Advantages and Disadvantages of Direct Selling: Perspectives of Both Tourism Operators and Tourists

Topics: Disintermediation, Travel agency, Travel Pages: 7 (2147 words) Published: September 11, 2008
The growth of the internet has made direct selling easier and faster for both tour operators and tourists. According to Frost (2004) the fascination with new technology has changed the way tourism providers interact and trade with their customers. The primary focus for this essay is to discuss the advantages and disadvantages of direct selling for travel and tour management. In this essay, the perspectives of both tourism operators and tourists will be considered. This essay will be presented in four sections. The first section will outline direct selling and identify the users of direct selling. The second section will discuss the advantages and disadvantages for a tourist using direct selling. The third section will discuss the advantages and disadvantages for a tourism provider using direct selling. Finally, the essay will be concluded summarising the key advantages and disadvantages for direct selling.

In the past, travel agents have been an intermediary for tourists and tourism sellers. Travel agents have been used by tourists to access a wide range of tourism service providers; likewise tourism providers have used travel agents to gain access to numerous customers (Frost, 2004). Due to the extreme competition in the tourism industry, tourism providers are looking to cut costs in order to win over customers with lower prices. This is currently being done by cutting down on the commission costs payed to intermediary such as travel agents and introducing direct selling. In recent years the rapid growth and vast accessibility of the internet has allowed the transition to direct selling to take over. The internet creates availability and accessibility for tourists and tourism providers to do business while providing equivalent information at a lower cost than a travel agent can (Bennett & Lai, 2005). Moreover, Frost (2004) identifies four methods of direct selling other than the internet where tourism businesses are able to get in contact and do business with tourists, these include: use of the telephone, increased use of credit cards, the development of call centres and the development of customer loyalty programs. Each of these function have the ability to facilitate direct selling and put the tourism seller directly in touch with the purchaser. However, for many tourism businesses, airlines in particular, the internet has become the primary method for direct selling (Law & Leung, 2000, as cited in Frost, 2004)

Tourism businesses are generally able to easily create their own websites on the internet to attract, interact and make transactions with potential tourists without using an agent. According to Bennett and Lai (2005) the internet has given tourism providers such as hotels the opportunity to cut out intermediaries by providing facilities for direct booking via their websites. Hotels and airlines are service providers who make notable use of direct selling over the internet. According to Howard and Harris (2001) travel products are one of the most popular products and services available on the internet as they do not require the customer to feel, smell, try on or test before purchasing and the product does not need to be sent to the buyer. Many tourism businesses provide the opportunity to purchase tourism products or services directly via their websites.

A study by Dolnicar and Laesser (2007) revealed that 64.4% Swiss tourists purchase tickets for scheduled flights departing from local airports directly from suppliers in comparison to 35.6% who purchase from travel agents, similarly only 33.2% of Swiss tourists purchase tickets for ships and cruises from travel agents. This data shows that many tourists are moving away from the traditional use of travel agents and further towards direct purchasing. Webber and Wesley (1999) found that the types of tourists most likely to be using the internet to purchase directly form tourism sellers are usually between the ages of 26 and 55, have high incomes, are...

References: Bennett, M. M. & Lai. C. K. (2005). The impact of the internet on travel agencies in Taiwan. Tourism and Hospitality Research, 6(1), 8-23.
Frost, W. (2004). Travel and tour management, Melbourne: Hospitality Press.
Howard, J. & Harris, R. (2001). The Australian travel agency (3rd Ed.). Roseville, N.S.W: McGraw-Hill Book Company Australia.
Dolnicar, S. & Laesser, C. (2007). Travel agency marketing strategy: insights from Switzerland. Journal of Travel Research, 46, 133-146.
Webber, K. & Wesley, R. (1999). Profiling people searching for and purchasing travel products on the World Wide Web. Journal of Travel Research, 37, 291-298.
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