Impact of online travel agencies to the operation of local travel agencies in Maldives / Aishath Hana

Abstract

Purpose
This paper examines the impact of the Online Travel Agencies (OTAs) to the operation of the Local Travel Agencies (LTAs) in the Maldives. More specifically, the paper explores the source of the actual competition that the LTAs encounter and recommendations on how to control the rivalry as well as the technological aspects that needs to be embraced by the LTAs.
Design/methodology/approach
A mixed methodology of qualitative and quantitative approach was practiced. Data for this study was collected in Velana International Airport in the Maldives through 70 structured survey forms in both the arrival and departure area. Further, data also were obtained from seven tourist resorts in the Maldives through thirteen standardized open-ended interview questionnaires emailed to sales managers and sales executives. Also, a set of nine standardized open-ended interview questionnaires were emailed to LTAs from which four feedbacks were acquired from various levels of sales department. Moreover, an informal conversational one on one interview was conducted with a director level participant of a provider of an online platform in the Maldives, which is OpenHotelier (OH). All the data collected and used in this research were primary data.
Findings
The findings show that contrary to the beliefs that the demand for LTAs has begun to decrease due to the OTAs, which is partly true, the actual competition in the tourism industry of the Maldives is initially created by the suppliers, which is the resorts. The competition and price war between the LTAs in the Maldives is resulting in the main drawback for most LTAs. The OTAs are subsequently the next competitors for the LTAs, who manipulates the technology to control the market. The LTAs need to exploit technology to compete with the internal and external competitions. Also, the strategic adaptation, business models and technology is closely integrated and highly important in achieving the customer and supplier motivation for a competitive advantage. The impact of OTAs should be perceived as an opportunity rather than a threat.