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Strategic Responses to Digital Disruption in the Outbound Wholesale Travel Industry: A New Zealand Perspective

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Whole thesis(1.88 MB)

Date

2015

Authors

Supervisor

Diaz Andrade, Antonio
Milne, Simon

Item type

Thesis

Degree name

Master of Philosophy

Journal Title

Journal ISSN

Volume Title

Publisher

Auckland University of Technology

Abstract

Tourism distribution has seen a shift from the traditional business-to-business (B2B) channels via intermediaries to direct business-to-consumer (B2C) distribution. Following the introduction of the World Wide Web in the 1990s, the new technology brought transparency to the market by allowing access to information that was previously the sole domain of the intermediaries in the travel industry. This study aims to understand how the evolving nature of information and communication technology (ICT), both past and current, is underpinned by a process of integration and consolidation in the New Zealand outbound wholesale travel sector. This single case study focused its investigation on a key player in the New Zealand outbound wholesale travel sector, one which was the best representative of the evolving changes outlined above. This approach allowed an in-depth, intensive investigation of the process of both horizontal and vertical integration in the presence of ICT. The findings show that the establishment of strategic alliances was a protection tactic employed by businesses in the intermediary sector, when threatened by the possibility of disintermediation. The strength of the new, integrated organisation manifested in this study as increased leverage and buying power with suppliers, enhancing the role of the outbound travel wholesaler in their aggregation and provision of product to their affiliated retail network. This in turn leads to an interesting and challenging balance for the different stakeholders involved in the distribution process, with the travel wholesaler seemingly holding the power balance when product availability is limited. The findings also show that while the wholesale sector acknowledges changes in consumer buying behaviour expressed by a preference for online booking, they are constrained by the cost of ICT development. Having already invested heavily in software development, it is becoming increasingly difficult to maintain the required level of system enhancement. In an attempt to gain more synergies with common ICT usage and development, further integration and consolidation within the sector is a likely outcome, given the history of such amalgamations outlined in this study. This research makes an important contribution to theory by confirming the concept of reintermediation, showing the strength and value of the intermediary sector in the travel distribution structure. By exploring how ICT can be exploited by stakeholders to gain or regain control of their distribution channel, it is the focus on unique product and proprietary content that provides practical managerial implications, with the suggestion of leveraging such content as a strategic solution for the outbound travel industry. When determining operational solutions for the wholesale sector, this study reflects the difficulty in maintaining the required level of system enhancement due to the investment required, without further collaboration within the sector itself.

Description

Keywords

Wholesale, Distribution, ICT, Integration, Disintermediation, Casestudy

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DOI

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Permanent link

https://hdl.handle.net/10292/9106

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Masters Theses