Because tourism is an information-based industry it is one of the natural leading industries on the Internet (Anchi et al., 2003). It is anticipated that most, if not all, sectors in the travel and tourism industry throughout the world will have sites on the Internet;
showing the suitable marriage of two of the world’s fastest growing industries: information technology and tourism. That is why e-travel is the leading and fastest growing category of e-commerce (Law & Leung, 2002; Demetriades & Baltas, 2003). In order to exploit these opportunities in the market environment, tourism businesses have developed and implemented several business models. Table 3 shows the most frequently used models in the tourism industry.
Table 3. Business models used in the tourism and travel industry
Type of Model
Description and Forms
Brokerage
Brokers are market makers; they bring buyers and sellers together and facilitate transactions (Law & Huang, 2003). Brokerage models include the following forms:
Marketplace Exchange: offers a full range of services covering the transaction process, from market assessment to negotiation and fulfillment (example: Orbitz) (Law, 2002b).
Demand Collection System: it is the "name-your-price" model pioneered by Priceline.com. Prospective buyer makes a final (binding) bid for a specified good or service, and the broker arranges fulfillment.
Auction Broker: conducts auctions for sellers. Broker charges the seller a listing fee and commission scaled with the value of the transaction (examples: eBay and Skyauction.com)
Advertising
Model
The web-advertising model is a Portal; usually a search engine that may include varied content or services. A high volume of user traffic makes advertising profitable and permits further diversification of site services. A personalized portal allows customization of the interface and content to the user. (examples: Yahoo.com; In.gr)
Infomediary Model
Firms function as infomediaries (information intermediaries) assisting buyers and/or sellers understand a given market.
Travel infomediaries are globally branded ‘virtual businesses’ on the Internet that collect and sell information about a specific sector of a market and create a convenient platform (Cyber marketplace) on which buyers and sellers can gain information and do business (examples: Expedia; Travelocity; BargainHolidays and Travelselect).
E-tailing
Business operating exclusively in electronic retailing. This model might take three forms (Turban et al., 2000; Kleindl, 2001):
· E-store: a single tourism shop
· E-mail: consisting of many electronic stores
· E-broker: simply provides aid to customers searching for products and business. It gains a commission from the businesses (example: Travelforall.gr]
R. Law (2001) provides valuable insights into the Priceline.com model. It offers products for sale in two categories: a travel service that offers airline tickets, hotel rooms, rental cars, packaged vacations and cruises; and a personal finance service that offers home mortgages, refinancing and home equity loans through an independent licensee. Priceline.com has pioneered a unique new type of e-commerce known as a "demand collection system" that enables consumers to use the Internet to save money on a wide range of products and services while enabling sellers to generate incremental revenue. Priceline.com is the world's first buying service through which consumers name the price they are willing to pay. Priceline.com licenses its business model to independent licensees.
Orbitz.com has implemented the Marketplace Exchange model. It is a leading online travel company that enables travellers to search for and purchase a broad array of travel products, including airline tickets, accommodation, rental cars, cruises and vacation packages.
The web-advertising model is a Portal; usually a search engine that may include varied content or services. A high volume of user traffic makes advertising profitable and permits further diversification of site services. A personalized portal allows customization of the interface and content to the user. (examples: Yahoo.com; In.gr)
Infomediary Model
Firms function as infomediaries (information intermediaries) assisting buyers and/or sellers understand a given market.
Travel infomediaries are globally branded ‘virtual businesses’ on the Internet that collect and sell information about a specific sector of a market and create a convenient platform (Cyber marketplace) on which buyers and sellers can gain information and do business (examples: Expedia; Travelocity; BargainHolidays and Travelselect).
E-tailing
Business operating exclusively in electronic retailing. This model might take three forms (Turban et al., 2000; Kleindl, 2001):
· E-store: a single tourism shop
· E-mail: consisting of many electronic stores
· E-broker: simply provides aid to customers searching for products and business. It gains a commission from the businesses (example: Travelforall.gr]
R. Law (2001) provides valuable insights into the Priceline.com model. It offers products for sale in two categories: a travel service that offers airline tickets, hotel rooms, rental cars, packaged vacations and cruises; and a personal finance service that offers home mortgages, refinancing and home equity loans through an independent licensee. Priceline.com has pioneered a unique new type of e-commerce known as a "demand collection system" that enables consumers to use the Internet to save money on a wide range of products and services while enabling sellers to generate incremental revenue. Priceline.com is the world's first buying service through which consumers name the price they are willing to pay. Priceline.com licenses its business model to independent licensees.
Orbitz.com has implemented the Marketplace Exchange model. It is a leading online travel company that enables travellers to search for and purchase a broad array of travel products, including airline tickets, accommodation, rental cars, cruises and vacation packages.