18 Questions
What term describes the process where intermediaries are eliminated from a supply chain?
Disintermediation
What did leading travel suppliers develop in response to competition from online agents?
Ecommerce strategy
In which year did British Airways see a significant increase in the percentage of short-haul leisure flights booked online?
2004
How are language and cultural barriers being addressed in the context of electronic distribution channels?
Through globalization
Which type of transaction involves the direct sale of products or services from a business to consumers?
B2C transactions
What do industry alliances aim to do in the context of electronic distribution channels?
Strengthen the position of travel suppliers
What is the main emphasis of Opodo?
Airlines
How does Hotwire differ from Orbitz in terms of its business model?
Hotwire focuses mainly on airlines, while Orbitz offers a variety of travel products.
What technology is TravelWeb focused on?
Hotel reservations
What is a factor contributing to the decline of travel agents according to the text?
Globalization and internet adoption
How have customers viewed travel agents according to the text?
As interrupting rather than helping
What has accelerated the trend of declining role of travel agents?
Globalization and international integration of travel companies
What do we call the development of electronic means by existing players to communicate and transact?
Reintermediation
Which term refers to the emergence of new players using electronic means to add value and distribute tourism products?
Reintermediation
What type of transactions do traditional intermediaries like tour operators support through their internet presence?
B2B and B2C transactions
Which of the following companies have taken on the roles of both tour operators and travel agencies?
Expedia.com
Which term refers to the reduction in the number of intermediaries in a distribution channel?
Disintermediation
What do new entrants into the industry, such as Lastminute.com, do to capture market share and expand it?
Take roles of both tour operators and travel agencies
Study Notes
Reintermediation in Tourism
- Reintermediation refers to the development of electronic means of existing players to communicate and transact, and the emergence of new players that use electronic means to add value and distribute tourism products.
- This involves either a new electronic intermediary or new methods for existing channel members that use technology for eCommerce.
New Intermediaries in the Industry
- New entrants, such as Expedia.com or Lastminute.com, have taken roles of both tour operators and travel agencies, capturing a significant proportion of the market and expanding it.
- These new entrants have developed their Internet presence to support B2B and B2C transactions.
Online Search Engines
- New search engines, such as Cheapflights.com, Kelkoo.com, Mobissimo.com, Kayak.com, and FareChase.com, have been created to scan travel agents' sites, airlines, and car rental agencies to find the best prices.
- These search engines scan around 150 travel sites, including those of low-cost airlines, which rarely show up on GDSs and travel portals.
Impact of eCommerce on Distribution Channels
- eCommerce enables both principals and intermediaries to develop eCommerce strategies and adopt a variety of electronic distribution channels.
- In response to competition from online agents, leading travel suppliers developed their eCommerce strategy to attract direct sales.
Examples of Industry Alliances
- Orbitz, created by five American airlines, offers airline-focused products, as well as hotel and car hire.
- Opodo, formed by nine European airlines, offers a variety of travel products with the main emphasis on airlines.
- Hotwire, which follows the Priceline technique, offers products from the same segments as Orbitz.
- TravelWeb, developed by five major hotel chains and a reservations technology provider, focuses on hospitality products, offered mainly by hotel chains.
Future of Distribution Channels
- The future of distribution channels needs to be discussed alongside the application of ICT to evaluate how electronic channels will affect the future of tourism intermediaries and what strategies for survival should be.
Decline of Travel Agencies
- The role of travel agents is predicted to decline due to the ease of finding information about destinations and suppliers globally.
- Internet adoption, globalization, and international integration of travel companies have accelerated this trend.
- Travel agents have demonstrated a flexible approach to changes in the past.
Explore the concept of reintermediation in the context of tourism distribution channels, focusing on the emergence of electronic intermediaries and new players in the distribution of tourism products. Understand how existing channel members adapt to electronic means to add value and improve distribution.
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