Intelligent Systems in Travel and Tourism

Hannes Werthner
e-Commerce and Tourism Research Lab (eCTRL)
ITC-irst and University of Trento, Italy
werthner@itc.it



Abstract
Travel and tourism is the leading application field in the
b2c e-commerce, it represents nearly 50% of the total
b2c turnover. Already in the past travel applications
were at the forefront of Information Technology, i.e., the
airline Computerized Reservation Systems in the early
60s. The industry and its product have rather specific
features which explain this circumstance: the product is
a confidence good, consumer decisions are solely based
on information beforehand; and the industry is highly
networked, based on world-wide cooperation of very
different types of stakeholders. Consequently, this
industry depends on advanced IT applications. As such
travel and tourism may serve as an example of what
happens and will happen in the emerging e-markets,
pointing at structural changes as well as challenging
application scenarios. The paper provides an overview
about the industry, describes ongoing structural changes,
outlines domain-specific requirements and discusses
achievements and challenges in the field, following an
AI and e-commerce point of view. It finishes with
considerations regarding a future IT scenario.
1

1 Introduction
Despite unfulfilled business and stock market expectations,
in some sectors such as the travel and tourism industry
online transactions are rapidly increasing. This industry is
the leading application in the b2c arena. The travel and
tourism industry is witnessing an acceptance of e-commerce
to the extent that the structure of the industry and the way
business is conducted, is changing. The Internet is used not
only for information gathering; there is an obvious
acceptance of ordering services over the Internet. A new
type of user is emerging; they become their own travel
agents and build their travel packages themselves.
In the year 2002 European online bookings increased by
53 percent, accounting for about 3,5 % of all consumer
spending in this domain, whereas in the US this number is

1
This work is partially funded by the CARITRO foundation
and the European FP5 projects Dietorecs and Harmonise.
about 11 % (according to the Danish Center for Regional
and Tourism Research). 64 Mio. Americans researched their
travel options online (Travel Industry Association of
America); and 32 percent of US travelers have used the
Internet to book travel arrangements (see
www.nua.com/surveys/). Forecasts state that by 2007 30%
of all transactions in the European tourism domain will be
done via the Internet, at least in the German speaking
countries [Schuster, 1998].
This importance of e-commerce can be explained by the
features of the industry, but it highlights also another issue,
not less important: e-commerce and especially the Web are
not only transaction and business oriented, it is also a
medium of curiosity, of creating communities or having just
fun, all of which may or may not result into business.
Especially the tourism product has to do with emotional
experiences; it is not just business [Werthner, 2001].
The paper is organized as follows: the following two
sections describe the industry and look at the changing
business environment. Section 4 provides an overview on
the emerging IT landscape, it discusses domain specific
requirements and related application examples, pointing at
open research issues.
2 The Industry
The travel and tourism industry is a global (and a
globalization) industry, with very specific features:
Travel and tourism represents approx. 11% of the world
wide GDP (following the tourism satellite account
method of the World Travel & Tourism Council).
There will be one Billion international arrivals in the year
2010 (following the World Tourism Organization). And
tourism grows faster than the other economic sectors.
It represents a cross-sectoral industry, including many
related economic sectors such as culture, sport or
agriculture, where over 30 different industrial
components have been identified that serve travelers.
This explains the industrys heterogeneity, and due to its
SME structure it has a huge importance for regional
development. For example, in the EU there are around
1.3 Mio. hotels and restaurants (9 % of all enterprises).
And 95 % of them are very small, i.e., 1-9 employees.

Tourist
Primary
supplier
travel
agent
tour
operator
incoming
agent
NTO
outlets
RTO
LTO
government
bodies
hotel
chain
CRS/GDS
Airline
Consumers
Suppliers
Intermediaries
DMO,
Planners &
Administration
other
transport

Figure 1: Structural view of the market [Werthner and Klein, 1999]
The supply and the demand side form a worldwide
network, where both production and distribution are
based on cooperation.
The product is perishable, complex and emotional: i) a
hotel bed not sold for one night represents a lost income.
Suppliers are in a risky situation, which can be reduced if
access to information is available; ii) the tourism product
is a bundle of basic products, aggregated by some
intermediary. To support the rather complex bundling
products must have well defined interfaces with respect
to consumer needs, prices or also distribution channels;
iii) vacations are emotional experience structures that
involve cognitive and sensory stimulations as well as
affective responses to certain events.
Tourism is an information based business, the product is
a confidence good; an a priori comprehensive assessment
of its qualities is impossible. Tourists have to leave their
daily environment for consuming the product. At the
moment of decision-making only a model of the product, its
description, is available. This characteristic of tourism
products entails high information search costs and causes
informational market imperfections. Consequently, the
industry has comparably long information and value chains.
Figure 1 differentiates between the supply and demand
side and the respective intermediaries. Links mark the
relationships as well as the flow of information, showing
only the most relevant links. Nodes indicate the relevant
types of players.
On the supply side we denote with primary suppliers
enterprises like hotels, restaurants, etc., which are mostly
SMEs. One should note that with respect to a functional
differentiation these companies are at the same level as the
big players like airlines. Tour operators can be seen as
product aggregators, travel agents act as information
brokers, providing final consumers with the relevant
information and booking facilities. CRS/GDS (Central
Reservation Systems / Global Distribution Systems),
stemming from the airline reservation systems already
developed in the 60s, include also other products such as
packaged holidays, or other means of transport. Whereas the
intermediaries on the right side can be seen as the
professional connection between supply and demand
(mainly based on the electronic infrastructure of the
CRS/GDS), the left side is relevant for the management,
planning and branding of a destination. Normally, these
entities have to act on behalf of all suppliers within a
destination and are not engaged in the booking process. The
links to governmental as dotted lines indicate that
Destination Marketing Organizations are often
governmental organizations.
The upstream flow of Figure 1 consists of product
information, whereas the downstream flow reports on
market behavior, mostly represented in terms of statistical
aggregates. Both information flows create a tourist
information network tying together all market participators
and, apparently, reflecting the economic relationships
between them.
3 The New Business Landscape
The Web facilitates new ways to meet changing consumer
behavior and to reach new market segments, leading to an
informatization of the overall tourism value chain. This
allows different strategies to generate value [Sweet, 2001]:
Value extraction: increases efficiency and reduces costs,
e.g., automation of processes or outsourcing to clients

such as self check-in of hotel guests or airline passengers.
Value capturing: client and sales data are used to support
the marketing, e.g., data mining for forecast or yield
management.
Value adding: a linear combination of products / services
to create richer product bundles, e.g., new service quality
for consumers such as linking mobile services to existing
Web services to advise tourists during their travel.
Value creation: the focus is on network effects, e.g.,
tourists within a destination participate in service
definition and planning.
Such strategies allow for the design of new products and
services, enlarging the range of options to customize and to
configure products. IT and, more importantly, improved
organizational procedures lower the price of customization,
enabling individualized offerings based on mass-
customization. On the other side, configuration points at the
bundling of different product or service components to
integrated offerings. Core product can be combined with
additional service elements in order to create integrated
customer solutions.
Given the dynamics of the sector and the emerging
already very competitive electronic market, nearly all
stakeholders have implemented their Internet strategy.
Travel and tourism has also become the playing field for
new entrants, either start-ups or companies from the media
and IT sector. Since tourism is an information-based
business, it fits well with their respective background.
The overall trend points towards a further specialization
and an ongoing deconstruction of the value chain paralleled
by an integration of players and products. Companies will
compete and cooperate at the same time, boundaries within
the industry are blurring. All types of market players are
affected:
Tourists will be addressed by more players, and as they
accept the Web as a booking channel, they will also play
a more active role in specifying their services.
Travel agents will see a diminishing power in the sales
channel, as a consequence they will put more emphasis
on consulting and complex products.
Internet travel sites, as platforms with bundling of
offerings will enhance by providing new market
functionality and technology. This will lead to easier
accessible price comparisons and market overviews,
enabled by personalized intelligent tools for travelers.
Destination management organizations will develop
cooperation models within destinations and they will
occupy a new role as consolidator and aggregator.
Tour operator will blur the boundaries between individual
and packaged tour, based on mass-customization and
flexible configurations.
CRS / GDS show an "INTEL inside" marketing strategy
for major tourist Web sites to increase their transaction
volume, and they also move into direct sales for the retail
segment
Suppliers will support electronic direct sales, increasing
again price competition as well as price differentiation,
and they will redefine customer processes (electronic
ticketing, automated check-in, etc.).
This development leads to an evolution of the market best
described as an ongoing interaction of concentration (e.g., as
in the US with the major travel sites like Expedia, Orbitz or
Travelocity) versus the simultaneous entering of new
players. The related increased complexity, however,
generates the need for new services such as providing
transparent access or price comparisons. This enforces the
design and deployment of more specialized services. Such a
process will quite naturally create new business
opportunities, accelerating competition and putting even
more emphasis on technical innovation.
4 The IT Scenario
The described business scenario is based on flexible
network configurations and the further integration of
consumers into internal business processes. Adding the
tourist life cycle taking into consideration the mobility
aspect of travelers one can draw the following simplified
figure of linking tourists life cycles with companies
business processes.
Marketing Sales Planning Monitoring
Processes of the
supply side
Service delivery
Relationship
Community
pre trip on site after trip
Tourist life cycle
Marketing Sales Planning Monitoring
Processes of the
supply side
Service delivery
Relationship
Community
pre trip on site after trip
Tourist life cycle

Figure 2: Tourist life cycle and companies processes both suppliers and intermediaries

Obviously, processes cross company borders, leading to
distributed b2b2c applications, requiring cooperation
between companies, and supporting also mobile
communication with the consumer. Such a future business
scenario is based on the assumption that technology based
on a common pervasive infrastructure will become
transparent, invisible for the consumer; information will be
available at home, the work place and during travel. Given
such a holistic approach interleaving business and
technology perspectives, what are specific requirements
when looking at the user machine interaction? What is the
intelligence needed to support collaboration among
companies within a networked industry? These questions
lead to interesting considerations regarding system
architectures.
4.1 User Requirements
One could look at the human-computer interaction as a
variant of the famous Turing test: as a competition between
a human and an intelligent travel system.
2
Even if one thinks
of it as an engineering task, and not as a cognitive science
test, it poses hard questions: i) a simple problem like
inquiring a flight from location A to B, with specific price
and time constraints, complemented by a specific hotel, with
similar constraints. In this case linking to a predefined
database or to one of the CRS/GDS would be sufficient, if
one ignores interoperability issues. This type of planning
problem is already partially solved by existing online
systems such as Expedia or Orbitz. But the need for more
intelligent heuristics is obvious, when one thinks of the
enormous number of scheduled flights and constraints such
as different rates or different booking conditions within
airline alliances, etc. ii) a complex problem which involves
background knowledge of a specific traveler, e.g., the
problem of traveling to Milan only when Milan plays. This
needs the modeling of knowledge about the Italian city of
Milan, the inference that in this case Milan refers to AC
MILAN (a soccer club), the timing regarding soccer
tournaments (normally at weekends). And other background
knowledge might be needed such as specific weather
conditions or cultural activities. In fact, the "leisure" domain
might cover nearly all domains of daily life. And the
information, stored in different bases with no common
format and even unknown locations, needs to be extracted.
Here wrapping techniques, learning accurate extraction rules
and also adapting to structural changes in sites, are needed
[Knoblock et al., 2000; Kushmerick, 2000]. Other non-
trivial tasks within this context are
conversation with its semantic and pragmatic aspects,
identification of problem domains,
search and information retrieval with the related
evaluation,
negotiation including additional and even unsolicited
offers, both having cooperative and opportunistic

2
These ideas are based on discussions with W. Grossmann,
University of Vienna, O. Stock, ITC-irst, A. Tjoa, TU Vienna, and
W. Wahlster, DFKI.
behavior.
However, these problem types assume that users are able
to express their needs, which is normally not the case.
Systems have to become active and to provide advice,
adapting to different travel decision processes as well as
navigation styles [Moutinho, 1987; Ankomah et al., 1996].
For example, Grabler and Zins [2002] have identified, based
on a study on 200 human human and human machine
counseling sessions, 6 different traveler groups such as
highly pre-defined, recommendation oriented or geography
oriented ones. These groups differ in the order in which
information is searched, the type of information needed, the
level of support required and the level of personal flexibility
and knowledge. Two groups of factors are identified:
personal, i.e., socioeconomic and psychological/cognitive
factors (experience, personality, involvement), and travel
features, i.e., travel purpose, travel party size, the length of
travel or the distance to the destination.
An application example of such an approach is
Trip@dvice [Ricci and Werthner, 2002]. Based on Case
Based Reasoning (CBR), it adapts its dialogue as it learns
more about the user, supports product aggregation for a
given travel, provides personalized recommendations based
on previous system experience, and it applies query
refinement methods helping to adjust queries according to
the data available in a given product catalogues. Thus, it
integrates topical information and good" examples of
product bundling contained in previous travels built by a
community of users.
Case Base
2. Search
Similar Cases
tb
u
r
twc
Case
3. Output
Reference Set
Q
tb
u
r
twc
Current
Case
Input
4. Sort locations loc
i
by similarity in
reference cases
1. Search the
catalogue
loc1
loc2
loc3
Locations from Catalogue
Travel
components
loc1
loc2
loc3
Ranked Items
Output
Suggest
changes to Q
Case Base
2. Search
Similar Cases
tb
u
r
twc
Case
3. Output
Reference Set
Q
tb
u
r
twc
Current
Case
Input
4. Sort locations loc
i
by similarity in
reference cases
1. Search the
catalogue
loc1
loc2
loc3
Locations from Catalogue
Travel
components
loc1
loc2
loc3
Ranked Items
Output
Suggest
changes to Q

Figure 3: Sequence of interaction in Trip@dvice
Dietorecs, another example, extends this approach by
integrating the iterative presentation and evaluation of
alternative proposals [Fesenmaier et al., 2003]. It assumes
that by presenting specific images, which implicitly
represent the most discriminating offers within a given
product catalogue, the evaluation of the user provides
indications about his/her references. At the beginning the
systems performs a cluster analysis of the offers within a
given catalogue. The users choice is the starting point of an
iterative process of refocused clustering and presentation. At

the end, either the user directly takes the chosen product, or
the obtained criteria serve as input for a CBR process.
These examples show, that different decisions styles as
well as the seamless switching between them have to be
supported. But the choice on tourism products is not
rational; these products are complex experience structures
that involve cognitive and sensory stimulations. Due to the
multi-sensory nature of tourism products, textual ways of
describing vacations are very limited to convey a complete
picture that can be used to formulate product expectations
serving as a basis for decision.
A possible approach is to look at product trails these are
sources of information for the formation of brand beliefs
since they involve an experience of the product through
multiple senses describing leisure experiences and to draw
conclusions on how to present tourism information and how
to guide a user in a non rational navigation process. Gretzel
and Fesenmaier [2003] looked at 3000 randomly selected
persons who were asked to imagine a trip and to report the
colors dominating their mental image, the scents they would
like to smell, and the sounds they expect to hear. They
identified a number of such sensory categories, which were
clustered to experiences representing coherent bundles such
as Autumn or Scenic / Nature. These findings indicate that
sensory domains and associations thereof exist and that
these follow specific patterns. Such bundles can be used to
describe coherent experiences sought after by certain groups
of travelers. These results can provide substantial input for
interface design and user guidance.
Finally, travelers need access to information whenever
and wherever they want, making tourism a perfect
application field for mobile computing. Latest generations
of mobile devices and wireless networks offer new
opportunities, but mobile devices still suffer from
restrictions compared to web based systems. Moreover, the
mobile context imposes a very different interaction style and
decision model. But, on the other side, mobile applications
could take advantage when linked to existing web sites and
refer to already existing personal profiles and selected travel
products. The mobile Intelligent Travel Recommender
(mITR) supports travelers to complement their product
while traveling [Ricci et al., 2002]. The objective of mITR
is to improve iteratively the fitness of recommended
products. But instead of asking the user for explicit input,
mITR exploits the knowledge contained in the pre-travel
plan to guess an initial set of candidate products. The user
can provide critics to some of these products, such as "I like
this feature of this product" or "I want something less
expensive", which is used for further interaction.
4.2 System Features Intelligent Networking
System designed to support such applications should
allow users to access information whenever and wherever
they want,
guide the user in the decision and traveling process, and
allow the user to create product bundles.
Business services for the traveler may use Web services
to be more easily integrated and bundled into new, ad-hoc
products. Web services provide an open, flexible, modular,
layered architecture that can integrate multiple
communication models. But these services do only facilitate
the manual combination of components across different
platforms. The vision is that this should be available (semi-)
automatically, for example, allowing a customer to plan a
trip in the city of Vienna visiting restaurants with at least 15
gourmet points and some classical concerts. Another
enabling technology might be Peer-to-Peer (P2P) services to
directly exploit resources present at other nodes without
intervention of any central server, where nodes may join and
be integrated in an ad- hoc manner. Such services need to be
described for the respective peer device and discovered in
an ad-hoc manner in a decentralized scheme, without a
centralized registry as this may be unavailable in a mobile
environment; to be composed ad-hoc and to interact not
only with servers, but also with other peers; and to be
connectable to legacy systems.
However, when taking the supply sides point of view,
the requirements become even more complicated: For
instance, a middleman might search for 100 individual web
services hosted by several individual, privately-owned
hotels and with golf courses nearby in the Tyrol within a
diameter of 100kms in order to bundle them with flights into
tourist packages. In this case functions are needed to
enable middlemen to create sets of bundled products,
ease the participation of SMEs to larger networks, and
facilitate networking leading to virtual organizations.
In this context networked business operations could be
defined as P2P enabled semantic Web services that integrate
business networks allowing for an n:m organization and
communication between participating enterprises. This
transfers the level from composing individual instances of
services to composing sets of services; and from ad-hoc
integration between two participants to an arbitrary number
of cooperating enterprises. The orchestration of a large set
of web services requires possibilities for business planning
with more refined means. Techniques of constraint
reasoning, multi-value optimization and relaxation might be
used to aggregate web services at the set level and to
achieve specific business goals, e.g., profit optimization or
the equal distribution of income within a destination.
However, such a scenario is based on a non-existing
assumption: there exists no agreed electronic standard to
describe tourism services. Those existing such as the OTA
(Open Travel Alliance) specifications are just adopted by
few players. Given that the number of available tourism
relevant information sites is huge, e.g., out of the 1.3 Mio
European enterprises in this sector nearly 40% have already
their Web site, it can be foreseen that also future
standardization initiatives will fail.
One approach to this problem is the European project
Harmonise, creating an ontology based mediation and
harmonization tool [DellErba et al., 2002]. The project puts
emphasis on the combination of a social consensus process
with the application of new technologies. The goal is to
allow participating tourism organizations to keep their
proprietary data format while cooperating with each other.

Specific tourism mediators are dedicated to the translation
needs between these data sources. Such a mediator looks at
information from a higher conceptual semantic level using
this level of abstraction for the mapping purpose.
Local
Conceptual
Schema(RDFS)
C-Normalization
Local
Normalized
Data (RDF)
D-Normalization
L-Data (XML)
L-Schema (XSD)
Semantic mapping
Semantic Map
Reconciliation
Engine
Harmonise
Interchange Format
Ontology Schema
(RDFS)
Local
Conceptual
Schema (RDFS)
Ontology
Repository
Local
Conceptual
Schema(RDFS)
C-Normalization
Local
Normalized
Data (RDF)
D-Normalization
L-Data (XML)
L-Schema (XSD)
Semantic mapping Semantic mapping
Semantic Map
Reconciliation
Engine
Reconciliation
Engine
Harmonise
Interchange Format
Ontology Schema
(RDFS)
Local
Conceptual
Schema (RDFS)
Ontology
Repository

Figure 4: The Harmonise process
The data model of a source document, assuming XML, is
first lifted to a local conceptual schema (C-Normalization)
and then semantically mapped to the terminology specified
by the shared ontology, which is built by domain experts.
The output of the mapping process is a set of reconciliation
rules, which are used in order to transform the local data and
to code them according to the ontology content. Harmonise
is based on RDF(S) as language for representing local
conceptual schemata as well as the mediating ontology. But
Harmonise has several limitations: i) it does not solve the
problem of ontology versioning, which is severe in a
domain with constantly new products; ii) and Harmonise,
though mapping between different conceptual models, does
not support ontology reasoning, or even more advanced
concepts such as approximate reasoning, needed in a
domain which is based not only on true axioms or facts.
5 Conclusions
The tourism business is changing. More specialized
services, flexible network configurations and further
consumer integration into internal business processes will
lead to smart market places, integrating all stakeholders.
The underlying IT scenario, enabling as well as enforcing
this development, shows that tourism is an interesting field
of application. But it also demonstrates that this industry
poses hard challenges, which offer interesting research
opportunities. This has also been acknowledged by the
European Union, placing tourism as one of the preferred
application fields of the European IT research.
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