ICT and e-business in the tourism industry ICT adoption ... - empirica

Tourism
4.2 Dynamic Packaging
4.2.1 Introduction
Dynamic packaging (DP) is the travel industry jargon for a user centred, cheaper and
more flexible way of assembling and booking a personalised holiday, using the web and
associated application of technology. The phrase is rarely seen in the public literature on
a travel web site. Instead marketers have adopted more straightforward descriptions of
the technology: Book Together and Save, Build Your Own, or Flight + Hotel, etc. From
the end customer / consumer view, DP is an online real-time service which mimics the
experience of visiting a travel agent and negotiating a deal exactly as the consumer
wishes. From the travel service provider view, DP automatically combines offerings from
more than one data source on demand and according to customer preferences. Using
pre-determined packaging rules, which are set and controlled by the service provider, and
hiding price transparency on the individual components, a combined price is determined
for the chosen package. The booking can then be confirmed in a single user purchasing
transaction. Depending on the contracts and “hidden” discounts in place with the
inventory providers (such as global distribution systems, insurance, or travel suppliers
such as airlines, hotels, car rental companies, tours, activities) an attractive price and
assurance of a complete travel service can be offered for the entire package.
Dynamic packaging (DP) has been heavily discussed in the tourism sector as a new
“Wundermittel” (“miracle cure”, Fettner 2006) which offers both the supply and demand
side substantial advantages. DP can be considered as a key issue in e-tourism and
maybe even as a next logical step in e-tourism development, empowering the customer
not only to search and book single components, but also to assemble and book whole
travel arrangements in real-time by means of web-based technology (configurators). 58
As such, DP favours the process of dis-intermediation of traditional travel agencies by
partially outsourcing their assembling-activities directly to customers. On the other hand,
DP also enables re-intermediation, as there are new online intermediaries such Expedia
or Orbitz that dominate the field of DP (cf. Travel Weekley’s Power List).
Definition and distinction
Among many similar DP definitions (cf. Fitzgerald 2004, Rogl 2003), the one from Kabbaj
is rather concise and comprises several relevant elements: "DP means dynamically (i.e.,
in real-time) putting together – and pricing – a package of several major travel
components, e.g., air flight legs, hotel nights, car rental days, etc., from heterogeneous
suppliers and heterogeneous information sources or back-end reservation services, even
as those provide frequently changing availability or prices” (Kabbaj 2003).
This definition should be complemented by the following elements, however. Different
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An extensive analysis of DP markets, technologies, players and potentials for tourism
destinations is provided by the Salzburg Research study about “Dynamische Produktbündelung
in Salzburger Tourismusdestinationen. Eine Analyse von Potenzialen, Herausforderungen und
Umsetzungsschritten” (Markus 2006).
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