Who Are the Winners at Different Stage of the Changing Travel Industry

1. Who are the winners at different stage of the changing travel industry?

Stage 1 (1965-1972): The process for booking and ticketing flights from manual method to computer records. After the success of the Sabre, other airlines sought to construct similar systems. In this circumstance, IBM started an arms race, sold the weapon and got a great profit. IBM was the winner in this stage.

Stage 2 (1978-1995): After deregulation, as the travel system became more complicated, travel agents became more powerful increasing percentage airlines ticket form 38% to 80%. Travel agents were the winner in this stage.

Stage 3 (1995-2004): Electronic tickets issued by ARC and tickets were sold directly to the customer through the airline company's website. In 2002, most of airline companies canceled commissions to travel agent. In this stage, airline companies were the winner.

1. What are core competitive advantages of companies at different stages of the changing travel industry?

In stage 1(1965-1972): Airline company armed themselves with GDS system to be more efficient and assist in decision support functions. Software companies enhance their system to be closer to the golden standard.

In stage 2(1978-1995): Travel agents offer customers expert advice and guidance about travel-related issues. Airline companies maximized their revenues from each flight by establishing different flight for different seats through yield-management system.

In stage 3(1995-2004): Airline companies launched their own website to bypassing both costly GDS and travel agents. Online travel agents launched Travelocity and Expedia to beat the airlines own website.

2. What are the tendencies of the travel industry in China nowadays?

With the development of Internet, it is easier for customer to get travel information and make online booking of travel products. People will refer to combine the airline ticket and hotel by themselves instead of the tour offered by travel agents.

3. How has technology been changing the whole travel industry?

People used to order their ticket through telephone by travel agents, and then travel agents will check to the airline company, then response to the customer. With the using of GDS, customers can get an immediately reply by the travel agent. After

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