BUSINESS CASEINTRODUCTIONFrance Vacances (FV) is a fictional travel agency specializing in the rental of high quality accommodation in France. They have a wide variety of holiday cottages, apartments and chalets at various holiday resorts. They have offices on high streets in many cities and have a good reputation. They already have a huge customer database and a booking system. Currently, they provide their sales/services through the branch offices or via the phone/post but now they wish to have a presence on the WWW. They have decided to implement a new internet-based booking system.
They have done appropriate research and are convinced that, through this additional channel, they will be able to increase the revenue considerably. BACKGROUNDGlobally, tourism has become one of the most important industry with international arrivals expected to reach 1.6 billion by year 2020 and the expenditure on tourism is expected to hit US$ 2 trillion mark. (WTO 1998)The tour and travel industry or the hospitality industry includes tour operators, airlines, car rental agencies, and hotels and accommodation, online and offline travel agencies and other companies etc. Based on the information by World Travel & Tourism Council (WTTC ) this industry is very interestingly poised and ready for the phenomenal growth in the coming years.
The increased interest n tourism has been fuelled by many factors such as growth in world economy and developing countries allowing the people of these countries to spend their growing incomes on leisure and travel. Moreover, the airline prices are dropping due to competition and destinations are vying with each other to offer maximum discounts and sops to customers to boost their revenues.
Another important factor has been the rapid changes in technology especially the onset of internet revolution. The world wide web has changed the way people traditionally looked and bought goods and services and the travel industry has also been irrevocable changed by this phenomena. Thus, though the overall scenario is very bright, the ever demanding and changing customer preferences have brought the travel industry under pressure. With many small companies coming up as niche or mass market operators, the competition has increased tremendously and thus the travel agents and agencies are trying hard to differentiate themselves and their services by finding innovative ways to retain their competitive advantage.
The margins have shrunk and customers are unwilling to be loyal to one agency or operator and go for the best deal being offered. Thus to do business, companies must find ways to maximize their revenues and simultaneously reduce costs and kep the quality of the services high. The technology has come to the rescue once again. The new innovations technology are opening up new opportunities for the travel companies to grab and increase their market share.
Thus the onset of internet has revolutionized the way travel is purchased. Now a days, lots of information is available on internet and thus travelers or customers prefer to search internet and learn about destinations before making any decision regarding purchase. Since it is very convenient to compare prices, look for alternative options and even book ver internet, customers are increasing using this medium over the traditional modes. Even if they do not book through internet, they still use the net for researching various options and making their decisions.
And it can be used anywhere from an office, home, café, while traveling through laptops etc. – and is thus very easily accessible. Moreover, it allows customers to by-pass a travel agent and book online directly, thereby providing with him with the cost benefits. Thus the need of the hour is to go for websites and portals for travel and accommodation bookings by the travel agencies, companies and agents.