2. Tourism distribution on the internet

3. Changing channels? See Cooper and Lewis in Buhalis and Laws New media –disintermediation? –new virtual travel agents? –budget airlines and hotels as an alternative to the traditional package –or the same vertically integrated operators offering mass customisation

4. Internet penetration globally In US, Japan and Northern Europe around 70% of the population is already on-line The growth is likely to come from –Brazil 15% –Russia 20% –India 7% –China 9% www.internetworldstats.com

5. The Impact of the Internet UK 61% of the population have access (Mintel 2006) –75%+ for ABC1s under 55 years Half of these have browsed holiday/travel sites –35.1% of consumers booked their last holiday on the internet in 2005, an increase of 12% points from 2000. Better informed customers Dis-intermediation or Re-intermediation?

6. European online market

7. The top fifteen travel sites Europe 2005 Expedia Viamichelin TUI Lastminute SNCF Trip Network Deutsche Bahn Easyjet Opodo Ryanair Hotels.com Ebookers.com Thomascook.com Travelocity Yahoo Travel

8. New gateways for travel and tourism information and bookings Airlines: –individual airline sites –their affiliate networks easyjet.com –Sites owned by airline consortia – opodo, orbitz Hotel sitessites of individual hotels, groups or consortia Bed bankshotel booking companies – Utell, Hotel Connect, Hotelopia Destinations sites run by national, regional or local tourist offices On-line travel agencies: Expedia, Travelocity Review sitesTripadvisor Late booking sites – lastminute.com, Cheap Flights

9. New entrants offering travel booking Portalstravel pages of internet service provider portals – Yahoo, Orange Vortals*travel pages of specialist portals – tennis.com, igolf.com News mediaOn-line newspapers and other media – telegraph, guardian, cnn Auction siteseBay, Qxl Social networks Facebook, mySpace, WAYN Adapted from Buhalis 2003

10. So much choice- who do you trust?

11. The big brands? The traditional tour operators – Thomas Cook? The ones that spend most on advertising – Expedia? The ones linked to a brand you know? –Affiliate networks – white-labelling –Including content from another provider on webpages with your brand EasyjetEasyjet

12. Or your mates? User-generated content (Web 2.0) Harnessing the collective intelligence (O’Reilly) Websites relying on users, not businesses or experts, to provide the material YouTube, Wikipedia

13. Tripadvisor 15 million travel reviews 25 million users a month an affiliate network of leading on-line travel agencies, tour operators, airlines and hotel groups. TripAdvisor is owned by on-line travel agency Expedia, Inc.

14. Social networks On-line communities created by ‘viral’ recommendations Often linked by some shared value –Communities of consumption (Cova) –E.g. Facebook travel groups

15. WAYN Where are you now? Community-based website where you can log your trips, see who’s there and make new friends 11.4 million members Travel companies can advertise on WAYN or use WAYN information on their sites

16. A new distribution network On-line agency Destination Management System Hotels Attractions Airlines Global Distribution System Maps from Google Earth Youtube videos Tripadvisor reviews Social network Friends Satnavs SMS Customer ‘Aggregated content’

17. How do the traditional operators fight back?

18. Dynamic Packaging Dynamic packaging is a travel industry term for a more flexible way of booking a holiday. Instead of offering customers a set package off the page of a brochure, the agent or operator assembles the elements of the holiday to meet the customer's requirements. By using 'bed-banks' - companies that offer a database of hotel rooms at a discounted rate - the agents can match the prices of traditional tour operators while achieving better profit margins for themselves. For an example of a bed-bank company see www.travelberry.co.ukwww.travelberry.co.uk

19. Why the tour operators will survive Customers with busy lives value the convenience of a ‘one-stop-shop’ for all their travel purchases Faced with a bewildering choice, consumers value the reassurance provided by a well-known brand Suppliers value the efficient access to wide consumer markets provided by intermediaries The purchasing power and marketing spend of the large consolidated companies continues to give them a competitive advantage over their smaller rivals

20. On-line marketing

21. The uses of cyberspace Angehrn 1997 Virtual Information SpaceVirtual Communication Space Virtual Transaction SpaceVirtual Distribution Space Web pages Product info Price Availability E-commerce Orders Payments Downloads File transfers Fulfillment Order-tracking Advertising Email Message boards

22. Search engine marketing Keyword analysis –what words do potential customers use? –optimise the site design to ensure high listing Paid placement Pay per click –bidding against competitors for highest listing Domain names see www.webgravity.co.uk

23. Web site design www.insites.be in Pelsmacker How do you judge a good website? Content productivity –relevant, up-to-date, meeting needs Browse efficiency –ease of navigation Design efficiency –interpreted and understood correctly

24. Exchange level –interactivity Emotional attractiveness –entertainment value

25. Relationships on-line Communication –information –dialogue Differentiation –exclusive content and services for subscribers Personalisation –using cookies to recognise and personalise Reward

26. On-line communities e.g. user forum, message board Customer to customer communication added value for the website user Viral marketing feedback PR vehicle not an advertising medium

27. Effects on the value chain Disintermediation Depersonalisation Commoditisation Customer control of contact and content or re-intermediation or customisation or value-added differentiation or customer contact management

28. De Pelsmacker et al (2001) Marketing Communications Prentice Hall Cooper and Lewis in Buhalis and Laws Tourism Distribution Channels