Disintermediation and Reintermediation of the Travel Agents
TABLE OF CONTENTS Page
1. Introduction 2 2. Disintermediation and re-intermediation of the travel agents 3 3. Travel agencies responses to a challenging market 6 4. Conclusion 8 5. References 9
1. INTRODUCTION
Nowadays, the travel distribution channel is very complex and characterized by the presence of many different kind of intermediaries which operate in a very competitive market.
Since the beginning of the travel industry, intermediaries have always played an important role for the development of tourism products and services. Indeed, intermediaries have the ability to organize and aggregate a large amount of data into one price. Moreover, they have a fundamental role for counseling and delivering a personalized service according to the specific need of customers (Kracht and Wang, 2009).
Before the advent and further development of communication technology, the market was dominated by the large suppliers such as airlines, hotel chains and resorts. Travel agents were the conventional intermediaries which were independent from each other and represented a portion of the dominant players in a non-competitive market (Gharavi and Sor, 2005).
Later on, with the high spread of ICT and the need of cutting costs the position of the travel agents has been threatened. New kind of middlemen emerged adding additional layers of intermediation, disintermediating certain players by bypassing the traditional intermediaries (Buhalis and Law, 2008). Technology has also allowed suppliers to directly communicate with consumers who have seen their choices enormously increased. This has increased the competition and the complexity of the market and has raised an important issue for the presence in the market of traditional travel agents.
The aim of this paper is to investigate how disintermediation and re-intermediation have affected the way travel agents operate and whether there is still a place and a
1. Introduction 2 2. Disintermediation and re-intermediation of the travel agents 3 3. Travel agencies responses to a challenging market 6 4. Conclusion 8 5. References 9
1. INTRODUCTION
Nowadays, the travel distribution channel is very complex and characterized by the presence of many different kind of intermediaries which operate in a very competitive market.
Since the beginning of the travel industry, intermediaries have always played an important role for the development of tourism products and services. Indeed, intermediaries have the ability to organize and aggregate a large amount of data into one price. Moreover, they have a fundamental role for counseling and delivering a personalized service according to the specific need of customers (Kracht and Wang, 2009).
Before the advent and further development of communication technology, the market was dominated by the large suppliers such as airlines, hotel chains and resorts. Travel agents were the conventional intermediaries which were independent from each other and represented a portion of the dominant players in a non-competitive market (Gharavi and Sor, 2005).
Later on, with the high spread of ICT and the need of cutting costs the position of the travel agents has been threatened. New kind of middlemen emerged adding additional layers of intermediation, disintermediating certain players by bypassing the traditional intermediaries (Buhalis and Law, 2008). Technology has also allowed suppliers to directly communicate with consumers who have seen their choices enormously increased. This has increased the competition and the complexity of the market and has raised an important issue for the presence in the market of traditional travel agents.
The aim of this paper is to investigate how disintermediation and re-intermediation have affected the way travel agents operate and whether there is still a place and a
References: The success of internet in this respect, is perhaps due to the nature of the tourism product, which is a little more than an information product, easy to convey through the web (UNCTAD, 2000; cited by Anckar, 2003). Anckar, B. (2003) “Consumer Intentions in Terms of Electronic Travel Distribution”. E-service Journal, Vol. 2, No. 2, pp. 68-86 Anckar, B Bennet, M. and Kevin Lai C. W. (2005) The impact of the internet on travel agencies in Taiwan. Tourism and Hospitality Research, Vol. 6, No. 1, 2005, pp. 8-23. Buhalis, D. and Licata, M. C. (2001) The future eTourism intermediaries. Tourism Management, (2002) 207–220. Available at: www.elsevier.com Cheung, R Chircu, A. M. and Robert Kauffman, J. (1998) Strategies for internet middlemen in the intermediation / disintermediation / reintemediation cycle. The International Journal of Electronic Commerce and Business Media, 9, 2, 1999, pp. 109-117 Doherty, N eMarketer Inc (2005) “Travel Agencies Online Report”. http://www.emarketer.com Gharavi, H Harris, L. and Duckworth, K. (2005) Travel agents future. Published online in Wiley InterScience. Available at: www.interscience.wiley.com Hoontrakul, P Huang, H. H. et al. (2006) Exploring Customer Satisfaction, Trust and Destination Loyalty in Tourism. The Journal of American Academy of Business, Cambridge, Vol. 10 Knight J Law, L. and Lau, W. (2004) A Study of the Perceptions of Hong Kong Hotel Managers on the Potential Disintermediation of Travel Agencies. The Haworth Press. Available at: http://www.haworthpress.com/web/JTTM Law, R Law, R., Leung, K., and Wong, R. (2004) “The Impact of the Internet on Travel Agencies.” International Journal of Contemporary Hospitality Management, pp. 100–107 Lawton , L