Cloud Computing in Travel Agency Industry

According to our workings in previous assignments, I learnt that the rapid development of technology, especially the cloud computing, makes the operating of business in different industries be more convenience, lower cost and higher efficiency.

1)  Cloud computing

Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g. networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.  The cloud model promotes availability and is composed of five essential characteristics (On-demand self-service; Broad network access; Resource pooling; Rapid elasticity; Measured service), three service models (Cloud software as a Service, SaaS; Cloud Platform as a Service, PaaS; Cloud Infrastructure as a Service, IaaS), and four deployment models (Private cloud; Community cloud; Public cloud; Hybrid cloud). (Babcock, 2010, p224-225). 

Google, Yahoo, Amazon, Microsoft, Apple, IBM, Oracle and Dell have built up their several data centers as public cloud to serve the end-users all over the world.  Cloud computing is widely used for personal and business purposes.

2)  Travel and tourism industry.

The travel and tourism industry is one of the world’s largest industries with a global economic contribution (direct, indirect and induced) of almost seven trillion U.S. dollars in 2013.  In 2013, global international tourism revenue reached approximately 1.16 trillion U.S. dollars, having almost doubled since 2005  (Source : The Statistics Portal : http://www.statista.com/topics/962/global-tourism/). 

Travel agencies are the retailers selling services or products on behalf of the suppliers, such as hotels, food and beverage, airlines/cruises, etc. to the domestic, or international customers at their destinations.  Sometimes, the travel agencies join many different national official tourism authorities to promote the events or attractions to their consumers.  

The figure 1 shown the systematic lines between demand and supply flow in the marketing of travel agency industry. 

3)  The Travel Agency

The travel agency is a services provider but linkage with many suppliers in different areas.  Therefore, in traditional, it is a labour intensive industry,  marketing people design and create some new products (routes) with its branches or partners in overseas, tour operators in the offices to handle the customers' enquiries or bookings, same as the structure of companies in other industries, there are some staffs in administrative, accounting and customer relationship departments respectively.  Man power in many travel agency is high normally.

3.1) Elasticity of Cloud Computing

However, the business of travel agency is very seasonal. The demand is always high in the seasons of Christmas and Summer holidays.  Whenever, there would be thousands of enquiries or bookings from many customers during the peak seasons.  On the other hand, the change of economic situation would influence the demand of the domestic people in the travel business, for example, the American people had been reducing their demand on travelling during the financial crisis since 2008.  Under the assistance of Cloud computing, it rapid elasticity helps the travel agency to be more stable for staffing in different seasons (i.e. no need to recruit more staffs during the peak seasons). The flexibility of cloud computing should be matched the unstable business environment of travel agency in order to save lots of unnecessary expenses. Therefore, the travel agencies can save lots of their cost under the rule of cloud computing : pay for what you use and cloud computing also makes their operation more reliable with highly efficiency.

 3.2)  Pool of Resources

Meantime, with help of cloud computing as the platform of exchange, the travel agency can link with more airlines, hotels in the resourcing pools to widen the choices for their customers in order to catch more business chances.  For example, CX-Holidays, customers are able to choose their freight schedule and hotels, even bus or train tickets, entertainment at destination, and paid for all from its web-site, just like Do It Yourself (DIY) tours.  

Collaborate marketing (with airlines, hotels, etc.) as the usual strategy of travel agency should be adopted more effective and efficiency.  I learnt from our lecture that the collaboration particularly can enable firms to achieve more, at a faster rate, and at less cost and less risk, those advantages would relieve the travel agency's pressure in high operating cost. 

Moreover, many small business in the same industry are unable to join together with the growth of e-business, AITO is a typical example for an succeed collaborated organization in travel agency business (Middleton and Fyall and Morgan (2009) p253-255).  This is another example of collaborate marketing.

4)  Challenge Under Globalization

With advanced technological supported and collaborate marketing adopted, business of travel agency have been developed widely and diversity.  Many Apps, such as TripAdvisor, trivago, Ctrip.com international, Hong Kong Wing On Travel Service Limited, etc, offer the package trips (freight and hotels, entertainments) with very attractive rates to the worldwide consumers for business or personal holidays purposes without any barrier.  

Easy to use, convenience, detailed information provided, all these factors, that the young people are prefer to use for their own booking.  At the same time, they are very concerning the feedback and review from customers.  

This is because,

"People believe reviews from other people more than they trust commercial advertising."

Therefore, most of these Apps become well known and were succeed in their business. According to what we learnt, market development and product development under the globalization bring higher competitions among the industry.  Moreover, many aging people who have strong purchasing power still prefer the traditional services, i.e. they would like to visit the travel agency offices to talk with the tour operators by face to face.  How to encourage this group of people to use the services through internet is the major mandate of travel agencies.  There are many promotions, such as offer discount or coupons for entertainments to the customers using their services through internet, a Hong Kong travel agency, 


Miramar travel is always encouraging consumers to book their products through internet by offering special discount.  

Rapid knowledge transfer & technology adoption to stay competitive, with cloud adoption strategy, the enterprises are able to get more competitive advantages in its financial, human resources, and other different areas (Isom and Holley (2012) p.186-188).

5)  Conclusion

In the world of technology, business enterprises, even the small guys, can be running more easily. Building own brand name and getting trust from customers are also not difficult to do at very initial stage.  However, technology is a tool only.  How to supply our products or services as better as we can is the most important factor for sustainable development.  According to what we learnt, the basic stages of product lifecycle, at "Nail it" stage, we have to keep our review on the consumers' demand or requirement always.   
Therefore, more interesting products (good products: new, interesting, safety, route tours) are created, with helping of cloud computing, the travel agency industry will offer more good products to consumers for improving their quality of life.

Reference :

1.  Charles Babcock (2010) Management Strategies for The Cloud Revolution,  Mc Graw Hill

2.  Middleton and Fyall and Morgan (2009) Marketing in travel and tourism, 4th edition,       Butterworth-Heinemann

3.  Isom and Holley (2012) Is Your Company Ready for Cloud? Choosing the Best Cloud Adoption Strategy for Your Business, Pearson