Tour Operators Overcoming of Intangibility and Perishability by Using the Internet

How can tour operators use the internet to overcome the problems of intangibility and perishability in selling holiday packages? Use examples of good practice.

A famous person once said and I quote, “Follow your dreams”. Holidays are dreams which people perceive and Tourism is all about selling those “far-fetched dreams” and bridging the gap between �fantasy and reality’. Tour operators use the internet to portray a “picturesque description” of a “dream destination” which we as tourists are lured to follow. Tourism can be viewed as an unforeseen, unpredictable service industry which offers an intangible and perishable yet desirable experience to the consumer. It can be defined as a multifaceted, multidimensional activity which touches many lives and many different economic activities. (Chris Cooper et al, 2005)

Tourism produces and sells product bundles instead of products (products being “experiences”) which are very intangible, products that cannot be stored (simultaneity of production and consumption), therefore perishable. As far as the tourist is concerned, the product covers the complete experience from the time he leaves home till the time he reaches his chosen destination. (Barnett, M & Standing, C, 2001)

For travel and tourism in the Twenty First century, intermediation comes about through �tour operators’ or �wholesalers’ assembling the components of the tourist’s “ideal/dream” holiday destinations into attractive packages and promoting the same by offering them at appealing prices through such mediums as the internet. (A, Lockwood, & S, Medlik, 2001).

Traditionally, tour operators tend to pre-reserve or pre-purchase combinations of transport and accommodation services to integrate them into standardized “inclusive tours” or “holiday packages”, distribute them through brochures displayed in travel agencies and sell them at inclusive prices. (Buhalis, D, 1998). But as tourists become sophisticated and more demanding, they seek high quality products and value for their money. Thus, in order to satisfy tourism demand the Twenty First Century has produced an explosion in visual and electronic communication which is more interactively user-friendly, accurate and reliable. The tour operators’ web sites offer correct products, priced effectively and promoted efficiently thus leading to alleviated customer satisfaction.

Package holidays are incorporeal, intangible services that cannot be physically displayed or inspected at the point of sale before purchasing. They are normally bought before the time of their use and away from the place of consumption. (Chris Cooper et al, 2005) From one perspective, this makes marketing services much easier; none of the usual problems of physical distribution is encountered, and there is no problem of storing the product in warehouses prior to its delivery to the customer. On the other hand, Intangibility of tourism products implies a large amount of risk and uncertainty about customer value (quality-price-ratio).

Tourism marketers must attempt to overcome the drawbacks posed by an intangible product, and there are a number of imaginative ways in which this has been achieved in practice. Since the holidays cannot be �road-tested’ prior to purchase, tour operators, such as Thomas Cook and Thomson Holidays, have built websites which the customer can browse through to select the best-suited package. The internet provides unparalleled opportunities for tour operators to research destinations and develop their products on-line. It aids them to communicate directly with consumers and therefore better cognize their specific needs and wishes and thus fulfills them by exhibiting comprehensive, personalized and up-to-date information about more �exotic’ destinations and �authentic’ experiences. It also helps them make significant savings on commissions paid to travel agencies, as well as reduces the costs of incentives, bonuses and educational trips for retailers. The initial costs of establishing a web site may be high but once the system has been developed the cost of incremental sales is close to zero and currently less than 0.5 per cent. These tailor-made online packages save the customer the time he would traditionally waste on waiting for brochures in travel agencies. He has speedy access to the online brochures which offers tips on how to best allocate his available time and money on his prospective holiday by providing a detailed itinerary of his day to day schedule. Thus even before reaching the place, the tourist gets a somewhat vague idea of what his holiday is likely to be. He can thus make impromptu reservations in the hotel of his choice and take the flight to his dream destination. (Buhalis Dimitrios, 2003)

By browsing through the