ecommerce.internet.com
* http://cyberatlas.internet.com
* www.netvalley.com/intval.html
* www.livinginternet.com
* www.isoc.org/internet-history
* www.foldoc.org
CASE STUDY: Commissions in the Hotel Industry: Agents for Change?
Concurrent with the increased use of the Internet, travel agencies may go the way of the buggy whip and the carbide lantern. The Internet is now a major channel for the travel industry to reach potential customers. It gives consumers more options to book their travel, and it provides airlines, car rental firms and hotels the ability to reach these same consumers directly, therefore bypassing third-party agencies.
Like all industries, the travel industry constantly examines the relative cost/benefit of the various distribution channels available to make contact with customers. Because of this comparative analysis, most airlines, and a growing number of car rental firms, have determined that travel agents do not represent a relatively cost-effective channel for booking business, given the cost of commissions paid. Therefore, these segments of the industry are beginning to eliminate or severely reduce the commissions they pay to travel agents.
American hotels have yet to implement the industrywide changes to travel agent commission policies that we have seen in the airline and car rental sectors of the travel industry. Historically, hotels have been less dependent on travel agents for their guests as compared to airlines and car rental agencies.
Given the current industry downturn, hotel owners and operators are looking at all their expenses. Seeing what the airlines and car rental firms have done, hotel managers are now examining their policies toward travel agent commissions. For a hotel or company to properly analyze the cost/benefit of travel agent commissions, the following data are needed:
* Commissions paid
* Volume of revenue/profit derived through travel agents
* Potential lost revenue/profit
* Lost revenue/profit that could be captured through an alternative channel
* Cost of operating an internal distribution channel
* Cost of alternative distribution channels
In an effort to provide some context to the magnitude of travel agent commissions as an expense to the hotel industry, we extracted data from our Trends in the Hotel Industry database. An analysis of travel agent commissions was performed on 696 "same-store" hotels for which we have consecutive years of data from 1995 through 2001. The sample consisted of 420 full-service hotels and 276 limited-service properties. Please note that hotels report only room revenue and travel agent commission data for our Trends survey. Therefore, the other data listed is not available to complete a full analysis.
SMALL YET DECLINING
From 1995 through 2000, travel agent commissions for the entire study sample averaged 2.0% of room revenue. This same ratio varied from 1.1% for the limited-service hotels to 2.3% for the full-service properties. The year-to-year increases in commissions paid tracked closely to the annual increases in room revenue.
While the commission-to-revenue ratio has not changed much from 1995 through 2000, we see a shift in this strong relationship during 2001. As expected, the drop in room revenue experienced in 2001 caused a decline in the amount of commission paid to travel agents. On average, the typical hotel in our sample paid $472.32 per available room (PAR), or 2.0% of room revenue, in travel agent commissions during 2001. This is down from the $532.82 PAR, or 2.1% of room revenue, paid in 2000.
Of note is the disparity between the magnitude of the decrease in commissions paid compared to the degree of decline in room revenue. In 2001, our sample of hotels suffered a 10.9% decline in room revenue from the prior year. This compares to the 11.4% decline in travel agent commissions paid. That suggests two factors at work. Either the volume of revenue booked through travel agents declined to a greater degree in 2001, and/or hotels have already begun to adjust their commission policies.
The decline in commissions paid was greater at full-service hotels than at limited-service hotels. From 2000 to 2001, our sample of full-service hotels experienced a 12.5% decline in room revenue. Concurrently, these same properties paid 14.3% less in travel agent commissions during the year. For the limited-service sample, room revenue declined 5.5% in 2001, while travel agent commissions dropped 13.6%.
ALTERNATIVE CHANNELS
As an expense that consistently equaled less than 2% of total revenue during the 1990s, travel agent commissions were not given much attention. After all, revenues and profits were improving at record levels. During the current industry recession, U.S. hotel managers are examining all expenses. However, any changes in a hotel's policy toward travel agent commissions has to be examined for its impact, not just as an expense reduction but also for a potential loss in revenue.
Given recent history, there appears to be good reason to believe that the falloff in revenue for most hotels would not be that great from either an elimination or a decrease in travel agent commissions. Of course, the relative revenue and cost impact for a resort property in a remote destination may be different than that of a roadside motel, so each individual property's situation should be thoroughly examined.
Looking at the airline industry for guidance, it appears that people who continue to need the services of a travel agent for airline reservations have just absorbed the service fees charged by the agents. As an alternative to travel agents, people are already getting comfortable booking their air travel directly through the airlines' sites or through services like Expedia.com or Travelocity.com.
If travelers can gain a comfort level and an understanding of how to book air travel on their own, then they certainly can achieve that same skill for the process of reserving a hotel room. A November 5, 2001, Lehman Brothers study reported that the Internet already accounts for 4% of Hilton's reservation volume and 3% of Marriott's. For Hilton, the increased use of the Internet by hotel guests was just one factor that contributed to a 38% reduction in costs per reservation from 1992 to 2001.
We believe that hotel companies should begin to examine their policies toward travel agent commissions. If hotel companies can efficiently and effectively operate their own Web sites, they can not only reduce the commissions paid to travel agents but also save money in their reservations department and earn back some of the "spread" captured by other third-party booking channels.
QUESTIONS TO PONDER:
1. What is the major motivation for the travel industry to reduce the use of the travel agents?
2. Why is the hotel industry failing to reduce the dependence on travel agents?
3. What data are needed to conduct a cost/benefit analysis? Does it make sense to you? Why?
4. Why do any changes in a hotel's policy toward travel agent commissions need to be examined for their impact not just as an expense reduction but also for a potential loss in revenue?
SOURCE: This case study was provided by Robert Mandelbaum, director of research information services for the Hospitality Research Group of PKF Consulting.
REVIEW QUESTIONS
1. Define the Internet.
2. What is the Internet composed of?
3. What was the idea behind building the Internet?
4. Who funded the first Internet network project?
5. What is the name of the first communication network funded by ARPA?
6. What common language was employed to enable communications between computers?
7. Who showed early interest in the ARPANET? Why?
8. When was the e-mail application first introduced?
9. Define the World Wide Web.
10. What is the difference between the Internet and World Wide Web?
11. Who founded the Web?
12. Describe the functions of a browser.
13. Describe the major functions of the HTML language.
14. What are the basic elements of an e-mail address?
15. Compare the differences between a Mailing List and a traditional mailing list.
16. What is Usenet's cataloging system?
17. What is the difference between a newsgroup and a Mailing List?
18. What is the difference between Java and JavaScript?
REFERENCES
Berners-Lee, Tim. (2003). www.w3.org/People/Berners-Lee/FAQ.html#What.
Internet Society. (2003). www.isoc.org/internet/history/cerf.html.
Leiner, Barry M., Vinton G. Cerf, David D. Clark, Robert E. Kahn, Leonard Kleinrock, Daniel C. Lynch, Jon Postel, Larry G. Roberts, and Stephen Wolff. (2003). A Brief History of the Internet. www.isoc.org/internet/history/brief.html#Origins.
NCSA. (2001). www.ncsa.uiuc.edu/General/Internet/WWW/HTMLPrimer.html.
Zakon, Robert Hobbes (2000). Hobbes' Internet Timeline v5.2. www.zakon.org/robert/internet/timeline.
Zongqing Zhou, PhD
Associate Professor
College of Hospitality and Tourism Management
Niagara University
TABLE 2.1
Common Tags Used in HTML
Every HTML document should contain certain standard HTML tags. Each
document consists of head and body text. The head contains the title,
and the body contains the text, which is made up of paragraphs, lists,
and other elements. Required elements are shown in this sample
bare-bones document:
<html>
<head>
<TITLE>A Simple HTML Example</TITLE>
</head>
<body>
<H1>HTML is Easy To Learn</H1>
<P>Welcome to the world of HTML.
This is the first paragraph. While short it is still a
paragraph!</P>
<P>And this is the second paragraph.</P>
</body>
</html>
The required elements are the <html>, <head>, <title>, and <body> tags
(and their corresponding end tags).
TABLE 2.2
A Mailing List and Its Basic Elements
LIST NAME ADVENTURE (RENO)
Purpose An adventure forum for passionate and adventurous
people: sports, travel, global escapes.
List type Unmoderated discussion
Subscription Does not require owner approval
Archive Readable by anyone
Created Mar 05, 1999
Owner reno marioni
To join Subscribe here, or send an e-mail to
[email protected]
To post Send mail to [email protected]
Stats 62 subscribers/<1 messages per week
TABLE 2.3
The INFOTEC-TRAVEL Mailing List
Mailing List Name INFOTEC-TRAVEL
Description Information Technology in Travel and Tourism
Worldwide
To subscribe Send a message to infotec-travel-subscribe@
yahoogroups.com with only "subscribe
infotec-travel your
name" in the message body.
To post a message Send the message to
[email protected]
To unsubscribe Send a message to infotec-travel-unsubscribe@
yahoogroups.com
For more information www.infotec-travel.com
List owner e-mail [email protected]
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| |
| Author: | Zhou, Zongqing |
|---|---|
| Publication: | E-Commerce and Information Technology in Hospitality and Tourism |
| Date: | Jan 1, 2004 |
| Words: | 6312 |
| Previous Article: | Chapter 1 Overview. |
| Next Article: | Chapter 3 Connecting to the world. |