Knowledgeable Consumers: How E-Tourism and Publishing has Adapted to the Connected User

Digital natives, the generations that have been born since the 1980s, have grown up in a world where vacation plans are researched and reserved online and books can be downloaded to a tablet in an instant. Both the traditional publishing industry and the tourism industry have withstood significant upheaval in the face of digitization and ICTs (information computing technologies) in the past couple decades. ICTs have replaced much of the infrastructure in both industries in similar ways, and both industries have had to adapt to new consumers who have grown used to having information instantly at their fingertips and are now aware of the bargaining power they hold. Yet these industries face different digital challenges regarding the relevance of their gatekeepers and the rise of the ‘Sharing Economy’. Despite the digital upheaval that is sure to continue to disrupt traditional publishing and tourism, each industry has things going for them that might keep them afloat and relevant as the digitally native generations take power in the world.

Prior to the digital age, the travel distribution role was performed by travel agencies and tour operators (Buhalis, 2002). Travel agents used computer reservation systems (eMediaries) and an agency’s professional networks to organize and book tours for travellers. As Internet networks grew, new eMediaries from a wide rage of organizations began to sell services directly to consumers by allowing users to access reservation systems directly on the Internet (Buhalis, 2002). Tourism suppliers like airlines, car rentals, and hotel chains that used to do all business through agencies began to connect directly with travellers, developing eCommerce sites and bypassing travel agents. Ideally, this disintermediation would effectively cut out the middleman – the travel agency – with the hopes of lower distribution costs and greater reach of the customer base (Buhalis, 2002, Table 2).

Disintermediation through digitization has affected the traditional publishing industry in different ways than tourism. As the intermediary between the publisher and the consumer, bookstores have had an increasingly difficult time maintaining profits in an industry where margins are slim and are getting slimmer with the rise of Amazon. An online retailer’s ability to offer many times more titles than bricks-and-mortar bookstores at deeply discounted prices has forced bookstores to compete with unbeatable online prices and consumers’ changing concepts of book ‘anchor’ prices (Thompson, 2012). Digitizing books as eBooks has also changed the way digital natives shop, as has the less-than-legal ‘sharing economy’ that is still a moral grey area in traditional publishing.

Similarities in Digitization between E-Tourism and Publishing

Knowledgeable Consumers

Today’s consumers are more knowledgeable than ever and have grown used to having instant access to information at their fingertips on their mobile devices. Consumers can research a new topic that interests their niche preferences, compare prices of products that relate to these interests, and purchase these items online. With online information aggregation and price comparison, consumers have real-time, mobile access to data that they previously relied on bookstores or travel agents to provide them with (Ernest & Young, n.d.). Booksellers are now catering to the knowledgeable consumer who enters a bookstore with the screen-capture of the book they are looking for on their phone along with the competitive online price they expect the bookstore to match. These customers have read reviews online and will face the decision to own the hard copy of the book at a higher price, wait several days for the cheaper Amazon alternative to arrive in the mail, or download the eBook instantly for the median price.

Modern technology has allowed both the ‘new’ book buyer and the ‘new’ e-tourist to gather information about their particular preferences and interests, and compare competitive prices before purchasing online. The ‘long tail’ (Anderson, 2008) of niche choices in both publishing and tourism has made consumers less likely to choose a travel ‘package’ or blockbuster and more likely to pursue their own preferences. Today’s ‘new’ tourist is a sophisticated traveller who is both linguistically and technologically skilled and “is less interested in following the crowds in packaged tours and much more keen to pursue their own preferences and schedules” (Buhalis, 2008, p. 610). While E-Tourism has had to adjust to consumers who want to tailor their own vacations by bypassing travel agents, booksellers have had to adapt to more customers seeking out niche titles online, and purchasing those books at the best price.

Consumers in both industries today also trust each other more than they trust the corporations who used to recommend products to them (Ernest & Young, n.d.). Customers go online to sites like TripAdvisor and GoodReads to read reviews and opinions from other users rather than approach travel agents and booksellers. Overall, consumers today have more bargaining power than ever before, with better access to information, more choice, and the ability to make comparisons about purchases that are more relevant to their preferences (Buhalis, 2008). Both the publishing industry and the tourism industry have had to adjust their traditional practices to accommodate these new knowledgeable consumers.

The Sharing Economy and the Open Internet                                                                                                                        

The use of web platforms that bring together individuals who have assets with people who would like to rent those assets has created The Sharing Economy (Cusumano, 2015). A recent ‘sharing economy’ success has been Airbnb’s challenge to the hotel industry. Airbnb allows people to rent out properties to travellers on a short-term basis, giving locals a source of income and providing tourists with a more ‘authentic’ traveling experience. Airbnb relies on the power of networks, and will no doubt pose challenges to the hotel industry as the network extends. In order to protect traditional business, hotels have raised legal and regulatory concerns in order to restrict Airbnb activities in New York, San Francisco, and other cities due to subletting and housing regulations (Cusumano).

Similarly, the rise of the ‘open internet’ has put pressure on traditional publishing in the way that it has undermined human capital. With digitization and the easy sharing of files online, publishers have found it difficult to regulate the illegal sharing of eBooks. This has so far been a moral grey area, as many argue that consumers may lend hard copies of books to others, so why should they not be able to send digital book files as well? Pirating eBooks is not completely comparable to the renting of extra rooms on Airbnb, but it effectively eliminates the need for aspects in both industries: the bookseller and the hotel chain (along with the travel agent).

Cheaper Competition

ICTs and the Internet have dramatically increased the number of choices for consumers. Before the Internet, consumers could only access brands and organizations in their immediate vicinity, hence the reliance on bookstores and travel agencies. Now, consumers spend increasingly more time comparing prices on different travel websites like Kayak and Expedia, searching for alternatives that can lower the cost of their vacations (Buhalis, 2008). Sites like Hotwire and LastMinute offer dramatically reduced prices that can often undermine traditional travel agency deals and over time will lower expectations for how much a vacation should cost. Lowering the ‘anchor’ price for consumers is something book publishers are very familiar with due to Amazon’s competitive pricing. By selling books at nearly a loss in order to drive traffic to the site, consumers have become accustomed to extremely low book prices online. This puts the publishers and the bookstores at a disadvantage, as they lose money due to the need to drop prices and shrink profit margins.

Differences in Digitization between E-Tourism and Publishing

The Sharing Economy

Although both industries have had to adapt to the ‘sharing economy’ and ‘open internet’ in different ways, the publishing industry has been under less of a threat from digital sharing than the e-tourism industry. While illegal downloading of eBooks may become a greater issue as the digital native generation grows, for now it is still a challenge to find more than the biggest bestselling books online; niche titles must usually be purchased from an eBook retailer. Additionally, as of yet there is no ‘sharing economy’ initiative for books that mirrors an Airbnb model, nor may a similar model be viable for the publishing industry. However, the publishing industry must be prepared to face new ‘sharing economy’ start-ups that could challenge an aspect of the traditional publishing model in the near future.

The State of Gatekeepers

E-Tourism is under threat of losing the relevance of their gatekeepers (travel agencies) due to the rise of the knowledgeable consumer and the online tools ICTs offer. From travel-related research, to making online air-ticket bookings, to online hotel reservations, customers no longer need a travel agent to facilitate most of the process for them (Buhalis, 2008). In fact, there may only be a place left for what Conde Nast calls ‘Travel Specialists,’ travel agents who offer highly personalized and luxurious touches to travel plans (Williams, 2015). Travel Specialists can arrange exceptional experiences for complicated trips including destination wedding travel for large groups, trips that require going far off the grid, and VIP travel experiences like tickets to a soccer game in Madrid with great seats (Williams, 2015). Travel agencies may only be necessary when vacation packages can be dynamically packaged and customized.

On the other hand, the mass-publishing industry will most likely always have some form of gatekeeping facility, where a group of professionals will choose what books get acquired and published. Though the future may hold other circumstances for publishing acquisition, I believe digitization affects publishing gatekeepers less than it will for E-Tourism in the short-term.

Conclusion

Traditional publishing houses – though forced to adjust to digital demands and ‘new’ consumers – will still have the financial backing and stability needed to maintain the distribution infrastructure needed to survive. There are significant advantages to marketing digitally; increasing the reach of their customer base and customer interaction while lowering distribution costs. Publishing may be cheaper and more efficient online, it allows one to browse many more titles (niche or otherwise) than they could in a bookstore, and it offers the same degree of reviews, opinions, and personalization. However, many still feel personally connected to bookseller opinions and prefer to own the hard-copy book rather than the eBook. However, bookstores will face the threat of shoppers’ tendency to window shop in bookstores and order books online later.

E-Tourism is cheaper and easier online due to the variety of options, competitive prices, and access to information. It is more personal and interactive, yet travellers still don’t always trust eCommerce and worry about issues of trust and privacy with purchasing online (Buhalis, 2008). Traditional travel agencies and hotels still provide more reliable, consistent, broader, and safer services than sharing-economy competitors (Cusumano, 2015). While traditional travel agents will lose share of their market over time, there will always be a need for an aggregator of vacation packages and travel advice (Buhalis, 2002). Additionally, traditional hotels can compete with Airbnb by their ability to host major events and connect customers to tourism services (Cusumano, 2015). With the rising generation of digital natives, both industries will need to adapt and modernize their online tools to stay relevant to knowledgeable consumers who may not always need the ‘middleman.’

References

Anderson, C. (2008). The Long Tail: Why the Future of Business is Selling Less of More. Hachette Books.

Cusumano, M. A. (2015). How Traditional Firms Must Compete in the Sharing Economy. Communications Of The ACM, 58(1), 32-34. doi:10.1145/2688487

Buhalis, D. & Licata, C. M. “The future eTourism intermediaries, Tourism Management,” Tourism Management. Volume 23, Issue 3, June 2002, Pages 207-220.

(http://www.sciencedirect.com/science/article/pii/S0261517701000851)

Buhalis, D. & Law, R. “Progress in information technology and tourism management: 20 years on and 10 years after the Internet—The state of eTourism research”, Tourism Management. Volume 29, Issue 4, August 2008, Pages 609-623.

(http://www.sciencedirect.com/science/article/pii/S0261517708000162)

Thompson, J. B. (2012). Merchants of Culture: The Publishing Business in the Twenty-First Century. Plume.

Williams, M. (2015 May 28). Why a New Generation of Travel Agents Matters More Than Ever. From Conde Nast Traveler cntraveler.com.

(http://www.cntraveler.com/stories/2015-05-28/why-new-generation-of-travel-agents-matte\nrs-more-than-ever)

Showing 1 Reviews

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    Juan Pablo Alperin
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    This essay is well written and well organized. It presents a clear plan at the outset, and then executes that plan throughout. Other than in a few instances, it presents itself clearly and in an easy to follow fashion. The points of convergence and divergence between the two industries are well thought out, and are sufficiently explored. However, this essay suffers from very weak sourcing and citation practices. A few small number of sources are used, and in several instances they are overused. In other parts, the essay makes claims that should be cited. Overall, it is a good essay, but one that is lacking in rigor.

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