Internet of Things for Travel Services

Introduction

IoT has the ability of capturing the all sources of value and it creates the systems that can maximize business value by new business models and management innovations. According to Gartner (2017), 8.4 billion connected devices are in use worldwide and total spending on IoT services is about $2 trillion in 2017. As an ever-increasing number of devices become associated with the internet, there are in excess of 21.7 billion active and interconnected devices worldwide at the end of 2020 and it is anticipated to attain 70 billion by 2025 (IoT Analytics, 2020). More than 65% of the businesses are expected to adopt IoT products including a combination of devices such as sensors, gateways, mobile devices, and cloud applications (Gartner, 2019). According to Vodafone Report of 2020, IoT enabled businesses to decrease their operating costs by an average of 21% and it creates new revenue streams (Vodafone, 2020). It is also estimated that one trillion sensors will be connected to the global network by 2025 and $14 trillion will be generated via IoT devices for the global economy by 2030 (WEF, 2021).

The use of IoT produces massive amount of unstructured data. Almost all devices collect and send data, which have hidden and valuable knowledge. IoT technologies are a good option to discover knowledge from large amounts of data that have been produced from daily activities of people, tourists, business operations and all facilities relating activities. For this reason, IoT has become a very important mediator for various industries especially for tourism. IoT help businesses to improve their service quality by integrating business services, operations and visitors’/tourists’ experiences with an effective planning.

To deliver goods and services to the customers, the sectors with instant data sharing such as travel services and accommodation need the use of IoT services more than other sectors. Since the nature of touristic services are not eligible for before-you-buy-experience, it may not be possible to meet expectations of the customers without digital interaction and IoT technologies. From this point of view, IoT has a crucial role to produce huge amount of customer data and process data flows for creating value with new insights.

Digitalization and informatization are the future trends of the integration of the IoT technologies into the tourism industry (Gretzel, 2011). The data generated from IoT devices related to daily key activities of habitants of a destination city, tourists or even other people, can be used in investigating the impact of certain events or decisions for tour operators and travel agencies. These data must be processed using various analytic tools for high quality of product and service delivery to customers. IoT technologies can enhance creating tour packages and alternative routes in a destination, service differentiation, revenue forecasting as well as and an efficient decision making on travel services and tour operations.

In tourism industry, travel agencies and tour operators are two different types of businesses operating on the basis of mutual cooperation and dependency. Tour operators are mostly wholesalers that create mass package tours and make collective agreements with service providers while travel agencies are retail businesses that mediate in the sale of the package tours. Although the activities of both businesses differ from each other in terms of scope and content, their mutual dependency is high. For this reason, tour operators and travel agencies must have a technological infrastructure in order to adapt to technological developments as soon as possible. IoT technology is a suitable tool that integrates different forms of interaction both through walk-in operations and online services in travel services and tour operations domain. Valuable data can be acquired from real-time, near real-time or batch processes through IoT devices. In case of considering the importance of the big data and analytics which are the key tools to extract valuable information from the data, IoT environments have a crucial role to improve tourism services for tour operators and travel agencies (Polat et al., 2019).

In this study, we try to discuss the importance of IoT for travel services and tour operations, in a subfield of tourism operations. We firstly describe the concept of travel services and tour operations in tourism terminology. Then, we discuss the types and the sources of data, which is generated by IoT applications towards tourism services and operations. Finally, we conclude the chapter with major challenges and opportunities of IoT for tour operators and travel agencies.