Author Question: Discuss how online distributors affect the travel agency industry. What will be an ideal response? (Read 82 times)

pepyto · **on:** Sep 11, 2019

Question 1

How does more competition lead to lower prices for consumers?

What will be an ideal response?

Question 2

Discuss how online distributors affect the travel agency industry.

What will be an ideal response?

smrtceo · **Reply #1 on:** Sep 11, 2019

Answer 1

It is axiomatic that more companies in an industry will lead to lower prices in a market than one involving fewer competitors. This is because fewer competitors will be less inclined to reduce price since an implicit understanding of interdependence will be present. With many companies, such discipline is less likely.

Answer 2

When online agencies like Travelocity came on the scene in the 1990s, another blow was felt by the traditional brick and mortar agencies. The online agencies were accessible at the touch of a key while traditional agencies had to be visited in person or over the phone. Most traditional agencies had equal access to supplier discounts but their advantage was their more personalized service, which was not practical for online agencies and kept customers loyal. However, the demographics of the traditional travel agencies indicate that the changes caused many small and medium-sized agencies to close down.