Travel Reference
In-Depth Information
use the Internet as a way to bypass product and service intermediaries and deal directly with
consumers. The airlines have been a leader in aggressively using e-commerce.
In 1995, low-fare carrier Southwest Airlines was the first to provide customers with schedule and
fare information on the Internet. This marked a signi cant departure for the air industry, which had
been limited almost exclusively to central reservation systems (CRSs) for the electronic distribution of
information. The Internet and e-tickets became a natural combination as airlines added online booking
in 1996. At first, airline booking site development was slower than that of the leading online travel
agents, Expedia and Travelocity. Soon, airlines realized they could reduce distribution costs and have
direct contact with consumers. The major carriers built powerful Web sites where passengers could
make reservations, review frequent- yer accounts, and check on the status of flights. As a result,
airline online bookings increased, as did the depth of information airlines were able to collect on
customers. Such information gave the airlines a marketing advantage in creating direct relationships
with consumers. The relatively low cost of e-mail marketing enabled the airlines to contact customers
more frequently and less expensively than through the mail.
The low-cost carriers in the United States and around the world have been leaders in the use of the
Internet and will continue to do so to keep their distribution costs low. The major carriers have
followed, aggressively promoting direct booking on their Web sites.
In parallel with airline Web site development, online travel agencies invested large sums to improve
their sites and presence. Since 1995, a number of online booking and fare search sites have appeared
(and disappeared), disseminating almost unlimited information on any possible destination and thus
creating more interest in travel. Consumers search for information and book online to make travel the
most successful commercial sector on the Internet. Surveys show the public perceives that the lowest
airfares are on the Internet. As the Internet
reputation grows, air market
share will continue to shift away from traditional travel agents and be booked directly.
The Internet has become the distribution channel of choice for the airlines, and they are
aggressively pushing sales on their own sites. Airlines have grown their share of direct online
distribution from less than 3 percent of passenger revenue in 1999 to more than 30 percent today.
Traditional travel agents will continue to compete for sales with airlines sites and online agencies.
Although this explains some major reasons why there has been a decrease in the number of travel
agents, they have not gone away and are still a major distribution channel for travel. They will maintain
that position as long as they continue to deliver valuable service and save clients time and money.
Skilled travel agents are still the best choice for complex travel arrangements.
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s
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easier and less expensive
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The Travel Agent versus the Internet
The Internet is no longer an emerging channel, but a major channel
with half of travel
in the United States now booked online. Consumers have a choice. They can make their own bookings
on the Internet, or they can use the services of the travel agent and they are choosing the Internet. For
simple, easy-to-make transactions and attractive travel opportunities, the Internet is a powerful tool.
It can increase the scope and reach of a consumer
a juggernaut
s efforts and allow a person to check hundreds of
options or research destinations in depth. But to make the Internet work effectively, a person has to
understand where to look and what questions to ask; otherwise, hours can be wasted sur ng the Web.
This is where a travel agent can save clients a lot of time and effort.
Because of the expertise of travel agents, many customers may save time and achieve savings that
more than cover the cost of service fees. Agents have superior knowledge of the industry and are aware
of various alternatives that provide lower fares that the average consumer is unaware of. Agents are
more likely to know enough to check alternative airports and departure times. Agents can search the
Internet as well as their CRS for low fares, and they typically have specialized Web search tools that
make searching more ef cient. Perhaps the greatest advantage is that once a booking is made, travel
agents continue to manage the customer
'
s travel, serving as an alert system, troubleshooter, and
customer advocate when supplier problems occur. The Internet can be a valuable resource, but it
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