Disintermediation of travel industry

January 28, 2007 lilmiche

In our seminar we looked at the disintermediation of travel industry.

We found that travel agents in the high street are moving to the internet, but people still use the high street, we thought that this was because of the security issue, people often find getting an expert to organise thier holiday safer than the internet. But sites like expedia and lastminute are still travel agents, but are purely online.

The internet has now given travellers the opportunity to be able to contact the hotels and airlines directly, which is surely more secure as the hotel has directly confirmed your booking. This affects the value chain as it cuts out the wholesaler and the retailer as it is straight from supplier to consumer.

Holidays are now being auctioned off on MyTravel to shift the last few that dont get sold. This is similar to the travel agents putting the last minute holidays in the window, but rather than commit to one price, an auction enables the holiday to sell according to the popularity of it and could possibly reach a price which is above what the holiday is worth.

We concluded that the internet has definately affected the value chain for the holiday industry as it has made it easier for the consumer to research and contact the hotels and airlines directly rather than go through an agent. Many people, however, still use travel agents both on the high street and online as they offer a quick and easy way to book a complete holiday, and many people do not feel confident enough or have the time to contact the hotels and airlines directly.