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Geneva, Switzerland, 10 November 2005

But the Information Economy Report 2005 notes that setting up Internet systems that allow planning, booking and payments is a stiff challenge for many poorer nations

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media before 10 November 2005, 17H:00 GMT

Developing countries are finding that tourism, already a major source of income, can be greatly enhanced by setting up domestically run websites that enable potential customers to research, reserve, and pay for trips and hotel stays electronically.

UNCTAD´s Information Economy Report 2005 (1) (IER), released today-, notes that tourism profits often drain out of the world´s poorer nations and back to the large travel firms, hotel chains, and booking and transportation providers based in the United States and Europe that are responsible for arranging most foreign vacations.

The Internet offers a chance to change that pattern. Many potential travellers are now shopping for their vacations online, and countries in the Caribbean, Africa and Asia have the chance to court these customers directly, offering domestic flavour, unique experiences and local knowledge that can trump overseas competition. The challenge, the report notes, is to reorganize tourism services and set up well-linked websites that allow domestically owned hotels, banks and travel firms to provide the entire package of services necessary for tourists to arrange their trips - reservations, plane flights, currency exchange and payments. That way the profits can stay at home and contribute to job growth and economic development.

Developing regions that have low levels of Internet access and use can find that setting up such networks is difficult, the report points out, but the Caribbean Tourism Organization has demonstrated the payoffs for succeeding. Its website, established in late 2000, receives over 2 million visitors a year and has a reputation as a trustworthy guide that provides online booking and payment facilities for 33 destinations in the Caribbean, including small islands. It focuses on vacations flavoured with local culture and heritage, and helps Caribbean countries, especially smaller ones, compete for tourism profits in a region where tourism accounts for 25% of GDP and generated US$21 billion in revenues in 2004.

Developing countries now attract some 35% per cent of international travellers each year, the report says, but most have been unable to increase tourism profits because most trips are planned, booked and financed through firms based in richer nations. Developing countries are starting to develop e-tourism. Today, 24 least developed countries (LDCs), for example, now have e-tourism websites. Unfortunately, these are largely "information windows," the report says - they do not allow booking and financing of trips.

As Internet shopping by tourists increases - recent studies released in the United States show that 56% of Internet users are planning their vacations online, including making hotel and airline reservations - Governments and national and regional tourism organizations in poorer countries need to focus on spreading Internet access and on setting up linked websites that can cover the entire "value chain" behind international travel, the report contends. A particularly daunting task will be overcoming domestic bottlenecks in technology, payments, telecommunications, and computer adoption and use.

Governments need to play a central role by providing technical infrastructure and guidance, the report says. The stiff investments necessary may be worth the cost: effective tourism marketing through the Internet can help developing countries to build their own brand images, develop new products, promote their tourism resources, expand their customer bases, and keep a much higher share of tourism profits.

Already, travel is the Internet´s largest source of business-to-consumer revenues - it generated $52.4 billion in 2004 and is predicted to produce some $119 billion by 2010, according to Forrester Research. The UNCTAD report notes that developing countries also need to learn how to capitalize on unique and distinct tourism activities that give them an advantage over overseas tourism providers.

The Information Economy Report 2005 focuses on the challenges posed for the world´s poorer nations by accelerating use of the Internet in the conduct of international business and finance. The UNCTAD survey behind the report notes among other things that while 89% of enterprises in European Union nations are connected to the Internet, only 5% of firms in Mauritius and 9% in Thailand are, and in many developing countries Governments cannot even provide statistics on the topic.

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