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Tourism distribution on the internet

Tourism distribution on the internet. 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

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Tourism distribution on the internet

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  1. Tourism distribution on the internet

  2. 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

  3. 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

  4. 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?

  5. European online market

  6. 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

  7. 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

  8. 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

  9. So much choice- who do you trust?

  10. 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

  11. Or your mates? • User-generated content (Web 2.0) • Harnessing the collective intelligence (O’Reilly) • Websites relying on users, not businesses or experts, to provide the material • YouTube, Wikipedia

  12. 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.

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

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

  15. 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

  16. How do the traditional operators fight back?

  17. 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

  18. 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

  19. On-line marketing

  20. 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-tracking

  21. 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

  22. 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

  23. Exchange level • interactivity • Emotional attractiveness • entertainment value

  24. Relationships on-line • Communication • information • dialogue • Differentiation • exclusive content and services for subscribers • Personalisation • using cookies to recognise and personalise • Reward

  25. 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

  26. Disintermediation Depersonalisation Commoditisation Customer control of contact and content or re-intermediation or customisation or value-added differentiation or customer contact management Effects on the value chain

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

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