Online Competition in the Distribution Chain

Abstract

Until recently, travel agents have been the principal intermediary between travel suppliers and consumers, with information as their primary trade. However, changes to information and communication technology (ICT) and the beginning of the internet have the potential to allow travel suppliers and consumers to interact directly. Today, consumer websites that integrate global distribution systems (GDSs) are no longer only an emerging threat but show fierce global competition between travel agencies and tour operators worldwide. Subsequently, one of the most pertinent questions today is how local, small-scale travel agencies respond to these market changes and what practices do they use to maintain their comparative advantage and offer competitive services? However, despite the relevancy of this issue, literature is generally scarce on travel agency strategies to confront the competition of consumer websites. Thus, in order to address this question, this article provides an analysis on the advantages and disadvantages of new technologies are available to travel agencies and strategies and practices that travel agencies can use to compete with websites.