Tourism distribution on the internet

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Tourism distribution on the internet
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Changing channels?See Cooper and Lewis in
Buhalis and Laws

• New media
• disintermediation?
• new virtual travel agents?
• budget airlines and hotels as an alternative to
  the traditional package
• or the same vertically integrated operators
  offering mass customisation

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Internet penetration globally

• In US, Japan and Northern Europe around 70 of
  the population is already on-line
• The growth is likely to come from
• Brazil 15
• Russia 20
• India 7
• China 9
• www.internetworldstats.com

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The Impact of the Internet UK

• 61 of the population have access (Mintel 2006)
• 75 for ABC1s under 55 years
• Half of these have browsed holiday/travel sites
• 35.1 of consumers booked their last holiday on
  the internet in 2005, an increase of 12 points
  from 2000.
• Better informed customers
• Dis-intermediation or Re-intermediation?

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European online market
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The top fifteen travel sites Europe 2005

• Expedia
• Viamichelin
• TUI
• Lastminute
• SNCF
• Trip Network
• Deutsche Bahn
• Easyjet
• Opodo
• Ryanair

• Hotels.com
• Ebookers.com
• Thomascook.com
• Travelocity
• Yahoo Travel

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New gateways for travel and tourism information
and bookings

• Airlines
• individual airline sites
• their affiliate networks easyjet.com
• Sites owned by airline consortia opodo, orbitz
• Hotel sites sites of individual hotels, groups or
  consortia
• Bed banks hotel booking companies Utell, Hotel
  Connect, Hotelopia
• Destinations sites run by national, regional or
  local tourist offices
• On-line travel agencies Expedia, Travelocity
• Review sites Tripadvisor
• Late booking sites lastminute.com, Cheap Flights

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New entrants offering travel booking

• Portals travel pages of internet service
  provider portals Yahoo, Orange
• Vortals travel pages of specialist portals
  tennis.com, igolf.com
• News media On-line newspapers and other media
  telegraph, guardian, cnn
• Auction sites eBay, Qxl
• Social networks Facebook, mySpace, WAYN
• Adapted from Buhalis 2003

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So much choice- who do you trust?
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The big brands?

• The traditional tour operators Thomas Cook?
• The ones that spend most on advertising
  Expedia?
• The ones linked to a brand you know?
• Affiliate networks white-labelling
• Including content from another provider on
  webpages with your brand Easyjet

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Or your mates?

• User-generated content (Web 2.0)
• Harnessing the collective intelligence (OReilly)
• Websites relying on users, not businesses or
  experts, to provide the material
• YouTube, Wikipedia

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Tripadvisor

• 15 million travel reviews
• 25 million users a month
• an affiliate network of leading on-line travel
  agencies, tour operators, airlines and hotel
  groups.
• TripAdvisor is owned by on-line travel agency
  Expedia, Inc.

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Social networks

• On-line communities created by viral
  recommendations
• Often linked by some shared value
• Communities of consumption (Cova)
• E.g. Facebook travel groups

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WAYN

• Where are you now?
• Community-based website where you can log your
  trips, see whos there and make new friends
• 11.4 million members
• Travel companies can advertise on WAYN or use
  WAYN information on their sites

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A new distribution network
Airlines Global Distribution System
Hotels
Friends
Destination Management System
On-line agency
Social network
Attractions
Tripadvisor reviews
Customer
Youtube videos
Maps from Google Earth
Satnavs
Aggregated content
SMS
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• How do the traditional operators fight back?

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Dynamic Packaging

• Dynamic packaging is a travel industry term for a
  more flexible way of booking a holiday. Instead
  of offering customers a set package off the page
  of a brochure, the agent or operator assembles
  the elements of the holiday to meet the
  customer's requirements.
• By using 'bed-banks' - companies that offer a
  database of hotel rooms at a discounted rate -
  the agents can match the prices of traditional
  tour operators while achieving better profit
  margins for themselves.
• For an example of a bed-bank company
• see www.travelberry.co.uk

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Why the tour operators will survive

• Customers with busy lives value the convenience
  of a one-stop-shop for all their travel
  purchases
• Faced with a bewildering choice, consumers value
  the reassurance provided by a well-known brand
• Suppliers value the efficient access to wide
  consumer markets provided by intermediaries
• The purchasing power and marketing spend of the
  large consolidated companies continues to give
  them a competitive advantage over their smaller
  rivals

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On-line marketing
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The uses of cyberspaceAngehrn 1997
Virtual Information Space
Virtual Communication Space
Web pages Product info Price Availability
Advertising Email Message boards
Virtual Transaction Space
Virtual Distribution Space
E-commerce Orders Payments
Downloads File transfers Fulfillment Order-trackin
g
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Search engine marketing

• Keyword analysis
• what words do potential customers use?
• optimise the site design to ensure high listing
• Paid placement
• Pay per click
• bidding against competitors for highest listing
• Domain names
• see www.webgravity.co.uk

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Web site designwww.insites.be in Pelsmacker

• How do you judge a good website?
• Content productivity
• relevant, up-to-date, meeting needs
• Browse efficiency
• ease of navigation
• Design efficiency
• interpreted and understood correctly

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• Exchange level
• interactivity
• Emotional attractiveness
• entertainment value

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Relationships on-line

• Communication
• information
• dialogue
• Differentiation
• exclusive content and services for subscribers
• Personalisation
• using cookies to recognise and personalise
• Reward

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On-line communitiese.g.user forum, message board

• Customer to customer communication
• added value for the website user
• Viral marketing
• feedback
• PR vehicle not an advertising medium

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Effects on the value chain

• Disintermediation
• Depersonalisation
• Commoditisation
• Customer control of contact and content

• or re-intermediation
• or customisation
• or value-added differentiation
• or customer contact management

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• De Pelsmacker et al (2001) Marketing
  Communications Prentice Hall
• Cooper and Lewis in Buhalis and Laws Tourism
  Distribution Channels