Business Overview

Travel companies are under intense pressure to find innovative ways to both maximize revenue and reduce costs. Despite the various challenges, the travel industry is considered to have performed successfully because of its early adoption of the revolutionary medium - Internet technology for business improvement and benefits. The convenience, speed and access to 'comparison pricing' the Internet affords have won over business and leisure travelers, forcing travel-related businesses to serve their customers online or go under.

Technology offers opportunities to reduce the cost of travel, improve service delivery, improve security, and deliver a better experience to the customer from their first making an initial enquiry to arrival at the final destination. Despite this, many segments of the industry are failing to realize these benefits. Price competition is cutthroat, and many travel companies cannot - or will not - invest in technology that requires more than a few months to deliver a return on investment.

Today, what is different is the pace of change in the current market, which prompts the need to move fast using technologies that enable these issues to be quickly addressed. Additionally, customers have become a proactive force in today's economy and are determining the nature of competition as they voice their expectations and select the manufacturers that can best respond to their needs.

The Business Challenge

Changing business demands are forcing travel companies to adapt and evolve faster than ever. The travel industry has seen radical changes in recent years, with extraordinary growth but reflective and capricious shifts in demography and consumer expectations. The consumer base has become too far spread; and the need of the time is to induct scalability, reduce operation costs, and invent new methods to bridge the spread.

Managing distribution costs

It's going to become a key strategic priority among travel companies. Airlines, for instance, rank distribution costs as their third largest expense after fuel and payroll but also consider distribution costs to be the most controllable of the three. The Internet gives travel marketers the ability to reduce distribution costs from as much as $30 per room to less than $1.