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Sunday, 31 January 2016

How will you book your next holiday: online or through a travel agency?

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The digital platform presents serious challenges but also offers many opportunities for the travel industry

The digital platform presents serious challenges but also offers many opportunities for the travel industry

DATUK Seri Dr Victor Wee – Malaysia’s former Tourism Ministry secretary-general and the man who played an instrumental role in setting up the Cabinet committee on tourism and Malaysia My Second Home (MM2H) One Stop Centre – is back to doing what he knows and loves best: tourism and culture.

The avid photographer, whose eyes light up when he speaks of his favourite destination, the Tibetan Plateau, is now a professor at Taylor’s University. He joined the university’s School of Hospitality, Tourism and Culinary Arts last year, after serving as Malaysia Tourism Promotion Board chairman.

Having run the successful Visit Malaysia 2007 campaign, he led the Tourism Laboratory under the Economic Transformation Programme to formulate the 2010-2020 tourism industry roadmap and is now taking young Malaysians “beyond the books” by sharing his years of experience.

The former Finance Ministry advisor, Economic Planning Unit senior director, and National Economic Action Council deputy head talks to Sunday Star about the boom in digital tourism and explains why travel agencies must venture beyond the traditional brick and mortar set-ups to survive.

>What is digital tourism?

It’s using ICT to transact tourism business, sell and buy travel services, search for travel information, visualise travel destinations, get traveller feedback, and share travel experiences over the Web. The digital platform and IT are perfect tools for servicing travellers and doing business in the tourism industry.

>Do travellers really go online for travel inspiration and research, or is digital tourism just a trending buzzword?

The Internet has become one of the most important platforms for travel-related services and to share information with customers. A 2013 (Ipsos MediaCT/Google) survey of 5,000 travellers found that 61% of travellers researched an upcoming trip; 68% use the web for travel research and planning and seek value by engaging in comparison shopping; 70% share their experiences on social media while on vacation; 46% researched a destination, flight, hotel or vacation as a result of seeing an online ad, and read reviews from other travellers; 35% requested more information related to an upcoming trip and watched a travel video; and 31% looked at travel content or reviews by friends and family.

>How has technology changed the face of tourism?

The evolution in the travel industry challenges traditional retail travel agencies. Since the 1960s, travel agencies have used global distribution systems like Amadeus, Galileo and Worldspan to access real-time reservation and booking information. During this era, hotels, airlines and other hospi­tality product suppliers depended on travel agencies and paid them a commission for each reservation.

This began changing from 1993 onwards. There was tremendous development in online travel.

Suppliers became more independent and gradually decreased their dependence on travel agencies. They started investing in brand websites and booking engines to offer cost-effective tools for direct marketing to travellers. This led to the “dis-intermediary” process.

At the same time, Web technologies enabled Internet users to automate searches through search engines. The entire content of web pages, not just titles and URLs, could be indexed, which lead to the intermediating role and search services of Google in 1998. This led to the “re-intermediary process” when portals began to emerge to perform the role of traditional retail travel agents. These online travel agents (OTA) provide consumers with Web access to the central reservation systems of hotels, airlines, car rentals and suppliers of other travel-related products and services.

OTAs like Travelocity and Orbitz let consumers check availability of accommodation, do price comparisons and allow the use of various payment modes. OTAs provide one-stop convenience, empowering travellers to find the best value for their travel needs. Some OTAs even specialise in last-minute reservations with the purpose of selling airline seats and hotel rooms at heavily discounted prices.

Then, technology became even more sophisticated, with innovative online business formats like Priceline.com which collects demand from consumers and communicates it to suppliers. In 2000, “cybermediaries” came along. These third parties – like Skyscanner and FareCompare – charge a fee for negotiating or conducting transactions over the Internet.

As travellers became more confident about buying directly from suppliers, they were exposed to a wide range of travel information, including real-time reservation and booking information. The Internet lets them compare prices and buy tourism packages so they can do their own planning and purchase travel packages without going through a travel agency.

The Internet and social media allow the visualisation of travel products and services through video clips and graphical images. Travel community sites like TripAdvisor and Facebook have shifted the traditional one way supplier-to-consumer communication to an open consumer-to-consumer communication.

>Does all this mean that Malaysian travel operators are in trouble?

Traditionally, travel agencies create value by facilitating the sale and delivery of tourism services from suppliers to consumers. Since all these online tools allow tra­vellers to directly access products and services, commissions paid to travel agencies are shrinking, and travel agencies are being by-passed with bookings made directly with the service provider.

The role of travel agencies as middlemen seems redundant, raising questions about their future. They have to give travellers more than what the Internet offers otherwise why would anyone bother with the agents? The challenge is for traditional travel agencies to re-invent themselves. Those able to do so are prospering, while those that haven’t are barely surviving or have left the industry.

The Internet has the potential to serve as a new communication and distribution channel for servicing travellers as well as the suppliers of travel services and products. For travel agencies that are Internet savvy, this channel enables tourism businesses to improve their competitiveness and performance. But ICT for the tourism business requires huge investments.

>How can travel agents take advantage of technology?

Travel agencies must meet the changing customer. ICT and the Internet must become part of an integrated, customer-centric marketing plan that includes online and traditional marketing tools.

The industry players need an active social media presence to build brand awareness, influence consideration, drive sales or grow loyalty. Social media is an excellent channel for real-time feedback.

Traditional retail agencies must familiarise themselves with online marketing. Pay attention to content posted on sites like TripAdvisor as more travellers are relying on them.

For travel agencies to be relevant in the age of digital tourism, they have to improve their knowledge, increase professionalism and specialise, so that they can give advice that’s in the traveller’s best interest. The digital age travel agent must not only sieve through Internet reviews and packages, but they must have firsthand knowledge of what they’re promoting.

So agents that offer high quality professional service, placing the traveller’s satisfaction – not a commission – as a priority, will prosper.

>Are there any Malaysian digital channels that have impressed you?

AirAsia’s flight ticket sales and promotions get high hits. Online purchase is the main way of buying a ticket from AirAsia. It was the first local airline to popularise online bookings, forcing Malaysians to overcome their apprehension and learn how to buy flights on the Internet.

Also, the award-winning Tourism Malaysia website doesn’t just provide tourist information on places of interest and events, it also has a trip planner and allows online bookings. Other national tourism organisations are trying to do the same.

>Any tips for the digital-savvy traveller?

Everyone does everything online these days. There are many online travel sites claiming to provide the best deals but how can you be sure?

Even if you’ve done your homework, booking a trip that meets, or exceeds your expectations, can be stressful, daunting and time-consuming.

There is so much information coming in from all directions. Travellers are faced with a wide range of choices which complicates the decision-making process. What to buy? It’s a guessing game because not every detail appears online.

Online reviews are merely the views of individuals and pictures can sometimes be misleading. Experienced travel agents keep up with developments about resorts and tours. They know what the service and facilities are really like because they’ve experienced it. They can advice on and recommend the option that best suits you because they know the pros and cons of the hotels and the suita­bility of the area.

For instance: You select a hotel but you may not realise that it’s located next to a noisy club or is very far from the places you want to visit. Travel agents not only arrange the various modes of transportation, but may also save you money with early booking discounts, special fares, hotel deals and travel advisories.

Take cruises for example – an experienced tour agent can probably negotiate freebies and upgrades for group bookings. So there are more benefits when booking with an experienced travel professional versus a faceless computer.

>But isn’t it still cheaper to do away with travel agents?

This is a myth. Talking to agents is free. Travel vendors pay a commission when agents book a trip at no cost to the traveller. You may think you’re getting a better deal by booking online but travel agents offer experienced, personalised service. If you wake up late and miss a flight, who’s going to help you make last-minute adjustments to your travel itinerary if you book online?

>NGOs have pointed to the growth of sex tourism as the world gets smaller in the digital age, warning that Malaysia could be a sex tourism destination with perpetrators grooming their victims online before swooping in. Are you concerned?

Malaysia isn’t the only country at risk. The Internet is borderless. Any country can be targeted by perpetrators. Paedophiles can be traced from footprints left in the search engines. There must be education, awareness and child protection programmes.

Tags / Keywords: tourism , Datuk Seri Victor Wee

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