THE IMPACT OF INTERNET ON TRAVEL AGENTS

The Impact of Internet on Travel Agents

Table of content

Table of content2

Chapter 1: Introduction3

Aim and objective5

Chapter 2: Literature Review6

The growth of the Internet and disintermediation in the travel industry6

Chapter 3: Methodology9

Research setting9

Sample characteristics10

Factor analysis10

Chapter 4: Result and discussion13

Positive influence of Internet benefits on service bonds and social bonds13

Negative influence of Internet barriers on service bonds and social bonds14

Significant influence of interactional benefits on switching costs15

Strong effect of service bonds, social bonds and switching costs on customer loyalty16

Business performance is an outcome of Internet use to build customer relationships and loyalty17

Types of travel business influence business performance and loyalty differently17

Managerial implications18

Chapter 5: Conclusions23

References31

Appendix40

Chapter 1: Introduction

The rapid growth of the travel industry requires sophisticated information technologies (ITs) for managing the increasing volume and quality of tourism traffic. Prior studies have indicated that modern travellers demand more high quality travel services, products, information, and value for their money (Christian, 2001; Lubetkin, 1999; Samenfink, 1999). The emergence of new tourism services and products, coupled with a rapid increase in tourism demand, have driven the wide-scale adoption of ITs in general, and in particular, the Internet as an electronic intermediary. In other words, the Internet serves as a new communication and distribution channel for e-travellers and suppliers of travel services and products. This new channel also enables tourism businesses to improve their competitiveness and performance.

Tourism researchers have emphasized the importance of the Internet on travel and tourism. For tourism suppliers, the Internet provides a way for them to sell their products globally to potential travellers at any time. These suppliers can remotely control their servers to display information on services/products at an electronic speed (Inkpen, 1998; Law, 2000). The successful factors for a travel Web site, from a supplier's perspective, are lower distribution costs, higher revenues, and a larger market share. For travellers, the Internet allows them to communicate directly with tourism suppliers to request information, and to purchase products/services at any time and any place (Olmeda and Sheldon, 2001).

To the extent that the Internet enables e-travellers to easily arrange and purchase their own services/products, the future of travel agencies - the traditional intermediary - becomes uncertain. In the travel and tourism context, the topic of disintermediation, i.e. the elimination of the middleman by using the Internet in the traveller-agent-destination/supplier network in the travel industry, has been debated by different tourism researchers. To some researchers, the accessibility of online travel Web sites reduces the importance of travel agencies, and might ultimately result in travellers bypassing travel agencies altogether (Buhalis, 1998; Barnett and Standing, 2001). However, Palmer and McCole (1999) and Walle (1996) argue that a key strength of travel agencies is their ability to provide personal information and advice to travellers continuously. The role of travel agencies would consequently remain secure if their advice-offering capability were strengthened by the presence of the Internet, rather than if they functioned according to the more negative image of being simply a “booking agency”. While some tourism researchers have investigated the views of ...