Diffusion of Internet Technologies in Travel Agencies in Australia

The Internet appears to playing a role in the restructuring of some traditional business sectors in which some organisations profit and some decline. Travel agencies are being subjected to increased competition from virtual on-line travel agencies. These agencies do not possess the traditional retail outlets but exist predominantly on the Web. In addition, airline companies and travel wholesalers are beginning to market their products directly to the consumer. Despite the threat of disintermediation, the Internet has created opportunities for the travel agency as it provides a method of providing service around the clock and of being accessible from home and work. This paper reports on an Australian wide study that has been undertaken to investigate the diffusion and adoption of Internet (Web) technologies in travel agencies. The agencies were randomly selected within each State. A questionnaire was developed and sent to almost 2000 travel agencies. Two hundred and forty seven questionnaires were returned. The findings are examined against traditional IS/IT diffusion models and frameworks. The results highlight that a significant number of travel agencies have adopted the use of the WWW but most only use a fraction of its business potential. It would appear that traditional frameworks for analysing technology diffusion do not help explain the reasons behind either the lack of Internet adoption or the simplicity with which these systems have been implemented. Sophisticated Internet technologies involve the adoption of a new business model which may compete with the business model currently used by travel agencies. These aspects of conflict create a barrier for the small businesses to adopt Internet technology. Whilst the pessimists forecast a very bleak outlook for travel agencies, those that do re-engineer with a new vision and strategy have the opportunity to be amongst the leaders in the sector. Focusing on becoming information service providers is one option that travel agents can take. However, given the rapid rate of change in electronic commerce and the varying patterns of adoption and strategies used, it is still not clear how severe the shake out of this important industry sector will be.