The internet has provided opportunities for travelers to book their travel directly online thereby circumventing the traditional travel channels i.e. travel agencies. Nowadays even airlines have started encouraging travelers to book tickets directly on their websites thus avoiding having to pay 10% commission to the travel agents. Thus it has made it an urgent need for traditional travel agents to find new methods and strategies to stay in business (Yamanouchi, 2004).
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While serving as an intermediary channel between travelers and travel service providers, what the internet has done is to eliminate the relevance of the traditional intermediary (travel agents) or at the very least make that traditional role very different in today’s practice (Taylor, 2003). Today, would-be travelers can arrange for their own travel by booking straight from the providers themselves via the internet (Law, Leung & Wong, 2004). Online travel websites more or less eliminates the need for traditional middlemen, who as Law, Leung & Wong (2004) notes; are debatably on the verge of extinction.
Internet mediation may ultimately lead to disintermediation of travel agencies since the travel service and product providers can sell their services and products directly to the travel clientele. Yet, the internet and its travel websites does not portend only doom for the travel agents. Travel agents still have the advantage of providing personalized services especially in offering advice to travelers with a personal touch. This ability to make services personal will guarantee that the role of travel agents remains secure. (Law, Leung, & Wong, 2004).
The internet has become a distribution channel in the travel industry such that the role of traditional intermediaries like travel agents has also changed. Yet rather than be patients of the internet, travel agents have seized the opportunity to employ the internet in their daily operations. Travel agents are using the internet to market themselves and to advertise their services. They are also offering some of their services online (Vrana, & Zafiropoulos, 2004).
The travel agents themselves have found it easy to make arrangements and bookings over the internet for their clients thus reducing their operational costs. The internet adoption among travel agents has made their services more efficient and timely and gaining a reliable means of communication with their contacts and clients (Vrana, & Zafiropoulos, 2004).
Literature Review
How Travel Agencies Take Advantages of the Internet and Avoid Its Negative Effects on Their Business
Travel agents are nowadays using the strategy of ‘If you can’t beat them, join them’. They have started using the internet to their own advantage by using the internet to market their own services online and by contacting travelers via their own websites. They also provide services that travel sites cannot provide like personalized services and complex travel arrangements and iteneries (Vrana, & Zafiropoulos, 2004).
Travel agencies also nowadays focus more on building lasting relationships rather than trying to maximize their profits. They do this by providing quality personalized services. This is a strategy adopted by most travel agencies in Japan (Zhang, 2004).
By so doing, travel agencies are today exploiting the internet opportunities such as virtue communities, to build what travel websites cannot, personalized relationships with clients (Maurer, 2002). This way, they can exploit the benefits that come with the internet, and avoid losing their role in mediating travel, by making their services uniquely personalized. Travel agents form networks, create newly branded travel services, exploit the internet to market themselves, get specialist packages and products unveiled by online agencies and seek to provide consumers with competitive deals if they have to survive (Downes, & Legg, 2006).
Why People Book Over the Internet
Customers mainly book over the internet since it is convenient, cost saving, and resourceful. It is more accessible and less expensive. Travelers also can compare the various rates offered by different service providers and thus make a much more informed choice. Online service providers offer more competitive rates and better discounts due to the low operational costs. Customers can also access extensive amount of information on the internet. It is also very useful for working professionals who do not have time to go and meet travel agents to make their travel plans when they can just do their booking when they are at work or at home (Heung, 2003).
Customers also have the opportunities of learning more about the places they are visiting from the internet and thus able to book hotels online. The bottom line that one is able to make all arrangements needed before traveling without involving any intermediary as long as he or she has access to internet. The advent of internet has also been coupled with people acquiring personal computers and internet providers thus bringing the technology closer to the people (Lewis, Ira, Semeijn, Janjaap, Talalayevsky, & Alexander, 1998).
Why People Book with Travel Agents
The main reasons why customers book via travel agents are the security concerns (credit card scams), interpersonal communication i.e. face to face transactions, human contact in transactions, and ability to make custom made travel packages as opposed to by travel websites (Vrana, & Zafiropoulos, 2004).
Travel agents are able to make all arrangements for their clients unlike in travel websites for example hotel bookings, sightseeing bookings, airport drop and pickup, and flight tickets, something they might not be able to or might lack the time to do (Buhalis, & Licata, 2002). Most clients who go to travel agents are also those who want to build relationships with their travel facilitators and those who need the guarantee of human element in transactions (Cheyne, Downes, & Legg, 2006).
There are some circumstances where by customers are left with no choices other than using the agents. This happens mostly in situations whereby one has to pass through different destinations. It is very hard to do several online bookings when one is traveling as it means dealing with many different entities. When one has to pass through different destinations, it is easier to use the international agents who have offices in different places around the world. By doing this one is able to deal with one company because he just have to state his or her demands to the agent and all his needs will be taken care of. (The Travel Insider, 2010).
Repeat Clients in Online Booking
Customers will go to the same website and online portals or directly to particular service providers using the internet if such providers have created brand name of products, built global marketing, have lower cost due to discounts, facilitates labor saving means and if they have standardized processes, products and service delivery (Vrana, & Zafiropoulos, 2004). Improved service delivery and competitive website features are the main ongoing preferences for online service providers in Hong Kong (Chu, 2001).
Another reason why customers repeatedly use one online service provider is that they were initially satisfied with the service that was provided and do not want to research another serviced provider (Cheyne, Downes, & Legg, 2006).
Repeat Clients for a Travel Agent
Customers mainly repeatedly book via travel agents due to the relationship that they have built with that travel agent (Vrana, & Zafiropoulos, 2004).
Therefore travel agents in Japan are using this strategy of building lasting relationships with customers to improve business rather than just focusing on maximizing profits by trying to attract more customers (Zhang, 2003).
If a customer is satisfied with a travel plan that a particular travel agent has made for them they prefer using the same travel agent to make all their future travel plans. Therefore providing good quality service also generates repeat clientele for travel agents (Wyne et al., 2001).
Demographics Characteristics that Predetermine Online Booking and that of Travel Agency Booking
The choice of internet and travel agent booking is influenced by sex, age, education, income, and occupational characteristics of customers (Furr, & Bon, 1998). Studies indicate that internet bookings are mainly made by females aged between 21 and 30, educated and earning high incomes and working in education related professions who prefer commercial lodgings during travel and who predominantly prefer to travel by air (Heung, 2003).
On the other hand the demographics of non- internet travel agent users is mainly married men traveling with families on a long vacation from medium earning brackets aged between 36 to 45 years. This is mainly because when traveling with families travel agents can provide much more extensive information on the types of hotels and which types of hotels offer certain types of services and also they provide information on the different types of sightseeing options and which one would suit the family’s requirements best (Heung, 2003).
Effects of Airlines on Internet Bookings
The industry of travel agency involves communication and processing information of its clients. Initially, the agencies had access to details of flights so the customers had no alternative. The fact the airlines are able to do their advertising online and directly to the customers and the customers are able to apply for their travel tickets online has affected the travel agencies a lot. It is also of paramount importance to note that airlines have realized this trend and have thus reduced fares, as they no longer pay the commissions they used to pay the agents (Bennett, Marion, Lai, Chi-Wen, & Kevin, 2005).
The customers needs have also changed significantly in their demands due to the development in IT since one is able to learn all the exotic places there are to visit at the touch of a button. It is more convenient for a customer to do his or her research at the convenience of his or her sitting other than going to an agent. It is worthy noting that it is cheaper to book online since one will be dealing with the airline directly without involving an intermediary. The airlines are also happy to serve their customers directly for they will be able to understand their needs more. The advent of the internet technology gave the airlines an opportunity to be close to their clients and they realized that the need for an intermediary is not that important. (Frias, Rodrígueza, & Castanedaa, 2008).
It is important to note that a minute means a lot in the amount one may pay for an air ticket since the fares change from time to time. When one is passing through many points, it is less demanding to use the agent for they will be able to fix his or her time according to the lowest fares possible. By doing this you end up saving money and time since you will be having someone who will be taking care of your travel plans. When one is doing booking, it is important to do research so as not end up paying more than what he would have paid through an agent (Farooqui, 2010).
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