1.0 Introduction
Today’s hospitality sector has been faced with many challenges, thus posing significant threats to the survival of travel agencies. These are challenging times for small-sized travel agencies and those who are just beginning to get started in the travel industry. The traditional reason for making one approach an agency is becoming less meaningful every year. The emergency of digital technologies has adversely affected the travel agency industry since individuals seek their destinations from Google. Similarly, tourists see it less meaningful to seek a third-party agency because they can book services and accommodation directly through the internet. Similarly, travels are seeing it less significant to remain loyal to one agent when many are at their fingertips. Therefore, the management in the travel agencies should evolve with the technologies since travellers are becoming smatter from one year to another.
2.0 Synthesis of the articles
There are significant issues or challenges facing the present travel agency industry in the digital era. Some of these challenges include; price dispersions, dynamic capabilities and environmental concerns. Dynamic capabilities refer to the organizational and strategic routines in which travel agency firms reach new resource configurations as the market collides, emerges, develops, divides and dies. This has been a significant problem for travel agencies in the modern era, where many travel agencies still rely on the traditional operational routines to serve their customers. In the hospitality industry, the extent of dynamic capabilities is measured through reconfiguration, integration and recreation or renewal capabilities. Similarly, it involves the seizing, sensing and transformation of the hotels to improve the services of the travel agencies (Abrate et al., 2020). Some of the hotels still rely on traditional services and have failed to cope with the technological changes. Therefore, they have posted this as a challenge in the travel agency industry, thus reducing the number of customers reaching out to these industries. Inability to cope with the dynamic capabilities will make many customers seek other travel agencies since there are more choices than ever. There are many options for travellers when arranging and searching for their trips.
The other factor which affects the travel agency industry is price dispersion. Price dispersions refer to the variations in the prices across many travel agency service providers for the same services. Price dispersion has been considered the measure of the industry frictions for the investors in the travel agency industry. Price dispersions are attributed to consumer search costs for the accommodation and travel services. The variations in the prices have contributed to high competition in the industry where the customers are keen on the prices of different service providers when searching and booking for the providers. They make comparisons before making the choices. With improved technologies and the internet, many online travel agencies (OTAs) have emerged. They have created online websites where they present their service prices, thus making the travellers make comparisons before choosing their intended service provider (Camisón, & Monfort, 2012). This factor has changed the hotel search behaviour as the OTAs have changed this search behavior which was previously active with the interactions of the travel agent and the salesperson. With the increase in price transparency in the travel agency industry, the already competitive advantage has become even more competitive.
The other significant challenge in the travel agency industry is the lack of environmentally-friendly behavior by the salespeople. The environment is a significant factor that affects the behavior of the consumers in the travel agency industry. Travel agency salespersons have a significant influence on the search for customers. The inability of the salesperson to have enough knowledge about different accommodation centers such as hotels has adversely affected the travel agency industry (Chen, & Peng, 2014). Similarly, environmentally unfriendly products have adversely affected the travel agency industry, reducing the number of customers looking for the services.
3.0 Recommendations
There are significant strategies or recommendations that can solve all three significant issues that adversely affect the travel agency industry. Firms in the travel agency industry should improve their dynamic capabilities in this digital era. They should concentrate on shaping opportunities and deleting all the firm’s threats. They should also use the capabilities of the service choices of their customers, which will attract many customers. In addressing the environmentally unfriendly conditions, firms should ensure that their salespersons use environmentally friendly behaviors when interacting with the travel agency salespersons (Pereira-Moliner et al., 2021). They should ensure that their hotels and other accommodation facilities are environmentally conducive to attract many customers. Similarly, travel agency firms should ensure that the salespersons have enough knowledge about their facilities. Statistically, product knowledge moderates consumers’ consumption behavior. Therefore, when salespersons have enough knowledge about the products, their behavior will be moderated when communicating with potential customers (Jiang, Ritchie, & Verreynne, 2021). In addressing the problem of competition arising from price dispersion, travel agency firms should ensure that they avail of all their services on the internet by creating their specific websites. They should ensure that they join the OTA industry to adapt to a number of pricing tactics to increase the attractiveness of their inventories (Kim et al., 2020). Similarly, they should offer a more economical solution when compared to their competitors on services of the same quality, hotel location, quality of the accommodation space and other amenities.
4.0 Two travel agency organizations
The two organizations that I have chosen for the travel agency management sector are; Booking. Com and Expedia. Booking.com was established in 1996 and is owned by Booking Holdings. The platform offers accommodation services and other travel products such as cars, flights and taxis. Its headquarters are in Amsterdam, and it serves customers looking for resorts, hotels, apartments, villas, guest houses, hostels, breakfasts and beds (Goldenberg et al., 2021). It serves almost 200 countries globally. The other business organization is Expedia, which was founded in 2001, and its headquarters are in Seattle, Washington. It operates as a metasearch engine and OTA with more than forty localized sites. It offers booking services for motels, holiday homes, cabins, and B&Bs. It also offers additional travel bookings. It serves all the online markets across the globe (Shen, 2018). The reason why I have chosen these organizations is that they are faced with some of the issues discussed above.
5.0 Conclusion
With the technological improvements, the travel agency industry is adversely faced many challenges, thus reducing the number of customers visiting their organizations for bookings. These challenges are price dispersions, the inability to have dynamic capabilities and environmental issues. However, firms can use different strategies to address these problems. Travel agency firms should ensure that they well developed dynamic capabilities in relation to the digital era. Similarly, they should ensure that they introduce more economical services which enable them to compete favorably with the other rivals in the industry. Similarly, they should ensure that their accommodation centers and services are environmentally friendly to attract many customers.
References
Abrate, G., Bruno, C., Erbetta, F., & Fraquelli, G. (2020). Which future for traditional travel agencies? Dynamic capabilities approach. Journal of Travel Research, 59(5), 777-791.
Camisón Zornoza, C., & Monfort Mir, V. M. (2012). Measuring Innovation in tourism from the Schumpeterian and the dynamic-capabilities perspectives. Tourism Management, 2012, vol. 33, p. 776-789.
Chen, A., & Peng, N. (2014). Recommending green hotels to travel agencies’ customers. Annals of Tourism Research, 48, 284-289.
Goldenberg, D., Kofman, K., Levin, P., Mizrachi, S., Kafry, M., & Nadav, G. (2021, January). Booking. Com WSDM WebTour 2021 Challenge. In ACM WSDM Workshop on Web Tourism (WSDM WebTour’21).
Jiang, Y., Ritchie, B. W., & Verreynne, M. L. (2021). Building dynamic capabilities in tourism organisations for disaster management: Enablers and barriers. Journal of Sustainable Tourism, 1-26.
Kim, J., Franklin, D., Phillips, M., & Hwang, E. (2020). Online travel agency price presentation: examining the influence of price dispersion on travelers’ hotel preference. Journal of Travel Research, 59(4), 704-721.
Pereira-Moliner, J., Molina-Azorín, J. F., Tarí, J. J., López-Gamero, M. D., & Pertursa-Ortega, E. M. (2021). How do dynamic capabilities explain hotel performance? International Journal of Hospitality Management, 98, 103023.
Shen, Y. (2018). How to Improve Customer Loyalty to Online Travel Agencies: A research on Expedia, an online travel booking platform.
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