Effect of the Internet on the Travel Industry - A shrinking world and shrinking costs

With the world more than ever on the move, the travel industry stands to benefit greatly. The Internet is just the tool it needed to cope with an increasingly mobile world. Earlier, the various service providers such as airlines, hotels and tour operators worked closely so that they all shared the revenue from each others' transactions. The effect of the Internet on the travel industry has been to make each area of service independent, because the customers can be reached directly online.

Rather than depend on someone else to plan their travel, people are increasingly inclined to go to a travel agency website directly to see what is on offer. Such a direct channel has encouraged many new players to enter the travel business. The Internet technology tends to bring both big and small operators to the same level.

Despite the possibility of direct access, travel agents have not disappeared. They have simply adapted themselves to the technology by expanding their database of hotels, airlines and other travel-related businesses. Some travelers prefer to use the websites of these travel operators to compare a large number of service providers to get the best deal. Such a service also offers reassurance to those customers who are not confident about dealing directly with businesses that they know little about. A travel operator still banks on the expertise of negotiating with a large number of businesses in the industry.