Document Type

Article

Publication Date

12-1-2007

Abstract

The internet has revolutionized travel packaging, in terms of both travel package development and distribution. Although tour packages are still assembled and sold in the traditional fashion by tour operators, customers who use the web have access not only to assembled tour products, but also to an array of travel-element bundles. These offers take various forms, depending on the approach of the many suppliers and intermediaries who sell directly to customers via the internet. Packaging travel elements benefits suppliers by reducing the price transparency created by the internet, because the prices of those individual travel elements are bundled and therefore difficult for the package buyer to discern. Moreover, with the growth of online communities, suppliers can observe consumers' stated desires for travel and make proposals for travel packages, rather than wait for consumers to search out the packagers. A notable development is consumers' creation of their own packages in real time, based on changes in vendors' inventories and revenue management pricing. The efficacy of this process depends on the connectivity and computing power of the suppliers, packagers, and intermediaries. A framework presented here assesses value-creation aspects of the following package value drivers: component quality levels, reductions in the opportunity cost of time, flexibility of time and destination choice, and risk management. Based on the value-creation assessment, the report suggests a research agenda and a checklist for package value creation

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© Cornell University. This report may not be reproduced or distributed without the express permission of the publisher

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