The Internet and Deveopment of Travel Market
Author
박 의서
Date
2023-02-18 21:56
Views
330
The Internet and Development of Travel Market
Park, Eui Suh
Ph.D, Professor, Dept. of Tourism Management, Anyang University
Virtual markets on the Internet have emerged as a very important target market tourism industry, one of the most promising industries in the 21stcentury along with information industry and environmental industry. Tourism-related businesses in Korea, such as hotels, travel agencies, and theme parks, have establish new-generation e-commerce with innovative reservation and marketing strategies. Thus, how we compete in the cyber market is the key to competitive performance in tourism industry.
Tourism industry is service industry with almost no material trading and all transactions can be completed online through a simple procedure. Therefore, cyber space cannot help but play important roles. Cyber space for consumers is a very useful and convenient tool to choose the most desirable and affordable products among countless products, airlines, and lodging facilities.
E-commerce is fast-growing in travel and tourism industries. According to Jupiter Communication in New York, tourism-related sale online will reach about USD 63 billion in 2006 and the U.S. travelers use e-commerce to purchase airline tickets (94%) and book hotel rooms (78%).
Under these circumstances, leading airlines and online travel agencies have started competing for leadership in the cyber space. As airlines have built systems to sell airline tickets, book hotels and rental cars, and provide related information on the Internet, the online travel market, which has been represented by Travelocity, Expedia, and Preview, has encountered a keener competition in the cyber space.
Airline travel market is also introducing on-line booking and purchasing. Airline ticket auctions for personal travelers, Airtel products for both airline tickets and hotel rooms, and joint purchasing which allows a group of people with same schedules and destinations to purchase tickets together and receive discounts are some of the new patterns of online trading.
E-commerce for tourism products is a fast-growing industry and is expected to dominate over 50% of the online market in 2-3 years. Internet-based trading of tourism products are expected to grow for the following reasons:
First, it is not limited by space. Any computer with the Internet connection is open to travel information from around the world and a small cyber space is needed to plan and sell tourism products.
Second, it is not limited by time. Sellers can promote their products 24/7 and users can access them anytime.
Third, most Internet users are mid-class citizens in the 20-30s and with high education level, and they are relatively more interested in traveling.
Fourth, it is easy to access target groups. Internet users are very attractive to the sellers. Marketer can divide up into several categories and easily access their target groups.
Fifth, it is not pricy to market via the Internet. Marketing products to the world 24/7 is much cheaper than using the conventional newspapers, magazines, television and radio.
Sixth, it is easy to make two-way communication. Marketers can use online chatting and bulletin boards to gather and analyze information on consumer trust and preference. Consumers can freely express their complaints and suggestions regarding services, products, and market trends.
Seventh, marketing is not limited by size or type. Various multimedia technologies, such as video, graphics, sound, and letters, are available and may contain information on companies, products, and other useful traveler's information.
Eighth, it is relatively easy to check popularity of products. The website automatically counts the number of visitors and the duration of their stay. If users log on with their user ID, more detailed popularity check and consumer information are available. In addition, accumulated data can be used for database marketing and direct tourism marketing.
Theoretically, e-commerce reduces prices of products and services by directly connecting suppliers and consumers and eliminating intermediate merchants. E-commerce in the online environment can be advantageous for tourism services in the following aspects:
First, it can maximize tourism products. Although the value of tourism products change with time and season, offline markets only have limited measures to sell products that are about to expire. However, this is not a problem in the online environment. The outstanding communication capacity of the Internet can sell any products that are about to expire if their prices are reasonable.
Second, tourism products are intangible. Therefore, every step of the transaction can be processed via the Internet should the purchaser does not appear in person.
Third, travel services require a considerable planning and information gathering before purchasing. In other words, most travelers plan before going on a trip and gather and compare a massive amount of information in the process of planning. It means that tourism products are highly compatible with the Internet's efficient deliveryof diverse information and various compare and search features online are very useful for travelers.
Considering these characteristics of travel services and products, tourism and travel industries are capable of creating high values on the Internet and are very suitable for e-commerce. Therefore, the existing offline markets are highly likely to be dominated by the Internet.
In spite of various advantages and conveniences, e-commerce in tourism industry is not growing and developing as much as e-commerce in other industries. In Korea, e-commerce for virtual domestic flight tickets and international e-tickets was built relatively early, but has not been used by many travelers. Travel agencies' cyber sales are very poor and most travel agencies do not even have cyber sales. Even cyber travelers have not completely converted their sales to e-commerce.
The following explains why travel or airline industries in Korea have not been very successful on the Internet in spite that their e-commerce system was introduced to the market relatively early.
First, prices are not very low. Cyber stocks that are seeing an exponential growth only charged fees that were 1/2-1/5 of offline fees. However, airline tickets and travel products were not much cheaper compared to offline markets.
Second, online travel services have limited products. Airline tickets via e-commerce only allow one-way or round-trip tickets. Complicated trips with several destinations can only be booked, estimated, and ticketed by airlines or travel agencies. Travelers need travel agencies' explanations and advice to decide which travel services and products are suitable for them.
Third, travel services and products require many complicated decisions. It is not easy for travelers to rely on online information to choose international travel packages and many related issues, such as visa application and passport extension, always need special help from travel agencies.
Fortunately, new technologies and software have been introduced to overcome such limits. Online travel agencies provide personalized trips for individual travelers for more intimate services.
Tourism industry can extend to infinite possibilities on the Internet and is similar to the Internet as it targets the world. It actually has great potentials to grow on the Internet as it is easy to sell and purchase tourism-related services and products online. As Bill Gates said, "Travel business is the most suitable business for the 21st-century online environment," tourism and travel industries will be the center of the digital age.
As the Internet is constantly changing, business patterns in the travel market will also change. However, not all companies in the online travel industry would be successful. Travel agencies' websites would not be very successful only by providing company information. In other words, simple Homepages and advertisements would not attract many visitors to make purchases. Websites shall be strategic tools to profitability and sales. For this purpose, real-time booking and transaction system shall be supported. It would be helpful for online travel agencies to consider strategic partnerships with offline agencies to process transportation arrangements, sales, settlements, accounting, and planning in the offline environment and to utilize the strong points of the online environment.
Park, Eui Suh
Ph.D, Professor, Dept. of Tourism Management, Anyang University
Virtual markets on the Internet have emerged as a very important target market tourism industry, one of the most promising industries in the 21stcentury along with information industry and environmental industry. Tourism-related businesses in Korea, such as hotels, travel agencies, and theme parks, have establish new-generation e-commerce with innovative reservation and marketing strategies. Thus, how we compete in the cyber market is the key to competitive performance in tourism industry.
Tourism industry is service industry with almost no material trading and all transactions can be completed online through a simple procedure. Therefore, cyber space cannot help but play important roles. Cyber space for consumers is a very useful and convenient tool to choose the most desirable and affordable products among countless products, airlines, and lodging facilities.
E-commerce is fast-growing in travel and tourism industries. According to Jupiter Communication in New York, tourism-related sale online will reach about USD 63 billion in 2006 and the U.S. travelers use e-commerce to purchase airline tickets (94%) and book hotel rooms (78%).
Under these circumstances, leading airlines and online travel agencies have started competing for leadership in the cyber space. As airlines have built systems to sell airline tickets, book hotels and rental cars, and provide related information on the Internet, the online travel market, which has been represented by Travelocity, Expedia, and Preview, has encountered a keener competition in the cyber space.
Airline travel market is also introducing on-line booking and purchasing. Airline ticket auctions for personal travelers, Airtel products for both airline tickets and hotel rooms, and joint purchasing which allows a group of people with same schedules and destinations to purchase tickets together and receive discounts are some of the new patterns of online trading.
E-commerce for tourism products is a fast-growing industry and is expected to dominate over 50% of the online market in 2-3 years. Internet-based trading of tourism products are expected to grow for the following reasons:
First, it is not limited by space. Any computer with the Internet connection is open to travel information from around the world and a small cyber space is needed to plan and sell tourism products.
Second, it is not limited by time. Sellers can promote their products 24/7 and users can access them anytime.
Third, most Internet users are mid-class citizens in the 20-30s and with high education level, and they are relatively more interested in traveling.
Fourth, it is easy to access target groups. Internet users are very attractive to the sellers. Marketer can divide up into several categories and easily access their target groups.
Fifth, it is not pricy to market via the Internet. Marketing products to the world 24/7 is much cheaper than using the conventional newspapers, magazines, television and radio.
Sixth, it is easy to make two-way communication. Marketers can use online chatting and bulletin boards to gather and analyze information on consumer trust and preference. Consumers can freely express their complaints and suggestions regarding services, products, and market trends.
Seventh, marketing is not limited by size or type. Various multimedia technologies, such as video, graphics, sound, and letters, are available and may contain information on companies, products, and other useful traveler's information.
Eighth, it is relatively easy to check popularity of products. The website automatically counts the number of visitors and the duration of their stay. If users log on with their user ID, more detailed popularity check and consumer information are available. In addition, accumulated data can be used for database marketing and direct tourism marketing.
Theoretically, e-commerce reduces prices of products and services by directly connecting suppliers and consumers and eliminating intermediate merchants. E-commerce in the online environment can be advantageous for tourism services in the following aspects:
First, it can maximize tourism products. Although the value of tourism products change with time and season, offline markets only have limited measures to sell products that are about to expire. However, this is not a problem in the online environment. The outstanding communication capacity of the Internet can sell any products that are about to expire if their prices are reasonable.
Second, tourism products are intangible. Therefore, every step of the transaction can be processed via the Internet should the purchaser does not appear in person.
Third, travel services require a considerable planning and information gathering before purchasing. In other words, most travelers plan before going on a trip and gather and compare a massive amount of information in the process of planning. It means that tourism products are highly compatible with the Internet's efficient deliveryof diverse information and various compare and search features online are very useful for travelers.
Considering these characteristics of travel services and products, tourism and travel industries are capable of creating high values on the Internet and are very suitable for e-commerce. Therefore, the existing offline markets are highly likely to be dominated by the Internet.
In spite of various advantages and conveniences, e-commerce in tourism industry is not growing and developing as much as e-commerce in other industries. In Korea, e-commerce for virtual domestic flight tickets and international e-tickets was built relatively early, but has not been used by many travelers. Travel agencies' cyber sales are very poor and most travel agencies do not even have cyber sales. Even cyber travelers have not completely converted their sales to e-commerce.
The following explains why travel or airline industries in Korea have not been very successful on the Internet in spite that their e-commerce system was introduced to the market relatively early.
First, prices are not very low. Cyber stocks that are seeing an exponential growth only charged fees that were 1/2-1/5 of offline fees. However, airline tickets and travel products were not much cheaper compared to offline markets.
Second, online travel services have limited products. Airline tickets via e-commerce only allow one-way or round-trip tickets. Complicated trips with several destinations can only be booked, estimated, and ticketed by airlines or travel agencies. Travelers need travel agencies' explanations and advice to decide which travel services and products are suitable for them.
Third, travel services and products require many complicated decisions. It is not easy for travelers to rely on online information to choose international travel packages and many related issues, such as visa application and passport extension, always need special help from travel agencies.
Fortunately, new technologies and software have been introduced to overcome such limits. Online travel agencies provide personalized trips for individual travelers for more intimate services.
Tourism industry can extend to infinite possibilities on the Internet and is similar to the Internet as it targets the world. It actually has great potentials to grow on the Internet as it is easy to sell and purchase tourism-related services and products online. As Bill Gates said, "Travel business is the most suitable business for the 21st-century online environment," tourism and travel industries will be the center of the digital age.
As the Internet is constantly changing, business patterns in the travel market will also change. However, not all companies in the online travel industry would be successful. Travel agencies' websites would not be very successful only by providing company information. In other words, simple Homepages and advertisements would not attract many visitors to make purchases. Websites shall be strategic tools to profitability and sales. For this purpose, real-time booking and transaction system shall be supported. It would be helpful for online travel agencies to consider strategic partnerships with offline agencies to process transportation arrangements, sales, settlements, accounting, and planning in the offline environment and to utilize the strong points of the online environment.