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ICT and the New Zealand Outbound Retail Travel Industry: Strategic Adaptation to the Threat of Disintermediation

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Whole thesis(2.07 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

Disintermediation is the displacement of market intermediaries within the supply chain allowing for consumers to engage directly with suppliers to purchase product. Widespread disintermediation of travel intermediaries was predicted as early as the 1990s, when it was felt that Internet technology would fuel competition and allow new online entrants easy access to the global travel market. More recently, increasing consumer demand for online retailing continues to threaten further the existence of traditional travel agency businesses within travel distribution channels. Furthermore, the rapid development of information and communication technology (ICT) has shaped an environment in which suppliers, wholesalers and intermediaries compete for the same customers. The aim of this study is, therefore, to understand how ICT has influenced changes in the structure of the New Zealand outbound retail travel industry and to investigate the strategic responses of businesses as they adapt to changing market conditions. A case study design was used to collect data through in-depth interviews with senior managers and owners of retail travel businesses operating in the New Zealand market. In addition, industry publications and company documents were analysed and a comparison of the participants’ businesses’ websites undertaken to identify the current structure of the sector. A thematic analysis was completed, including an extensive coding process which led to the identification of the two emergent and interrelated themes: technological capacity and adaptation. The study shows that the New Zealand outbound retail travel industry has experienced considerable structural change in the ten years between 2004 and 2013. This change has been influenced by the nature of strategic relationships and by increased access to ICT provided by Internet technology, two factors that have facilitated the emergence of a new breed of travel agent, the travel broker, who are now a significant sector in the market. In addition, the nature of business models in the market often dictate the strength and value of strategic relationships. Key issues pertaining to the technological capacity of businesses have been identified including enhanced process efficiency and increasing opportunities for consumers to connect with businesses via websites and associated Internet technology. All retail travel business are actively promoting travel to niche markets via email direct marketing, and specialisation in this type of travel by consultants and brokers contributes significant revenue for businesses. The need to use multiple supplier and wholesaler ICT systems in transacting a customer journey and the non-interoperability of these systems presents a problem for retail travel businesses, impacting on both efficiency and profitability. These findings complement studies from other parts of the world where traditional travel agency businesses remain successful, having avoided disintermediation from the travel distribution chain. Further research is needed, however, to investigate the impact of the interoperability of information technology (IT) on the productivity levels of travel consultants, while research into the role ICT plays in traditional travel transactions would shed light on the level of expertise required to maximise efficiency. Finally, an understanding of the role played by ICT in the booking behaviour of loyal consumers would be of value for retail travel businesses to enable their continued success in a dynamically changing environment.

Description

Keywords

Travel agents, ICT, Disintermediation, Reintermediation, Distribution, Strategic relationships

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DOI

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Permanent link

https://hdl.handle.net/10292/9240

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Masters Theses