E-marketing for Tourism Business Development in Ethiopia: Its Practice, Challenges and Implications on Performance of Tour Operating Firms

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Addis Ababa University


Advances in information technology have created great opportunities in various business sectors, especially in the tourism industry. Among others, tour operating firms often apply various marketing activities. However, there is hardly any study conducted on the practice of E-marketing among Ethiopian tour operating firms. This study fills in this research gap. The main aim of this study is, therefore, to investigate the association of E-marketing for Tourism Business Development in Ethiopia by focusing on its practice, challenges and implications on performance of tour operating firms.A quantitative research approach is employed in this study. Data (n=132) are collected from purposely selected owner-managers of tour operating firms, which have applied E-marketing in their business by using a survey questionnaire and the collected data is analyzed by SPSS version 20. A two stage Exploratory Factor Analyses is employed to validate the items used to measure E-marketing, followed by a reliability test using Cronbach's Alpha test. In this study, five dimensions of E-marketing, namely e-promotion, e-price, eservice/product, e-privacy, and e-payment, are validated for the first time in the tourism sector of Ethiopia. Hierarchical regression analyses is employed to predict implications of E-marketing on firm performance as measured by size changes in annual sales, employment, profit and total assets. Besides, the main challenges tour operating firms face while applying E-marketing in their business are identified and presented in their level in a rank-order. The empirical findings show that, tour operating firms use ICT tools in their business since internet marketing plays a vital role for the business of the tour operating firms by providing access to global consumer markets as well as growing their market share. Although, tour operators use internet for their business it’s significantly influenced by tremendous factors like low and intermittent internet connection, licensing issues of internet to e-marketing, less perceived value of Internet marketing, low accessibility of banks to e-payment, internet privacy and e-marketing is highly dependent on political decision. Regression analyses results also reveal that some of the dimensions of E-marketing mix have positive association on performance of tour operating firms. Nonetheless, not all of the dimensions of E-marketing have effects on firm performance. The use of Eprivacy and E-service are positively associated with an increase in sales, E-payment is negatively associated with employment but E-privacy is positively associated with employment, E-pricing and Eprivacy are positively associated with profit and E-promotion, E-pricing and E-privacy are positively associated with asset of the tour operating firms. Whereas the use of E-place is not associated with any of the four firm performance measures. It is, therefore, recommended that the concerned governmental bodies should do their utmost efforts in promoting E-marketing in Ethiopia for a successful tourism business development in Ethiopia. Keywords: E-marketing, Ethiopia, firm performance, scale validation, Tourism Business, Tour operating firms