Travel agent vs internet: What influences travel consumer ...

Travel agent vs internet: What influences travelconsumer choices?

Jo Cheyne*, Mary Downes and Stephen LeggReceived (in revised form): June 2005Anonymously refereed paper

*Massey University, Palmerston North, New Zealand

E-mail: [email protected]

Jo Cheyne is a lecturer in management and

tourism at Massey University, Palmerston North,

New Zealand. Her current research interests in-

clude SMEs in tourism, particularly copreneur-

ship in rural tourism, environmental programmes

in tourism, and women entrepreneurs.

Mary Downes is Director – National Student

Administration and Teaching Support at Massey

University. Her contribution to this paper resulted

from an interest in travelling and formed part of

her research project for her BBS(Hons) degree.

Professor Stephen Legg is Director of the Cen-

tre for Ergonomics, Occupational Safety and

Health in the Department of Human Resource

Management at Massey University, a Fellow of

the Ergonomics Society (UK) and a Certified New

Zealand Ergonomist. He has published over 60

refereed papers.

ABSTRACT

KEYWORDS: travel, service, intermediary,quality, internet

Until relatively recently, travel agents have beenthe key intermediary between travel suppliers andconsumers, with information as their primary stockin trade. However, changes to information technol-ogy and the advent of the internet have thepotential to allow travel suppliers and consumers tointeract directly, thus threatening the existence ofthe traditional travel agent. This paper examinesthe factors that influence travel consumers’ choices

between using a travel agent and/or the internetwhen planning and arranging their overseas holi-days. Research employing a questionnaire surveyand focus groups was conducted in a small NewZealand city. Findings from this exploratory studyindicated the importance of a number of servicedimensions, in particular: reliability, handlingcomplexity, assurance, good deals and security.Other findings suggested that travel agents couldbecome more competitive through more effective useof information technology and that the perceivedvalue of the services required can influence consu-mer choices.

INTRODUCTIONDriven by cost considerations, many organi-zations are trying to save money throughminimizing their distribution costs, with aspecific focus on intermediaries in the distri-bution chain. Blank,1 Inkpen,2 Morrell,3

Oliver,4 and Sloan5 contend that advances ininformation technology, especially the inter-net, have enabled suppliers in many indus-tries to sell directly to their consumers,leading to significant cost savings.

This trend towards ‘disintermediation’,the elimination of middlemen between pro-ducers and consumers, is readily apparent inthe travel industry where much of the recentliterature about the industry has focused onthe dynamic and competitive environmentin which travel agents operate.6 This envir-onment is epitomised by the deregulation ofairlines, the reduction of, and limits on,

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Journal of Vacation MarketingVol. 12 No. 1, 2006, pp. 41–57& SAGE PublicationsLondon, Thousand Oaks, CA,and New Delhi.www.sagepublications.comDOI: 10.1177/1356766706059307

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commissions paid to travel agencies and theadvent of electronic ticketing.7–9

As intermediaries between travel suppli-ers and consumers, with information astheir primary stock in trade, travel agentsare particularly vulnerable in this en-vironment.10–12 Bennett13 claims thatchanges to information technology in thetravel industry over the past few years haveworked predominantly in favour of thesuppliers and at the expense of the travelagent (see also Barnett and Standing,14 Bu-halis and Licata15). Caywood,16 Loverseed17

and Murray18 support this view and suggestthat these changes are aimed at encouragingtravellers to forego using travel agents alto-gether.

In particular, the internet is providing themeans for suppliers and consumers to bypassthe travel agent and interact directly.McFarlane19 attests that online travel salesnow make up the largest retail e-commercecategory. Suppliers such as airlines, hotelchains and car rental companies are sellingdirectly on websites, allowing them to putpressure on traditional travel agencies andto make significant savings in distributioncosts.20–27

There is an abundance of literature onthe advantages offered by ‘do-it-yourself’travel arrangements using the internet.Many writers suggest that the internet pro-vides travel consumers with more informa-tion, quicker responses and often lowerprices than they can achieve when makingtravel arrangements through a traditionaltravel agent.28–33 On the other hand, anumber of authors maintain that travelagents provide better service than the inter-net, especially when making complex travelarrangements,34,35 answering questions,36

handling problems37 and maintaining a re-lationship with travel consumers.38 Small39

claims that travel agents can save travellersa lot of time when planning and arrangingtravel and Renshaw40 suggests that the un-biased advice that travel agents provideadds value for travel consumers. Theseviews are supported by Inkpen,41 Lyle42

and Paulson43 who maintain that travelagents can offer a more personalized service

than the internet, while providing conveni-ent, authoritative and impartial advice.

A number of arguments are put forwardto suggest ways in which travel agents cansurvive and prosper, despite the growingpopularity of the internet and self-servicetravel arrangements. In their research ontravel agents in a changing information tech-nology environment, Lowengart and Reich-el44 claim that there are opportunitiesavailable to travel agents provided they focuson specific markets and specialise their activ-ities. Waksberg45 and Standing andVasudavan46 agree, suggesting that travelagents should move from a focus on transac-tion processing to the provision of consulta-tive services. Similarly, Lovelock47 andSamenfink48 postulate that travel agents willneed to expand their advisory functions andconcentrate on the provision of informationand details that are not available on theinternet. Beirne49 suggests that travel agentsshould position themselves as consumer ad-vocates who will find the best deals fortravellers, and Morrell50 maintains that theprovision of extra service and value to travelconsumers is essential for survival. Lyle51 andPaulson52 argue that those agencies that willsurvive are likely to be those that organizethemselves into powerful consortia or fran-chizing networks.

On the other hand, Bennett,53 Blank,54

and Murray55 believe that there is consider-able potential for travel agents to expandtheir use of information technology, includ-ing the development of their own websitesand the use of online bookings, in order toenhance their advisory role. Standing andVasudavan56 agree, advocating that the inter-net provides a whole new set of opportu-nities for travel agents.

However, although Dilts and Prough57

have completed a study on the travel agent’sexperience under deregulation, there hasbeen little formal research comparing therelative advantages of travel agents and inter-net travel services when planning and arran-ging travel. Furthermore, other thanempirical research by Kendall and Booms58

on consumer evaluation and selection of re-tail travel agencies and a later study by Cliff

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Travel agent vs internet



and Ryan59 on consumer expectations oftravel agents, there is very little informationabout why consumers might choose to usetravel agents instead of, or as well as, theinternet.

Empirical studies have tended to lookat the issue from the perspective of travelconsultants/agencies rather than the travelconsumer. For instance, Standing andVasudavan60 focused primarily on the use ofthe internet and related strategies by travelagencies rather than travel consumer prefer-ences and needs when making travel ar-rangements. Waksberg61 maintains that theinternet can facilitate closer links betweentravel supplier and travel consumer; yet hisstudy considered the impact of the interneton global distribution systems (GDSs) whichhave, in the past, provided the link betweenthe travel supplier’s own reservation systemand that used by the travel agent. Likewise,Buhalis and Licata62 predominantly reflecton the impact that the emergence of theinternet has had on these traditional electro-nic tourism tools, though they do also sug-gest that the trend towards the use of theinternet for travel transactions is likely toexpand, enabling travel suppliers to movecloser to travel consumers.

There is generally more knowledge/certainty, less expense and different issues/concerns associated with domestic travelthan for overseas holiday travel. For businesstravel, the tourist trip is taken in relation towork requirements and decisions relating tothe trip and its financing are often made bysomeone other than the traveller.63 We havetherefore chosen to focus in the presentstudy on a particular group of travel consu-mers – overseas holidaymakers.

Because there appeared to be little re-search on the impact of the internet from thetravel consumers’ perspective, the purpose ofthe present exploratory study was to identifywhat factors influence travel consumerchoices between using a travel agent and theself-service environment of the internetwhen planning and arranging overseas holi-days.

Specifically, this study aimed to determineawareness levels of the range of services that

are available through travel agents and on theinternet, identify whether or not there is atendency to use travel agents for some ser-vices and the internet for others, determinethe service dimensions that are most impor-tant to people when planning and arrangingtheir overseas holidays and, finally, comparehow people rate both travel agents and theinternet on these factors.

METHODS AND RESEARCH SETTINGAs this research was exploratory, the multi-phase approach recommended byChurchill64,65 was used. Data was collected intwo stages. In the first stage, a self-admin-istered questionnaire was posted to 400 resi-dents of Palmerston North, a small city inthe lower half of the north island of NewZealand. It has a population of approxi-mately 73,000 people. In the second stage,two semi-structured focus groups were con-ducted.

QuestionnaireThe questionnaire contained predominantlyclosed-ended questions, along with oneranking question. Opportunities for respon-dents to include more qualitative informa-tion were provided through comments fieldswithin the questionnaire.

Questions were in three sections. Thequestions in the first section attempted todetermine awareness levels of the range ofservices that are available through travelagents and on the internet. Participants wereasked to indicate the services they thoughtwere available via each source, within threecategories: information, planning and trans-actions. The services that were identified inthe questionnaire were: accommodation,destination, rental car hire, flights, packagedeals, currency exchange and tours and otherentertainment. Respondents were asked totick as many boxes as applied to them.

In the second section, respondents wereasked to indicate whether or not they hadaccess to the internet. Those people whohad not been on an overseas holiday withinthe past two years were then asked to skip

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Cheyne, Downes and Legg



this section and move onto the third section.After these initial questions, there were twomain parts to the second section. The firstpart focused on determining what internetand/or travel agency services people hadused when planning and arranging theiroverseas holiday. Respondents were invitedto tick as many boxes as applied for a numberof services – these were the same services asthose identified in the first section of thequestionnaire. In the second part, respon-dents were then asked to identify whetherthey thought a travel agent or the internetbest met their needs for the same range ofservices. They were asked to tick only onebox for each service (i.e. either the travelagent or the internet). Questions in bothparts were again broken down into threecategories: information, planning and trans-actions.

The final section of the questionnaireconcentrated on identifying the service di-mensions that were important to peoplewhen planning and arranging overseas holi-days. In addition to service dimensions ofreliability, responsiveness, assurance andempathy,66 the questionnaire included anumber of other factors that had been identi-fied as being important in the literature re-view: accessibility, unbiased advice, gooddeals, security, information and handlingcomplexity. Respondents were first asked toselect the five dimensions that were mostimportant to them when planning and arran-ging overseas holidays, and then to rank thefive in order of importance from 1 to 5, with1 being the most important. Brief definitionsof each dimension were provided to ensurebetter understanding and to enhance thevalidity of the results. Finally, respondentswere asked to indicate whether a travel agentor the internet best met their needs for eachof the 10 dimensions.

At the end of the questionnaire, demo-graphic information was requested for age,gender, education level and income level.

A first draft of the questionnaire was pilottested with 10 people before it was used inthe study. Their responses were principallyconcerned with wording of questions. Theresponses were then used to improve its

layout and wording to ensure each questioncould be clearly understood. The question-naire was then sent by mail to 400 people,selected at random from the PalmerstonNorth electoral roll. Participation in a prizedraw was offered as an incentive to returncompleted questionnaires within a threeweek deadline. Along with the question-naire, each person was sent a personalizedletter outlining the aims of the research andassuring respondents that their individualresponses would be kept strictly confidential.Contact details of the researcher were alsoprovided. Questionnaires were numberedand respondents were given the opportunityto include their name and contact details forpossible participation in the focus groups. Astamped, addressed return envelope was en-closed to facilitate a prompt return.

Focus groupsTwo focus groups were held, each withseven participants, following initial analysisof the data derived from the questionnaires.Participants in the focus groups were madeup of questionnaire respondents who hadindicated that they would be interested intaking part in further discussions. The focusgroups included seven people who had onlyused a travel agent for planning and arran-ging overseas holidays and seven people whohad used both the internet and a travel agentat some time. They were evenly spread intoboth focus groups. All but two of the partici-pants had travelled on an overseas holidaywithin the last two years.

A standardized but open-ended approachto questioning was used in the focus groups.Six main questions were asked. These ex-plored themes identified in the questionnaireresponses in greater depth, along with anumber of ideas that had not been includedin the questionnaire. The six questions were:

(1) Why do you think each of the dimen-sions (reliability, handling complexity,assurance, good deals and security)ranked in the top five in the question-naires is important?

(2) What are the sorts of things that would

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discourage you from using the internetwhen planning and arranging your over-seas holiday?

(3) What would discourage you from using atravel agent when planning and arrangingyour overseas holiday?

(4) Are there instances where you would tendto use the travel agent for some aspects ofplanning and arranging your overseasholiday and the internet for others?

(5) What do you think travel agents coulddo better/need to do to remain com-petitive in the future? Are there anyadditional services you think they could/should offer?

(6) What do you think the internet could dobetter/need to do to remain competitivein the future? Are there any additionalservices you think they could/shouldoffer?

Each focus group took approximately onehour and was tape-recorded and later tran-scribed for analysis.

Data analysisData from the questionnaires was initiallyexplored using cross tabulation in SPSS. Thechi-squared test was then used to compareresponses for demographic groups. To avoidproblems from multiple tests (age, gender,education and income for each topicamounts to a total of 80 tests), a morestringent approach than the standard p valueof 0.05 or below was taken. Accordingly,the criterion for significance was tightenedto p , 0.01 to reduce the risk of false indica-tors. Fisher’s exact test was used to analysedata where respondent counts were low inthe various categories. Descriptive statistics(numbers of observations, means and stan-dard deviations) were also used to analysedata pertaining to the service dimensions.Content analysis was used to analyse theinformation from the focus groups.

RESULTSOne hundred and nineteen completed ques-tionnaires were returned within the three-

week deadline from time of delivery, repre-senting a 30 per cent response rate. Onerespondent failed to indicate his/her gender,age and education level, and six failed toindicate their income range. Of the 118respondents who had indicted their gender,61 (51.7 per cent) were females and 57 (48.3per cent) were males. Other demographicdata is included in Table 1.

One hundred and four out of 119 (87.4per cent) respondents indicated they hadaccess to the internet, either at work or athome, while only 15 (12.6 per cent) respon-dents indicated no internet access. Seventy-three out of 119 (61.3 per cent) respondentssaid they had been on an overseas holidaywithin the last two years, 42 (35.3 per cent)had not been on an overseas holiday in thattime, and four (3.4 per cent) people failed torespond to this question.

Table 1: Respondent age groups (N118), highest level of formal education

(N 118) and income levels (N 113)

Number ofrespondents

Percentage ofrespondents

Age groupUnder 20 3 2.5420–29 10 8.4830–39 28 23.7340–50 30 25.42Over 50 47 39.83

Education levelPrimary school 2 1.70Secondary school 20 16.95Some university/

tertiary studies18 15.25

Trade/professionalqualification

31 26.27

Completeduniversity/polytechnic degree

47 39.83

Income level$20,000 or less 19 16.81$20,001–$29,999 15 13.28$30,000–$39,999 22 19.47$40,000–$49,999 12 10.62$50,000–$59,999 19 16.81$60,000 + 26 23.01

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Awareness of travel agency and

internet servicesThe first three questions in the survey weredesigned to establish levels of awareness ofthe services available via the travel agent andthe internet when gathering general infor-mation, planning and arranging an overseasholiday. Table 2 shows the results for thesequestions. In summary, for most services,more people were aware of the servicesprovided by both the travel agent and theinternet, rather than being aware of only onesource. However, in the area of awareness ofservices available for planning and arrangingcurrency, more people were aware of theservices provided by the travel agent thanthe internet or both. Of those people whowere aware of a service being available eitherthrough the internet or through a travelagent (i.e. only one or the other), more

people were aware of travel agency servicesthan those provided on the internet.

Demographic differences relating toawareness of the services available were as-sessed using the chi-squared test. Compari-sons were generally made between theTravel Agent category and the Both TravelAgent and Internet category since counts inthe other two categories were low. How-ever, for currency, where counts were moreevenly spread across the categories, compari-sons were made across all four categories(Neither Travel Agent nor Internet, TravelAgent, Internet, Both Travel Agent andInternet). Using the p , 0.01 criterion, theonly significant demographic difference wasthat those with a higher education weremore likely to be aware of both internet andtravel agent services. This was most signifi-cant for information services relating to des-

Table 2: Awareness levels of travel agent and internet services (N 119)

Number of respondents who were aware of services available via each channel

Identified servicesNeither travel agentnor internet

Travel agentonly Internet only

Both travel agent andinternet

Gathering general informationAccommodation 1 24 8 86Destination 2 25 6 86Car hire 4 37 9 69Flights 1 16 7 95Packages 2 50 2 65Currency 18 43 11 47Tours 4 46 11 58

PlanningAccommodation 2 43 7 67Destination 4 41 8 66Car hire 6 47 10 56Flights 1 35 7 76Packages 4 65 2 48Currency 14 46 15 44Tours 5 58 6 50

ArrangingAccommodation 2 38 4 75Car hire 11 35 5 68Flights 2 25 6 86Packages 3 53 1 62Currency 29 58 11 21Tours 8 59 4 48

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tination and tours (both p ¼ 0.001), andarrangement services for accommodation(p ¼ 0.001), car hire (p ¼ 0.001) andpackages (p ¼ 0.008).

Comparison of travel agency and

internet usage and ratingThe next set of questions asked respondentsto indicate the various travel agent and inter-net services they had used when gatheringinformation for, planning and arranging anoverseas holiday taken within the last twoyears. The data collected is presented inTable 3. Analysis of these questions wasrestricted to the 70 respondents who hadgone on an overseas holiday within the lasttwo years and also had access to the internet.

As with the analysis of awareness levels,demographic trends were assessed using the

chi-squared test and results were only takenas significant if p , 0.01. The main demo-graphic trends indicated in this analysis werefor gender and education levels. The resultsshow that women were marginally morelikely to use the internet while men weremarginally more likely to use a travel agent(gender p ¼ 0.013); those with a lower edu-cation were marginally more likely to usethe internet while those with a tertiary edu-cation were marginally more likely to use atravel agent (education p ¼ 0.011).

Respondents were also asked to indicatewhether they thought a travel agent or theinternet best met their needs across a rangeof services when gathering information for,planning and arranging an overseas holiday.Many people tended to recommend thesource they used. For information gathering,the percentages recommending using thesame source again ranged from 73 per cent

Table 3: Usage levels of travel agent and internet services (N 70)

Number of respondents who used the services available via each channel

Identified services Neither travel agentnor internet

Travel agentonly

Internet only Both travel agent andinternet

Gathering general information for an overseas holidayAccommodation 20 24 10 16Destination 18 19 11 22Car hire 45 12 9 4Flights 3 32 14 21Packages 32 29 5 4Currency 47 12 10 1Tours 39 13 10 8

Planning an overseas holidayAccommodation 21 29 7 13Destination 19 27 13 11Car hire 42 15 9 4Flights 3 39 11 17Packages 30 32 3 5Currency 44 18 7 1Tours 36 20 8 6

Arranging an overseas holidayAccommodation 18 41 8 3Car hire 49 12 6 3Flights 4 47 12 7Packages 35 32 2 1Currency 52 14 4 0Tours 43 21 4 2

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to 100 per cent for travel agents (dependingon the topic), and 40 per cent to 89 per centfor those who used the internet (again de-pending on the topic). For example, 73 percent of those who used a travel agent forgathering information about accommodationwould recommend this source while 100 percent would recommend a travel agent forgathering information about currency; 40per cent of those who had used the internetfor gathering information about accommo-dation would recommend the same source,with 89 per cent recommending the internetfor gathering information about overseasholiday destinations. Likewise for planning,percentages recommending using samesource again ranged from 79 per cent (ac-commodation) to 94 per cent (currency) fortravel agents, and between 33 per cent (ac-commodation) and 71 per cent (rental cars)for those who used the internet.

Using p , 0.01 as the threshold for sig-nificance, chi-squared tests identified onlyone area of significance. When planningflights, 31 out of 39 who used travel agentswould recommend using them again,whereas only 4 out of 11 who used theinternet would recommend using it again(p ¼ 0.0058). Another couple of topicscould be deemed marginally significant. Thefirst was gathering information aboutpackages: 25 out of 27 people who usedtravel agents would recommend doing thesame again, while only 2 out of 4 who usedthe internet would (p ¼ 0.0177). Similarly,for planning accommodation, 23 out of 29who used travel agents would recommendusing them again, while only 2 out of 6 whoused the internet would (p ¼ 0.0233).

Fewer people had answered this questionabout making arrangements for their over-seas holiday. This meant it was more difficultto get some comparative data, so Fisher’sexact test was used to analyse the data thatwas obtained. The differences in the propor-tion of people recommending the travelagent over the internet were not as apparentwhen it came to recommending a source formaking arrangements. For instance, similarproportions would recommend the travelagent and the internet for making arrange-

ments for both accommodation (p ¼ 0.595)and flights (p ¼ 0.448). The main differencesappeared to be with tours, packages andcurrency. Although the internet was notused much (thus affecting the numbers re-commending this source in the future), sig-nificant differences were identified betweenthose recommending travel agents and thoserecommending neither a travel agent nor theinternet. A higher proportion of people whoused travel agents would recommend usingthem again compared to those who eithermade their own arrangements or used otheragencies (p ¼ 0.003 for currency and p ,0.001 for both tours and packages).

Service dimension importanceIn this section of the questionnaire, respon-dents were first asked to rank the five mostimportant service dimensions out of a possi-ble 10 dimensions. The dimensions and thedefinitions that were used in the question-naire are provided in Table 4. Respondentswere then asked to indicate whether theythought a travel agent or the internet wouldbest meet their needs for each of thesedimensions when planning and arrangingany future overseas holidays.

Overall, the results suggest that the fivemost important dimensions for people whenplanning and arranging their overseas holi-days are, in priority order: reliability, hand-ling complexity, assurance, good deals andsecurity. Results were very similar whencomparing the ratings of the service dimen-sions between those respondents who hadbeen on an overseas holiday within the pasttwo years and those who had not. Almostthe same order emerged when looking atboth sets of ratings. In Table 5, the dimen-sions are arranged in order of how often eachis mentioned by respondents. Using thismethod of ordering, the top four dimensionsare the same for both groups (those who hadtaken an overseas holiday within the last twoyears and those who had not) – reliability,good deals, assurance and unbiased advice.

By contrast, Table 6 presents the servicedimensions in order of the mean ranking,again for both holidaymakers and non-

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holidaymakers. In this table, a few differ-ences in order of importance are apparentbetween the two groups, though other thanunbiased advice (non-holidaymakers) andgood deals (holidaymakers), both groupshave included the same dimensions in theirtop five ranking. Two of these commondimensions were also in the top five whenarranged in order of the number of men-tions: reliability and assurance.

These results are compared and contrastedin terms of what holidaymakers and non-holidaymakers mentioned and how they

rated the dimensions (see Figure 1). Thebiggest discrepancies (i.e. points furthestfrom the diagonal line) are: holidaymakersmention accessibility more often than non-holidaymakers, while non-holidaymakersmention handling complexity and securitymore often than holidaymakers; and, holi-daymakers rate reliability and unbiased ad-vice higher than non-holidaymakers, whilenon-holidaymakers rate handling complexityand information higher than holidaymakers.

As mentioned earlier, respondents werealso asked to identify whether they believed

Table 4: Service dimensions and their definitions

Service dimension Definition provided

Accessibility Being able to easily contact the travel agent or internet service providerAssurance Feeling confident about the knowledge and expertise of the travel agent or

internet service providerEmpathy Provision of caring, individualized attentionGood deals Cheaper travel, special package dealsHandling complexity Ability to deal with complex travel arrangementsInformation Provision of a wide range of useful informationReliability Knowing that what you arrange through the internet or travel agent is what

you will getResponsiveness Provision of helpful and prompt serviceSecurity For example, feeling confident when making payment for your holidayUnbiased advice Receiving honest and helpful information, not influenced by relationships

with specific airlines, hotels etc

Table 5: Service dimensions arranged by how often each is mentioned by those

who had not been on an overseas holiday within the past two years and thosewho had

No Holiday Holiday

Dimension N Mean Std Dev. Dimension N Mean Std Dev.

Reliability 34 2.03 1.243 Reliability 65 2.38 1.295Good deals 29 3.14 1.156 Good deals 52 2.92 1.506Assurance 27 2.85 1.406 Assurance 48 2.83 1.419Unbiased advice 27 2.81 1.075 Unbiased advice 43 3.30 1.186Security 25 3.04 1.399 Accessibility 37 3.62 0.953Responsiveness 17 3.59 1.372 Responsiveness 33 3.36 1.410Handling complexity 15 3.07 1.486 Security 31 3.06 1.237Information 13 3.69 1.601 Information 26 3.08 1.547Accessibility 10 3.90 0.994 Handling complexity 18 2.50 1.383Empathy 5 3.80 1.789 Empathy 12 3.75 1.288

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a travel agent or the internet best met theirneeds for each of the dimensions. Table 7presents the findings from this question fromthe perspective of those people who hadranked a dimension in their top five. Thetravel agent rated more highly than theinternet across all the service dimensions.Those dimensions where there was a signifi-cant preference (i.e. p , 0.01) were: assur-ance, reliability, empathy, responsiveness,security and handling complexity. Of thesesix dimensions where there was a significantpreference for the travel agent, four wererated in the top five by respondents: assur-ance, reliability, security and handling com-plexity.

Chi-squared tests comparing the answers

Table 6: Service dimensions arranged by mean ranking by those who had notbeen on an overseas holiday within the past two years and those who had

No Holiday Holiday

Dimension N Mean Std Dev. Dimension N Mean Std Dev.

Reliability 34 2.03 1.243 Reliability 65 2.38 1.295Unbiased advice 27 2.81 1.075 Handling complexity 18 2.50 1.383Assurance 27 2.85 1.406 Assurance 48 2.83 1.419Security 25 3.04 1.399 Good deals 52 2.92 1.506Handling complexity 15 3.07 1.486 Security 31 3.06 1.237Good deals 29 3.14 1.156 Information 26 3.08 1.547Responsiveness 17 3.59 1.372 Unbiased advice 43 3.30 1.186Information 13 3.69 1.601 Responsiveness 33 3.36 1.410Empathy 5 3.80 1.789 Accessibility 37 3.62 0.953Accessibility 10 3.90 0.994 Empathy 12 3.75 1.288

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Table 7: Travel agent and internet

ranking across the service dimensions

Respondent Preference

Dimension Travel agent Internet

Assurance 68 (90.7%) 7 (9.3%)Accessibility 28 (60.9%) 18 (39.1%)Reliability 86 (84.3%) 16 (15.7%)Empathy 17 (100%) 0Unbiased advice 38 (55.9%) 30 (46.1%)Good deals 44 (57.1%) 33 (42.9%)Responsiveness 37 (74.0%) 13 (26.0%)Security 47 (85.5%) 8 (14.5%)Information 22 (55.0%) 18 (45.0%)Handling

complexity29 (93.5%) 2 (6.5%)

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to these two questions (ranking of the di-mensions and rating of travel agent andinternet against these dimensions) to variousdemographic factors were undertaken. Theseindicated no significant associations betweendemographics (age, sex, education and in-come) and the likelihood of mentioning anyparticular dimension of service as being oneof the five most important.

On the other hand, there were some areasof significance when it came to identifyingwhether the travel agent or the internet bestmet respondents’ needs in these dimensions.Men were significantly more likely to re-commend travel agents with regards to ac-cessibility (p ¼ 0.002) and reliability (p ¼0.002). Older people were more likely torecommend travel agents for unbiased advice(p ¼ 0.016); for instance, 10 out of 16 (63per cent) respondents in the 30–39 agegroup recommended the internet, while 12out of 19 (63 per cent) respondents in the40–50 age group and 18 out of 24 (75 percent) respondents in the over 50 age grouprecommended travel agents.

Qualitative comments from

questionnaireThirty-two people included qualitative com-ments in their responses, most of whichtended to converge around a number of keythemes. For example, 12 respondents men-tioned the importance of the relationshipand bond of trust that can develop betweentravel agent and travel consumer and theimpact that the personalized service thatsome travel agents provide has on the choicebetween a travel agent and the internet.Correspondingly, one person commentedthat he/she would be prepared to pay for thispersonalized service. However, another re-spondent suggested that he/she was not pre-pared to pay a premium and that such acharge would encourage further use of theinternet for travel arrangements. This re-spondent also suggested that ‘travel agentscould be a dying breed’.

A number of people (eight) believed theinternet can be more convenient and can

provide more extensive information than atravel agent while others (seven) believed atravel agent can offer more practical andpersonal advice. The only comments (three)relating to a ‘one-stop-shop’ referred to trav-el agents rather than the internet.

A relatively common theme was the useof the internet for information gathering yeta tendency to use travel agents when book-ing and paying for travel services. Therewere a number of reasons cited for this: theneed to feel confident about the security ofany payments made, the ability of the travelagent to put together a better package dealthan could be done over the internet andmore confidence in a travel agent to dealwith complex travel arrangements. Likewise,most people (12) indicated that they weremore confident in using the internet fororganizing all aspects of their overseas travelwhen going to places they were familiar withor believed were close enough to their homeenvironment, for instance travel from NewZealand to Australia, but would use a travelagent to make bookings for places they hadnever been to before or were less certainabout.

Focus groupsThe first of the six questions in the focusgroups looked at the reasons why partici-pants thought that reliability, handling com-plexity, assurance, good deals and securitywere ranked the top five in the questionnaireresults. Most participants agreed that thesedimensions were important to them. Theonly factor for which there was some debatewas to do with good deals. Some agreed thatobtaining a good deal was important tothem, that costs mattered, and that theywould use the source (travel agent or inter-net) that would provide them with the bestdeal. Others were not as price sensitive andwere more concerned with the personaltouch and being able to establish a relation-ship with their travel provider.

Reliability was important to all partici-pants in both focus groups. All agreed thatholiday time is usually limited (i.e. on aver-age, overseas holidays tended to be between

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two and four weeks in duration) and holi-daymakers needed to feel confident thatwhat they had arranged was what they got –that valuable holiday time was not spent intrying to sort out ‘faulty’ arrangements.Similarly, feeling confident about the know-ledge and expertise of the travel providerwas important to all members of bothgroups. Often participants lacked confidencein their own knowledge of overseas destina-tions and wanted to feel assured that theprovider could provide reliable and persona-lized advice. Being able to effectively handlecomplexity was important for many partici-pants as they believed that the more complexthe trip, the more room there was for mis-understandings and for things to go wrong.Finally, security was important to all, parti-cularly in relation to payments made forholiday travel and accommodation. Partici-pants wanted to be sure that there were noopportunities for fraud in their travel transac-tions. Associated with this was the need tohave someone/something to fall back on ifthings did go wrong.

The second question investigated whatsorts of things would discourage people fromusing the internet when planning and arran-ging their overseas holidays. A number offactors were identified, primarily relating tolong response times, a lack of personal rela-tionship, doubts over security of transactionson the internet, navigational difficulties anda lack of confidence when travel arrange-ments are complex. A number of participantsmentioned that timeliness was important tothem – they wanted instantaneous answers– and have been frustrated by the length oftime it can take to navigate through andobtain full information on the internet.Many also agreed that the lack of humancontact was a factor which dissuaded themfrom using the internet. They liked to feelthat they could establish a relationship withtheir travel provider, a relationship wherethe provider got to know them and theirneeds, and then made every effort to meettheir particular needs, searching out the ar-rangements that would best suit them. Therewas a general belief that, with the internet, itis not so easy to have someone to fall back

on should things go wrong on their travels.A number mentioned that they liked thesecurity of, for example, the accommodationvoucher they received from the travel agent,that this was something tangible whichinstilled confidence when planning andarranging overseas holidays. Lastly, most par-ticipants agreed that they felt more confidentin the reliability of the travel agent whenmaking more complex holiday arrange-ments, particularly when their own know-ledge was relatively low. They suggested thatthe assurance they could get from a travelagent when handling complex arrangementswas not available through the internet.

Question 3 asked participants about thesorts of things that would discourage themfrom using a travel agent when planning andarranging their overseas holiday. Two mainnotions were identified: poor relationshipbuilding and cost. Other factors included alack of integrity and a lack of up-to-dateinformation and knowledge. All participantswere of the opinion that the primary advan-tage the travel agent could offer in today’stechnological environment was the ability toestablish a positive and long lasting relation-ship with their clients. If this was not done,they suggested that the travel agent then lostwhat they believed to be a key advantageover the internet. A number of participantswere price sensitive and would use the inter-net rather than a travel agent if this wouldsave them money, especially if the holidayarrangements were reasonably straightfor-ward.

The fourth question aimed to identifywhether there was a tendency for overseasholidaymakers to use a travel agent for someaspects of planning and arranging their over-seas holiday and the internet for others.Many participants maintained that they usedthe internet for information gathering andsome aspects of planning their overseas vaca-tion, but that they tended to make theirarrangements through a travel agent, thoughin a number of cases, the latter depended inpart on the travel destination (this was ex-plored in further detail in the next question).These participants agreed that the advantagesof booking through a travel agent were the

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increased feeling of security and the assur-ance that if anything goes wrong there issomeone to call on. Several participants de-clared that they would use the internet forthings where there was less risk and less cost(for instance, booking a rental car), butwould prefer to use a travel agent to arrangeflights and accommodation. Security was an-other issue here. While some participantswould be happy to pay for things over theinternet using their credit cards, others weremore reluctant and some argued that theywould never be comfortable doing this, nomatter what they were paying for.

Questionnaire responses included a num-ber of qualitative comments from peopleindicating that they would feel more com-fortable about using the internet when mak-ing arrangements for holidays in Australiaand, perhaps, in other English speakingcountries, and for places they had been tobefore. Focus group participants were askedfor their perspective on this. After somegeneral discussion, all agreed that they wouldbe more inclined to feel comfortable inpurchasing travel and accommodation viathe internet for a trip to Australia – thatAustralia was close enough and similarenough to New Zealand that they felt moreconfident in being able to deal with anyproblems that might arise themselves. Whilesome would be happy to extend this use ofthe internet to arrangements for any countrywhere English is the first language, otherswere more inclined to consider the com-plexity of the overall arrangements, andwhether or not they had been to the destina-tion before, when deciding whether or notto use the internet.

The penultimate question in the focusgroups looked at what participants thoughttravel agents could do better/should do inorder to remain competitive in the future,and what additional services they could/should offer. Key suggestions focused onbuilding lasting relationships, increasing theirknowledge base to improve the quality ofadvice, and more effective utilization of theinternet for travel agent use. The relationshipthat can be established between the travelagent and holidaymaker was considered to

be vital. Several participants said that thequality of this relationship would sway theirdecision about whether or not to go to atravel agent or use the internet. They be-lieved that the personalized service a travelagent could provide was something withwhich the internet could not compete – andthey did not mind paying a bit extra whenthey received this level of service as it addedvalue to the holiday experience. This rela-tionship was at its best when consumersbelieved that the travel agent was working intheir best interests, providing them withoptions that suited them rather than focusingonly on what would give the agent the bestcommission.

Participants also believed that travel agentsneeded to do more to ensure they had allrelevant information, including local know-ledge and pitfalls. At times, participants felt asif the agent did not necessarily have thewhole picture and that this limited the holi-daymaker’s ability to make an informed de-cision about what best met their needs.Closely associated with this last point was thesuggestion that travel agents should utilizeinternet resources more effectively them-selves. This would facilitate their ability tobe more knowledgeable about options avail-able, thus improving the quality of theiradvice, and offering a further advantage bysaving consumers time in searching out thisinformation for themselves.

Finally, participants were asked for theirideas on what would make them more likelyto use the internet in the future. Suggestionshere tended to focus primarily on issues ofsecurity and reliability. A number of partici-pants believed that the provision of some sortof guarantee of service would help them tofeel more confident in the knowledge, ex-pertise, security and reliability of internetservices, particularly when planning and ar-ranging complex travel or travel to placeswith which they were unfamiliar. Corre-spondingly, participants maintained thatmembership of some international travel or-ganization would provide further authenti-city and assurance to consumers. Othersuggestions included the expansion of ser-vices such as the provision of accommoda-

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tion ‘tours’ on the internet, increased linksbetween travel suppliers and improved re-sponse times and site navigation. Most feltthat the websites for individual providerswere too fragmented and a more ‘one-stop-shop’ approach with links between airlines,hotels, tour operators, rental cars would en-hance internet services.

DISCUSSIONIt has been argued that there is a diminishedplace for the travel agent in today’s techno-logical environment, that the internet canprovide travel consumers with more infor-mation, cheaper prices and quicker responsesthan travel agents.67–72 However, the resultsof this study suggest that there are severalfactors which influence travel consumerchoice between the internet and the travelagent, including consumer knowledge of theoverseas holiday destination, perception ofthe value of a number of key service dimen-sions and evaluation of travel agent andinternet delivery of these services. Althoughthis research is of an exploratory nature, itcan inform future research and may providea basis for similar studies, which could repli-cate the method used.

This study failed to establish a clear rela-tionship between participants’ awareness ofthe various services available via travel agentsand the internet and subsequent usage andevaluation of services. Similarly, with 87.4per cent of questionnaire respondents indi-cating access to the internet, no conclusionscould be drawn about whether or not accessto the internet had any significant bearing onrespondent preference for travel agents orthe internet. There was also limited indica-tion of gender and education differences inresponse to a number of survey questionsand no significant difference in responsesfrom people in different age and incomecategories. Nonetheless, analysis indicated atendency for those with a higher educationto be more aware of the services availablethrough both the travel agent and the inter-net. Furthermore, men and those with ahigher education were more likely to usea travel agent, while women and those with

a lower education were more likely to usethe internet. However, as there were nosignificant demographic differences in rela-tion to the service dimensions that wererated the most important by questionnairerespondents, it may add little value to ex-plore these few demographic differencesfurther. In fact, this again may inform futureresearch with regard to these demographicdifferences.

Although the questionnaire results did notindicate a significant tendency to use travelagents for some aspects of planning andarranging overseas holidays and the internetfor others, qualitative comments elicitedfrom both the questionnaire responses andthe focus groups suggested otherwise. Thesecomments indicted that people were morelikely to use the internet for informationgathering and for making arrangements forsome potentially less expensive and less im-portant details, such as booking a rental car,but that more people preferred the securityand assurance of travel agents for bookingand paying for flights and accommodation.Closely associated with this was the propen-sity for people to be more enthusiastic aboutusing the internet to book and pay for traveland accommodation for destinations theyhad been to before, believed were similar totheir home environment and/or where Eng-lish was the first language. Lowengart andReichel73 recommended that travel agentsshould focus on specific markets if they wereto compete successfully in today’s increas-ingly technological environment. Thesefindings, if corroborated by further research,could identify the potential for a niche mar-ket for travel agents, focusing on travel ar-rangements for specific, perhaps exotic,destinations.

Based on the numbers of respondents whowould use the same source again, question-naire respondents were generally more satis-fied with the services provided by travelagents than the internet. The difference insatisfaction rates may be a reflection of thehigher ratings scored by travel agents over allof the service dimensions that were surveyedin this study and, in particular, the signifi-cantly higher ratings given to travel agents in

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four of the top five most important dimen-sions as ranked by questionnaire respondents:assurance, reliability, security and handlingcomplexity. The importance of these dimen-sions, and the possible impact they may haveon travel consumer choice, is further vali-dated by some of the qualitative commentsvolunteered in the questionnaires and frominformation gathered in the focus groups,where suggestions for improvement for bothtravel agents and the internet centred aroundthese service dimensions. This would sup-port earlier literature where claims are maderegarding the superior service provided bytravel agents when handling complex travelarrangements74,75 and maintaining a relation-ship with travel consumers.76

The service dimension where there wassome ambivalence was good deals. Despitethis being included in the top five dimen-sions as rated by questionnaire respondents,focus group participants were divided aboutthe importance of cost when choosing be-tween travel agents and the internet. Thiscould suggest that, contrary to the beliefs ofsome theorists,77,78 a move towards the pro-vision of consultative rather than transac-tional services may be premature or onlyappropriate for certain market niches. Futureresearch based on this suggestion would beuseful.

In addition to the importance of improv-ing performance in the areas of relationshipbuilding and the delivery of more persona-lized and value-added service, the focusgroups considered that travel agents couldcompete more successfully through more ef-fective utilization of information technologyto improve the quality of advice and time-liness of service they provide to travel con-sumers. This upholds assertions by someauthors who argue that travel agents shouldbe expanding their use of information tech-nology.79–82

The impact of the importance and deliv-ery of these service dimensions on satisfac-tion rates and consumer choice should befurther investigated, along with the potentialto make more effective and customerfriendly use of information technology. Ifsubstantiated by other research, such infor-

mation could be significant in assisting bothtravel agencies and internet service providersto achieve a strategic advantage when estab-lishing and managing the desired image andpositioning of their organization in an in-creasingly competitive environment. It isalso acknowledged that variations in demo-graphics of respondents will affect the im-portance placed on service dimensions andsatisfaction rates, and that this could befurther investigated.

CONCLUSIONSThis study has shown that awareness levels ofthe various services offered by both travelagents and the internet are generally quitehigh among a sample of residents of a mod-erately sized city in New Zealand. While thepeople in this study tended to use travelagents more than the internet, limited con-clusions can be drawn from this as a similarproportion of participants recommend bothsources for making arrangements for the twokey services: accommodation and flights.Nonetheless, this study offers clear insightsinto the different factors that impact ontravel consumer choices between using atravel agent and/or the internet. In particu-lar, although some overseas holidaymakersmay be price sensitive, many value the posi-tive and lasting relationship that can be estab-lished with a travel agent. Another importantfactor is the consumer’s familiarity with theholiday destination. People in this studywere more likely to use the internet whentravelling to a destination they had been tobefore, considered similar to their homeenvironment and/or where English was thefirst language. This study also demonstratesthat there is potential for travel agents toutilize the internet to add value to thisrelationship by consolidating and synthesiz-ing the data available on the internet intomeaningful information for their clients.Finally, the study highlights the potential forfurther research into the key service dimen-sions and the need for more effective utiliza-tion of information technology, and theimpact that these can have on travel consu-mer choice of service provider and, ulti-

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mately, on the ability of travel intermediariesto succeed in a dynamic and highly competi-tive environment. This exploratory studycan inform future research in these areas andprovides a basis for further investigations anddiscussion in these areas.

ACKNOWLEDGEMENTSThe authors gratefully acknowledge the as-sistance provided for this project by DuncanHedderley from the Statistics Research andConsulting Centre at Massey University andPaul Rennie of Orbit Corporate Travel forsponsorship of the prize draw for the ques-tionnaire.

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