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Chapter 2: The Internet--blessing or curse?

SUMMARY

In a short period of time, the Internet and the World Wide Web have transformed the way products and services are bought and sold. Although these changes are viewed both positively and negatively by the travel industry, no one yet knows precisely what the impact will be. It is no longer a question of whether consumers will buy travel directly from suppliers; the question is how much.

The number of Web sites that sell travel products is increasing rapidly, and travel counselors are understandably concerned about the effect of this on their traditional businesses. At this point in time, however, there is very little to indicate that the Internet will put travel agencies out of business and travel counselors out of jobs. In fact, many travel agencies are themselves jumping on the technology bandwagon by creating their own Web sites and using the Internet as an important resource in their day-to-day business.

There remain some things that travel counselors do better than a Web site ever will. Many observers feel that customer service is probably the biggest problem for on-line consumers. The amount of information available to consumers on the Web is daunting. Travel counselors hold their customer base by providing personal service, by helping customers interpret travel information they find on the Web, and by being a convenient and time-saving alternative to on-line booking.

OBJECTIVES

At the conclusion of this chapter, you should be able to:

* understand the enormous growth and change associated with the Internet.

* understand the impact of the Internet on the travel industry.

* identify major airline computer reservation systems and understand their advantages to a travel counselor.

* recognize the advantages to the consumer of using a travel counselor instead of a Web site to book travel.

* outline several ways in which a travel counselor can utilize the Internet.

KEY TERMS

browser

Computer Reservation Systems (CRS)

e-commerce

e-mail

hub

Internet

Internet Service Provider (ISP)

on line

personal computer (PC)

search engine

Uniform Resource Locator (URL)

Web banner

World Wide Web (www)

Just the word--Internet--inspires a wide array of perceptions and emotions. Internet hype is everywhere, whether you are an investor in Internet stocks or a user of Internet technology; whether you love it or hate it, you can't get away from the Internet in today's economy. There is no question that the Internet has transformed the way we buy and sell products and services. According to one estimate, nearly 4 1/2 million small businesses had Web sites in 2001, and the sales generated from those sites topped $12 billion. The growth rate has been amazing when you consider that almost no Web sites existed in 1994.

Because of the Internet's tremendous growth and complexity, and the extremely rapid pace of change, it is impossible for one person to have or claim to have all the answers. When studying the Internet, and how it relates to the travel industry, it's important to remember that fact. About the only thing we can say for certain is that the travel industry is among the many industries that have experienced both the positive and negative impacts of this new technology, and we do not yet know what the outcome will be.
Internet

A global network of data,
news, and opinions,
connecting millions of
computers and
encompassing more than
100 countries.


WHERE DID ALL THIS START, AND WHERE IS IT GOING?

Automated airline reservations systems have been around and used by airlines since the 1950s. Travel agencies first gained access to the airline Computer Reservation Systems (CRS) in the 1960s. It was a miraculous thing to be able to type in a few commands and retrieve a fare or make a reservation. What a time saver! Yet, as recently as 1980, only a handful of travel agencies used airline computers. They were so expensive that only the largest agencies could afford them. By 1993, 95% of the travel agency locations were automated with one or more airline CRSs. In a relatively short period of time, computers had almost totally replaced printed schedule and fare references.

Then the desktop or personal computer (PC) made it possible to manage many everyday tasks relatively inexpensively at work or at home. It was no longer necessary to have a computer that filled a large room or an entire floor of a business. With the small desktop computer, specially designed software could manage the complexities of a business' customer list, typing and revising letters became easier with word processing programs, newsletters could be created and sent to customers in a fraction of the time previously required, and accounting became much easier.

Access to the Internet is now available to anyone who owns a PC with a modem and access to a phone line. Hundreds of thousands of PCs are connected worldwide through networks to form the Internet. Begun in the late 1960s, the Internet links between 65,000 and 75,000 worldwide information networks. Internet users can access and transfer data and communicate with other users through electronic mail (e-mail), bulletin boards, or "chat rooms."

Besides the modem and phone line, a PC owner needs two things to gain access to the Internet and the World Wide Web: an Internet Service Provider (ISP) and a browser. Some well-known ISPs are America Online (AOL) and MSN, but there are thousands of other ISPs, both large and small. An ISP provides an access phone number to the Internet. Some charge a monthly fee, but some are completely free. Browsers are software programs that allow the user to move from location to location on the Web. Popular browsers include Microsoft Explorer and Netscape Navigator.
Important Industry Web Sites

http://thelist.internet.com is a helpful site that offers complete
data on over 6,300 ISPs, listed by country, state, or even area
code. You can find out what services are offered and the monthly
rates for any ISP in the world!

The facet of the Internet that is on the tip of everyone's tongue
is the World Wide Web (www). The web manages an incredibly vast
amount of information on the Internet. A user is able to gain
access to that information with ease either by using a search
engine or by typing in the exact location or "address" of the
information using a Uniform Resource Locator (URL). Every Web site
has an individual URL, just as you have a distinctive address or
telephone number. A typical URL looks like this:
_http://www.twcrossroads.com_.


If you do not know the specific URL, a search engine will help you find the information you are seeking. A search engine is a software program that searches the Internet database for files that fit specific guidelines you have set up. Some popular search engines are Yahoo!, GoTo, Snap, Excite, and LookSmart. A search for a general term like "travel" might yield thousands of web locations (URLs) at which you can find information about travel.

"E"-Commerce

It is possible for any individual, small business, or large business to create a "Web page" that can be accessed by anyone throughout the world! This feature of the World Wide Web is what has caused the explosive growth of "e-commerce," the sale of products and services over a Web site. An individual or small business can sell products or services alongside the largest companies on the Web. The big question facing many businesses today is whether it is an option or a necessity to have a Web site and join in the e-commerce revolution.

Web sites that engage in e-commerce for travel-related products and services are being developed with some frequency, and for good reason. Travel accounts for the largest volume of sales on the Internet. One e-commerce site (www.orbit2.com) has been developed jointly by the major U.S. airlines. Another site (_http://www/hotwire.com_) attempts to sell unused airline seats at set prices. Other sites, such as _http://www/LastMinuteTravel.com_, offer airline seats, cruises, cars, lodging, and vacations without the usual penalties for last-minute booking. Still another of these sites (www.priceline.com) has taken an entirely new approach to selling travel by allowing customers to name what they are willing to pay for airline tickets, hotel rooms, and other travel products.

E-commerce has not, however, managed to do all of this without problems. It is safe to say that most e-commerce sites are not making a profit for their developers. Further, consumers who purchase products and services, including travel, on the Web are finding that difficulties are far from rare. Some Web sites see their role as one of providing cost savings rather than customer service. An ongoing concern for consumers who would like to purchase products on the Internet is the safety of putting personal information, like credit card numbers, on the Internet. Although most Web sites that accept credit cards say their sites are safe, there is a perception among consumers that this may not be the case. Many sites assure consumers that their personal information will not be shared with or sold to anyone else, but again, consumers do not trust this to be accurate.

Although e-commerce offers some advantages to consumers and has grown steadily, it is too soon to be able to predict the long-term scenario. There is little doubt that the number of Web sites selling travel will continue to grow. One group of consumers finds e-commerce to be the best way to buy products. Another group will probably never buy a product online. How large each group will become is anybody's guess at this point in the history of the Internet.

The Internet Consumer

The Internet has created an efficient way to buy products and services as well as sell them. Consumers are showing their readiness to buy on line. In one seven-month period, a survey found a gain of 16 million on-line buyers! On-line revenue from the sale of travel will reach $8.9 billion worldwide by 2002. It is possible that nearly one million trips will be booked per week by 2003. On-line consumers have access to a much wider range of information and comparison shopping requires a few mouse clicks instead of a few days visiting traditional stores.

The question facing many in the travel industry is not whether travel consumers will buy on-line, but how much. Many travel suppliers are attempting to expand their marketing opportunities and cut marketing costs by establishing Web sites through which consumers can buy directly.
   Some Web sites provide information that has never before been
   available to the public. One of those sites is
   _http://www.trip.com_. Using "flight tracker," you can select a
   specific or random flight, and you will see a graphic screen that
   puts you in the cockpit of that plane. In real time, you see the
   altimeter, compass, and speedometer. If you choose the map
   function, an airplane symbol appears on the map in the exact
   location of the plane, and it moves to accurately track the exact
   flight path! Have a husband or mother who worries about you when
   you fly? You can fill out a form up to two days in advance of your
   flight, and when your flight arrives at its destination, trip.com
   will send an e-mail message to the people you select to say you
   have arrived and when you arrived.


Who Will Win the Race?

The winners in this race to embrace technology will be those businesses that give consumers what they are looking for: value, convenience, and service. If on-line suppliers can do that, on-line sales will continue to grow. Some, however, doubt that all, or even most, consumers will find buying travel on the Web to be everything they want. Currently, large numbers of consumers access information about travel on line without ever making a purchase. On-line purchase of tours, cruises, and complex air itineraries has not shown nearly as much growth as the sale of point-to-point air tickets. One study found that even on-line travel buyers do not necessarily purchase all of their travel on line, but will make some purchases from a travel counselor. A sizeable number of the traveling public still want help sorting through the options and finding the best prices, especially when the travel planning becomes complicated and expensive. Too often, consumers who attempt on-line bookings become frustrated by slow access, low quality sites, and Web sites that offer nothing useful. It takes time, energy, and patience to book on line. Some people say the best way to book travel on the Web is to call a travel counselor!

For years, travel counselors have been an unbiased source of information for consumers. There is now so much information available to consumers over the Web that a travel counselor may be the only resource able to verify or disprove information found on a Web site. And we cannot forget that although nearly half of all adult Americans use a computer to access the Internet, 50 percent do not have access to the Internet. These people travel, too.
Computer Reservation
System (CRS)

An automation vendor such
as Amadeus, Galileo, Sabre,
and Worldspan.

personal computer (PC)

Also called a desktop
computer or PC; a small
computer that
revolutionized the use of
computers by individuals
instead of only large
corporations.

Internet Service Provider
(ISP)

A company that provides
access to the Internet via
phone lines.

browser

A program such as
Microsoft Internet Explorer
or Netscape that provides
easy access to the Internet.

World Wide Web (www)

The Internet function that
manages the vast amount of
information available to
users.

Uniform Resource Locator
(URL)

The address of a Web site.

search engine

An Internet function that
allows a user to search Web
sites by name or subject
matter.

e-commerce

The sale of products and
services over a Web site.

on line

The act of being connected
to the Internet via a phone
line and Internet Service
Provider (ISP).


THE INTERNET: A TOOL FOR COUNSELORS

We have already determined that the Internet is a resource for consumers to find travel information. It is, of course, available for travel counselors to use, too. The Internet can be used as a reference tool, to communicate with customers or other professionals, as an advertising medium, or to sell travel products.

The Internet as a Reference Tool

Using the Internet as a reference tool is possibly its most obvious use to a travel counselor. Our customers use it and often bring information into the agency that they have found on the Net. Counselors are expected to know what's "out there." There are many Web sites that provide information that a travel counselor can use to assist a client. Need passport information? A map to a restaurant in Seattle? Tours for motorcycle enthusiasts in Europe? Currency conversion? It's all there on the Web. The down side is that it isn't easy to find time to "surf" the Web looking for information. Sifting through hundreds, if not thousands, of Web sites can be overwhelming.

To simplify the process, some travel industry sites have consolidated information into "hubs." Each hub is a unique collection of travel-related information as well as "links" to other sites that provide useful, related information. On a hub you might find maps, travel industry news, travel warnings, legislative updates, and destination information, all easy to locate.

Some examples of travel industry "hub" sites include:

* Travel Weekly Crossroads (<http://www.twcrossroads.com>). Find daily news stories, daily articles on destinations, the latest in cruising, ideas for travel counselors, as well as links to hundreds of other sites.

* ASTA (_http://www.astanet.com_). This site is sponsored by the American Society of Travel Agents and caters to both travel professionals and the traveling public. Travelers are urged to contact ASTA members for their travel planning, and can locate one by entering a zip code. There are also links to tourist information, Customs Service, National Parks, CIA World Factbook, and much more. ASTA members will find a complete ASTA Travel Agent Handbook, plus much more industry-related information.

* Travel Trade Online (_http://www.traveltrade.com_). Search this site for information in the news archives. Find a link to Cruise Trade. Read articles and editorials on various travel subjects.

E-mail

According to recent studies, e-mail has replaced the telephone as the primary source of business communication. A 1999 survey by ASTA indicated that 77.6 percent of travel counselors use e-mail; 26.5 percent use it every day for client communications. Advantages of e-mail are that it can be sent at your convenience and the receiver can read it at his convenience; no more "phone tag."

Another advantage is that e-mail provides a written record of the communication. This might be seen as a disadvantage as well. What is written leaves a permanent trail. It is easy to forget that as we dash off an e-mail message or delete one from our e-mail program with equal ease.

As when writing a business letter, e-mail requires that appropriate etiquette be followed. Business e-mail should be clear and accurate and avoid saying things that could be misconstrued. It is important to note that e-mail is often the source of computer "viruses" that have the potential to cause serious damage to your computer. You can limit the risk by not opening e-mail messages that are not familiar to you, and by not forwarding e-mail messages to dozens or even hundreds of other e-mail addresses. Some e-mail providers now have a feature that will scan incoming e-mail messages for a virus.

E-mail can be used to promote your agency through newsletters, sale letters, announcements of travel specials, and the like. An agency should have e-mail addresses (and permission to use them) of all of its current clients. Lists of e-mail addresses may also be purchased or leased. E-mail is an inexpensive way to reach many consumers with your message.

Advertising on the Web

Travel agencies can find inexpensive advertising opportunities by posting banners on other Web sites. It is possible to advertise directly to consumers worldwide for only a few hundred dollars a month. Web banners are usually placed at the top of a Web page and they act like small billboards to encourage the viewer to "click here" to visit your Web site. Because you will have only a few seconds to grab the consumer's attention, using bold colors and animation will increase the banner's chance of being seen. Including a coupon also increases your response rate, and it also can serve to collect name and address data for your agency from potential customers.

Placing your banner ad requires some thought about what type of consumer you wish to reach, and then identifying the Web sites these consumers are likely to visit.

Creating a Web Site

We have enough experience with e-commerce to know that selling on the Internet does not guarantee profitability. Actually, few Web sites make any profit at all. It has, however, become important to have a presence on the Web. In combination with a traditional travel agency operation, a Web site can be an attractive addition to a marketing plan.

Creating a Web page can be fairly simple to extremely complicated. Before beginning, decide what you want to accomplish with a Web site. Identify your audience and focus. Do you want to be educational or informative; do you want your customers to be able to just look or to be able to book as well?

Design options include hiring a consultant (which can be pricey), or designing your own. If you choose to design your own site, you can get assistance from some travel sites, such as _http://www.astanet.com_, or by subscribing to a site that provides design templates, such as Yahoo. Software is available to make designing a Web site fairly easy. The cost of this software ranges from free to $300, but the major cost of building your own site is your time. The job isn't done when the site is completed either. You must continually edit and refine your site.

Giving customers a Web site to access your business is only part of the equation toward success. The real power of a travel counselor is customer service. One of the biggest problems in the evolution of e-commerce is in the area of customer service. Studies of on-line travel buyers have found that they are not loyal to one Web site. Seventy percent use multiple sites when making travel arrangements. To counteract this problem, many agencies with Web sites have provided for personal contact between counselor and customer in order to continue the agency's high level of customer service. Making it easy for the Web customer to contact your agency, giving a fast response to all contacts, and providing personal service to Web customers will increase the chances of Web success.

Sign in a travel agency window: "We fix Internet Vacations!"
hub

A unique collection of
travel-related information
and links to other useful
and pertinent Web sites.

e-mail

Electronic mail that is sent
and received via computer.

Web banner

An unsolicited
advertisement that appears
on a Web page.


THE COMPUTER RESERVATION SYSTEM

Where does all the emphasis on the Internet leave the airline's computer reservation systems (CRSs)? The technology used by airline CRSs has been around since the 1960s. Some say today's CRS is basically unchanged from the early days; it is built on old technology, inflexible, and unable to adequately serve those who must use it. Although the technology is over 30 years old, it has been upgraded constantly and according to most, it is still the only system that can support the level of transactions that are currently demanded of a reservation system. Of the two largest CRSs, Sabre handles just under 5,300 transactions per second and Apollo handles around 3,000. Considering all of this, today's airline reservation systems are extremely reliable for the users.

About 40 percent of travel agencies in the United States use Sabre. The remaining three CRSs are Apollo/Galileo, Amadeus, and Worldspan. Independent computer reservation systems are also under development. One of the most notable is a system called Genesis being developed by Ustar.

The U.S. Department of Transportation (DOT) regulates the way in which airline schedules, fares, rules, and availability are displayed by each CRS. The potential for bias based on the order in which information is listed has been lessened by DOT rules that "prevent unfair, deceptive, predatory and anti-competitive practice" in the operation of each CRS.

Each of the CRSs contains information on domestic and international airlines, Amtrak, VIA Rail Canada, hotels, rental cars, tours, and cruises. Nonairline suppliers pay the CRS to have their information listed. Even though many suppliers have their own computer reservation systems, any supplier who is serious about selling product will be included in one, or probably all, of the airline systems.

Which CRS a travel agency subscribes to depends on many factors, among them cost and contract terms. The basic operation of any airline CRS is very similar to every other airline CRS. A person experienced on one system will usually be able to function quite well on any of the others with only a small amount of additional training. Although one system may have a capability that another does not, the choice of a CRS often comes down to cost. Currently most agency CRS contracts are based on segment pricing. A segment is a part of an itinerary between two stop points. In general terms, the more segments booked, the lower the monthly fee paid by the travel agency to the CRS.

The four major CRSs have developed direct-to-the-consumer Web sites. These sites allow any consumer with Internet access to look at airline schedule and fare information and actually make reservations on line, bypassing the travel counselor. Sabre's Web site is <http://www.travelocity. com.Worldspan, in partnership with Microsoft, has <http://www.expedia.com>. System One Amadeus has <www.amadeus.net>.

Why would a travel counselor use a CRS rather than an Internet site such as those listed previously? The two main reasons are speed and convenience. When a travel agency subscribes to a CRS, connecting to that CRS is virtually instantaneous. Once connected, the counselor types a series of characters requesting specific information, and that information is presented quickly and in a way that allows comparing flight schedules and fares between several carriers. A travel counselor may very well use the Internet for information and research, but when it comes to making reservations, the speed and accessibility of a CRS is far superior.
? What Would You Do?

You have spent quite a bit of time quoting prices for a cruise to a
new customer. On a call to follow up, the prospective client tells
you he has made the reservation on line with Carnival Cruise Lines.
What would you do?

1. Will you tell the customer he made a big mistake and hang up on
him?

2. Will you explain to the customer that because he booked his
cruise on line, you will not receive any commission on the sale
even though you have spent considerable time gathering information
for him?

3. Will you thank him for contacting your agency and offer your
assistance on future travel arrangements?
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Title Annotation:Section 1: Charting Your Course in a Computerized World
Publication:A Guide to Becoming a Travel Professional
Geographic Code:1USA
Date:Jan 1, 2005
Words:4207
Previous Article:Chapter 1: Your place in travel.
Next Article:Chapter 3: Air travel basics.
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