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Business Strategy Report for Online Travel Agency

Info: 4346 words (17 pages) Assignment
Published: 8th Sep 2021 in Assignment

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Table of Contents

Online business Category: TourSmart – Online Travel Agency

Title Page

Letter of transmittal

Executive summary

Introduction to the report

1. Disintermediation Impact Analysis – Travel Industry

2. E-commerce Business Model

2.1 Value proposition

2.2  Revenue model

2.3  Competitive advantage

2.4  Market strategy

2.5  Organisational development

3. Clickstream Behaviour

3.1   Use Data of clickstream behaviour for TourSmart

4. Conclusion

5. Recommendations

Appendix 1 – Prototype Website Checklist and Screenshots of TourSmart Web pages

Appendix 2 - Website Development Journal References

Executive summary

E-commerce in Travel industry is changing fast especially for Business to Customer retailer such as TourSmart. TourSmart is an online travel agency that provide various distinctive tour packages to travellers based on their needs in the global market. The mission of TourSmart is focus on the customer satisfaction and let the customers who travel with them to feel like home and always choose TourSmart without second thought.

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The purpose of writing this e-commerce strategy report is to develop a well-planned and workable leading online travel website in travel sector to compete with others direct and indirect competitors. We have conducted am analysis on how to enhance the business strategy for online travel agencies to analyse the disintermediation impact on the Online Travel Agencies, included five essential components of the e-commerce business model and clickstream behaviour that can benefit the Online Travel Agencies such as TourSmart.

By having detailed analysis on all these three aspects, TourSmart can attract more customers to make online reservation with them and other investors will join these successful travel agencies.

Introduction

We are authorised by the TourSmart Pty Ltd to plan a business strategy report to conduct analysis to the disintermediation impact on the Online Travel Agencies, included five essential components of the e-commerce business model (Value Proposition, Revenue Model, Competitive Advantage, Market Strategy and Organisation Development) and clickstream behaviour that can benefit the Online Travel Agencies such as TourSmart.

The purpose writing this e-commerce strategy report is to develop a well-planned and workable leading online travel website in travel sector to compete with others direct and indirect competitors. By having detailed analysis on all these three aspects, TourSmart can implement a workable and well-planned online website called TourSmart, where customers will select it to make online reservation as customer first choice.

As the TourSmart meaning customer can Tour with Smart without any worries and hesitation. The limitation of this study are the other three components of e-commerce business model components that are also important but are not included into this study are market opportunity, competitive environment and management team. Also, the length of study by conducting the analysis and research are not sufficient time.

1. Disintermediation Impact Analysis – Travel Industry

Conventional travel agencies are being threatened by the integrated travel agents and electronic channels such as online travel websites. Customers and travel companies can obtain the travel information and advice, price comparison through a web-based application. Thus, removing of the travel agents as the intermediaries where the disintermediation inculcating. (Patricia 2008)

The competition between the intermediaries to reach the customers directly and instantly, and the online travel websites able to fulfil this matter. From travel supplier or provider perspective, suppliers use the internet to promote their travel packages and services to their customers and avoid paying any commissions to the intermediaries. Hotels provide direct online reservations through their own hotel website and encourage tourist to make a reservation online with various price policies and provide loyalty programs that are user-friendly and price transparency.

In addition, Airlines Company encourage customers to call or contact Airlines Company directly, zero commissions to the intermediaries and disintermediation their travel agents. (Patricia 2008) From the supplier perspective, travel organisations try to control the operating cost of marketing and distribution of tickets into consideration.

The internet can help travel supplier or provider to reduce costs for printing reservation confirmation and distribution costs. For Online Travel Agencies such as Expedia, they are cost saving by generating e-ticket and printing cost by sending booking confirmation via email. By adopting e-commerce in travel, a travel company who offering the travel packages online are benefited by saving enormous costs on hiring in-house staffs, travel campaigning and physical infrastructure are not important.

For the conventional travel agency, they need to plan new travel packages to attract the more tourists and given discounts or promotion to the loyalty tourists who used to book with them in order sustain their businesses. (Almunawar & Anshari 2014) For instance, the tourists who booked with them will have a further discount by bringing other new tourists to join the travel packages. It was a good saving of money for those tourists that like travelling around the world.

In addition, the Online Travel Agency also associates with other online payments system that support electronic money transfer. Therefore, the Online Travel Agency only earning revenue through the service charges online customers who are booking and cancellation of tour packages. The Online Travel Agency associates with diverse service providers such as hotels, transportation company and flight company to promote cross-selling.  (Chakravarthi & Gopal 2012) From a tourist perspective, customers nowadays preferable the electronic channel that is easily accessible and user-friendly rather than the traditional agents.

The web-based channel can reach customers 24/7 and 365 days, ubiquitously and anytime when they are available. (Chakravarthi & Gopal 2012) Travellers are empowered by using the new approach, making the reservation through the online Web or an app downloaded from their mobile phone. They can check and compare the price of the online travel packages that suit their needs and make the booking instantly through web booking without time and location constraints.

Travellers are saving the costs by making a reservation online and eliminating the commission charges payable to traditional travel agents. (Nazir & Ul Haq 2017) However, tourists who used the web reservation provide their payment details online which their credentials and banking details can be leak and hack by the hacker and dangerous to the tourists if the web provider did not have a well-planned security system.

Therefore, some tourists still using the conventional travel agents to make the reservation, where the travel agents have good reputation able to provide them with the travel information, advice instantly and importantly are trustworthy. Especially for those tourists who are older age’s people and do not familiar with the online booking system. As they may rather trust the traditional travel agent to prevent any inconvenience and fraud incurred.

Furthermore, this may create a win-win situation for the customers whether booking through a traditional travel agent or online travel websites.

2. E-commerce Business Model

A business model is a set of plans that are used for making profit in the marketplace. The business model reflects the strategies chosen by the company for creating competitive advantages among their other travel competitors. (Laudon & Traver 2017, pp.326–336) To ensure the business model are effectively operate, we will describe five effective components of the e-commerce need to be taken into consideration for Online Travel Agencies website as follow:

2.1 Value proposition

The value proposition is the vital and essential elements for the travel company. A value proposition is how the travel’s company travel packages and services fulfilled the needs of local and overseas travellers. Before the Online Travel Agencies, such as Expedia or Booking.com, travellers used to go traditional travel agency to enquiry and make a reservation of the travel destination and tour packages that they preferred.

However, not all travel agency has all the various types of travel packages. Thus, the customer may have to visit different travel agencies to find out the travel packages that they wanted.

TourSmart is a Business to Consumer retailer. The main value proposition is offering the various categories of tour packages with the lowest prices. By having the Online Travel Agencies, such as TourSmart, that offers variable customised tour packages according to the different city (Auckland, Wellington, Queenstown and Christchurch) and different seasons accordingly to the popularity of the tour packages.

Therefore, customer happy with the customised tour provided by TourSmart, can 24/7 accessibility to TourSmart to check and search for availability of the tour packages base on the date, duration and price of the travel package with any time and place constraints. TourSmart also provides 10% price discount for instant confirmation to attract travellers. By lowering the tour packages price.

In addition, TourSmart also provides loyalty program to the travellers who always travel to write comments about the tour packages provided by the tour experts by earning rewards points for activities that customer participates in the TourSmart. Hence, customers can use those points to pay for part of their purchase with TourSmart.

2.2  Revenue model

In the TourSmart, we are using the sales revenue model by draw profit directly from the sales of tour packages to travellers. For instance, TourSmart offers distinctive tour packages based on the different sizes of the tour group and with the tour guide or self-guided and budget or luxury accommodation for every customer needs.

On the other hand, TourSmart also uses the advertising revenue model to advertise our distinctive customised tour packages and online video to display tour services and video advertising. The user can view the services provided by TourSmart to make the decision which tour packages to select and based on their needs and suitability.

TourSmart also provides account registration to the customers for booking, and the customer can subscribe to their weekly or monthly newsletter to have their exclusive offers and latest travels deals from time to time. Furthermore, the customer who registered with TourSmart will receive 5 percent discount on their first order. This registration and subscription with TourSmart is free of charge to travellers and save more money for them.

In addition, TourSmart also pursues market strategy as a "one-stop shop” which offers hotel and transportation booking to assist in their purchasing decisions in order differentiate TourSmart from the competition with other competitors. TourSmart makes money through commission fees received from affiliate with Hotel and transportation company.

2.3  Competitive advantage

TourSmart is a leading online tour agency as compared to its original online competitors such as Tours.com, have lost businesses. The main competitors mainly are local travel agencies and providing tour packages catalogues while Tour Smart's main competitive advantages are the establishment and patented a brand name as “TourSmart” that it will be difficult for the competitors to duplicate. It’s hiring and develop more experienced, knowledgeable and loyal tour experts and employee base than other competitors.

TourSmart also provides cheaper tour packages by the affiliate with the hotel and airlines company, where they can get business and it can earn revenue through sales of services with the cheapest price and provide promotion code and discount to usual traveller booking with them.

2.4 Market strategy

TourSmart uses a “bricks-and-clicks” market strategy. At first, it was traditional tour agencies located at several different locations and leveraged its brand to the e-commerce environment. TourSmart can promote by allowing the travellers that booked with them before to leave the review on their website and gain the rewards point to purchase for the tour packages or accommodation that they may interest in future.

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Meantime, TourSmart also creating an online survey to the travellers on the tour packages they booked and each survey result with providing the useful and vital information to the TourSmart to improve its services. TourSmart providing lower prices not only to the local but also to the global market if traveller have a valid visitor visa to New Zealand. TourSmart also providing email marketing by subscribing to its subscriber list through receiving the free email newsletter about the exclusive offers and latest offers to attract more customers.

2.5 Organisational Development

Customer can find the information about TourSmart's management team and organizational structure by clicking on "About Us" page. TourSmart needs to have a well-planned organisation development for the outcomes of globalisation. It's having to organise the works that need to be accomplished according to the functional departments such as management, customer services, marketing and finance.  Jobs within the functional department are defined and allocated to the employee based on specialised experience and knowledge and responsibilities.

Normally, there will one employee will handle few job title and responsibilities on electronic tourism, however, once the TourSmart turning to the global market, recruiting become more specialised. For instance, there is one marketing manager needed for the local e-tourism, after the businesses grow steadily, TourSmart must recruit several marketing individuals to handle separate jobs derived from a marketing position.  Therefore, the organisation develops into the well-organised globalised e-tourism with many employees, departments and managers to responsible for the various aspects of the organisation.

3. Clickstream Behaviour

Clickstream behaviour is a sequence of clicks that customers browse the website for web shopping and purchasing before exit the websites. (Laudon & Traver 2017) Upon customer click on the online website, the clickstream provides insight on how the customer navigates the websites. Each time a visitor or potential customer can visit multiple web pages on the online website, they could search for a product or service, read the products or services reviews from the social media, checking latest deals in various websites and responded to an exclusive offers, or just visit the website with to do price compare, and purchase the products which have exclusive offer or eventually exit website without purchase any products or services. (Ganeshan 2014) User visits a travel website to search for tour packages promotion, the user can read the reviews from the site or connect to social media, Facebook, to read other reviews about the tour packages services provided by the website. After compare prices of the tour packages and level of services provided, the user makes the decision to purchase tour packages from which online travel website.

3.1 Use Data of clickstream behaviour for TourSmart

3.1.1 Marketing managers can identify how customer are awareof their site, and where they come from through search, email, and social campaigns. TourSmart analyses clickstream data is to focus on how the conversion e-visitor to the potential customer: a) how many visitors visit our website daily and b) how many visitors purchase tour packages.

3.1.2  We can use the clickstream data to record numbers of visitors that are with the travel website, related to the webpages being viewed/visited and length of time on the website. By having this information, business managers can enhance the design of our website and improve the content viewers are seeing.

3.1.3  Through social media network, customers’ opinions and behaviour can be gathered and transmitted to their friends and relatives, which can encourage visitors to interact and share their experiences, opinions, preferences, and behaviours with their friends, as well as other visitors to the site to attract more customers.

3.1.4  Purchase on the shopping cart page is vital to how the sales revenue is generated, and this is also where the customer frequently exits the entire website and cause online travel agency loses a potential sale. Finally, clickstream data can help managers discover customer loyalty and post-purchasebehaviour by writing travel reviews about our tour packages and tour experts.

3.1.5  Help managers building a detailed understanding of how consumers behave when visiting the website and assess the impact of specific travel campaigns with latest discounts, loyalty points, and special offers.

3.1.7 Managers can change the content of a TourSmart by responding to customer complaints and comments and arrange various travel campaigns with trending topics or news developments. Thus, this can enhance the effectiveness of building an online website.

4. Conclusion

The current study is to explore the disintermediation impact on the online travel agencies such as TourSmart. The main findings show that the Online Travel Agency adopted E-commerce in their business governed by five essential components as discussed. The data of clickstream behaviour enables the travel agency to analyse and enhance their services by improving the content of the website and create better relationship with customers. Therefore, by developing and implement the online website of TourSmart will help TourSmart Travel Agency to have a better competitive advantage to succeed on Tourism industry.

5. Recommendations

  • We would highly recommend traditional Travel Agency to develop Online Travel website to attract more customers with the well-develop travel website.
  • By having instant interaction with online travel consumer through leave reviews after travel with TourSmart, can bring more customer to TourSmart.

Appendix 1 – Prototype Website Checklist and Screenshots of TourSmart Web pages

Prototype Website Checklist

  1. Valid setup of Joomla! Website with filled checklist document.

Online Business Name: TourSmart Online Business Category: The company sells New Zealand tourist packages to local and overseas traveller. URL in cloudaccess.net: http://uunz707256.cloudaccess.host/ Joomla site Login details: Username: sherene0102@gmail.com Password: colagal9193 Template name: Cloudbase3 Number of Pages visible and their screenshots: 11 pages

  1. Template and layout is accessible and user friendly.
  2. Content – Key pages: Home, About Us, Tour Packages, Blogs, Contact Us, Search, Policy Page.
  3. Screenshots

Cloudbase3 Free Joomla Template - Google Chrome

Screenshot 1 & 2 – Discovering New Zealand Home

Cloudbase3 Free Joomla Template - Google Chrome

About Us - Google Chrome

Screenshot 3 & 4 – About Us

About Us - Google Chrome

Screenshot 4 & 5 – Tour Packages

Tour Packages - Google Chrome

Tour Packages - Google Chrome

Screenshot 6, 7 & 8 – Blogs

Blogs - Google Chrome

Blogs - Google Chrome

Blogs - Google Chrome

Screenshot 9 – Contact

Contact - Google Chrome

Screenshot 10 – Search

Search - Google Chrome

Screenshot 10 & 11– Policy Pages

Policy Page - Google Chrome

Policy Page - Google Chrome

Appendix 2 - Website Development Journal

Date Research Activity / Duration Resource used / Website visited Time/ Duration
28/2/2018 Register on the cloudaccess.net and setup on Joomla! website https://www.cloudaccess.net/ 3 hours
7/3/2018 Develop an idea for a sitemap for your website https://www.cloudaccess.net/ 3 hours
14/3/2018 Write some content for your website and watching cloudbase Joomla tutorial on Youtube. https://www.cloudaccess.net/ https://www.youtube.com/ 3 hours
21/3/2018 Create or copy some relevant images/ videos/ resources for your website https://www.cloudaccess.net/ 3 hours
28/3/2018 Create Content – Articles & Categories https://www.cloudaccess.net/ https://www.youtube.com/ 3 hours
29/3/2018 Defining Menu Items to display articles https://www.cloudaccess.net/ https://www.youtube.com/ 2 hours
30/3/2018 Create content for Blogs https://www.cloudaccess.net/ 3 hours
31/03/2018 Create articles for tour packages and link to Tour Packages page https://www.cloudaccess.net/ 2 hours
1/4/2018 Create content for Policy Pages https://www.cloudaccess.net/ 1 hours
3/4/2018 Checking and print screenshots for the TourSmart webpages. https://www.cloudaccess.net/ Ms. Word 2 hours

References

Almunawar, MN & Anshari, M 2014, ‘Applying Transaction Cost Economy to Construct a Strategy for Travel Agents in Facing Disintermediation Threats’, Journal of Internet Commerce, vol. 13, no. 3/4, pp. 211–232.

Chakravarthi, JSK & Gopal, V 2012, ‘Comparison of Traditional and Online Travel Services: A Concept Note’, IUP Journal of Business Strategy, vol. 9, no. 1, pp. 45–58.

Ganeshan, R 2014, ‘Clickstream Analysis for Forecasting Online Behavior’, Foresight: The International Journal of Applied Forecasting, no. 33, pp. 15–19.

Laudon, KC & Traver, CG 2017, E-Commerce 2017 13 edition., Pearson, Boston. Nazir, S & Ul Haq, Z 2017, ‘E-Commerce Perception and Adoption- A Study of Tour and Travel Operators of J&K State’, Amity Global Business Review, vol. 12, no. 2, pp. 69–76.

Patricia, DS 2008, ‘The Interne, Threat or Tool for Travel Agencies?’, Annals of the University of Oradea, Economic Science Series, vol. 17, no. 2, pp. 103–108.

 

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