International Journal of Contemporary Hospitality Management

E-commerce performance in hospitality and tourism

Nan Hua
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Nan Hua , (2016),"E-commerce performance in hospitality and tourism", International Journal of Contemporary Hospitality
Management, Vol. 28 Iss 9 pp. -
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 E-commerce performance in hospitality and tourism

Submitted: 15 May 2015

1st Revision: 24 August 2015

2nd Revision: 14 November 2015

Accepted: 12 February 2016

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1. INTRODUCTION

Over the last two decades, the explosion of research interest related to E-commerce

performance has stimulated a substantial number of academic studies (e.g., Chae et al., 2014;

Hua et al., 2015; Law et al., 2014; Yang et al., 2015). Although these studies have significantly

enriched the body of knowledge for E-commerce performance, new challenges surface as the

sheer work volume has become more or less an obstacle for knowledge development and the

literature has still remained fragmented. In particular, an overarching framework that can provide

guidance and structure to the swiftly increasing body of academic literature is lacking. Therefore,

the evolution of E-commerce performance literature calls for a systematic integration and

synthesis of existing knowledge in order to inform the next wave of academic endeavors in this

field.

An information technology (IT) intensive environment (Hua et al., 2015) has managed to

come through and stay for the hospitality and tourism industry, regardless of the well-recognized

reluctance for hoteliers to adopt new technologies (Buhalis, 2003; Law and Jogaratnam, 2005) or

the evolving harmony for business stakeholders to welcome IT progressing with tourism hand in

hand (Poon, 1993; Sheldon, 1997). Business processes, such as business-to-business (B2B) and
 business-to-consumer (B2C), are digitized (Beldona et al., 2012), and attentions have shifted

from promotion (1960s), product development and marketing research (1970s), and revenue

management (1980s) (Dev et al., 2010) to focus on Internet and IT-mediated business processes,

such as consumer-to-consumer (C2C) social activities (Morosan et al., 2014).

While IT has increasingly permeated the industry as supported by its own advancement and

accommodating business models (Law et al., 2014), a holistic customer/client experience is a

common goal most contemporary digital processes are striving for (Nyheim and Connolly,
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2012). In addition, these digital processes are often characterized by usefulness, playfulness, and

ease of use (Morosan and Jeong, 2008). As a result, mobile and social networking business-

related technology (Berkus, 2013), for example, is gaining momentum over traditional personal

computers (Hua, et al., 2015). Electronic commerce (E-commerce), therefore, can be considered

as a sophisticated IT process that supports achieving the holistic customer/client experience from

aspects of design, communication, delivery, fulfillment, and evaluation (Hua et al., 2015), with

the underlying structural vehicle evolving from computer reservation systems (1970s), to global

distribution systems (1980s), to Internet (1990s), and to today’s organization-facilitated C2C

virtual network social activities (Buhalis, 2003; eBusiness W@tch, 2006; Emmer et al., 1993;

Morosan et al., 2014; O’Connor, 1999).

While serving as the fundamental media for most customer- and client-related activities in

today’s markets, E-commerce carries a full commercial connotation because such a process is

essentially transactional (Hua et al., 2015). Its synergistic and accelerating interaction with

hospitality and tourism has brought fundamental changes to the industry (Buhalis and Law,

2008) and cultivated competitiveness in the business environment (UNWTO, 2001).

Consequently, E-commerce performance is referred to as the business value impact of E-

 commerce (Zhu and Kraemer, 2002) that includes three types of benefits: marketing and

competition benefits, essential benefits that support strategy and development, and business

efficiency benefits (Abou-Shouk et al., 2013).

Considering the complexity, ubiquity, and criticality of E-commerce among B2B, B2C, and

organization-facilitated C2C settings in the tourism and hospitality industry (e.g., Hua, et al.,

2015), this study offers a review of 155 recent articles published both in mainstream E-

commerce literature and the hospitality and tourism field. Focused on E-commerce performance,
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this study aims to further our understanding, identify research gaps, and suggest potential future

study directions. It should be noted that, although studies in hospitality and tourism have

approached E-commerce performance from many distinct perspectives, we have only managed

to understand the nature and impacts of E-commerce in a scattered and fragmented fashion; an

integration approach is thus much needed. Therefore, this study also attempts to synthesize

extant empirical studies of E-commerce performance and offer a coherent and informative

framework of E-commerce performance, which should contribute to advancing knowledge

development and produce a significant long-term impact (e.g., MacInnis, 2011).

2. METHODOLOGY

Because no study has systematically examined the topic of E-commerce performance in the

mainstream, hospitality, and tourism fields, conducting a comprehensive and pertinent review of

the E-commerce performance literature requires the method of theoretical sampling (Corbin and

Strauss, 2008). In this case, articles related to E-commerce performance are considered the

sample, whose size is determined by the point of “informational redundancy”. In other words,

the article collection process will stop when finding overlaps start to emerge from the articles

repetitively and no new information is anticipated (Lincoln and Guba, 1985, pp. 202). Such a
 point would suggest that both information depth and breadth are achieved (Bowen, 2008), and a

theoretical framework governing E-commerce performance would emerge. Specifically, this

study followed the methodology by Greenhalgh et al. (2009) for the article sample collection and

employed exploratory methods (browsing, asking colleagues) before the snowballing technique

(searching references of references and using citation-tracking databases such as EBSCOhost

(e.g., Hung and Law, 2011), ScienceDirect (e.g., Tsang and Hsu, 2011) and ProQuest Business

(e.g., Tsai et al., 2011).) to identify key sources to uncover the E-commerce performance themes
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and prior findings systematically (Greenhalgh et al., 2009)—Greenhalgh and Peacock (2005)

show snowballing techniques are more efficient than both using formal search strategies to

electronic databases and hand searching. The article collection process started with four of the

latest articles related to E-commerce performance published in premium academic journals—

Chae et al. (2014) in Management Information Systems Quarterly (The impact factor for 2014:

5.311; Five-year impact factor: 8.490), Hua et al. (2015) in International Journal of Hospitality

Management (The impact factor for 2014: 1.939; Five-year impact factor: 2.519), Law et al.

(2014) in International Journal of Contemporary Hospitality Management (The impact factor for

2014: 1.407; Five-year impact factor: 1.963), and Yang et al. (2015) in Technology Analysis and

Strategic Management (The impact factor for 2014: 0.942; Five-year impact factor: 1.49)—and

stopped at 155 articles when thematic saturation and finding overlaps became obvious and a

theoretical framework governing E-commerce performance emerged. In addition, the following

two criteria were applied to determine the 155 articles selected. First, only full-length research

papers were included—this criterion follows from the common belief that other scholarly works,

such as research notes and book reviews, tend to lack in originality and contribution to

knowledge development (e.g., Law et al., 2012). Second, the research paper under consideration
 needed to be related to E-commerce performance as defined in Abou-Shouk et al. (2013), Hua et

al. (2015), and Zhu and Kraemer (2002).

The collected articles were then reviewed, organized, analyzed, synthesized, and evaluated to

form clear and logical conclusions with regards to what is learned and yet to be learned (Denyer

and Tranfield, 2009). Specifically, abstracts of the selected articles were first reviewed in a

chronological order, which ensured deduction of idea evolution trends over time (e.g., Mustak et

al., 2013). Guided by abstract review insights, this study then formed the article structural
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scheme, following the framework established by Abou-Shouk et al. (2013)—each article

collected was categorized under the three types of E-commerce benefits: “marketing and

competition benefits”, “essential benefits that support strategy and development”, and “business

efficiency benefits” (Abou-Shouk et al., 2013) for mainstream journals and hospitality and

tourism journals, respectively. It is a common practice in hospitality and tourism fields to use

“mainstream journals” to refer to generic discipline specific journals, such as Management

Information Systems Quarterly, and to use “hospitality or tourism journals” to refer to journals

that are contextualized in hospitality and tourism. This categorization further facilitates research

gap identification, article synthesis, and theoretical framework construction.

3. E-COMMENCE PERFORMANCE BACKGROUND

A temporal pattern emerged while researchers were closely examining the relationships

between E-commerce and firm performance. E-commerce in the 1990s appeared to have offered

advantages to firms with resource slack, exhibiting characteristics of utilizing proprietary

systems (Wang, 2010). For example, E-commerce facilitated by electronic data interchange

(EDI) created competitive advantages for those that employed it (Mukhopadhyay et al., 1995).

Santhanam and Hartono (2003) showed that EDI was sustainable to a certain extent in a multi-
 industry context, suggesting firm IT capabilities could improve performance (Bharadwaj, 2000).

In addition, these stand-alone and proprietary systems are often costly or difficult for firms to

communicate with their trading partners because of a lack in powerful communicating platforms

and constraints in data (Yang, et al., 2015).

Facilitated by abundant IT support, significantly reduced costs, and surging vendor interests,

E-commerce started to take center stage in the 2000s (Masli et al., 2011). Particularly

noteworthy was that the extensive standardization of IT tools (Wang, 2010) and web-based
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technologies, which offer two-way, real-time information exchange on the value chain (Zhu

2004), offered opportunities for firms that were smaller and less resourceful to compete with

those that were bigger and more resourceful (Masli et al., 2011). As a result, E-commerce

induced large-scale transformations that were both internal and external to an organization,

exerting profound influence on both the organization and its relationship with stakeholders (e.g.,

Carr, 2003).

3.1. Marketing and Competition Benefits of E-commerce

From a resource-based view (RBV), E-commerce capabilities can lead to performance

advantages (Nevo and Wade, 2010), such as differentiation or cost advantages (Bharadwaj,

2000) because unique organizational capabilities can be derived from proper resources utilization

and allocation within a firm (Chae et al., 2014) with support from other resources such as

productive organization cultures (Bharadwaj, 2000). However, firm capabilities are dynamic and

continuously evolving to “adapt to rapidly changing environments” (Eisenhardt and Martin,

2000; Teece et al., 1997), which led researchers to a dynamic capabilities perspective (DCP) to

understand how a firm gains competitive advantages in today’s dynamic market places (Chae et

al., 2014). Superior performance can result from a firm’s strong E-commerce orientation because
 such a firm can be more agile to adapt to dynamic business environments (Sambamurthy et al.,

2003). However, this stream of research has built in an assumption that E-commerce will bring

the expected benefits and lead to competitive advantages, which appears at odds with the

inconclusive results from recent empirical studies about the performance impact of E-commerce

(Chae et al., 2014)--not all E-commerce endeavors materialize into resources that are “rare,

inimitable, non-substitutable, and valuable” (RINV) and thus create competitive edges and

command economic rent (Barney, 1992; Amit and Schoemaker, 1993). Consequently, skepticism
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started to arise as to whether Internet-based electronic businesses will continue to benefit from

the economic impact of IT (e.g., Tallon and Kraemer, 2007; Zhu and Kraemer, 2002), and more

general approaches are called for to better understand potential benefits of E-commerce in the

business setting (Chathoth, 2007).

Several benefits of E-commerce that facilitate gaining a marketing and competitive edge,

however, have been documented. For example, E-commerce can ensure a stable survival in the

ever changing and competitive business environment (Stansfield and Grant, 2003). In particular,

E-commerce can improve competitiveness of small and medium enterprises (SME) because it

can enable efficient collaboration (e.g. Kvainauskaite et al., 2005). It is widely recognized that

E-commerce, which leads to improved organization image and reputation of SMEs in the global

market (e.g., Ayeh, 2006; Beckinsale and Levy, 2004; Collins et al., 2003; Kajogbola, 2004;

Scarborough and Zimmerer, 2003) and technology diffusion result in SMEs’ improved

competitive positions (e.g., Beatty et al., 2001; Daniel and Wilson, 2002; Kartiwi and

MacGregor, 2007; MacGregor, 2004).

Moreover, E-commerce can improve productivity and realize economies of scale, leading to

better operating efficiency and performance (e.g., Beekhuyzen et al., 2005; Harindranath et al.,
 2008; Migiro and Ocholla, 2005; Simpson and Docherty, 2004). By shortening response times to

enquiries and by tracking and improving customer satisfaction, E-commerce can lead to more

repeat businesses and enhanced customer loyalty (e.g., Dyerson and Harindranath, 2007; Quayle,

2002; Saffu and Walker, 2008; Teo et al., 2009). An “e-competitive transformation” (Straub and

Klein, 2001), if appropriately employed, can gain firms competitive advantage over both online

and offline competitors (Dyerson and Harindranath, 2007; Harindranath et al., 2008; Poon and

Joseph, 2001).
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3.2. Essential Benefits of E-commerce that Support Strategy and Development

From a strategic and development perspective, turning investment in E-commerce into firm

capabilities that can generate sustainable competitive advantages and outperformance is playing

an increasingly critical role for business organizations. On the one hand, physical IT assets such

as equipment and even some software are often easily imitable and thus tend to bring only

temporary outperformance (Teece et al., 1997). On the other hand, the intangible IT assets and

capabilities, once successfully integrated in a business, can bring sustainable superior

performance (Christensen and Overdorf, 2000) because they are considered RINV resources,

characterized by tacitness, idiosyncrasy, and often a long development time window (Dierickx

and Cool, 1989), and shielded by factors like social embeddedness and causal ambiguity from

competition imitation (Dierickx and Cool, 1989).

Therefore, studies in the business literature predominantly focus on adoption and related

issues (e.g., Wang et al., 2013). Particular attention was directed to strategic and development

implications that follow from E-commerce adoption. For example, E-commerce adoption was

shown to improve financial growth at both the top and bottom lines of organizations (e.g.,

Karagozoglu and Lindell, 2004; Straub and Klein, 2001) and enhance a firm’s capability to
 penetrate international markets through easy information access on a global scale (e.g., Jin, 2007;

MacGregor, 2004; Zheng et al., 2004). By improving communications with customers, E-

commerce strengthens firms’ capability of service customization (e.g., Pease and Rowe, 2005).

By improving communications with customers, suppliers, and partners (e.g., Azam, 2007;

Karanasios, 2008; Simpson and Docherty, 2004) and efficient use of technology to serve

customers, E-commerce leads to customer satisfaction and loyalty (APEC, 1999), further

advancing effective relationship building. In addition, because E-commerce technology provides

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support to organizations with increased and easier access to information and knowledge, E-

commerce adoption can lead to improving decision making processes and management

productivity (APEC, 1999), as well as better systems, frameworks, and methodologies to make

strategic and functional decisions (Grandon and Pearson, 2004; Kajogbola, 2004).

In general, IT infrastructure and other physical IT assets, such as Internet and associated

technologies, do not create value without being integrated with other organizational resources

(Mata et al., 1995), which are often difficult or costly to transfer when combined (Amit and

Schoemaker, 1993). Only by complementing tangible technology assets, intangible IT assets

such as human and business IT resources appear to explain performance variances among

companies (Siqueira and Fleury, 2011; Li et al., 2014). Owning IT resources that best

complement technology in attaining innovation appears to be the most powerful way to create

and secure sustainable competitive advantages against competition imitation (Feeny and

Willcocks, 1998). In the E-commerce context, firms do not have the same E-commerce

capabilities; even if they do, they can benefit only from web-based technologies that are

integrated into organizations and produce “sustainable resource complementarity” (Lederer et

al., 2001; Straub and Klein, 2001; Zhu, 2004).

 3.3. Business Efficiency Benefits of E-commerce

Successful interaction between E-commerce and four intangible assets, i.e., “alignment of

E-commerce with business strategy, financial resources, user involvement, and external

relationship management” (Bharadwaj, 2000; Thong, 2001; Sauer and Willcocks, 2002; Bruneel

et al., 2012; Li et al., 2014; Yang et al., 2015) could result in outperformance (Yang et al., 2015)

because of increased business efficiency (Bharadwaj, 2000) and barriers to imitation (Amit and

Schoemaker, 1993).
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Therefore, E-commerce can lead to operations and internal efficiency improvements

(Collins et al., 2003; Dyerson and Harindranath, 2007; Karanasios, 2008; Kuan and Chau, 2001;

Teo et al., 2009), which result in better business performance (Jin, 2007; Poon and Joseph, 2001)

and improved supply chain efficiency (Quayle, 2002). A number of reasons have been explored

to understand business efficiency benefits of E-commerce. For example, adopting E-commerce

technology was cited to improve internal efficiency by enabling better order processing,

employment growth, inventory control, online staff recruitment, accountability, and staff

satisfaction (Dyerson and Harindranath, 2007; Harindranath et al., 2008; Kajogbola, 2004;

Quayle, 2002), in addition to supporting improved cooperative efficiency of supply chain

management (Daniel and Wilson, 2002; MacGregor, 2004; Saffu and Walker, 2008). In

particular, E-commerce is recognized for facilitating collaboration and planning among supply

chain partners (Quayle, 2002). Additional benefits of creating E-commerce technology

capabilities include business knowledge enhancement (APEC, 1999; The e-Regions Trust,

2006), internal knowledge sharing improvement (Daniel and Wilson, 2002), and online

transaction execution enhancement (Álvarez et al., 2007; Raymond, 2001), which includes both

processes of order taking and tracking (Ayeh, 2006; Wesrthner and Klein, 1999).
 In short, E-commerce can be a resource that generates competitive value only when it is

combined with tacit, specific business resources and skills (Yang et al., 2015). The literature of

its performance, as illustrated above, can be categorized into a production-economics-based

stream and a process-oriented stream (Barua and Mukhopadhyay, 2000) -- production functions

are employed in the first stream of research to explore the input-output relationships driven by IT

and, in general, positive empirical evidence was found between IT and productivity (e.g., Chan,

2000); performance analyses are conducted in the second stream of research to examine the
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effects of investment on intermediate operational performance, as well as financial performance

at a higher level (e.g., Barua and Mukhopadhyay, 2000).

4. E-COMMERCE PERFORMANCE IN HOSPITALITY AND TOURISM

E-commerce evolved uniquely in the hospitality and tourism industry over time (Gaffney,

2013). Early E-commerce practices started in the 1960s, when the hospitality and tourism

industry began to rely on global distribution systems (Thakran and Verma, 2013). In particular,

the programs of frequent flyers in the 1980s provided airlines with detailed customer information

(Kim et al., 2009) and led to successful customer relations management and relationship

marketing, setting a foundation for modern E-commerce (Chen, Gillenson, and Sherrell, 2002).

While the Internet emergence in the 1990s took E-commerce to a new level, where B2B and

B2C relationships were more interactive (Kim et al., 2009); the year of 2000 observed E-

commerce stepped into the SoLoMo era, when social, location, and mobile played dominating

roles (Thakran and Verma, 2013). Starting from 2012 and featuring extensive consumer behavior

intermixing across purchase, channel, and device alternatives (Thakran and Verma, 2013), the

hybrid era witnessed rapid evolvement of E-commerce into the mobile commerce domain

(Gaffney, 2013) and offered great opportunities of research to complement prior studies that
 addressed technology progress and marketing evolution (Berkus, 2013; Dev et al., 2010). For

example, the majority of hotel guests tend to bring at least two devices with them and consider

paramount the freedom to use their own devices and control their entertainment (Watkins, 2013).

Some cruise lines and upscale hotels, such as Oceania and Kimpton, have started to make iPads

available for guest use and convenience (Hua et al., 2015).

4.1. Marketing and Competition Benefits of E-commerce

The resource based view (e.g., Chae et al., 2014; Nevo and Wade, 2010) and the theory of
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dynamic capabilities (e.g., Eisenhardt and Martin, 2000; Teece et al., 1997) appear to have

served as theoretical foundations for studies related to E-commerce performance in the

hospitality industry. Relationships describing E-commerce and hotel performance were proposed

(Chathoth, 2007); IT-mediated tasks and performance measures were tested but, similar to

studies in the mainstream, were found to have inconclusive results. IT, for instance, failed to

exhibit a direct influence on company performance; but rather firm capabilities that take full

advantage of informalization and networking lead to improved performance (Sigala, 2003).

When mediated by employee outcomes, E-commerce that supports customer service was found

to influence hotel performance (Cohen and Olsen, 2013). Recently, Hua et al. (2015) found that

E-commerce expenses in general influence rooms revenue positively and significantly, though

such expenses appear to have distinct impacts across different chain scale types.

The theory of dynamic capabilities suggests that E-commerce can be considered as a

dynamic capability (Hua et al., 2015). Utilizing knowledge, routines, simple rules, and analytic

processes to create customer value, organizations exhibit characteristics of dynamic capabilities

as they use appropriate E-commerce support to keep improving their resource allocation and

performance (e.g., Wheeler, 2002). Early examples can be found in the tourism and hospitality
 industry in the 1960s when American Airlines developed SABRE, a basic but automated E-

commerce system, to improve data processing efficiency of traveler bookings and data. SABRE

grew quickly to serve over 10,000 travel agents all over the world and later on became the

biggest private real-time data-processing system at one time. SABRE Technology Group

introduced Travelocity.com in 1996 and created a new market featuring optimization of

consumer and inventory interaction and aggregation such as search and customization, changing

the landscape of E-commerce (Mamaghani, 2009). The current shift in guests’ increasing use of
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mobile devices (Gaffney, 2013) also highlights some areas where dynamic capabilities can be

carefully developed in the mobile dimension, such as trip planning, real-time information

accessing, information sharing, and problem solving (Wang et al., 2012). Geo-based technology

can significantly create differentiating features by offering timely geographical information and

associated services (Tussyadiah and Zach, 2012). While technology advancement has brought

into being virtual reality (VR), VR appears unlikely to replace a real visit in the near future

(Guttentag, 2010).

Understanding how people seek, process, and use travel information in both online and

offline contexts can provide managers with benchmarking information to improve effectiveness

of online marketing strategies (Ho et al., 2012), particularly given responses toward web

advertising were shown to positively impact website attitude, which leads to improved attitudes

about brands, and in turn to increased intentions to purchase (Hwang et al., 2011). For example,

Xiang and Gretzel (2010) studied the appearance frequency of social media websites in travel-

related information search results, considering that social media is a critical source of travel

information. They found that a large proportion of search results on travel information came

from social media websites and that search engines have become increasingly sensitive to social
 media content. Later on, Hays et al. (2012) showed that social media can function as a marketing

tool for destinations. In addition, given that online marketing effectiveness positively influences

tourism dominance (Woodside et al., 2011), websites play a critical role in promoting destination

image (Jeong et al., 2012). Furthermore, because both internal and external factors are essential

in determining use of electronic marketing (El-Gohary, 2012), different approaches should be

employed to target potential customers to improve marketing effectiveness in an online

environment (Luna-Nevarez and Hyman, 2012) to improve E-commerce performance.

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Online travel communities hosted by business organizations also appear to behave as

effective marketing platforms, since consumers’ intention to participate in such communities was

found to positively impact their intention to use and recommend products of the host business

organizations (Casaló et al., 2010). Consumers were found to accept online purchasing, and

perceived website control was shown to be positively related to purchase intention (Liang and

Lim, 2011). In addition, online purchasing intention appears to be positively related to user

innovativeness and ease of transaction process (San Martin and Herrero, 2012). Interestingly,

taking souvenirs purchasing as an example, it may be a good idea to complete a transaction the

traditional way in a local store before disclosing available online purchasing options since

purchase limitation appears to increase initial purchase intent regardless of item type (Abendroth,

2011). Along the line of consumers’ repeat purchase and loyalty in online contexts, Kim et al.

(2013a, 2013b, 2013c) showed that navigation functionality, transaction security, and cost

effectiveness significantly influence trust, which then positively affect intention to repurchase

online; Llach et al. (2013) offered empirical evidence that quality, decomposed into the

functional and hedonic quality, positively and significantly influences loyalty through perceived

value in an online purchasing context of the airline industry. And more experience using E-
 commerce tools appears to positively affect repurchase intention (Oh et al., 2009). Therefore, it

appears that E-commerce platforms that are user friendly, functional, easy and fun to use, and

safe can significantly improve E-commerce performance. In particular, proper E-commerce

decisions can result in competitive advantages (Bilgihanet al., 2011).

4.2. Essential Benefits of E-commerce that Support Strategy and Development

Tracing a similar line of evolvement, hospitality and tourism studies on E-commerce are

predominantly IT adoption oriented (Wang et al., 2013). Yet, academic attention has been
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broadened to address institutional employment of IT (e.g., Herrero and San Martin, 2012; Kim et

al., 2008, 2009), while keeping pace with the increasing number of industry applications of E-

commerce (Law et al., 2014).

IT adoption studies are critical in understanding how to improve E-commerce performance

since they pinpoint areas of interest that tend to have significant strategic implications and

produce timely and practical improvements for business development. For example,

strengthening market position by maintaining good relationships with current business partners

and securing new ones is a widely recognized E-commerce benefit (Kim, 2006). E-commerce

has been shown to help SMEs in the tourism industry with collecting and distributing

information on a global scale; by offering easy information access to tourism services and

products, E-commerce was shown to improve stakeholder relations (Bourgouin, 2002; Kim,

2006). Social media is often considered as a critical source of information by international

tourists to seek solutions for a variety of problems (Schroeder et al. 2013). And guest

empowerment technologies appear to be valuable for hotel room services, as shown by Schrier et

al. (2010) that hotel guests consider on-demand services the most attractive features.
 In particular, understanding the determinants of IT adoption facilitates organizations to

optimize their choice of IT systems (Tarcan and Varol, 2010), which, in turn, could lead to

improved E-commerce performance. For instance, tourists who are more familiar with the

Internet and exhibit high innovativeness tend to use podcast tours in museums for an enhanced

experience (Kang and Gretzel, 2012). Consumers in restaurants are prepared to use biometric

systems when they are perceived as useful and secure (Morosan, 2011). Potential hotel guests

tend to use mobile hotel reservation services if they offer high information and system quality
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(Wang and Wang, 2010).Because customers rely on E-commerce platforms to facilitate their

decision making process (Law et al., 2014), websites focus on needs of customers instead of

those of investors (Escobar-Rodríguez and Carvajal-Trujillo, 2013).

Several studies tried to understand customer needs in an attempt to improve E-commerce

performance from an online textual content perspective and started to explore potentials of text

mining in the tourism and hospitality industry. For example, positive online reviews (eWOM)

were found to significantly improve booking intention and trust (Sparks and Browning, 2011),

intention to travel, tourist attitude, and destination image (Jalilvand et al., 2012). A selection of

keywords appears to dominate destination image because tourists rely on these words as anchors

to find more destination information online (Pan and Li, 2011). In addition, travel blogs were

shown to convey information about bloggers’ travel expectations, values, and beliefs (Banyai

and Havitz, 2013). Therefore, managers can analyze online textural information to understand

tourists’ thoughts and work closely with identified online ambassadors (Rong et al., 2012) to

form effective marketing strategies. It was also shown that a price-network size schedule

featuring reducing price with increasing network size could work to attract potential customers to

make timely purchases (Xiong and Hu, 2010).

 Studies addressing the relationship between tourism suppliers and intermediaries are gaining

momentum in the literature. For example, the loyalty of an airline’s consumers and competition

of its own business website with online travel agency (OTA) platforms appear to determine

whether the airline uses OTA platforms to sell tickets (Koo et al., 2011). Online wholesalers are

perceived in some regions of the United States as partners of hotel operators, with acknowledged

benefits including global distribution of products and services and aggressive media advertising

that increase hotel visibility and exposure (Myung et al., 2009). And online communication was
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found to improve online reservation and e-ticket procurement (Andreu et al., 2010). E-commerce

technology applications were also found critical in increasing loyalty and satisfaction of

customers when supplier and travel agencies are concerned (Ruiz-Molina et al., 2010) and

leading to improved organization image and reputation of SMEs in the global market (Liao and

Par, 2006). Note, though, that the distribution channel structure is affected by market structure

during the process of restructuring caused by E-commerce technologies (Berne et al., 2012). Of

particular importance is that IT steering committees in hotels appear to exert a significant and

positive impact on IT integration (Cobanoglu et al., 2013). In conjunction with the large number

of benefits that E-commerce can bring (Abou-shouk et al., 2013), the committee is thus

considered strategically critical to hotel business success due to its influence in achieving IT

strategic goals and gaining a competitive edge over competition (Cobanoglu et al., 2013); while

a recent study examined impacts of E-commerce benefits on E-commerce adoption (Abou-shouk

et al., 2013), instead of focusing on E-commerce benefits as a result of E-commerce adoption

(e.g., Bigné-Alcañiz et al., 2009). Moreover, studies started to look at how hotels assess E-

commerce technology investment, and preliminary results suggest that centrally managed hotels

often utilize more assessment tools based on both financial and nonfinancial information, such as
 net present value and technical requirement fit, than do locally managed hotels (Karadag et al.,

2009). In short, E-commerce has started to play an increasingly more important and strategic role

in operating and strategic management (Law et al., 2014).

4.3. Business Efficiency Benefits of E-commerce

Business efficiency benefits derived from E-commerce can usually be classified into

external and internal benefits. For example, transaction cost reduction was proposed as a

potential internal benefit from employing E-commerce technology in a hotel service operation
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context--the internal benefit of transaction cost reduction was found positive, yet statistically

insignificant, suggesting resource lack in implementing E-commerce in the hotel industry

(Chathoth and Law, 2011). Using biometric technologies in hospitality and tourism was found to

offer potential external benefits such as consumer convenience and increase operating efficiency

and security which are generally considered internal to a company (Mills et al., 2010). The

concern, though, is how to securely protect consumers’ biometric data because they are critical

private information (Mills et al., 2010). Community preferences can also be influenced by E-

commerce technologies such as an audience response system (ARS) for tourism development

(Keske and Smutko, 2010). By facilitating collaboration and planning among partners of supply

chains (Quayle, 2002), E-commerce was shown to lead to better performance for travel agencies

(Heung, 2003). For SMEs, E-commerce technology applications could lead to improved

distribution channels and reduced operation costs (Abou-Shouk et al., 2013)

Overall, E-commerce appears instrumental in increasing productivity and operating

efficiency, which in turn leads to the benefit of economies of scale (e.g., Buhalis, 2003;

Karanasios and Burgess, 2008). Furthermore, indirectly, marketing benefits derived from E-
 commerce appear to also bring crucial benefits of operational efficiency, i.e., sales increase

and/or cost reduction (Abou-Shouk et al., 2013).

5. DISCUSSIONS AND RESEARCH GAPS OF E-COMMERCE PERFORMANCE IN

HOSPITALITY AND TOURISM

E-commerce is taking an increasingly more important role in serving as the fundamental

platform for all business transactions and non-business interactions between all parties of

interests—it provides critical support to all three domains of an organization: (1) the
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organization's external market environment, (2) the organization’s internal optimal performance,

and (3) flows between the organization and its market environment. Understanding the key

influencers of the performance of this fundamental platform as well as the core dimensions of it,

therefore, is critical for modern business survival and success.

Based on the findings of this study, the E-commerce performance framework can be derived

as follows in Figure 1. The key dimensions and influencers of E-commerce performance are

identified and relationships depicted. Specifically, E-commerce performance was found to

exhibit three key dimensions that encompass competitiveness and marketing, strategic

development, and efficiency (e.g., Abou-Shouk et al., 2013). It appears that E-commerce

performance is influenced by market E-commerce environment, organization E-commerce

environment, and the dynamic and interactive relationships in between (e.g., Cohen and Olsen,

2013; Ho et al., 2012; Hua et al., 2015; Law et al., 2014; Wang et al., 2013).

The market E-commerce environment, primarily the E-commerce infrastructure and

superstructure external to an organization that define, support, and communicate organizational

needs and wants for optimal results and superior performance, is considered as both stimulating

and constraining the organization’s potential for innovation and better performance. It
 encompasses suppliers, investors, IT developers, competitors, consumers, and other stakeholders

(e.g., Carr, 2003) and bears heavy influence on E-commerce performance by interacting with the

organization through a variety of channels and means, such as the fundamental supply and

demand relationship between the organization and suppliers (e.g., Wang, 2010), consumers (e.g.,

Gaffney, 2013), and competitors (e.g., Masli et al., 2011), asymmetrical environmental and

social responsibility concerns between the organization and investors (e.g., Escobar-Rodríguez

and Carvajal-Trujillo, 2013), and the balance of capital budget control and innovation push
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between the organization and IT developers (e.g., Gaston and Botts, 2013).

The organization E-commerce environment, which supports information synthesis into ideas

and solutions to developing and/or existing problems and issues, is considered as influencing

organizational effectiveness in response to its market environment. These include complex and

dynamic interactions between organizational core competencies (Lederer et al., 2001; Straub

and Klein, 2001; Zhu, 2004), products and services (e.g., Liang and Lim, 2011), and supporting

tangible and intangible assets such as Internet and associated technologies (e.g., Mata et al.,

1995), human and business IT resources (e.g., Siqueira and Fleury, 2011; Li et al., 2014),

dynamic capabilities developed in the mobile dimension--e.g., trip planning, real-time

information accessing, information sharing, and problem solving (Wang et al., 2012)--and

appropriate E-commerce support to continuously improve their resource allocation and

performance (e.g., Wheeler, 2002).

Opportunities and barriers to communication resulting from bordering internal and external

E-commerce environments between the organization and its market, given a set of internal

characteristics, can be both arousing and stifling the organization’s response. Therefore, the

market and organization E-commerce environments further interact and deliver a separate as well
 as combined influence upon E-commerce performance of an organization (e.g., Carr, 2003;

Cohen and Olsen, 2013; Escobar-Rodríguez and Carvajal-Trujillo, 2013; Gaffney, 2013; Ho et

al., 2012; Hua et al., 2015; Law et al., 2014; Wang et al., 2013), resulting in the dynamic model

of E-commerce performance depicted in Figure 1.

Prior studies that addressed issues of E-commerce performance in the hospitality and

tourism field, although fragmented, have made significant contributions to the literature by

providing both theoretical frameworks and empirical evidence for key relationships as depicted
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in Figure 1 (e.g., Abou-Shouk et al., 2013; Cohen and Olsen, 2013; Ho et al., 2012; Hua et al.,

2015; Law et al., 2014; Wang et al., 2013). It is important to note, however, that E-commerce

supported business interactions could significantly contribute to all three aspects of E-commerce

performance, i.e., competitiveness and marketing, strategic development, and efficiency, which

at the same time are critical considerations for business and strategic decisions to deploy E-

commerce technologies and infrastructure in the first place (Abou-Shouk et al., 2013).

**Please Insert Figure One Here**

Researchers in hospitality and tourism appear to have focused primarily on two stakeholder

groups when addressing issues and questions related to E-commerce performance, i.e.,

consumers and the organization of interest (particularly, managers and employees within the

organization). Many other stakeholders received limited attention and disproportionately much

less research interest, for example, regulators, researchers, media, environmentalists, suppliers,

and investors. This phenomenon appears to reflect the early stage of E-commerce performance

research in hospitality and tourism since consumers and the organization of interest tend to be

the most obvious to focus on from an academic perspective. Meanwhile, this phenomenon seems

to also reflect the present initial stage of E-commerce lifecycle in hospitality and tourism since
 organizations typically have to prioritize their stakeholders when initiating strategic and

significant new endeavors to ensure those that are most impactful for organizational survival are

satisfied (Chua et al., 2005; Jawahar and Mclaughlin, 2001).

Studies related to E-commerce performance in hospitality and tourism appear to have

focused primarily on social coordination (e.g., social media) and communication aspects (e.g.,

web interface), with relatively little attention paid to transaction based services such as online

payment. Issues of location- and situation- sensitivity appear to be also understudied. In

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addition, likely due to novelty and the explosive speed of popularity gains of mobile apps, only a

few studies in hospitality and tourism focused on services and products in the mobile app

domain. Relative to the large number of adoption studies, few studies explored E-commerce

performance issues of using mobile services. For example, in-store mobile services, such as the

apps created to enhance and support guest hotel experiences, have still not been well studied and

understood from an impact perspective.

Moreover, despite the surging interest in understanding the E-commerce performance impact

of OTAs (e.g., Priceline and Expedia), generic search engines (e.g., Google and Bing), and social

media platforms (e.g., Facebook and Twitter), studies in hospitality and tourism appear to only

slowly catch up with emphasis still placed upon various versions of IT adoption frameworks and

product attributes. The critical link between these E-commerce platforms and performance is still

missing or at best unclear. For example, the recent cry from hoteliers about OTAs burdening

hotel operation by heavy commissions has drawn considerable attention (Hotel News Now,

2015); however, the academic community has yet to offer a study explaining and tackling the

underlying mechanism and its intrinsic influence on performance.

 Another research area that appears lacking significantly in hospitality and tourism concerns

E-commerce driven decision making, which tends to bear significant direct and indirect

influence on performance. For example, even though decision making context has shifted from

quick and single-device-based to more integrated and multiple-synchronized-device-based

(Yadav and Pavlou, 2013), few studies in hospitality and tourism have approached and addressed

this area from either a theoretical or empirical perspective.

From a research design point of view, extant research related to E-commerce performance in
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hospitality and tourism predominantly employs surveys to collect data; relatively few studies are

conducted by secondary data analysis or experimental design. Two facts are noteworthy,

however. On the one hand, the emergence and explosion of big data provided much more

powerful analytical possibilities than ever before. All stakeholders of hospitality and tourism

organizations can use big data to improve predictions and decision-making processes. On the

other hand, experimental design is well known for its advantages on controlling for confounding

effects and isolating causality. Therefore, there appears to be more room for a diverse group of

studies that employ different research designs/methodologies to address both theoretical and

empirical questions related to E-commerce performance.

6. THEORETICAL IMPLICATIONS

Researchers have started to address the fundamental question of whether E-commerce

contributes to superior performance. For example, Kim et al. (2009) examined drivers of

individual E-commerce components, while Hua et al. (2015) tested the overall impact of E-

commerce on performance. It appears that the latest findings suggest that employing E-

commerce for strategic purposes contributes to achieving long-term competitive advantage; in

particular, E-commerce appears to be instrumental in improving customer satisfaction,

 managerial efficiency, marketing efficacy, and financial performance (Hua et al., 2015; Kim et

al., 2009).

In addition, broader as well as interdisciplinary implications follow from studies of E-

commerce performance in IT, performance analysis, marketing, and strategic management,

providing foundations for future studies examining consequences of strategic choices. For

example, Hua et al. (2015) made a contribution to the marketing literature by specifically

showing the manner in which combining various components of marketing strategies to form an
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overall strategy can help organizations increase revenue. On the other hand, specific manners in

which E-commerce contributes to performance were also revealed by recent studies, shedding

light on superior managerial decision making possibilities. For example, even though system

beliefs or desire of control tend to drive E-commerce deployment (Cohen and Olsen, 2013), E-

commerce’s contribution to room revenue provides an opportunity for managers to better

understand potential benefits of E-commerce adoption and, consequently, to make superior

decisions (Abou-Shouk et al., 2013; Hua et al., 2015).

Further fundamental and theoretical questions will likely be explored based on the proposed

framework of E-commerce performance, identified research gaps, and new research directions.

For example, different aspects of the framework (Figure 1) will likely be brought under scrutiny

to understand both their individual roles and mutual relationships against the backdrop of

improving E-commerce performance. Scholarly endeavors on E-commerce performance have

primarily focused on consumers and the organization(s) of interest in hospitality and tourism

largely because E-commerce still has a long way to reach its mature stage—maturity tends to be

positively associated with the resources that can be used to satisfy more stakeholders (Jawahar

and Mclaughlin, 2001). Along this line of reasoning, more studies will attempt to focus on many
 other stakeholders, such as governments, activists, environmentalists, technology acquisition

specialists, and venture capitalists, to understand their roles with regards to and impacts on E-

commerce performance.

7. PRACTICAL IMPLICATIONS

Driven by the need to create and maintain competitive advantages, E-commerce business

models have evolved over time to adapt to the dynamic market and to better produce and

implement E-commerce protocols within a “very competitive operating environment” (Hua et

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al., 2015).

Because E-commerce has become a necessity (Hua, et al., 2015), E-commerce performance

is critical to business survival and success. Web-based technologies and an E-commerce

environment have significantly transformed the competitive landscape in the hospitality and

tourism industry. With E-commerce’s global reach, companies can target a potential customer

market that covers the entire world. The non-stop availability feature enables transaction

opportunities 24/7 and offers unparalleled business information at all levels (e.g., B2B, B2C, and

C2C levels) (Morosan, 2014). The proportion of global population that has internet access

continues to increase from 15% in 2005 to 48% in 2014 (Internet Live Stats, 2014), which, when

properly explored, could offer companies great opportunities to improve business efficiency in a

number of areas, such as customer engagement, acquisition, conversion, and E-commerce

performance metrics, such as order value, order frequency, revenues per visit, and order

predictability (Gaffney, 2013). Brand awareness, therefore, follows, and online bookings could

increase (Hua et al., 2015).

The criticality of E-commerce performance has led IT developers to see the need and

demand of offering extensive E-commerce services, such as search engine optimization, social
 media, email marketing, paid search marketing, and customizable reservation systems (Gaston

and Botts, 2013), which in turn create more opportunities and vehicles for businesses to improve

their performance. It has led businesses to form specialized task forces to ensure execution and

improvement of their E-commerce strategies (Hua et al., 2015). For instance, by forming a

dedicated E-commerce team at the global level, Hilton Worldwide helps its properties to manage

and improve their websites and develops online performance analytics to ensure their strong

online presence (Hilton, 2014). Marriott has also started an E-commerce global activation
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summit.

The essentiality of E-commerce performance has led businesses to focus on further

understanding E-commerce behaviors of customers (Hua et al., 2015), since they evolve

continuously with increasing complexity along dynamic changes of business models and

practices (Pan et al., 2013). For example, consumers used to prefer websites of large online

travel agencies with familiar brands, typically featuring ease of use, playfulness, and usefulness,

around 2005 (Morosan and Jeong, 2008). But now they are using more mobile devices (Gaffney,

2013) for inventory access through “metamediaries” (Gaston and Botts, 2013), and paying

particular attention to automation of services and devices (SmartBrief Media Services, 2013).

Moreover, consumer behaviors appear to show more variations across different E-commerce

platforms, exhibiting characteristics of deeper fragmentation and a strong influence of search

technologies on consumers’ decision making process (Paraskevas et al., 2011). Therefore,

businesses as well as scholars in the tourism and hospitality industry should consider it critical to

introduce and assess E-commerce measures (Perlovich, 2013) while strategizing business

performance plans comprehensively (Boyd and Bilegan, 2003).

 Last, but not least, the cohesive framework of E-commerce performance derived from this

study offers industry practitioners an opportunity to have a holistic understanding on

determinants of E-commerce performance. In addition, the extensive content analysis and

synthesization update practitioners on current practices to improve E-commerce performance.

Findings of this study point industry practitioners to directions that can lead to better E-

commerce performance. For example, research on the mobile dimension appears to have lagged

behind the industry practices significantly in hospitality and tourism fields. Potential directions
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to explore matching app interface and function as well as achieving competitive advantages by

targeting niche markets could also be of great interests to practitioners.

8. FUTURE RESEARCH

Because of currently fragmented research on E-commerce performance in hospitality and

tourism, a stream of future research developing coherent themes and frameworks is more likely

to follow, particularly as E-commerce permeates businesses inside and out. From an E-

commerce performance perspective, studies are likely to explore the further impact of

relationships between all three domains of an organization: (1) the organization's external market

environment, (2) the organization’s internal optimal performance, and (3) flows between the

organization and its market environment. More in-depth theoretical building and empirical tests

are expected to focus on each of these three domains as well.

As the E-commerce life cycle evolves past the initial stage and into maturity, organizations

will adapt and evolve accordingly and accumulate more resources to satisfy more stakeholders

(Jawahar and Mclaughlin, 2001). As a result, scholarly endeavors on E-commerce performance

will also evolve from focusing primarily on consumers and the organization(s) of interest to

encompassing more constituents. For example, in addressing issues and questions related to E-
 commerce performance, corporate governance and market function can be further explored to

seek answers to questions related to criminals (e.g., unauthorized hacking to steal personal

information such as social security number) as well as competitors; E-commerce infrastructure

can be carefully examined to address and highlight the connection between

researchers/universities and the industry; and a variety of other themes such as acquisition,

evaluation, and public governance can be assessed to uncover solutions challenging to other

parties of interest such as technology acquisition specialists, venture capitalists, activists, and
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governments (Chua et al., 2005).

More targeted and specialized studies will focus on specific aspects of E-commerce

performance with in-depth analyses, considering current studies in hospitality and tourism tend

to be exploratory within the context of certain service category, such as mobile E-commerce,

online marketing, online data services, and social media marketing. For example, social media

integration into traditional distribution channels will continue to increase (Xiang and Gretzel,

2010). In particular, Facebook developed search tools that double as a distribution channel,

providing a natural context to further understand how to improve E-commerce performance from

marketing and revenue management perspectives.

Study scopes will expand further beyond foundational themes of defining, describing, and

exploring into modeling challenges and assessing determinants of E-commerce performance.

Success criteria and evaluation systems would be critical issues to explore in the future,

considering the motto of what gets measured gets done. Particularly, business models, systems,

and processes would draw more attention from both the industry and academia since they are

potential drivers of E-commerce performance. Although further examining outcomes of IT

adoption will provide an important complementary view and make a critical contribution to the
 literature on the institutional adoption of IT (Hua et al., 2015), future studies will likely cover

more diverse topics far beyond adoption as E-commerce evolves to incorporate more variations

and dynamics in hospitality and tourism organizations and markets.

Research design is likely to be more diverse and inclusive moving forward on the topics

related to E-commerce performance in hospitality and tourism, evolving to produce more studies

based on secondary data analysis and experimental design. Considering that big data has gained

significant momentum because of its vast information content, researchers are expected to
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discover more research interests utilizing secondary data to test theories and develop new

frameworks. At the same time, given the advantages of confounding effects control and causality

isolation and identification, researchers are also likely to explore more experimental design

possibilities.

Mobile apps will come under extensive study in the years to come since there appears to be

a significant gap between what’s being used in the marketplace and what’s under research. This

phenomenon is probably due to the explosive increase of mobile apps in a very short time

window, rendering many studies only “in progress”. Specialized apps that target niche markets

appear to form competitive advantages and deliver better performance, such as tripadvisor,

expedia, and priceline; while branded apps in hospitality and tourism appear to enjoy competitive

advantages over non-branded ones. More studies are likely emerging to further understand

reasons beyond the enhanced user experience from customized app interface and functions to

match services with the devices in hospitality and tourism.

The mixed findings of extant literature on E-commerce performance in hospitality and

tourism will be explored further since such inconclusiveness could result from a number of

possibilities, such as inconsistent methodologies, diverse research variable choices, measurement

 errors, and lack of a uniform theoretical framework. In addition, competing theories should also

be further explored to understand impacts of E-commerce against the specific backdrop of a

study. For example, it would be surprising to observe that the efforts exerted to developing

“storefront websites or mobile applications (apps)” often fail to improve consumer adoption that

brings in systematically more direct sales, without understanding that consumers may bypass

direct channels for relative benefits, such as ease of use and playfulness (Morosan and Jeong,

2008). As a result, measurement issues of effectiveness and specific causes of E-commerce

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performance need to be further addressed (Hua et al., 2015). Modeling impact of E-commerce

can also be extended into intangible dimensions to incorporate more performance measures such

as product or service quality, customer value-added, and customer loyalty; and to understand

which intangible benefits manifest themselves better from E-commerce infrastructure and

superstructure. Further, E-commerce orientation could be further explored, when confounding

factors are controlled for, to understand whether systematic company performance could follow

(Hua et al., 2015). Future studies will probably explore E-commerce performance further from

an external perspective, i.e., looking into impacts of external markets and political environment,

against a backdrop of potential industry differences.

9. CONCLUSION AND LIMITATIONS

Although much progress has been made in hospitality and tourism addressing E-commerce

performance, extant research remains fragmented, and many gaps need to be bridged. By

reviewing and synthesizing 155 recent articles, this study proposes a framework of E-commerce

performance to organize the complex literature parsimoniously. The framework is structured

around three major domains of an organization: (1) the organization's external market

environment, (2) the organization’s internal optimal performance, and (3) flows between the
 organization and its market environment, manifesting intrinsic, dynamic, and interactive

relationships that affect E-commerce performance. The proposed framework was used to identify

specific gaps in the literature and discuss opportunities that lead to future research frameworks,

theoretical developments, and emerging trends, in hopes of advancing scholarship as well as

practices in this increasingly more important area of E-commerce performance in hospitality and

tourism.

Key contributions of this study, therefore, can be summarized in four aspects. First, this
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study produced a cohesive framework of E-commerce performance based on an extensive review

of literature in both the mainstream as well as hospitality and tourism fields, addressing the issue

of currently fragmented understanding on E-commerce performance in hospitality and tourism.

Second, the proposed framework was used to identify specific gaps in the literature and discuss

opportunities that lead to future research frameworks, theoretical developments, and emerging

trends in this increasingly more important area of E-commerce performance in hospitality and

tourism. Third, the proposed framework would also shed light on industry practitioners with

regards to understanding determinants and being updated with current practices of E-commerce

performance. And fourth, findings of this study point practitioners to directions that can lead to

better E-commerce performance.

Proper caution, though, should be exercised when interpreting findings of this study because

of the intrinsic limitations associated with articles of the literature review nature--journal and

publication selection, timing and relevance criteria, as well as the researcher’s decision and

interpretation could affect generality of review papers.

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Figure 1: The E-commerce Performance Framework