The effects of Disintermediation and Re-intermediation on travel agents
This report will discuss about how travel agents market is influenced by disintermediation and re-intermediation and what is the impact on industry and travel agencies. The travel industry, is the substance in the sphere of information technology, is beyond any doubt a fascinating area in terms of the options given by Internet. One of the considerable increses in electronic market is travel bookings noted by Berstein and Awe, 1999 (cited by Bill Anckar, 2003) and likewise ’’the use of Internet by prospective travelers to research and plan their trips has proliferated.’’ (Smith 2000) therefore a specific example of a tumultuous consequence on the new technology is the travel industry.( Harris, L. and Duckworth, K, 2005). Over the years the Internet has rapid become an outstanding new channel for customers needs. Information and communication technology progressions has elaborate the tourism distribution system with different substitutions by adding extra ‘’layers of intermediation’’ (Kracht and Wang, 2009), supporting what Buhalis and Law, (2008) were saying: substitute the conventional intermediaries by making a direct link between suppliers and consumers supplied by technology. Furthermore, it is also necessary to define re-intermediation process or cyber-mediation defined by Bennet and Buhalis, 2003(cited by Bennet and Lai, 2005) as ‘’ the utilization of ICT and internet tools for the development of either new intermediaries that enable them to re-engineer the tourism distribution channel’’. In other words the Internet introduces possibilities to travel agents for defining their position in the distribution chain. Consumers, through the use of the Internet will become more self-sufficient in the service delivery process. The way we do business it will be changed, as well. Consequently, the Internet will affect the way consumers develop expectations. Ultimately, the role of travel agent will change and move from a commission based revenue to more of a fee based service (Samenfink, 1999). In order to discuss about the topic of this paper it is necessary to look first at the roots of the travel agents, to describe their role on travel industry and how they were affected by technology and therefore the need to reposition in order to survive in E-business world. The second section will critically examine the effect of disintermediation and re-intermediation on travel agents. The final section of this paper concludes with a short summary regarding the consequences of technology on travel agencies and as well some recommendations.
The role of the Intermediaries
The role of the travel agents was indispensible for suppliers and travel agencies claimed Dolnicar, S., and Laesser, C., 2007 (cited by Cheung and Lam, 2009). The travel agent is the person responsible with the arrangements in terms of tickets for hotels, resort accommodations, transfers of passengers, prepare itineraries, arranging business travels and in addition they need to check and verify the way the jobs are done in an agency. According to Heng-Hsiang Huang and Chou-Kang Chiu (2006) the travel agents are important for developing relationships with the clients. The authors states that in tourism industry, customer loyalty is an essential feature for agency profitability and moreover for customer retention. (eg. Crossby et al, 1990) In the study by Gharavi H. and Roger M.D. Sor (2004) they stated that, in the past the principals players in travel industry were the suppliers of tourist products whereby they are represented by travel agents. Travel agents are people with standard rules, operating in most of the situations in small businesses. The authors also mention about how expensive were airlines software in that time, for having their own suppliers, it was required a huge investment in technology and in training the personal. Disintermediation
Over the years,...
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