How Can Tour Operators Use the Internet to Overcome the Problems of Intangibility and Perishability in Selling Holiday Packages?

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Tourism is an information-intensive industry and is said to hold together different components belonging to the travel industry, such as airlines, travel agencies, attractions, car rental and several other aspects (Poon, 1993). The main objective of a tour operator is to combine these components to create a holiday package. With the advent of the internet, tour operators can now expand their activities and make available relevant information, conquering new customers (Wyner, 2000). However, in order to do so effectively they have to overcome the problems of intangibility and perishability. As a service industry, most tourist products are intangible services, they are experienced and cannot be touched, tasted, smelt or seen and therefore are difficult for tourists to grasp and evaluate. Being the most frequently cited characteristic of a service, intangibility emphasizes that it is not an object and has no physical dimension. While purchasing a product, the consumer might be able to see, feel and test its performance before purchase. With services, the consumer greatly relies on the reputation of the service firm. These immeasurable concepts have the potential to influence consumers' opinions and expectations of quality. (Ruiz, 2003) Perishability, on the other hand, refers to the concept that services, unlike tangible goods, cannot be stocked or stored. It is linked to the notion of inseparability or simultaneity in that services must be provided and utilised at the point of consumption, during the service encounter. The inability to store services is an important characteristic of most service operations. Vacant hotel rooms, empty airline seats and unfilled appointment times for a doctor are all examples of opportunity losses. The perishability of services has repercussions for both service providers and customers, for service providers it creates the problem of synchronising supply with demand, i.e. the management or scheduling of service capacity. In the...
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