The Impact of the Internet on Travel Agencies in Taiwan

Abstract

Travel and tourism-related products and services are highly compatible with the internet with the result that travel and tourism is one of the highest revenue-generating sectors of the internet. The rapid growth of the internet is having an impact on the distribution of travel services and has heightened speculation about the potential for disintermediation of the travel agent. This research investigates the impact of the internet on the distribution of travel services and the extent to which it has influenced travel agencies by focusing on Taiwan, a technologically advanced country and one which has witnessed rapid growth of the internet. Employing a combination of a quantitative questionnaire administered to 438 travel agencies and personal in-depth interviews, the research found that travel agencies in Taiwan generally regard the internet as an effective tool for their business. Most agencies have adopted the internet in their daily operations and some have provided e-commerce services on the internet. Although travel agencies are affected by e-commerce services, the effect is not found to be significant. Equally, no significant difference was apparent between company size and classification in terms of the effect of ecommerce travel services on travel agents. Travel agencies agreed that commission cutting by suppliers was a threat but disagreed that disintermediation would occur, although booking offices were seen to be at risk. The research identified two principal future roles for travel agents: first, the need for them to reposition themselves as travel consultants and secondly, the need for them to become more technologically orientated. Finally, seven key strategies were suggested for Taiwan's travel agencies to ensure survival.