Internet technology has revolutionized tourism and travel industry. In traditional airline system, there were several limitations. Traditional airline service providers relied on agents who acted as intermediaries in the system.The travel agent had to purchase client’s travel requirements in a number of ways; either the travel requirements would be obtained from a wholesaler, direct with the supplier or through GDS. The whole process of organizing the travel package was cumbersome. Information is the bulk of the products in travel industry. Traditionally, the travel agent offered a location where the supplier could showcase their products. Information was not readily available to the public. In most cases, only the travelagents had an access to information on travels. Before the invention of internet technology, most of the airlines were controlled by travel agencies. Nevertheless, internet use has gained wide applications in various fields including transport and tourism(Huggins, 2002). In this essay, the focus is on analyzing the contributions that internet use has brought in travels and tourism. In other words, this paper presents an essay that analyzes the changes that have come to effect on tourism due to internet use.
Various airline websites have been established since 1996. There has been a shift towards the provision of direct online consumer services. Sabre became the first GDS to launch the first website called Travelocity.com. Following this website was Expedia.com that was launched by Microsoft Company. Amadeus.net and trip.com were developed in 1997 and 2000 respectively.
Internet use has impacted significantly on travel and tourism system. There is a wide range of application of internet in the travel and tourism system. In other words, traditional travel and tourism system is fast changing due to the internet use. It is worth mentioning that business strategies are changing to fit the varying patterns and methods of distribution (Garkavenko, 2007). Travel industry in the past days, before the invention of internet services, was difficult to manage especially when dealing with international travels. Distribution of the products and services used to be hectic and expensive before the advent of the internet. Therefore, experts have relentlessly engaged in research efforts to come up with suitable means of reducing the cost of distributing of services and marketing at the global levels.
Secondly, internet technology has led to the creation of travel websites. Consumers have, therefore, been given access to the company travel services without having to follow several logistics and processes. The airline companies are able to establish stronger relationships with their clients directly. So to state, internet technology in the travel industry has made it possible to establish Business-to-Consumer, B2C distribution that was nearly impossible to have in the traditional system. According to Nick Mudge, 2001, a direct relationship with the clients is one of the most valuable distribution chains. The benefits accrue not only to the service providers but also to the customers. Through the internet enabled B2C distribution, consumers have the opportunity to access a wide range of information.
In addition, internet technology has transformed the traditional system making it possible for the consumers to compare the travel fares, make their bookings online and make the payment online. It is noteworthy that service in the travel industry is intangible and the only means to get quality service is to have the information on the available services and their costs. Internet technology gives power to the consumers to choose from the available options. This power by extension has helped the airline and travel industry to expand their marketing capacity. In other words, internet technology in the travel industry makes distribution easier and at cheaper cost.
A shift to embrace modern technology has an impact in a number of ways on the traditional systems. The use of internet has implications on the traditional airline distribution systems. One of the most obvious impacts is the loss of business to the consumer direct channels. Internet technology has helped in the establishment of B2C distribution channels. The implication is that the traditional distribution system has lost the business to a modern system. So to state, the traditional system does not have the capacity to compete the internet based distribution channels.
As observed in the traditional distribution systems, there were agents that had to be paid commissions in their bid to play their part as intermediaries. However, the internet led to the development of consumer websites that have given the consumers direct access to information. The impact of this direct link is that the suppliers no longer pay the commissions to agents, but if any, then the levels paid has significantly reduced. Precisely, the internet technology can be seen to be a good substitute to the intermediated traditional systems.
It is notable that the traditional travel systems are rapidly changing to be in correspondence to the new methods and developments. There are notable changes that have transpired in various aspects of the traditional travel system. Various countries all over the world are putting substantial efforts in research and development to transform their traditional travel system to be in line with the needs that are emerging in the tourism industry. The need to develop more consumer oriented service in the travel industry has made different countries discussed in this discourse to adjust their traditional systems. There are specific examples that are discussed below.
The tireless efforts by the US Airlines to come up with alternative ways of distributing their products via the internet necessitated significant changes in their traditional airline system. Different airlines in the US joined hands to develop a consumer website (Berners-Lee, 2001). American, Continental, Delta, Northwest and United Airlines jointly created Orbitz travel website to enable their clients to gain direct access to information without having to involve the intermediaries. This website that was created by the aforementioned airline service providers mainly targeted consumers directly. Consequently, American Airlines were able to establish B2C channel that provides the consumers direct access to the vital information they may need in order to make informed travel decision.
Elsewhere in Asia or the Pacific region, 15 major airlines that operate in the region also joined hands and developed Zuji consumer website. It is known to be a comprehensive consumer website that serves consumers within the region. It is notable that Orbitz Model became the basis from the development of Zuji in Asia. However, the initial motive for the creation of Zuji was to help in eliminating potential competitors. It was designed to give the airline operators within the Pacific region to enjoy a competitive advantage.
New Zealand has also not been left behind in a bid to transform the traditional travel system. Different airlines operating in New Zealand have mapped different strategies to be able to compete effectively in the airline industry and travel service provision. One of the most notable steps in the New Zealand was realized on 2001 October when NZ reported substantial losses associated with the collapse of Ansett Australia (Sharma, 2002). Consequently, the NZ government chipped in by given financial support to help in transforming the traditional business model. Remarkable changes were realized in the New Zealand airline industry in 2002. Among the changes include; changing the fare structures and the launching of Domestic Express, product simplification to allow online booking, e-marketing strategy, cutting of commissions and base travel agents and change of ownership of most airline firms in New Zealand. The government has become actively involved in the running of the airline industry.
In 1972, the United States came up with Value-Based Airline Low Cost Carriers. This service mainly focuses on simplifying the services in order to provide simple, reliable low cost travel services to the clients. In order to achieve this goal, Southwest simplified the service in a number of ways. Some of the areas that they considered include; introducing fewer fares, ensuring all time service, reduced the rules, introduced call centers, cutting of travel cost by reducing the level of reliance on travel agents. Later on, other airlines firms adopted the Value-Based Airline systems. They include Ryan Air, Easy Jet, Virgin Group among other international airlines.
The changes that have dominated the face of travel industry are rapidly influencing the stakeholders. It is important to underscore that stakeholders such as retail travel agencies and supplier have a lot to consider in order remaining competitive(Collier, 2011). Otherwise, they may be rendered jobless. Current changes were seen in the travel industry demand a lot from the stakeholders. To begin with, internet technology has empowered the consumers to access the valuable information that they need in order to make sound travel decision. Customers are, therefore, accorded an opportunity to compare the travel fairs offered by different service providers so that they can book online and make their payment online. The trend is headed towards online trading(Garkavenko, 2007).
In the light of this era of consumer empowerment, wholesalers have to avail and increase their presence on the consumer websites. So far, consumers have websites that allow them to inquire for any information regarding travel services. The horizontal integration, therefore, needs to be coupled with B2C distribution model(Collier, 2011). To the wholesalers, dealing with the consumer directly may be challenging. Unlike the traditional business model, wholesalers now have to consider establishing lasting and enduring relationship with consumers or else, their service may be rendered irrelevant.B2B Model is slowly being replaced by the new system that advocates for B2C(Huggins, 2002).
Another group of stakeholder that is affected directly by the changes that are underway is the GDS companies. The GDS have to look for new ways of maintaining their market share in the fast changing business environment. As hinted earlier in the discourse, most airline companies are on the verge of trying to reduce the cost of GDS in the process (Mudge, 2001). There is a need to adjust IT efficiency by the GDS to be able to serve both the travel agency and consumer websites. Perhaps, GDS may take up the role of the wholesalers in service provision.
The impact on the retail agencies cannot be taken for granted. They are equally affected by the current systems that are emerging with the new technology. Must the retail remuneration be sustained alongside the pay for service model (Laverty, 2012)? One of the most perplexing impacts is the level of complexity associated with the emerging systems. Retail Agents, therefore, have to adjust to comply with the new requirements that are arising. There is a need to mainstream the services such as cruising in the main pipeline of service provision. Retailers need to beware that the number of intermediaries in the service provision are slowly being reduced to enable the consumers have direct access to services(Collier, 2011).
As such, retailers have to make new strategies in compliance with the needs to the internet oriented services. There are various strategies that retail agencies may adopt to make them remain competent. One of the most outstanding strategies that retailers are adopting is the building of the relationship with customers. For instance, most retail agencies are now providing services that meet the needs of the customers or beyond their expectations(Jean-François, 2013). Another strategy is the introduction and promotion of one-stop-shop through the provision of information, planning, booking, personalized documentation, foreign exchange, visa and passport, insurance and tax (Christiansen, 2014). All these service are provided in one shop. Retailers have also changed their attitude towards internet technology. They no longer perceive internet as a threat but rather an opportunity to improve the services to the consumers. Retailers have established website that enable them to serve the consumers more effectively. For instance, Stella Travel Services retail brands has the following websites; www.unitedtravel.co.nz, http://www.harveyworld.co.nz and http://www.thetravelbrokers.co.nz/. The establishment of the retail websites comes in handy to enable the retailers to cope with the modern travel systems.
The efforts made by the various stakeholders to cope up with the rising changes in the travel sector have significant benefits. According to Nick Mudge, 2001 Business-to-Consumer distribution model is beneficial not only to the stakeholders but also to the consumers. Firstly, the new model enables the stakeholders to establish lasting relationships with their customers (Mudge, 2001). Once the consumers develop confidence in the services provided by the stakeholders, they will be willing to pay for the cost of travel without a lot of struggles and bargains (Jean-François, 2013). Secondly, it is easier to ensure customer loyalty through the constant presence of the stakeholders on the consumer’s websites. Besides, the new model makes easier for the stakeholders to have their clients aware of their range of services without incurring high costs of promotion (Collier, 2011). Through the use of the consumer websites, the stakeholders are able to inform their customers on the rules and policies that apply in their services.
Travel and tourism industry is very dynamic. Service providers must, therefore, endeavor to improve their efforts in coping with the changes in tastes and preferences of the consumers (Huggins, 2002). The next generation consumers have a wide range of information from the internet on modern services. The consumer websites offer the consumers the power to compare the fares and services available. Generation Y is described as a generation that require instant services (Garkavenko, 2007). They are known as “I want it now generation.” Meeting the needs of this generation is very challenging. Service providers need to restructure their strategies to enable them serve the interests of the future generation.
In the travel industry, internet must remain the main channel of distribution for the airlines. The future generation is more acquainted to the use of internet technology. Therefore, they can be served effectively via the internet (Scowsill, 2014). Moreover, it is anticipated that the future generation will have more female travelers then the male counterparts. The implication is that travel services must be fitted with facilities and equipment that are suitable to the needs of the female travelers. In other words, the one size fits all will be irrelevant. The demands posed by this anticipated generation require that facilities that are gender sensitive are installed in the airline facilities (Jean-François, 2013).
The use of internet in booking and payment is taking trends. Most customers are easily accessed via social networks, consumer websites, emails and other online service networks. Promotion of the services and communication with the traveler is best done via the internet (Collier, 2011). This is the reason most modern airline companies are establishing their own consumer websites to keep them abreast of the changes and needs.
In conclusion, it is important to acknowledge the fact the invention, and the use of internet services in the travel and tourism industry has transformed the traditional travel systems. As mentioned earlier, traditional travel system was limited to B2B distribution model but with invent of the internet, the focus has changed to B2C (Christiansen, 2014).Most airlines have created consumer websites to better their services to the clients. As a result, consumers now have direct access to important information that they need to help them make informed travel decisions. Consumer is now able to check available travel spaces; fares do the bookings and make online payments (Jean-François, 2013). It is projected that the next generation is a more complicated generation that can best be served online. Therefore, most service providers are gradually changing their strategies to meet the needs of the forthcoming generation.
References
Berners-Lee, T. H. (2001). The semantic web', Scientific. American, , vol. 284, no. 5, pp. 34-43. .
Christiansen, K. (2014, March 26). A Look at Global Travel Trends. New York Times , p. 15.
Collier, A. (2011). Principles of tourism: A New Zealand perspective 8th Ed. . Auckland: Pearson Education New Zealand Limited.
Garkavenko, V. &. (2007). ICT and the travel industry: Opportunities and Challenges for New Zealand Travel Agents. In W. M. Pease, Infromation and Communication Technlogies in Support of the Tourism Industry (p. 5074). doi: 10.4018/978-1- 59904-159-9.ch003 .
Gray, C. &. (2000,). The impact of information and communications technologies in EU rural areas, Small Business Research Trust. Cheshire: Knutsford.
Huggins, R. &. (2002). The digital divide and ICT learning in rural communities: Examples of good practice service delivery', . Local Economy, , vol. 17, no. 2, pp. 111-22. .
Jean-François, R. (2013, March 1). Be a Responsible Company. Retrieved from The Code: http://www.thecode.org/?gclid=CjgKEAjwtZucBRD77aiiq_v4xnASJABkAg8JSe19APTmittCoDDCMuSW06TW9eMdfRoFczVPWGF0efD_BwE
Laverty, S. (2012, June). Impact of Technology on the Travel Agency Business. Retrieved from Houston Chronicle : http://smallbusiness.chron.com/impact-technology-travel-agency-business-57750.html
Mudge, N. (2001). Impacts of Information Technolgy on Travel Services . Retrieved from Tourism New Zealand: http://www.tourismnewzealand.com/about-us/contact-us/contact-persons/nick-mudge/
Scowsill, D. (2014, March 20). Global Travel Industry and What Individual Nations Can Do to Help It Grow. New York Times , p. TR3.
Sharma, P. C. (2002). National online tourism policy initiatives for Australia. Journal of Travel Research, ., vol. 39, no. 2, pp. 157-62.
