How Can Tour Operators Use the Internet to Overcome the Problems of Intangibility and Perishability in Selling Holiday Packages?

Tourism is an information-intensive industry and is said to hold together different components belonging to the travel industry, such as airlines, travel agencies, attractions, car rental and several other aspects (Poon, 1993). The main objective of a tour operator is to combine these components to create a holiday package. With the advent of the internet, tour operators can now expand their activities and make available relevant information, conquering new customers (Wyner, 2000). However, in order to do so effectively they have to overcome the problems of intangibility and perishability.

As a service industry, most tourist products are intangible services, they are experienced and cannot be touched, tasted, smelt or seen and therefore are difficult for tourists to grasp and evaluate. Being the most frequently cited characteristic of a service, intangibility emphasizes that it is not an object and has no physical dimension. While purchasing a product, the consumer might be able to see, feel and test its performance before purchase. With services, the consumer greatly relies on the reputation of the service firm. These immeasurable concepts have the potential to influence consumers' opinions and expectations of quality. (Ruiz, 2003)

Perishability, on the other hand, refers to the concept that services, unlike tangible goods, cannot be stocked or stored. It is linked to the notion of inseparability or simultaneity in that services must be provided and utilised at the point of consumption, during the service encounter. The inability to store services is an important characteristic of most service operations. Vacant hotel rooms, empty airline seats and unfilled appointment times for a doctor are all examples of opportunity losses. The perishability of services has repercussions for both service providers and customers, for service providers it creates the problem of synchronising supply with demand, i.e. the management or scheduling of service capacity. In the case of customers, the time chosen to consume a service becomes quite critical, impacting upon the quality of the service provided. (Hallas, 2004)

When a tourist books a particular holiday package, he’s not sure what to expect and how he will eventually perceive and judge the overall experience of his vacation. The intangibility of tourism products creates a large amount of risk and uncertainty for customers. Hence, it is imperative to create confidence, establish quality criteria, and to introduce measures reducing risks thereby helping customers make decisions. The key to the tourist’s decision lies in the existence of relevant information. Through the internet such information is available and in a better way (Buhalis 1998). This type of information helps tourists plan complex tourist activities, such as the planning for long trips (Bieger et al. 2000).Thus, tour operators, such as Thomas Cook and Thomson Holidays, have designed websites enabling customers to browse through and settle on those packages that are best suited for them. TUI, Airtours, Cosmos, Cresta and Kuoni are examples of other tour operators who possess well designed websites and offer similar holiday packages.

Customers can get an enhanced view of the destinations they want to visit by looking through such websites. It provides information from a wide range of sources in a greater variety of formats, from text to photos, graphs, audio and video clips, whereas in the past, tourists mainly relied on printed brochures. Web-based electronic brochures can aid the complicated procedure of choosing among the innumerable holiday options using browser-generated selections through databases linked to web servers, whereas the printed brochures are usually arranged and indexed by one way, often by destination. Some of these electronic brochures can also be printed. (Liu, 2000)

Through Internet video telephony, tourists can "test drive" a prospective holiday by viewing real-time scenes through cameras placed in hotels,