Abstract
Information and communication technology improvements have challenged the organized and stable network of airlines, global distribution systems (GDS) and travel agencies. In Brazil, traditional travel agencies have faced significant challenges in maintaining their businesses because airlines have forced disintermediation by cutting commissions and reduced distribution costs by selling their product directly through airline websites. This study explores the existence of strategic groups in the Brazilian travel agency market to elucidate how they interact with GDS and other travel agencies to maintain and improve their market position. A latent class analysis model was applied to a sample of 4,288 travel agency points of sale located in Brazil. The study results identified groups with members that exhibited similar behaviors in their relationships with GDS and other travel agencies. The study findings do not support claims regarding the demise of the travel agency business model.
Highlights
Over the last few decades, the travel agency industry has seen dramatic improvements in airline reservation processes due to information and communication technology (ICT) enhancements that motivated the transition from manually collecting pricing and availability data to the current state-ofthe-art integrated systems that simultaneously obtain and compare booking information for multiple airlines
The latent class model was used to identify and analyze the different strategies adopted by travel agencies in the Brazilian market in regard to the geographic capillarity of their points of sale, the number of airline bookings they generated and their association with global distribution systems (GDSs) as well as examine the complex relationships of collaboration and competition among participants in this chain
The market for Brazilian travel agencies primarily consists of micro and small businesses that are associated with larger agencies that have bargaining power with both the GDSs and the airlines
Summary
Over the last few decades, the travel agency industry has seen dramatic improvements in airline reservation processes due to information and communication technology (ICT) enhancements that motivated the transition from manually collecting pricing and availability data to the current state-ofthe-art integrated systems that simultaneously obtain and compare booking information for multiple airlines. ICT improvements have contributed to both the intermediation and disintermediation currently occurring in the tourism market (more analysis in Figueiredo, Gomes and Farias (2010) about Brazilian hotels and Abou-Shouk, Lim and Megicks (2016) on travel agents in Egypt) This situation increases the uncertainty of the complex travel agency business environment, which involves numerous parties who provide an enormous array of different products and services. To contribute to our understanding of the disintermediation process promoted by the airline industry to reduce distribution costs, this empirical study used latent class analysis to analyze data regarding airline bookings created and/or canceled at 4,288 points of sale (POS) for 2,342 different travel agencies in Brazil. The concluding section describes the analysis of the study results and the relationships and strategy of each group
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