https://doi.org/10.31784/zvr Zbornik Veleučilišta u Rijeci Journal of the Polytechnic of Rijeka 1848-1299 1849-1723 Veleučilište u Rijeci Polytechnic of Rijeka Trpimirova 2/V, 51000 Rijeka zbornik@veleri.hr https://www.veleri.hr/?q=zbornik https://doi.org/10.31784/zvr.3.1.2 Izvorni znanstveni rad Original Scientific paper THE IMPLEMENTATION OF E-MARKETING IN THE HOTEL INDUSTRY: THE CASE OF ISTRIA COUNTY PRIMJENA E-MARKETINGA U HOTELIJERSTVU: PRIMJER ISTARSKE ŽUPANIJE Lončarić Dina dinal@fthm.hr 1 Radetić Nensi 2 PhD, Assistant Professor, Faculty of Tourism and Hospitality Management, Primorska 42, 51410 Opatija, Croatia Mr. sc., predavač, Veleučilište u Rijeci, Vukovarska 58, Rijeka, Hrvatska 6 2021 3 1 12 24 27 2 2015 7 4 2015 Creative Commons CC BY-NC 4.0 Puni tekst objavljenih radova besplatno se smije koristiti za osobne, edukacijske ili istraživačke svrhe uz poštovanje autorskih prava autora i izdavača. Korisnici radove smiju besplatno čitati, preuzimati, kopirati, distribuirati, tiskati, prerađivati ili koristiti ih na druge zakonite načine, uz ispravno navođenje izvornika i nekomercijalnu svrhu uporabe. The usage of full-text of the articles can be used exclusively for personal, research-related or educational purposes, with regard to the authors' and publishers' rights. The users are allowed to read, download, copy, distribute, print and transform or use them for any other lawful purpose as long as they attribute the source in an appropriate manner and for the non-commercial purpose of the usage.

Information and communication technology (ICT) has penetrated many spheres of life and work. Recognizing the potential of this new technology, marketers have readily accepted ICT and turned the marketing concept into e-marketing. The purpose of this paper is to examine the level of implementation of e-marketing practice in the hotel industry. The paper is based on empirical research conducted in Istria County, the most developed tourist county in Croatia. The research was conducted using a survey method. The research results show that hotel companies in Istria County have achieved a medium or even high level of implementation of e-marketing practice. The companies with a higher level of e-marketing practice also achieve better business performance. However, the survey also revealed the constraints to the widespread application of e-marketing in the hotel industry.

Informacijsko-komunikacijska tehnologija (IKT) prodrla je u mnoge sfere života i rada. Prepoznajući potencijale novih tehnologija marketinški stručnjaci spremno su je prihvatili i koncepciju marketinga pretvorili u e-marketing. Svrha je ovoga rada ispitati razinu primjene e-marketinga u hotelijerstvu. Rad se temelji na empirijskom istraživanju provedenom u Istarskoj županiji, turistički najrazvijenijoj županiji u Republici Hrvatskoj. Istraživanje je provedeno metodom ispitivanja. Rezultati istraživanja pokazuju da su istarski poslovni subjekti ostvarili srednju ili visoku razinu implementacije e-marketinga. Subjekti s višom razinom primjene e-marketinga ostvaruju bolje poslovne rezultate. Istraživanje ukazuje i na ograničenja u široj primjeni e-marketinga u hotelijerstvu.

E-marketing information and communication technology hotel industry e-marketing informacijsko-komunikacijska tehnologija hotelijerstvo

The increasing presence of the Internet in daily lives has resulted in the Internet an essential media in marketing communication. To gain competitive advantage in the demanding tourist market, it is important nowadays for a hotel company to have its own website, promote its products through social networks and mobile applications, use e-mail as a channel of communication with its business partners and customers, and apply all available information-communication technology (ICT). It needs to provide all information for potential clients in one place at any time of day, from anywhere in the world. That can be possible by using innovative ways of communication and by adapting business operations to demanding requirements of the modern tourist market. This imposes the innovation of practices and the implementation of new technologies in business processes. Therefore, there is a need for awareness about the necessity of applying ICT in the hotel business.

Previous studies have highlighted the importance of ICT in the tourism and hospitality industry (Andrlić, 2007; Šerić, Gil Saura, 2012; Sigala, 2003; Pitoska, 2013). They were mainly focused on the role and importance of websites in the marketing of a tourist destination (Govers, Go, 2004; Wang, 2008; Woodside et al. 2011), the importance of social media for destination marketing organisations (Ružić, Biloš, 2010), and destination choice (ham et al. 2013) etc. In addition, previous studies cover topics related to the application of e-marketing in hospitality such as the effect of e-marketing on consumer behaviour (Andrlić, Ružić, 2010), the application of e-mail marketing (Dobrača, 2011) and web promotion in the hospitality industry (Ružić et al. 2011). A set of papers are related to website quality in the hotel industry (Law, Cheung, 2006; Panagopoulos et al. 2011; Schmidt et al. 2008). However, “as the theory in the field of e-marketing is still in its infancy and not yet well established, there is a need for having more well-established studies that could be considered as a step towards theory building in the field of e-marketing” (El-Gohary, 2012: 1257). Since there is a lack of publications which deal with a general level of implementation of e-marketing in the hotel industry, it seemed justified to conduct research on the application of e-marketing in the hotel industry and thereby contribute to the study of this issue. Thus, the aim of this study is to determine the level of e-marketing implementation in hotels in Istria County, the most developed tourist county in Croatia.

Accounting for 29% of the total tourist traffic in the peak season, Istria is the most developed tourist region in Croatia (Institute for Tourism, 2014: 7)

This work consists of four chapters. The introductory chapter explains the purpose, objectives and structure of the paper. The second part gives an overview of previous research on the application of e-marketing in the hotel industry. The third part is dedicated to empirical research of e-marketing in the hotel industry and is followed by discussion and the conclusion of the paper.

There is no single definition of the concept of e-marketing. Some authors emphasize the role of the Internet in the application of e-marketing, while others perceive that term broadly, including the application of other ICT solutions. For example, speaking about e-marketing activities in tourism, Andrlić and Ružić (2010) consider the concept of e-marketing as a means of moving products or services from producers to tourists, and using the Internet as a means of promotion and a sales channel. Strauss and Frost describe e-marketing as “the use of electronic data and applications for planning and executing the conception, distribution and pricing of ideas, goods and services to create exchanges that satisfy individual and organizational goals” (Strauss, Frost, 2001: 454). Further, El-Gohary defines it as “a new philosophy and a modern business practice involved with the marketing of goods, services, information and ideas via the Internet and other electronic means“ (El-Gohary, 2012: 1256). According to the World Tourism Institution (2008: 1) “the purpose of e-marketing is to exploit the Internet and other forms of electronic communication to communicate with target markets in the most cost-effective ways, and to enable joint working with partner organisations with which there is a common interest.” Therefore, it can be concluded that e-marketing involves interactions with customers and delivers them value through the use of the Internet and other forms of ICT.

Although the website can be viewed as the basis for e-marketing activities in tourism (Andrlić, 2007), there are several e-marketing tools that can be adopted by the hotel industry. El-Gohary (2012) states that small tourism organizations in Egypt use five basic e-marketing tools such as Internet marketing, e-mail marketing, mobile marketing, intranet marketing and extranet marketing, as well as different e-marketing forms - Business to Business Marketing (B2B), Business to Consumer Marketing (B2C) and Business to Government Marketing (B2G).

There are numerous factors that are considered as prerequisites for using e-marketing in a company. For example, Peštek and Čičić mention the existence of a clearly defined strategy at a company level, the existence of the marketing function within the company, the domination of the marketing function in the development, implementation and monitoring of e-marketing results, and the existence of a database and building customer relations (Peštek, Čičić, 2010). When it comes to the implementation of e-marketing in tourism it can be said that the acceptance of e-marketing is determined by several factors such as owner skills, the available resources of an organization, the organization’s organizational culture, e-marketing, adoption cost, size of the organization, ease of use, compatibility, competitive pressures, government influence, market trends, national infrastructure, and cultural orientation towards e-marketing by the organization’s customers (El-Gohary, 2012). Also, there exist numerous obstacles to e-marketing adoption. Dlodlo and Dhurup examined the relevant barriers contributing to the non-adoption of e-marketing practices by small and medium enterprises and found that they include technology incompatibility with target markets, lack of knowledge, stakeholder unreadiness, technology disorientation and technology perception (Dlodlo, Dhurup, 2010). In their research conducted in Ghanaian hotels, Kwabena and Mphil (2008) found that organizational characteristics are the most important factor that determines the adoption and use of ICT, although the hotels’ environmental context, managerial characteristics, and perceived attributes of the Internet all have some influence.

The benefits of using ICT in tourism have been well-documented in the existing literature (Andrlić, 2007; Šerić, Gil Saura, 2012; Sigala, 2003; Pitoska, 2013). Dukić et al. (2013) highlighted the significance of ICT and e-marketing in tourism saying “the competitiveness of the tourism product has become functionally dependent on success in creating information superiority in the virtual environment.” Therefore, the implementation of e-marketing in the hotel industry is the focus of this research.

The hotel industry is very developed in Istria County. To be competitive in the tourism market, attract more guests and achieve a high level of customer satisfaction, hotels need to use information and communication technology (ICT). By applying the methods and techniques of e-marketing, the hotel has the potential to capture the targeted market and offer its product.

For the purpose of determining the level of e-marketing in hotels of Istria County we conducted empirical research. The objectives of this study are to: (1) determine the level of e-marketing implementation in hotels in Istria County, (2) find out which ICT are used in Istrian hotels, (3) find out which ICT is used in communication with the target market, (4) explore the attitudes of management on the application of ICT in the hotels, (5) determine the reasons for the possible lack of the application of ICT in the Istrian hotels and (6) explore the relationship between the level of e-marketing implementation and business performance of the hotel. The stated objectives of empirical research have been fulfilled by applying the methodology described below.

3.1. Research Methodology

Empirical research was conducted using the survey method. We applied a structured questionnaire consisting of six groups of questions selected from research on the application of e-marketing in tourism. The first set of questions referred to the application of e-marketing in the hotel industry. To estimate the application of e-marketing in the Istrian hotels we used a slightly modified scale created by Brodie et al. (2007) and Coviello et al. (2001). The extent of e-marketing practice in hotels was based on nine items and measured on a scale of 1 (never) to 5 (always)

The items are shown in Appendix 1

. The second group of questions referred to the application of ICT at the hotel. Respondents were asked to choose those technologies that are applied in their hotels, as well as in communication with the target market. The components offered were taken from previous research (Seric et al., 2011; Ruiz et al., 2010; Šerić, Gil Saura, 2012). The managers’ attitudes on the application of e-marketing in the hotel industry were examined by a third set of questions. The respondents were offered 38 items measured on a scale of 1 (completely disagree) to 5 (completely agree). The scale was designed in accordance with previous studies of Peštek and Čičić (2010) and Primorac et al. (2012). Additionally, we explored the reasons for insufficient use of ICT in hotels in accordance with the study of Buchalis and Deimezi (2004). In the fourth part of the survey, questions were aimed at collecting data on business performance, while the fifth part was related to information about the hotel. The sixth part of the questionnaire referred to the demographics of the respondents.

The survey comprises 43 independent hotels and hotel companies operating in Istria County in accordance with the list of the Ministry of Tourism

A list of categorized facilities, Ministry of Tourism, 2.3.2014.

. Hoteliers were contacted by email and asked to complete a questionnaire that was located on the Internet. The study lasted from 11 to 23 May 2014. It was completed by a total of 18 hotels or hotel companies, which represents a return rate of 41.8%. Most of the respondents were female (66.7%), aged 21-30 years (44.4%) and holding a university degree (55.6%). They had different positions in the company: 27.8% of them were top managers; 16.7%, marketing managers; 11.1%, sales managers; 5.6%, ICT experts; and 33.33%, people in other positions in the company.

3.2. Results of the research

The implementation of e-marketing was measured by asking the respondents to assess the marketing practices in their hotels on a 5-point scale ranging from 1 (never) to 5 (always). Following the methodology of Brodie et al. (2007) the items were summed using equal weights and converted to indices ranging from 0.0 to 1.0. The companies were then grouped into those with low, medium and high levels of e-marketing penetration. A low level of e-marketing penetration refers to an index less than or equal to 0.60 (an average of 3 or less on the 5-point scale) and a medium level, to an index from 0.61 to 0.80 (an average of 3.1 to 4.0 on the 5-point scale), while a high level was achieved when the index was greater than 0.80 (an average greater than 4.1 on the 5-point scale). Most of hotel companies (55.6%) achieved a medium level and fully 44.4%, a high level of penetration of e-marketing. According to the survey results and relatively high scores, it can be concluded that hotel companies have adopted the e-marketing practice.

One of the research objectives was aimed at determining the ICT used in hotels. Internal use of ICT is shown in Table 1.

Technologies used in hotels (N = 18)
TECHNOLOGY NUMBER OF HOTELS %
PC and laptop 16 88.88
PDA – Personal Digital Assistant 7 38.88
LCD screens 15 83.33
Touch – screen 11 61.11
Digital terrestrial TV in rooms 12 66.66
Digital satellite TV in rooms 16 88.88
Cable TV in rooms 7 38.88
Interactive TV in rooms 4 22.22
DVD in rooms 2 11.11
Specific departmental software 15 83.33
Information decision support system 8 44.44
Internet 17 94.44
Wi – Fi 16 88.88
Bluetooth 9 50.00
Intranet 11 61.11
Electronic payment 13 72.22

Source: research results

Most hotel companies (94.44%) use the Internet, and 88.88% use a PC and a laptop, digital satellite TV in rooms, and Wi-Fi Internet. The least used are DVD (11.11%) and interactive TV in rooms (22.22%). We can conclude that the hotel companies tend to use different technologies that help to maintain relationships with clients and meet their needs, but also help employees do their jobs more easily.

In addition to the use of technology in the hotel, we were interested in the use of technology in communicating with the market. The results are shown Table 2.

Technologies that are used in communication with the market (N = 18)
TECHNOLOGY NUMBER OF HOTELS %
Promotional CD/DVD 12 66.66
Own website 15 83.33
Promotional films on internet e.g. Youtube 11 61.11
Informative e-leaflet 9 50.00
Multimedia (3D, virtual tour) 10 55.55
Hotel booking system without payment facilities 12 66.66
Hotel booking system with payment facilities 12 66.66
Computer reservations system (CRS) 5 44.44
Global distribution systems (GDS) 6 33.33
Booking system of tourist destination 6 33.33
M-commerce 2 11.11
Self-service solution - check-in check-out 0 0
Call centre 10 55.55
E-mail marketing/direct marketing 15 83.33
Loyalty program 12 66.66
Searchers and meta searchers 6 33.33
Price comparison / predictor 7 38.88
Virtual web community 4 22.22
Online order remittance / reception 5 27.77
Social networks e.g. Facebook 12 66.66
Blog 3 16.66
Forum on internet 2 11.11
VOIP – Internet Telephone 3 16.66
Video conference 4 22.22
Others 1 5.55

Source: research results

Most respondents (83.33%) answered that the company uses its own website and e-mail marketing. This suggests that they recognize the importance of the use of web marketing and e-mail marketing for communication with their customers. In addition, 66.66% of the surveyed companies use promotional CD / DVD, online reservation systems, loyalty programs and social networks. None of the examined companies has the possibility of self-service check-in, check-out, and only one respondent said that they use other technologies.

To explore their attitudes on the application of e-marketing in the hotel industry, respondents were offered 38 statements and asked to rate their agreement with the statements on a scale from 1 (strongly disagree) to 5 (strongly agree). The results are shown in Table 3.

Approach to e-marketing
ITEM MEAN SD
The Internet is part of our marketing strategy. 4.83 0.38
Having a website is a must in our business. 4.94 0.24
When hiring new staff, we take into account the knowledge necessary for Internet use. 4.72 0.46
We change the website content based on the analysis of website usage. 4.17 0.71
Clients are able to register for receiving a newsletter. 3.94 1.39
Clients are able to post comments on the website. 3.83 1.58
Clients are able to communicate with other website users. 3.33 1.45
Clients are able to adjust pages to their needs. 3.11 1.49
We build a community with our clients via the website. 3.61 1.24
Clients are able to assess the offer or comment on it on the website. 3.39 1.50
We know our website clients by their name, last name or user name. 2.61 1.29
Links to our website can be found in well-known directories or on other websites. 4.17 0.79
Our website directs the client to other websites. 3.17 1.46
We have a database of users' e-mail addresses. 4.61 0.78
We permanently monitor results of our web page usage. 4.22 0.94
We use the website for investigating potential clients' needs. 3.72 1.18
We use the website for investigating the existing clients' satisfaction. 4.06 1.06
On our website, we also provide useful information on the environment (city, country, other tourist offers, weather forecast, foreign exchange list, logistic information, etc.) 4.00 1.08
Marketing over the Internet significantly contributes to the overall success of our marketing efforts. 4.78 0.43
We are satisfied with the return on investment in Internet marketing. 4.17 0.79
Internet marketing leads to boosting our image. 4.67 0.59
Internet marketing leads to the internationalization of our business. 4.67 0.69
Internet marketing provides my company with a competitive advantage. 4.50 0.79
We have clearly defined parameters for measuring effects of website usage. 3.78 1.11
We know what the return on our investment in Internet marketing is. 3.61 1.24
We know what visitors to our site do on the site 4.00 1.19
We know what proportion of visitors converts into clients. 3.67 0.91
We know what proportion of clients returns to our website. 3.72 1.23
Investment in Internet marketing reduces our investment in other media. 4.28 0.89
We plan to increase activities related to Internet marketing in the next year. 4.50 0.62

Source: research results

The results show that respondents agree with most of the statements. The attitude "Having a website is essential in our business" received the highest average rating from respondents of 4.94 (SD = 0.24). In addition, respondents are aware of the importance of Internet marketing for business, and they highly agree with the statement "The Internet is part of our marketing strategy ", with an average of 4.83. Respondents gave the lowest average rating (M = 2.61, SD = 1.29) to the statement "We know the users of our website by name, last name or nickname", indicating that there is room for improvement. The last statement referring to plans received a high average of 4.50, which means that hoteliers are aware of the advantages that Internet marketing brings and are planning to use it more.

One of the research objectives was to identify the reasons for the inadequate application of ICT. Most of the respondents (41%) noted a lack of financial resources as the reason for the lack of ICT application. Eighteen percent of respondents pointed out the necessity of continuously updating content, and 14% of respondents believe that the reasons for the lack of ICT application include the lack of knowledge about the importance of ICT, the lack of experts and other reasons.

Respondents were asked several questions to determine the success of their business. They gave their subjective assessment of business performance by responding to the question: "Please rate the extent to which your hotel (company) achieves business performance relative to last year’s expectations." Table 4 shows the percentage of surveyed companies with regard to business performance.

Business performance - % of companies (N = 18)
INDICATOR Much Worse Worse According to expectations Better Much better
Attracting new customers - - 44.4 27.8 27.8
Retention of existing customers - - 33.4 33.3 33.3
Sales growth - - 38.9 44.4 16.7
Revenue growth - 5.6 33.3 38.9 22.2
Market share - 5.6 44.4 33.3 16.7
Profitability - 5.6 33.3 44.4 16.7
Customer satisfaction - - 44.4 27.8 27.8

Source: research results

The results show that companies mainly operate in accordance with their expectations or even better than that. Only one company (5.6%) indicated that revenue growth, market share and profitability were worse than expected.

To examine whether companies that have reached a higher level of e-marketing implementation achieve better business performance, Spearman's rank correlation coefficient was applied. We found that those companies that generate a higher level of e-marketing implementation attracted more customers (rs = 0.496, p = 0.036), retained existing customers (rs = .469, p = 0.050), achieved better sales (rs = 0.635, p = 0.005), higher incomes (rs = 0.726, p = 0.001), better profitability ratios (rs = 0.767, p = 0.000) and higher market share (rs = 0.665, p = 0.003) compared with expectations in those companies that have a lower level of e-marketing implementation.

The research of e-marketing in the hotel industry of Istria County confirms the assumption that Istrian hotels have accepted and implemented e-marketing in their businesses. The research results show that most of the hotel companies surveyed achieved a medium or high level of e-marketing. In their daily operations, the hotel companies use a range of different ICT in communication in the hotel or with the market. Almost all companies use the Internet, Wi-Fi, digital satellite TV, etc. However, the use of DVD, interactive or cable TV in rooms, personal digital assistant (PDA) and information decision support system are still below the average. In addition, the use of some ICT in communication with the market is on a low level, e.g. computer reservations system, global distribution systems, booking system of tourist destination, m-commerce, searchers and meta searchers, price comparison, virtual web community, forum on Internet, VOIP and video conference.

In general, there is a positive attitude towards the use of ICT and the Internet in the hotel business. The respondents are aware of the importance of ICT for success in the highly competitive market. This finding is similar to that in Pitoska's study that has proved, by conducting research in the Greek tourist industry, that "e-marketing is absolutely necessary for the well-being of an enterprise" (Pitoska, 2013: 335). However, it is obvious that hotels in Istria County are not utilizing ICT to its full potential. There is room for improvement particularly in fostering mutual interactive communication with customers. As the reasons for the inadequate application of ICT in business, respondents stated a lack of financial resources as well as a lack of knowledge about the importance of ICT, a lack of experts and the need for continuous updating of website content.

Although we have used subjective rather than objective measures of business performance in our research, results are indicative. They show that those companies that apply e-marketing achieved better business performance. That is consistent with previous research (Brodie et al. 2007; Shuai, Wu, 2011) and represents additional evidence on the connection between e-marketing and business performance.

Based on the presented results of empirical research it is possible to make some recommendations to the hotel management. Despite the constraints that impede the use of ICT and e-marketing in the hotel business, it is evident that using ICT and e-marketing is a necessity. Hotels need to improve the quality of their websites and update content continually, use mobile applications and online booking to a greater extent, use e-mail marketing, foster a personalized relationship and adjust supply to customer requirements, apply social networks, etc. Although financial reasons are the biggest obstacle to full implementation of e-marketing in hotel companies, it is necessary to raise awareness about the benefits of e-marketing in the hotel industry. In the long term, investment in e-marketing is efficient and profitable, and the invested funds will be returned in a very short period.

The research has some limitations that prevent the generalization of results. Above all, the survey’s drawback is the poor response rate. Although it exceeded 40%, this is a relatively small sample and, therefore, this research can be considered a pilot study. Furthermore, the survey was conducted online. It would be possible to apply face-to-face interviews and personal contact with marketing professionals and ICT experts to identify differences in attitudes regarding the application of e-marketing in the hotel industry. Also, it would be necessary to investigate the relationship of e-marketing practice and objective indicators of business performance. An extension of the research would be an examination of application of different e-marketing tools in hotel marketing practice. In addition, the factors influencing the implementation of e-marketing practice in the hotel industry deserve further attention.

Items used to measure implementation of e-marketing practice
ITEMS
We collect and exchange market information through dialogue with customers.
Our marketing communication involves using technology to communicate with and among many individuals.
We communicate with our clients continuously and interactively.
When customers buy our products, we believe they expect to interact through technology.
Communication with customers is personalized with the use of interactive technology.
Our marketing activities are intended to create IT-enabled dialogue.
Our marketing planning is focused on issues related to managing IT-enabled relationships between the firm and individuals.
Our marketing resources (e.g. people, time, money) are invested in the creation of IT-enabled dialogue.
In our organization, marketing activities are carried out by marketing specialists in collaboration with technology experts.

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