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

Tourism
The legal dimension, which is concerned with creating an appropriate legislative
framework.
Expectations and Drivers: Why DP?
In the past few years the significance of DP as a new form of customisable tourism
arrangements has been continuously growing. Great expectations have been associated
with the adoption of DP, which sometimes is regarded as “the killer application for the
leisure travel industry” (Rose 2004). The following important expectations and drivers of
DP can be identified:
DP is a technology-based instrument for tackling the problem of over-capacities (cf.
Fischer 2005).
DP enables the customisation of travel components towards cost-competitive travel
packages (cf. Poon 2003).
DP avoids direct price competition and “introduces the ability to obtain hidden
discounts, enhanced marketing and merchandising to communicate consumer
benefit of purchasing in this new way.” (CSI Media 2005; Travel Mole 2005) 59
DP enables the re-establishment of the tour operators’ brand (cf. CSI Media 2005).
DP disburdens and enables the individualisation of travel packages by booking
agents and customers, who do not need to visit multiple websites to plan their trips,
to make multiple registrations and payments as well as to wait for a response or
confirmation (cf. Edeman 2005).
There is, however, no (available) empirical evidence providing sufficient support for these
claims yet. There is also a lack of comprehensive and systematic research on dynamic
packaging. In fact, a comprehensive web survey revealed that only few books provide a
comprehensive coverage of the topic (cf. Rose 2004, Stengel 2004). 60 The majority of
information sources accounts for announcements, short journal and paper articles or
case studies, presentations and company-based information material which often lack a
systematic approach and an all-embracing analysis. Despite a large quantity of
fragmentary information resources, the issue of DP is thus still encircled by a certain
“hype aura”, as there is a lack of empirical evidence on DP benefits and risks.
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In many cases hidden single prices and discounts seem to suggest the notion of DP, by
presenting customers an all-round price with, apparently, (substantial) cost reductions in
comparison to booking single components separately. This should enable suppliers to increase
revenues by obtaining better prices (i.e. over the limit of the established market) for some
components by selling them in a context of a package. Yet, it is arguable whether current DP
services, based on two or three basic travel components, provide a sufficient price-hideout and,
if they do, whether these non-transparent prices would be accepted by customers who have
been increasingly used to compare prices. In addition, the new emerging travel search engines
could further complicate company’s attempts of DP based price-hide-outs. In this context,
Patrick Urso, Managing Director and Chief Product Officer of Tazzoo.com, stated at the ITB
Berlin 2006: "We are going to provide possibilities of comparing and assembling packages on
different platforms, i.e. dynamic packaging."
The analyst and consultant Norman Rose (2004) covers the technological dimension and Nico
Stengel the implications of dynamic packaging for the tourism value chain, especially with
regard to dis-intermediation and re-intermediation.
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