Online Travel Business: The 4 Business Models By David Bain At Isnare.com Ezine Articles

The Internet offers an effective means for developing a single and sustainable electronic infrastructure for information gathering and business transactions for both travellers and suppliers. It is an ideal method for people to source information on travel. It is an essential for travel-related Websites to offer useful, pertinent and easy-to-find information alongside a booking facility if appropriate.

It can be used to fully research a destination, book all aspects of the holiday including travel and communicate others who have the same ideas or have been through similar experiences. It gives travellers an excellent opportunity to compare and contrast everything on offer before they make a purchase.

The information available online is continually being reformatted and presented in a more logical, easy-to-use and read format. The volume of consumers that rely on this information to make travel-related decisions will therefore continue to rise. In addition, features and benefits of using the Internet to research and book holidays are improving and being added to all the time. For example, consumers no longer have to receive printed tickets from the travel operator. They simply print out any information that they require themselves after they receive it automatically via email.

The ‘Net’ has meant that people can now easily plan trips for themselves. This has not only opened up a greater amount of discounts available to the general public, but also given people the fun and enjoyment of planning and booking their own trips.

Prior to the Internet, travel agents were the primary source of information and facilitating bookings within the travel industry. However, the onset of Net popularity has seriously impacted upon the future success of a telephone or face-to-face based travel agency. The Internet now allows individuals the ability to plan and book their own trips. It has revolutionised the travel industry as a whole and instigated a trend away from the customer using a travel agent.

There are four Internet business models that can be applied to the travel industry. The business models and examples of businesses within them are as follows:

1) The merchant model, which brings buyers and sellers together. It could be argued that this model is effectively an online travel agent. Websites in this business model category include Travelocity who have recently purchased LastMinute.com and Expedia – an offshoot from Microsoft.

2) The advertising model, providing valuable travel information whilst generating revenue through various adverts. The significant advantage of this model is its low cost base. A website in this business model that provides information on the UK is TREKtheUK.com.

3) The direct model allows the service provider themselves to deal directly with the general public. First of all, British Airways is the longest established and has a large marketshare and conventional competitive advantage. Secondly, EasyJet have established the Internet as being key to their core competency.

4) The community model is one of the longest established operating models on the Internet without having a history of generating a significant revenue stream. Two websites reviewed that fall into this category are Lonely Planet – based upon the books that have been published for more than thirty years, and VirtualTourist.com – a community of individuals who have a passion for travel.

Although it can be argued that some websites are using a mixture of several business models, it is interesting to acknowledge that just because a business generates the majority of its revenue online, it doesn’t mean that conventional business models can’t be applied to them.

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