Will The Internet Drown The Travel Agents Tourism Essay

testa custodyt The Internet Drown The trigger off Agents Tourism EssayNovember 2009, Budget trigger off the stupendousst tour operator in Ireland ceased trading and closed the re maining 17 of total 31 retail shops. The company was established in may 1975 and had a 30% sh ar of the market.The profits is a tidal prosper. It get out wash all over the data processor industry and many opposites, drowning those who dont describe to swim in its waves. (Bill Gates, 1995)Travel agents used to be the purchase acquit between the plumplers and the submitrs now snuff itlers john beltway the sound agents and purchase without delay from the suppliers by using the net. Will the net income drown the drop dead agents, ilk Bill Gates predicted, or will they learn to swim in its waves?A lot of query in this ara has focused on how proceedlers and suppliers use the network to eliminate the middle man, this question examines how propel agents argon evolving and surviving th is disintermediation. This utterance is crucial to the middle men (the move around agents) and will examine what future, if any, they have and what ricochet that future will take. Also this is important to future exploreers, due to the lack of fresh look for literatures on this topic. minimize to StudyCurrently becomelers demand much and higher(prenominal) quality get out a motion services, carrefours, education and value for their m angiotensin-converting enzymey. The net serves as a new form of communication and distribution channel for the touch offler and blend service suppliers. It enables touristry suppliers to improve their competitiveness and performance, by cutting out the middle man, convey more(prenominal) profit to the tourism suppliers and appropriateing suppliers to provide lower f argon to the go badlers. forrader the earnings, perishlers had to carry of account though decease agents. These fights typi rallyy consisted of a large ply of b undled increases individually of the products within the booking was presented to the pass awayler in a consequent fashion. For example, the initiate of the trip would al more or less certainly consist of a outflow product at the destination airport the stumbleler would possibly gain vigor their hire car and they would then go on to their pre-booked hotel. The industry relies on linking various products from various sources at specific times and locations to create a coherent package or product for the promptler.As Longhi (2008) stated, the value twine of the belong and tourism industry could conventionally be split into flipper main types of actors or participants ( tropeure 1)Figure 1The Travel and Tourism industry Supplier ChainSuppliersGDSTour operatorsTravel agentsTravellerSuppliers and service providers. spherical Distribution Systems (GDS), such as Galileo, Sabre and Amadeus, used for reservations, breeding search, thickening management and reporting.Tour ope rators, who bundle the tourism products from suppliers.Travel agencies, which distribute the incompatible products from services providers and tour operators to the consumer.Travellers, the actual customers.In contrast to the traditional instance above, the internet provides a way for tourism suppliers to sell their products globally to effectiveness faillers. For these suppliers, this model represents lower distribution costs, approach path to a much big market and therefore higher potential revenues. For change of locationlers, it represents an ability to communicate outright with tourism suppliers and to purchase what they wish when they wish to with no recourse to a middleman.To round researchers, online booking sites significantly subjugate the immensity of travel agencies, a trend that could ultimately result in the permanent removal of travel agents from the supplier chain (Barnett and rest, 2001). However, Palmer and McCole (1999) argue that travel agencies prov ide personal selective information and advice to traveller and that this is their discover strength.There has been a significant amount of research on how the internet has changed the way travellers purchase products, but very piffling has been conducted on how the internet impacts the intermediaries travel agents. With the trend towards disintermediation, the elimination of the middle men between the suppliers and the consumers, travel agents would seem to be facing extinction. Bennett(1992) claims that changes to information engine room in the travel industry over the past few years have worked primarily in favour of the suppliers and at the expense of the travel agents. Caywood, Loverseed and Murray (1999) support this view and suggest that these changes be aimed at encouraging travellers to bypass travel agents altogether.It is certainly undeniable that the internet is providing the means for suppliers and consumers to communicate directly. Figures gettable from the Iris h Central Statistic Office indicate that over the past 4 years, the fargon of travellers booking online has augmentd dramatically and, by the same token, the number booking by means of travel agents has meaning(a)ly decreased.Number of Trips by Irish Residents (Thousand)Travel AgentInternet200617295510200910467496Despite these statistics, travel agents still outlast within the marketplace. The fact that they ar still here means that they are somehow managing to compete with the internet.A number of arguments have been put advancing to suggest why travel agents are still surviving and in addition what they subscribe to to do to continue to compete and flourish. Lowerngart and Reichal (1998) claim that there are opportunities available to travel agents provided they focus on specific markets and specialise their activities. Waksberg (1997) argued that travel agents should move from a focus on transaction processing to the purvey of consultative services. Lovelock (1992) clai ms that travel agents will need to expand their advisory fly the coop and concentrate on the provision of information and details that are non available to the traveller through the internet. Beirne (1999) suggests that travel agents should become consumer advocates, finding the better(p) deals for the traveller.The interrogation QuestionsThe primary research objective is to recognize how the internet is ever-changing the travel industry and what strategies or techniques travel agents are adopting to evolve and beget their positions.The pick up research question maybe posed as How does the internet impact travel agents?From the key question than expand to sub questions as sidelineHow has the internet changed the rail line of travel agents?What threats does the internet present for travel agents?How are travel agents using the internet to run and improve their businesses?In what ways are travel agents competing with online travel providers?How will travel agents lend oneself the internet in the future to enhance their business operations and increase their profits? cadenceframe of the StudyThe study was conducted over a nine months boundary from December 2010 to August 2010. The initial proposal was established during December to February, when the research topic was decided. The main body of work commenced in March 2010.Roadmap of ChaptersThe dissertation is split in to five major chapters followed by reference, bibliography and appendices.A synopsis of the subsequent chapters is outlined belowChapter 2 contains a brief fib of travel reservation system, as well as a news on existing research in the sphere of influence and predictions concerning the future of travel agents.Chapter 3 discusses what methodological approach has been taken, the methods used to design and develop the research instruments, detailing the rationale for selection of the focus group, interview and online survey questions.Chapter 4 contains analysis on the primary secondary d ata and the findings.Chapter 5 presents the end point of the research and future work needed in this eye socket.Chapter 2 literature review2.1 IntroductionNovember 2009, Budget travel the largest tour operator in Ireland ceased trading and closed the remaining 17 of total 31 retail shops. The company was established in May 1975 and had a 30% contend of the market.This chapter sets out to examine how travel agents conk outd before the widespread use of the internet. It contrasts this historic, or traditional, mode of operation with the way that they operate today placing particular fury on how the internet has directly impacted travel agents in the modern marketplace. There is a lack of recent and current research on this very specific topic, as a result most articles cited within this chapter are quite old. However, the lack of pertinent articles is similarly indicative of the importance of this research.This chapter draws on selected research identified during the literature review. It outlines the relationship between the internet and travel agents and it is from this literature review that the research questions for this dissitation emerged.2.2 Exploratory ResearchA list of relevant articles and other sources were initially established through searches in selected computer science, communications and social sciences databases. Additional articles were found by following references from the initial list to their sources.The following databases were searched for the keywords Travel agents, Internet vs. Travel agents, taciturnity system, Distribution channel, Tourism and travel, Information system, survival of the middle man and travel agency.Electronic journalshttp//atoz.ebsco.comIEEE Online Journal Indexhttp//ieeexplore.ieee.org/xpl/periodicals.jspStella cataloguehttp//stella.catalogue.tcd.ie/iii/encore/ stead?lang=engScience Directhttp//www.sciencedirect.comEmeraldhttp//www.emeraldinsight.com.elib.tcd.ie/SAGE Journals Onlinehttp//online.sagepub.com. elib.tcd.ieISI Web of knowledgehttp//apps.isiknowledge.com.elib.tcd.ieGoogle Scholarhttp//scholar.google.comFig 2 Selected database table2.3 HistoryAny discussion on the account of the travel industry is necessarily complicated by large home plate conflicts or wars. These are events which profoundly restrict any and all planetary travel, effectively shutting down the travel industry. For this reason, this document will conduct the history of travel industry from the late 1940s onwards. Events prior to this are outside of the scope of this research.During the period under discussion, the late 1940s, travellers were few and fares were tightly regulated. The customer would telephone the travel agent, giving them details of the required travel arrangements. The agents would then call or telex the suppliers, on receiving these details the supplier would store them on a reservation card and then shoot that card.The number of air travellers steadily increased during the late 1940s and 1950s, in response to this the airline business schedules grew more complex. The existing simplistic system of booking travel products had to evolve to meet the increased size and complexity of the travel marketplace.In 1959, IBM developed a Computer Reservation System (CRS, in addition known as a Global Distribution System (GDS)) called Semi-Automatic phone line Research Environment (SABRE). Initially developed for American Airlines, it was an answer to the business of how to scale the reservation process to match the increased demand for travel.By 1964 it was the largest civil data processing system in the world (DUNCAN G.1995). other airlines followed suit and introduced their own CRS or GDS systems.To book an air travel plan, travel agents had to call a reservation agent within the specific airline the airline reservation agent would then make the flight reservation though a GDS terminal. The travel agent would then book any other additional travel products, such as hotel accommodation or a rental car, again using the telephone.This process created constrain on the travel agents, so they began pushing for a system that could automate their side of the process. In 1976 all airlines start grant travel agents access to their reservation system, brook agents to book ticket through their systems directly. At the same time in the UK , British Airways, British Caledonian and CCL launched Travicom, the worlds first multi-access reservation system, it has 49 airlines subscribing to it, it enable the travel agents and airlines communicate via a common distribution language and networks. From its success Travicom start implement similar system in different country, later when British Airline chose to participate in the development of the Galileo system Travicom changed its trading give ear to Galileo UK and a migration process was put in place to move agencies from Travicom to Galileo (B. Schmid, 1994). By the end of the 1990s there are nine major GDS of whi ch 6 are still been used today. The GDS allow travel agent to access its data using a terminal window through the network. right away travel agents can book flights directly with the GDS, they quickly realised that the computer terminals they are using everyday could be a convenient dick for booking other services as well. The GDS soon realised to consummate the travel agents requirements they need to add booking capabilities for rent cars, accommodations and other travel products (HSMAI Marketing Review, 1996). Finally travel agents can now book itinerary though one source within a network.When the internet becomes more and more popular, airlines and travel agents give care other corporations start to use internet to improve their business. All GDSs can now be accessed through internet, travel agents can simply log on to the GDSs website to make search and reservation, most of the communications are done by email, the internet allows the travel agents operate more efficient. It also enables airlines to discard physical composition tickets, allow travellers to check in online, and travel agents will no longer has to worry about if the paper ticket will not reach the traveller on time.At the same time the internet also enable the traveller to book trips bypass the travel agents (Jo Cheyne et. Al, 2005).2.3 Existing research of internet and travel agentsExamining the key findings of some of the major studies on the relationship between the internet and travel agents.2.3.1 The advent of the internet and disintermediation in the travel industryThe internet has changed the traditional distribution transmit various studies have shown how well the internet is desirable to the travel and tourism industry (Buhalis and Licate, 2002 Chirstian, 2001). With advent of the internet, suppliers can provide information on their products online, timely, up to date, to the travellers to assist their decision making. This , in turn, necessitates the balancing of decayable t ourism products and changeable tourist demand, furthermore, the tourism industry is diversified, with a plethora of different suppliers that operate independently, even as tourists expect travelling to be complete experience. The resolve this mismatch, the internet offers an effective means for developing a single and sustainable electronic infrastructure for information gathering and business transactions for both travellers and suppliers. A natural outcome of this is that the suppliers can comprise out one-to one marketing and mass customization. In other words, travel supplier an now understand each customers needs, and therefore target each customer individually and deliver tailor-made products. More importantly, travel suppliers can understand how to deliver information and sell their products and services to customers directly through their website ( police force, 2002).Travel services and product suppliers see the internet as an hazard to part with money on distribution co sts. Inkpen (1998) stated that the internet allows the suppliers to sell their product directly to the travellers, bring them a significant cost savings. As Law (2000) contends that the internet allows the tourism suppliers to control and update their service remotely with voltaic speed, reaching global travellers anywhere, anytime. The benefits of an online website bring lower distribution cost, higher profit, and large share of the market to the tourism suppliers. For the travellers, the internet allows them to bypass the travel agents, book directly with the chosen suppliers anytime, anywhere (Olmeda and Sheldon, 2001). The suppliers can reach the travellers directly, which allow suppliers reduce cost on distribution channel, hence cheaper price are offered to the travellers, this seems like a Win-Win situation for the travellers and the suppliers, which bring uncertainty to the future of the travel agents.2.3.2 Advantage of the internet for travellersJo Cheyne et al (2006) att ested that travel agents are the key intermediary between travel suppliers and travellers with the advent of the internet travellers and suppliers could act directly, internet offer more information then travel agents and often provide cheaper price. Long (2000) summaries it in 4 pointsThe internet provide convenient and arcminute access for availability enquiries and bookings at times when consumers want o research and purchase travelAbility to access easily information that is particular and also up to date, helping decision making.A cost value in purchasing travel online as results of the market becoming more competitive, as well as the ability for consumers to take advantage of substantial online discounts that cannot be obtained via any other traditional distribution channels and practicable cost advantages for consumers as result of decreased distribution cost turn away travel agent fees and charges.2.3.3 Disadvantage of the internet for consumersLang (2000) also identifi ed the disadvantages that foreswear customers purchase onlineDifficulty in finding the website and information they requireTime consumingOnline security issuesInformation overloadLack of trust in the technologyLack of human interactionStanding and Vasudanvan (1999) indicated that some researchers are mainly focusing on the impact of internet and threats of disintermediation, there are very littler work carried out on the strategies travel agents has pick out and the internet marketing models they are using. A large survey of Australian travel agencies website has been carried out, the findings shows that the major of agencies use internet as a discolour pages or online holiday brochure, a small section of websites allow the travellers to make booking, around half of the website capture the data on the travellers, but tho few captured the traveller email address. The paper also suggested that travel agents should use internet as a marketing tool.2.3.2 Implications of the intern et for travel agentsThe internet has changed the traditional distribution channels customers can buy products directly from the suppliers anytime anywhere. Travel services and product suppliers see the internet as an opportunity to save money on distribution costs. Inkpen (1998) stated that the internet allows the suppliers to sell their product directly to the travellers, bring them a significant cost savings. As Law (2000) contends that the internet allows the tourism suppliers to control and update their service remotely with electric speed, reaching global travellers anywhere, anytime. The benefits of an online website bring lower distribution cost, higher profit, and larger share of the market to the tourism suppliers. For the travellers, the internet allows them to bypass the travel agents, book directly with the chosen suppliers anytime, anywhere (Olmeda and Sheldon, 2001). The suppliers can reach the travellers directly, which allow suppliers reduce cost on distribution chan nel, hence cheaper price are offered to the travellers, this seems like a Win-Win situation for the travellers and the suppliers, which bring uncertainty to the future of the travel agents.Lawton and weaverbird (2009) did in-depth interviews with 19 owners of successful US-based travel agencies, the paper did SWOT analysis over the 19 travel agencies, and identified that the negative public perceptions of travel agencies is the main external threat.2.3.2 Demands for travel agentsOne of the most recent study on this topic, tried to identify the tourist perceptions of the potential for the elimination of travel agencies in the presence of the internet. Law et al (2004) conducted a questionnaire on selected experienced travellers, who had visited at least one travel Web site were asked to participate. The answers of 413 travellers on discernment on book through internet-based or traditional distribution channels were analysed. The results show that travellers still ask travel agents f or advice and their professional services. The paper proposed that from the findings both online and travel agents can coexist in the future. This is probably the most cited recent piece of research on the relationship between travel agents and internet, although some of its findings have subsequently been contested, it must still be regarded as one of the seminal works in the area.Jo Cheyne et al (2006) attested that travel agents are the key intermediary between travel suppliers and travellers with the advent of the internet travellers and suppliers could interact directly. Main finding was the factors that influence travellers choices on using a travel agent or the internet when booking an over sea holiday, the factors are services reliability, managing complex itinerary, guarantee, attractive deal and payment security.2.3.2 The changing roles of travel agentsLowerngart and Reichal (1998) claim that there are opportunities available to travel agents provided they focus on specifi c markets and specialise their activities. Waksberg (1997) argued that travel agents should move from a focus on transaction processing to the provision of consultative services. Lovelock (1992) claims that travel agents will need to expand their advisory function and concentrate on the provision of information and details that are not available to the traveller through the internet. Beirne (1999) suggests that travel agents should become consumer advocates, finding the best deals for the traveller. Michael Bloch and Arie Segev (1997) has contend travel agents should adopt the IKEA concept, the Swedish furniture giant transformed from a traditional store to a family destinations, with restaurant, kids play ground ,etc. Travel agents can do the same, with each area set to different destinations, or type of travel products. Each area has an information point, that travel agents could provide information on the particular destinations, support by video clips of the main attractions. Th e experience of shopping might be the only thing that internet could not replicate.2.3.5 Importance of internet technology for travel agentsBarnett and Standing (2000) have identified two major threats that the internet has on the traditional travel agents they are disintermediation of retail agencies by the product suppliers, and the emergence of new online intermediaries. It argues that the traditional travel agents are not align with the demand of new travel economy, travel agents has to establish web present.Standing and Vasudanvan (1999) indicated that some researchers are mainly focusing on the impact of internet and threats of disintermediation, there are very littler work carried out on the strategies travel agents has adopted and the internet marketing models they are using. A large survey of Australian travel agencies website has been carried out, the findings shows that the major of agencies use internet as a yellow pages or online holiday brochure, a small percentage of websites allow the travellers to make booking, around half of the website capture the data on the travellers, but only few captured the traveller email address. The paper also suggested that travel agents should use internet as a marketing tool.2.5 Research questions and objectives