The Impact of the Internet on the Marketing of Travel Intermediaries

Diplomarbeit von Michael Ott

Abstract:

In recent years, more and more people expressed their concerns about some companies’ performance. Mainly not about their financial performance, but about their social performance. About their attitude towards the environment. About the treatment of employees. Consumers, governments, environmentalists, trade unions, but also managers felt that there is a need for change in business life.

This paper investigates two questions: In general, how does the marketing of travel intermediaries change when business is conducted over the internet? In detail, how can travel intermediaries build customer loyalty an the internet?

Why do these two issues pose problems that require a thorough analysis? First, the internet provides a new platform for dealing with travel services. Although the internet travel market still represents only a small fraction of the total travel market, many travel intermediaries entered it in anticipation of huge profits. The number of travellers who use the internet to obtain travel services and the money they spend on-line for travel purposes is growing rapidly. But competition and marketing in the on-line travel market is strongly affected by the unique characteristics of the internet. In order to stay in business in the long run, a deeper understanding of the effects of the internet an the travel industry and an the marketing of individual travel firms is necessary. Also, the internet threatens to eliminate intermediaries by linking service providers and customers directly. Therefore, an evaluation of the marketing impacts of the internet is even more vital for travel intermediaries.

Second, a key element of every on-line marketing strategy is customer loyalty: Many internet travel intermediaries are able to attract a large number of visitors to their web pages. But most of these internet users are not loyal and visit the web page only once. Since a loyal customer base is essential to generate revenues an the internet, the concept of customer loyalty will be analyzed in the on-line context.

The first part of this thesis evaluates the influences of the internet an the marketing of on-line travel intermediaries: Chapter 1 highlights the important characteristics of the internet. These unique features have effects an industries and an individual companies, which are analyzed in Chapter 2. Chapter 3 uses the framework of the previous chapter to demonstrate the impacts of the internet an the travel industry and an travel intermediary firms.

The second part of this paper presents the Service Profit Chain model which links customer loyalty to customer value and customer satisfaction. These service marketing concepts are evaluated in the context of the internet in Chapter 4. Based an the relationships between customer value, satisfaction, and loyalty, hypotheses for a quantitative study are generated. Chapter 5 outlines the framework for the empirical study which tests the research hypotheses by conducting an on-line survey at the web presentation of the travel intermediary TIS GmbH. The results of the quantitative study are then presented in Chapter 6.

Recommendations for travel intermediaries in general and for TIS GmbH in particular make up the last part of the thesis. Methods to improve the marketing strategy and possibilities to increase the loyalty of web site visitors are presented. The suggestions are based an the secondary and primary research outlined in the first two parts of the paper.

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