ST.

MARY’S UNIVERSITY
SCHOOL OF GRADUATE STUDIES

THE EFFECTIVENESS OF INFORMATION COMMUNICATION

TECHNOLOGY ON THE PERFORMANCE OF TRAVEL AGENCY
BUSINESS, CURRENT PRACTICE IN ADDIS ABEBA

BY
YORDANOS BIRRU AYELE
SGS/0230/2009

JUNE, 2018
ADDIS ABEBA, ETHIOPIA
 THE EFFECTIVENESS OF INFORMATION COMMUNICATION
TECHNOLOGY ON THE PERFORMANCE OF TRAVEL AGENCY
BUSINESS, CURRENT PRACTICE IN ADDIS ABEBA

BY
YORDANOS BIRRU AYELE
SGS/0230/2009

A THESIS SUBMITTED TO ST. MARY’S UNIVERSITY, SCHOOL OF

GRADUATE STUDIES, IN PARTIAL FULFILMENT OF THE
REQUIREMENTS FOR THE DEGREE OF MASTEROF BUSINESS OF
ADMINISTRATION(MBA)

JUNE, 2018
ADDIS ABEBA, ETHIOPIA
 ST. MARY’S UNIVERSITY
SCHOOL OF GRADUATE STUDIES FACULTY OF
BUSINESS

THE EFFECTIVENESS OF INFORMATION COMMUNICATION

TECHNOLOGY ON THE PERFORMANCE OF TRAVEL AGENCY
BUSINESS, CURRENT PRACTICE IN ADDIS ABEBA

BY
YORDANOS BIRRU AYELE
SGS/0230/2009

APPROVED BY BOARD OF EXAMINERS

____________________ ____________ ________________

Dean, Graduate Studies Signature Date

_______________ _____________ ________________

Research Advisor Signature Date

________________ _____________ _______________

External Examiner Signature Date

________________ _____________ _______________

Internal Examiner Signature Date

 DECLARATION

I, the under signed, declare that this thesis is my original work, prepared under the guidance of
WondimenehMamo(Assistant Professor). All sources of material used while working on this
thesis have been duly acknowledged. I further confirm that the thesis has not been submitted
either in part or in full to any other higher learning institution for the purpose of earning any type
of degree.

______________________________ ______________________________

Name Signature and Date

 ENDORSEMENT

This thesis has been submitted to St. Mary’s University, School of Graduate Studies for
examination with my approval as a university advisor.

______________________________ ______________________________

Advisor Signature
 Contents
ACKNOWLEDGMENT ................................................................................................................. i
LIST OF ABBREVIATIONS AND ACRONYMS ....................................................................... ii
LIST OF TABLE ........................................................................................................................... iii
LIST OF FIGURE ......................................................................................................................... iv
ABSTRACT.................................................................................................................................... v
CHAPTER ONE ............................................................................................................................. 1
INTRODUCTION .......................................................................................................................... 1
1.1 Background of the Study....................................................................................................... 1
1.2. Statement of the problem ..................................................................................................... 3
1.3. Research questions ............................................................................................................... 5
1.4. Objective of the study .......................................................................................................... 5
1.4.1. General objective of the study ....................................................................................... 5
1.4.2. Specific Objectives of the Study ................................................................................... 5
1.5. Significance of the study ...................................................................................................... 5
1.6. Scope of the study ................................................................................................................ 5
1.7. Organization of the Study .................................................................................................... 6
CHAPTER TWO ............................................................................................................................ 7
LITERATURE REVIEW ............................................................................................................... 7
2.1. Theoretical Background ................................................................................................... 7
2.1.1. The concept of Travel and Tourism Industry ........................................................... 7
2.1.2. The Role of IT in the Tourism sector and its growth................................................ 8
2.1.3. Usesof IT/ICT in the Field ofTravel And Tourism................................................... 9
2.1.3.1 E-Tourism …………………………………………………………………………………9
2.1.3.2. Disintermediation ..................................................................................................... 13
2.1.4. Crs/ Gds As Backbone Of The Electronic tourism Market .................................... 16
2.1.5. Opportunities of ICT in Travel and Tourism .......................................................... 17
2.1.6. Treat of Internet and ICT on travel agent in digital era .......................................... 17
2.1.7. High competitors of ICT in Travel agent................................................................ 18
 2.1.8. Impact of ICT to Travel Agents Changes to Structure of the Organization ........... 18
2.1.9. Challenges of Travel Agency by ICT evolution ..................................................... 19
2.1.10. Possible strategies by ICT....................................................................................... 20
2.2. Empirical Review ........................................................................................................... 22
2.3. Conceptual Framework .................................................................................................. 26
CHAPTER THREE ...................................................................................................................... 28
RESEARCH DESIGN AND METHODOLOGY ........................................................................ 28
3.1. Research Design and Approach ......................................................................................... 28
3.2. Research Approach ………………………………………………………………………28
3.3 Population and Sampling Techniques .................................................................................. 28
3.3.1. Sample size determination ........................................................................................... 29
3.4. Source and procedure of collection .................................................................................... 29
3.5. Method of Data Analysis ................................................................................................... 29
3.6. Validity and Reliability Test .............................................................................................. 30
3.6.1. Reliability Test ............................................................................................................ 30
3.6.2. Validity Test ................................................................................................................ 30
3.6.3. Ethical consideration ................................................................................................... 32
CHAPTER FOUR......................................................................................................................... 33
DATA ANALYSIS AND INTERPRETATION .......................................................................... 33
4.1. Demography Characteristics Of Respondents ................................................................... 33
4.1.1. Age Classification of Respondents .............................................................................. 33
4.1.2. Education of Respondents Concerning Tourism Related ............................................ 33
4.1.3. Current status on the Agency ...................................................................................... 34
4.1.4. Experience on Tourism Industry ................................................................................. 34
4.1.5 Experience on current organization .............................................................................. 35
4.1.6 Locations of Travel Agencies ....................................................................................... 36
4.1.7 Travel Agencies Daily Booking ................................................................................... 36
4.1.8. Adopted ICT and Mode of Communication ................................................................ 37
4.2. Descriptive analysis of Effect of ICT on Travel Agencies Business ................................. 38
4.2.1. Opportunity of ICT for Travel Agency ....................................................................... 38
4.2.2. Challenge of Travel Agency Due to ICT Evolution .................................................... 40
 4.2.3. Possible Strategies to Overcome the Problem Faced by ICT ........ …………………..41
4.2.4. The ICT effect on Travel Agency outcome ................................................................. 43
4.3. Correlation analysis ............................................................................................................ 44
4.4. Regression Analysis ........................................................................................................... 45
4.4.1. Preliminary Tests ............................................................................................................ 45
4.4.2. Results of OLS Estimation ................................................................................................. 48
CHAPTER FIVE .......................................................................................................................... 50
CONCLUSIONS AND RECOMMENDATION ......................................................................... 51
5.1. Summary of Major Findings .............................................................................................. 51
5.2. Conclusion.......................................................................................................................... 52
5.3 Limitations ………………………………………………………………………………..52
5.4. Recommendation................................................................................................................ 53
 ACKNOWLEDGMENT

First and foremost, I would like to thank God almighty for giving me the strength, knowledge,
ability and opportunity to undertake this research study and persevere and complete it
satisfactorily. Without his blessing this achievement would not have been possible.

I have a great pleasure in acknowledging my gratitude to my advisor WondimenehMamo

(Assistant Professor), for the patient guidance, enthusiastic encouragement and advice he has
provided throughout my research work.

I would like to express appreciation and special thanks to all those individuals who participated
in the survey and my friends who had assisted me in administering that survey. Finally, I wish to
thank all my family and my parents for their support and encouragement throughout my study. I
also would like to thank all my friends who stand with me by all those attending years.

i
 LIST OF ABBREVIATIONS AND ACRONYMS

CRS Computer Reservation System

CRM Customer Relationship Management

FDRE Federal Democratic Republic of Ethiopia

GDS Global Distribution System:

ICT Information Communication Technology

IATA International Air Transport Association

ITInformation Technology

SMESmall and Micro Enterprise

TAM Technology Adoption Model

TIA Travel Industry Association

T&T Travel and Tourism

UNWTO United Nation World Trade Organization

USD United States Dollars

ii
 LIST OF TABLE

Table 2.1 Advantages from ICTs usage in the analyzed hotels and travel agencies …………... 22

Table 4.1 Age clasificaiton of resppondents …………………………………………………… 32

Table 4.2 Tourism Related Education/Training ………………………………………………... 33

Table 4.3 Current status of respondents at the organization …………………………………… 29

Table 4.4 Total year of experience in tourism industry …………………………………………34

Table 4.5 Current organization experience …………………………………………………….. 35

Table 4.6 Current existing location of travel Agencies …………………………………………35

Table 4.7 Description of travel agencies daily bookings ………………………………………..36

Table 4.8 Mode of communication and technology adopted ……………..……………………. 37

Table 4.9 Opportunity created by ICT …………………………………………………………. 38

Table 4.10 Challenges of travel agencies due to limed ICT……………………………………. 40

Table 4.11 Possible strategies to overcome the problem faced by ICT ………………………... 42

Table 4.12 The overall effect of ICT on travel Agencies ……………………………………….43

Table 4.13 Correlation analysis between each variable ………………………………………... 44

Table 4.14 Analysis of multicollinearity test …………………………………………………... 44

Table 4.15 Analysis of heteroskedasticity test …………………………………………………. 45

iii
 LIST OF FIGURE

Figure2.1: Online gross travel booking revenue………………………………………………. 12

Figure 2.2: Conceptual Framework ………………………………………………….………… 26

iv
ABSTRACT

This paper seeks to understand the effectiveness of ICT on the performance of travel agency
business using a cross-sectional data collected from 218 respondents. Specifically, the research
examines the opportunity that ICT offer for the travel industry, assess challenges of the travel
agencies because of the ICT evolution and examine to what extent ICT determine the travel
agencies business effectiveness. In order to answer the stated objective a causal and descriptive
research design were employed. The findings of the study revealed that ICT has strong positive
potential for the performance of firms. The analysis confirmed that the new and existing ICT
interventions increase the success of those travel agency enterprises. The opportunity created by
ICT and possible strategies influence significantly success of travel agency businesses. The
analysis further shows that the integration of personal approach with ICT is significant, with
new technologies having complementary and not substitutive function. Benefits of new
technologies enable development of travel agencies and make communication with customers
and other entities easier, which is the foundation for building competitiveness. The study further
revealed that the opportunity created by information communication technology increases the
business effectiveness of travel agencies. However, the travel agencies are challenges by the
current service of unstable internet connection. And it is recommended that for tourism
businesses to increase their competitive position they should incorporate ICT in their business
practice so as to increase their performance and their effectiveness.
Key words: Information Communication Technology (ICT), Traveled Agents, Effectiveness

v
 CHAPTER ONE

INTRODUCTION

1.1.Background of the Study

Technology in the form of the internet, software, hardware and communications has made the
lives of travel agencies a lot easier for every type of business. Technology has brought
efficiencies, automation, customer knowledge, and business opportunities to fill a variety of
needs, fast development of new products or services, traveler knowledge and space for new
entrants.Past technology needs to be present as a history lesson for the future, now that the world
is changing more rapidly than ever, nothing has changed in comparison to what will happen in
the next 20 years, and to address business opportunities, travel agencies need to maintain the
rhythm of change and anticipate what will come in the future of the new “Era of
Infostrialisation”, where society and economic change is transforming us from an industrial
society into an information society(Fernando, 2014).

Information is now available to everybody, but relevant and structured information, mixed with
the intelligence and service behind it, is where added value needs to be brought to the traveler
based on very specific needs and how those travelers want to see it, buy it and experience it.
Technology as a driver of change will bring internet everywhere (in people & in things),
mobility, monitoring of personal/social activity and especially: predictive analytics that will
impact with new rupture opportunities and business models.The travel industry is moving
quickly from traffic patterns to a web/mobile history where data is recorded, stored and analyzed
to address individual traveler needs. According to Fernando (2014) the connected travel future
will be based on a combination of the following FOUR S’s:

• Structured Data: not only the capture of the data (video, voice…) across the globe from
multiple sources (content, transactions, social media, mobile devices, sensors) but also to
put the right structured data in place to be blended for business purposes. Also having the
capability of managing non structured data in the same way.

1
 • Speed: the value of the relevant data has to come in real time. The speed of accessing
what the customer needs is key, from different angles: instant-real time data, instant
answer, instant buy, instant social…instant everything
• Service: a differentiated strategic service focus to improve the customer experience –
from digital self-service to human all-service and the economic value added behind such
chain.
• Sage: deeper knowledge of customers will be essential through analytics, usage of
customer predictive analytics and solutions on merchandise optimization to maximize
growth, profitability and customer experience

Technology, which is transforming our professional and personal lives, will be the heart of
change in blending this FOUR S’s to achieve not only a connected travel future but a fully
interconnected travel world beyond the different players, and in which “Next Gen-Tech Travel
Agencies” will keep playing an important role(Fernando, 2014)

Time savings and value added service for the traveler will be keys to the future of travel agencies
on (1) the whole travel process from planning to sharing experiences, that time saving will be on
the planning, on the search, on the booking, during the trip, on expense management, on the
post-trip experience sharing, etc. and on (2) Matching traveler needs based on profile and
predictive analytics with an intelligent offer to be sent in advance of a traveler’s need.In order to
provide such value to the traveler, it will require a combination of provider supplied instant data
(structured and non-structured), customer data, customer predictive analytics, which will allow
unique and differentiated service to maximize customer experience and loyalty. Technology will
be key to combine the necessary addressed elements to build a platform and maximize reach to
the traveler anywhere, anytime, through any device(Fernando, 2014).

As stated by Osborne. S.,et al., (2001) intermediate agents; also known as brokers or agents, are
prominent players in today’s economy are involved in a large number of business transaction.
Some common examples include stockbrokers, insurance brokers/agents, real estate
brokers/agents, ship brokers, oil brokers, mortgage brokers, coal brokers, sports agents,
employment agencies, auction houses, adoption agencies, food brokers, Internet Services such as
e-bay, e-scrap, etc., and many others. The common thread that links all of these is that links these

2
intermediaries serve as facilitators of exchange between two of more parties by acting as an
“agent” on behalf of “principals”. Thispaper examines the travel agent as a very visible example
of the intermediate agent in terms of its agency function as well as the impact that technology is
having upon its basic nature. The evolvement and progress of information technology has
therefore had a tremendous impact in tourism (Aldebert B., et al, 2011).

Addis Abeba is the state of Government of the Federal Democratic Republic of Ethiopia (FDRE)
it is also the head quarter of Africa Union and other major international Organizations. There are
473 individual travel agency companies that are actively engaged in providing traveling service
requests in the city of Addis Ababa(Ethiopian travel agency association and Galileo Ethiopia,
2018). The travel agencies are divided in to two categories; International Air Transport
Association (IATA) accredited agents and Non IATA accredited agents.IATA accredited agents
are booking the air ticket request and issue directly from the airline whereas the Non IATA
agents can have an access to book the ticket but not allowed to issue the ticket directly from the
airline instead they will purchase via the IATA agents and serve their clients. Therefore this
study intended to see the effectivnessof information communication technology on the
performance of travel agencies: current practice in Addis Abeba.

1.2.Statement of the Problem

As a sector, tourism has a momentous impact on the environment, economy as well as society at
local, national andinternational level. According to the annual research report presented by
WTTC projects that the industry of travel andtourism is one of the major contributor towards the
world GDP and has grown for six consecutive years until 2015 androse to a total of 9.8% of
world GDP (US$7.2 trillion). The report of 2015 also showed that the sector supported
284million people in employment, which is one out of every eleven jobs on the planet. The
industry, in general, is acombination of mainly two tires. Tire 1 is dominated by major industry
giants such as major tour operators and travelagencies, renowned hotel brands, airlines,
entertainment sites and food & beverage caterers, etc. Tire 2 consists ofMedium Scale Tourism
Enterprises as well as Small Scale Tourism Enterprise. The major differences between the
twotires are based on the infrastructure facilities, their management strategies as well as their
system of managinginformation and extent of the use of ICT.

3
Existing scholarship that has focused on examining how ICT has in recent timeplayed an
important role in reshaping the tourism industry, mostly agree that ICThas provided and continue
to provide a range of opportunities, for sub-sectors suchas tour operators, accommodation,
restaurants, travel agencies in a globalisecontext (Bojnec&Kribel, 2004; Buhalis&Kaldis, 2008;
Irvine & Anderson,2008; Spralls et al., 2011; Stiakakis&Georgiadis, 2011; Weigel, 2004;
Werthner& Ricci, 2004). Furthermore, a major contribution that has been touted for thetourism
industry also includes improving productivity market and market share(Aramendia-
Muneta&Ollo-Lopez, 2013; Buhalis, 2003; Buhalis&Molinaroli,2003; Chandler &Munday,
2011), improve competitive advantage (Buhalis, 1998,2003; Namasivayam et al., 2000) and
business performance(Shanker, 2008), aswell as reducing operational costs (Bojnec&Kribel,
2004; Buhalis&Kaldis,2008; Buhalis& O’Connor, 2005).

The tourism industry is often defined as the sectored system of innovation and production
worldwide. This sectored system in tourism is extremely complex; given the fact that the tourism
products and actors changes due to changes in the external forces. This is also the case in
Ethiopian tourism industry specifically in the capital, Addis Ababa(Aldebert B., et al,
2011).Even if technology can improve everything we do, it has got significant problem on the
travel industry in Addis Abeba. The major problem faced by the travel agency in the city of
AddisAbeba are the internet online and mobile reservation or booking of flight tickets discounted
by the airline, which is less than the airlines gives to the travel agent company. This lead to shift
the client of the private travel agency to direct purchase from the airline online; not only to get
the discount but to avoid some mandatory procedures asked by travel agency, which will be
order by the airline to the private travel agency but not found and requested in the online system.

Private travel agents face a problem not to keep in touch with their client using a variety of
medium like mobile devices and others and decline their service charge.This study focused on
the business of Travel Agency’s which are owned by private investors’ in Ethiopia. The reason
why the researcher want to select these sector is based on the researcher’s extensive work
experience in the Travel industry and have good knowledge on Information and Communication
Technology (ICT). The Effectiveness of ICT on the performance of Travel agency business is
the current frustration issue by the private travel agencies’ in Addis Abeba.

4
1.3.Research Questions
The study sought to answer the following research questions:
• What are the major opportunities that ICT provide for the travel industry?
• What are the main challenges posed by ICT in the travel industry?
• What are the possible strategies that could be designed to address the impact of ICT in
the travel industry?
• To what extent ICT determine the effectiveness of travel agencies business?

1.4.Objective of the study

1.4.1. General objective of the study

To assess the effectivenessof Information Communication Technology (ICT) on the performance
of Travel Agencies business

1.4.2. Specific Objectives of the Study

The study had the following specific objectives:
• To determine the opportunity that ICT offer for the travel industry
• To examine the challenges of the travel agencies because of the ICT evolution.
• To suggest the possible strategies for the travel agency that will help to address the
challenges faced due to the ICT effect.
• .To examine to what extent ICT determine the travel agencies business effectiveness

1.5.Significance of the Study

The need to conduct this study finds out the main technological factors that affect the travel
agency industry. Finding of this study helps the management team and stakeholder of the travel
agency organization to execute the overall strategy successfully this ultimately increase business
productivity and motivate employees by using technology.

1.6.Scope of the Study

The scope of this research is not outside the geographical location of Addis Abeba due to time
and other constraint. Further, in terms of concept this research was limited to analyze the
effectiveness of ICT on the performance of Travel agency business. The survey was carried out
between March and May 2018.

5
1.7.Organization of the Study
The research is organized into five chapters. The first chapter provides brief introduction to the
study, explains the research problem, and discusses objectives of the study, research questions,
and significance of the study. The second chapter reviewed theories and previous researches
done around the topic “The Effectiveness of ICT on the performance of Travel agencies
business” for this effort were made to link with the study that was made on the travel agency
business current practice in Addis Abeba.Chapter three presents the design of the research-
methodology adopted in the study which covers the research design, population and sampling
technique, data source and data collection techniques and methods of data analysis techniques.
Chapter four summarized the results/findings of the study, and discusses the findings linked with
the literature review as well as summary. Finally the last chapter which is Chapter five includes
the conclusions and recommendations of the study.

6
 CHAPTER TWO

LITERATURE REVIEW
2.1.Theoretical Background

2.1.1. The concept of Travel and Tourism Industry

As stated by Kayani, (2014)Tourism is a substantial industry (Fien, Calder, & White, 2012). It
serves many people in many different industries and is a standard way to exchange wealth
between nations; it has a wide array of stakeholders from owners of bed and breakfast
establishments to hotels to coach operators to theme parks to airlines and shipping companies to
travel agents. Tourism can be defined as the practice of traveling for recreation, the guidance of
tourists, the encouragement of touring or the accommodation of tourists ("Tourism," 2014).

Tourism relies on economic structures while creating a way to diversify them (Boiţ ă, Ardelean,
&Haiduc, 2011), and this phenomenon leads to substantial growth potential. The tourism
industry is massive on a global scale and continues to grow (TRA, 2014). In 2011, more than 983
million worldwide tourist arrivals were recorded, representing US$ 1.3 trillion dollars – an
annual growth of 4.6% compared to 940 million arrivals in 2010 (UNWTO, 2011). Similarly
according toDhaigude et al., (2016)the travel and tourism industry (T&T) has huge growth
potential. There were 1.133 billion international tourist arrivals across the world in 2014 and this
is expected to increase 3–4% in 2015 (UNWTO 2015).The major contributors to this growth are
globalization, the development of transportation technology and the increasing use of
information and communication technology (Berne, Garcia-Gonzalez, &Mugica, 2012).

According to Dhaigudeet al., (2016)the T&T industry is characterized by the presence of a large
number of actors present at different levels of the value chain, a high level of intangibility, value-
conscious customers and variations in terms of regulations. The actors vary in size, functionality,
location and level of autonomy.For example, large players such as airline operators or hotels are
actual service providers and may be located far away from their customers, whereas booking
agents and car rentals are smaller and located close to the customer. For efficient and effective
service delivery, the independent actors in the T&T industry must be integrated and this
integration is feasible only via ICT.

7
 2.1.2. The Role of IT in the Tourism Sector and Its Growth
As cited by Inversini&Masiero(2014)the advantages resulting from ICT developments have
greatly affected the hospitality domain, both in terms of marketing possibilities and sales
opportunities (Schegget al., 2013).

As stated by Buhalls& Law,(2008) Technological progress and tourism have been going hand in
hand for years (Sheldon, 1997; Poon, 1993). Since the 1980s, Information Communication
Technologies (ICTs) have been transforming tourism globally. Developments in ICTs have
undoubtedly changed business practices and strategies as well as industry structures (Porter,
2001). The establishment of the Computer Reservations Systems (CRSs) in the 1970s and Global
Distribution Systems (GDSs) in the late 1980s, followed by the development of the Internet in
the late 1990s, has transformed the best operational and strategic practices in the industry
dramatically (Buhalis, 2003; O’Connor, 1999; Emmer et al,, 1993; eBusiness Watch, 2006). If
the past 20 years have seen an emphasis on technology per se, then since the Year 2000 we have
been witnessing the truly transformational effect of the communications technologies. This has
given scope for the development of a wide range of new tools and services that facilitate global
interaction between players around the world.

In a similar way according toWahab, I.(2017) the development in the field of IT and ICT has
deeply influenced the ways in which tourism business perform their activities. Service standards
have rose quite high and customers expect to be served 24/7 around the year and service is not
confined to only office hours. Leading to the birth of online portals, the travel business was
revolutionized forever as these portals have be successful in effectively organizing and
distributing distressed tourism inventories to the clients. Various hotel chains, amusement parks,
luxury trains and most certainly the leading airlines have all be using IT in order to reach out to
customers and allowing them to directly access their reservation system. Such application of IT
or ICT has only helped these companies in getting better understanding about the needs of their
customers and also helped them in offering them the freedom of choice. ICT is critical for
strategic management of organizations as they allow: - expansion into the new market,
empowerment of Employees, Lowering of costs and enhancing distribution

8
In the same way according to Bethapudi, A. (2013).Information communication technologies
(ICTs) have been transforming tourism globally. The ICT driven re-engineering has gradually
generated a new paradigm-shift, altering the industry structure and developing a whole range of
opportunities and threats. ICTs empower consumers to identify, customize and purchase tourism
products and support the globalization of the industry by providing tools for developing,
managing and distributing offerings worldwide. Increasingly ICTs play a critical role for the
competitiveness of tourism organizations and destinations. ICTs are becoming a key determinant
of organizational competitiveness. The enhancements in ICTs’ capabilities, in combination with
the decrease of the size of equipment and ICTs’ costs, improved the reliability, compatibility and
inter-connectivity of numerous terminals and applications. ICTs provide a powerful tool that can
bring advantages in promoting and strengthening the tourism industry’s strategy and operations.

2.1.3. Uses of IT/ICT in the Field of Traveland Tourism

According to Smith, E (2018).Technology plays an important role in the hospitality and tourism
industry. Both customers and businesses can benefit from advances in communication,
reservations and guest services systems. Technology allows continuous communication and
streamlines the guest experience, from reservation to checkout.

2.1.3.1. E-Tourism
According to Wahab, I (2017)E-Tourism or Travel Technology is the digitization of all the
process and value chains in the tourism, travel, hospitality and catering industries that enable
organizations to maximize their efficiency and effectiveness. The scope of e-tourism includes not
just computer reservation system, but also incorporating the broader tourism sector as well as its
subset the hospitality industry. Travel technology, includes all business functions such as E-
Commerce and E-marketing, E-Finance and E-accounting, E-HRM, E-Procurement, E-Strategy,
E-Planning and E-Management.

Wahab, I (2017) state that;the applications of E- Tourisms are:- Flight Tracking system,
Dynamic Packaging, Computer Reservation System (CRS), Global Distribution System (GDS),
Customer Relationship Management (CRM, Mobile Technology, Social Networks and space
Tourism.

9
Flight Tracking System: Travel technology is used to monitor as well as manage travel, and
also includes flight tracking system. Global aviation software such as Plane Finder,
ReaderBox24, Flight Stats.com, etc., are useful in tracing the activities of flights from across the
world.Wahab, I (2017)

Dynamic Packaging: As cited by Ayazlar, R. (2014); Cardoso (2005), dynamic packaging can
be defined as combination of different travel components which are packaged and priced in real-
time in response to consumers’ and agencies’ demands. Dynamic packaging provides all travel
packages under single price by hiding each travel agency’s individual price. In the meantime,
other services regarding the holiday can be provided ina single web-site (Sharma, 2012;
Romano, 2005). According to Romano (2005), dynamic packaging is consumer-driven. It’s an
online packaging system in travel industry. Dynamic packaging was designed for satisfaction of
both service suppliers and consumers for their purposes (Rose, 2004). Dynamic packaging, at the
same time, means dynamic pricing because wholesalers can make adjustments in prices
whenever they want based on changing market conditions, supply and demand (Romano, 2005).

Similarly according to Wahab, I (2017) the freedom offered to customers in order to create their
own travel package by choosing the transportation services, flight tickets, accommodation types,
activities to get involved in, rental services, etc. instead of choosing a package predefined by the
agent is called dynamic packaging. This type of packaging witnesses the real time sourcing of
flights, trains, hotels, cars, etc. as per the requirement of the customer.

Computer Reservation System: CRS is famous for the ability to store the information and
retrieve it when required. It is also used for conducting transactions related to hotel books, air
tickets, car rental, etc. Some of the most widely used CRS around the world are Amadeus,
Abacus (Currently owned by Sabre), KIU, Mercator, Navitaire, Sabre, Travel Technology
Interactive, Travel Sky, Travelport, etc. Global Distribution System is a CRS which sells tickets
for major airlines across the globe.Wahab, I (2017)

Global Distribution System: GDS forms a linkage between the service providers in the travel
industry, such as airlines, hotels, car rental companies and enabling automated transaction
between travel service providers and the travel agencies. It is mainly through GDS, that the
travel agency is able to cater to its needs for various tourism related services, to the end users,

10
which is the customer. It concentrates across three main domains of the industry, viz.,
accommodation (hotel reservation), ticket reservation in airlines and car rentals. It not only
linked the bookings, but also the rates in which each of the services are available. Famous GDS
are Amadeus, Galileo, Sabre, Worldspan, etc.Wahab, I (2017)

Customer Relationship Management: CRM is famous for the convenience it brings in when it
comes to managing an organization’s interaction, not just with current customers, but also future
customers. CRM helps in analyzing customer and what to cater to. This plays a role in the
retention of the customer by maintaining ideal relationships with customers and ultimately
driving sales growth.Wahab, I (2017)

Mobile Technology:Cutting edge developments such as Global Positioning System service, Geo
Tagging, search based on location, and online mapping facility, which has become possible
through mobile service, has so much more to offer to the traveler at their respective travel
destinations. Personal assistant in travel is yet another advancement which is revolutionizing the
industry of travel and tourism. These applications assist the traveler in having a smooth and safe
travel. They also contribute largely on the distribution of resourceful information including great
offers and important deals.Wahab, I (2017)

Social Networks: According to Zeng, B (2013) the role of social media in tourism has been
increasingly noted and researched as an emerging topic. Social media plays an increasingly
important role in many aspects of tourism, especially in information search and decision-making
behaviors and tourism promotion focusing on best practices for interacting with consumers via
social media channels (social sharing of holiday experiences).

In the same manner Wahab, I (2017)the development of social networking sites related to travel
and tourism allow travelers to build a network of other travelers and share their travel stories and
experiences. The reviews and feedback left by other travelers gives a realistic picture of the
destination or service provider. Sites such as Trip Advisor, Matador, Tripsay, Couchsurfing,
GeckoGo, Travbuddy, etc are all example of such sites.

Space Tourism: One of the latest advancements in the field of travel and tourism is the concept
of taking regular people to space. For the purpose of leisure, recreation or business. As an
alternative tourism, Space Tourism is promoted by organizations such as Commercial

11
Spaceflight Federation, Russian Space Agency, etc. Remarkable research is still going on in this
domain. A name worth mentioning is Elon Musk from SpaceX who aims at flying two space
tourist around the moon in 2018.Wahab, I (2017)

The development of Information and Communication Technologies (ICTs) and particularly the
Internet have had a profound impact on the travel industry (Buhalis& Law, 2008:
Kamarulzaman, 2007)

As stated by Buhalls& Law, (2008)the energetic growth and development of the industry is
perhaps only mirrored by the growth of ICTs. The accelerating and synergistic interaction
between technology and tourism in recent times has brought fundamental changes on the
industry and on our perceptions of its nature. The significance of crossing the new information
threshold of universal, ubiquitous communications access have brought the entire tourism
industry to the new levels of interactivity, propelling management by wire. Increasingly, ICTs
play a critical role for the competitiveness of tourism organizations and destinations as well as
for the entire industry as a whole (UNWTO, 2001). Developments in search engines, carrying
capacity and speed of networks have influenced the number of travelers around the world that
use technologies for planning and experiencing their travels. ICTs have also changed radically
the efficiency and effectiveness of tourism organizations, the way that businesses are conducted
in the marketplace, as well as how consumers interact with organizations (Buhalis, 2003). There
have been many new entrants among the players on the tourism stage, shifts in market share and
balance of power, changes in political perceptions of tourism, and a growing recognition of the
importance of tourism to an ever-increasing number of national and regional economies.

As reported by Werthner, H., & Klein, S. (1999)ICT has played an important role in previous
phases of the development of modern tourism. Computerized Reservation Systems (CRS),
developed and operated by airlines in order to cope with the increasing volume of passengers and
the related logistic and operational problems, were among the first worldwide applications of
information technology, leading to systems with several ten-thousand participating companies.
At that time, comparable applications could only be found in the financial sector.

12
The diversity of the tourism sector places high demands on IS support and the performance of IS
systems. These demands reflect: global markets and the salience of destinations;high volume of
transactions and customized products;structured, standardized data as well as multimedia
representations;importance of intra- and inter-organizational systems;all different types of
customers (consumers, SME, large companies) and fragmented and concentrated markets.

According to (Statista, 2018)the statistic shows the worldwide revenue from online travel
bookings of 2011 to 2017. In 2016, the revenue generated through online travel bookings was
513 billion U.S. dollars, this figure was forecasted to reach 567 billion U.S. dollars.

Figure 2.1 Online gross travel booking revenue worldwide from 2011 to 2017 (in billion US
dollars)
Source: (Statista, 2018)

2.1.3.2. Disintermediation
According to Kaewkitipong, L. (2010) Disintermediation is terminology termed in the e-
commerce era to mean the removal of supply chain intermediaries which was expedited by the
Internet. This phenomenon has been foreseen by many e-business researchers’ since1990s.
According to Chaffey (2002), speculation was that disintermediation would occur as direct
selling through the Internet was increasingly easy. However, despite much effort of suppliers, the

13
results have been less than spectacular, particularly in the cases of car manufacturers as end
customers still sought for suggestions and services from sales representatives.

As stated by (Werthner, 1999)Faced with increasing competition and price pressure, all major
airlines have set up Web sites through which they also pursue direct sales strategies. While some
of them have been cautious not to alienate their established distribution partners, eg Lufthansa,
which is running monthly ticket auctions as a marketing event and promotion for the Web-site
which also features direct booking, others, eg Delta Airlines, are aggressively pushing the direct
sales channel; Up to the point that Delta has attempted to impose a penalty fee for all non-online
bookings.

A. New Intermediaries: Online Booking Servers

More important and potentially more dangerous for travel agents is the emergence of so called
online booking servers. They act as a kind of virtual travel agent or even travel supermarket
providing booking facilities for air, hotel, car rentals, or holiday packages, as well as many
additional information retrieval services. With respect to the tourism value chain they can be
regarded as new intermediaries, setting up an additional distribution link from the CRS/GDS to
the consumer, bypassing travel agents. The cooperation agreements with CRS/GDS follow from
the fact that the latter are the only electronic systems available which supply both a worldwide
product set as well as the necessary reliable functionality. (Werthner, 1999)

Traditional tourism players like Sabre with Travelocity or THISCO with Travel Web run some
of these booking servers while others have been set-up by new entrants like Microsoft with
Expedia. The sheer size and attractiveness of the travel and tourism market combined with
lowered entry barriers has attracted new entrants from outside the traditional tourism market,
especially from companies from the media and ICT field such as Bertelsmann or Microsoft.
These companies appreciate the huge interest from the consumer’s side in tourism applications in
the Internet and want to exploit the possibility of linking users to other Internet services offered.
They provide multimedia content and Internet mediating transactions to earn money. Since
tourism is an information business, it fits well with their knowhow and business processes. These
companies perceive tourism as one of the most important application fields for emerging

14
electronic markets. While, for many years, the tourism market has been characterized by a high
level of regulation and little external competition, this situation has changed fundamentally and
we have seen new entrants rise to major players during the past four years(Werthner, 1999)

The list of the top travel sites, i.e, Expedia [http:// www.expedia.com], ITN [http://www.itn.net],
Preview Travel [http://www.previewtravel.com], and Travelocity [http://www.travelocity.com],
demonstrates the dominant US position. These servers have enormous annual growth rates, for
example Travelocity tripled its gross sales from January 1998 to January 1999 when it reached
US$40.5 million. As a major way to increase Web traffic nearly all these servers follow a
strategy of distribution deals with portal sites. The strategic goal of these companies is to be
among those that will occupy a strategic position in this future market. This strategy, however,
requires ongoing major investment. This competition and comparability implies a permanent
innovation in the field of technology, tourism products and business processes. Moreover, since
tourism is one of the main application fields of the WWW, it is often a test field for new
technological developments.This will further increase the competition. In consequence, further
financial linkages with economical powerful companies, either from the tourism field or from
outside, can be expected.(Werthner, 1999)

According to Kaewkitipong, L. (2010)from the intermediary (travel agents and tour operators)
perspective, while the Internet allowed suppliers to contact directly to travel consumers more
easily than ever, many online travel agents also realized that they could add tremendous values to
the travel consumers by providing all the information the consumers may need in one place.
According to Buhalis and Law (2008), e-business technologies allow the travel agents to add
further value to their services by empowering the customers to not only search and book single
components, but also to assemble and book whole travel arrangements in real-time by means of
web-based technologies. Agrawal, Agrawal and Singh (2006) suggested infomediary as an
appropriate business model for non-physical products like flight and hotel reservation which
requires marketing value added into the product distribution. Nevertheless, despite many
alternatives to add values to their services, online travel agents are still facing challenges posed
by suppliers’ move to online. Many online travel agent sites have been used merely as price-

15
comparison sites, and then the customers jumped to suppliers’ sites for direct purchase
(Euromonitor, 2008).

B. New Infomediaries – Agents of the Customers

In addition to direct sales (disintermediation) and virtual travel agents or supermarkets,

innovative business models have emerged on the Web that combines the notions of flexible
pricing and customer advocacy (Hagel and Singer 1999).
TravelBids[http://www.travelbids.com], eg, runs reverse auctions, in which customers specify
their travelplans and travel agents bid to fulfill them. Priceline [http://www.priceline.com]
portrays itself as a demand collection system. Customers can specify their preferences including
the price. Priceline then advertises these binding offers to airlines who can decide whether they
want to fulfill this additional demand at the customer’s price. Systems like Priceline are focusing
on specific product characteristics of tourism products in general and schedule flights in
particular: The products are perishable and the marginal cost for an additional traveler is very
low. The infomediaries have strategically positioned their applications in order to generate
benefits for customers and suppliers which are not feasible in a direct sales model.They: - reduce
coordination and communication cost for buyersand sellers;generate volume for the
suppliers;pool homogeneous demand in order to give individual; customers access to suppliers’
volume discounts;improve the likelihood for order fulfillment for thecustomers;separate or even
isolate the coordination mechanism from other sales and distribution channels and by this way
limit spill-over effects of price discounts; andoperate with varying levels of
transparency.(Werthner, 1999)

2.1.4. Crs/ GdsAs Backbone Of TheElectronic tourism Market

Most of the online booking servers have direct links to one or several of the CRS/GDS, for
example Expedia uses Worldspan or ITN has links to all of them (Dombey1997). The CRS/GDS
themselves follow a variable strategy, they act as backend booking machines and at the same
time they attempt to position their systems as frontend systems.(Werthner, 1999)

16
 2.1.5. Opportunities of ICT in Travel and Tourism
By Dhaigudeet al.,(2016) and citing other scholars ICT has the ability to transform the entire
business processes in the T&T industry into an integrated operation and firms that fail to adopt
ICT will lose their competitive advantage (Law &Jogaratnam, 2005). ICT implementation helps
firms improve the quality of services offered, enhances operational efficiency, increases their
global reach and reduces costs, resulting in better consumer experience (Law, Leung, &Buhalis,
2009). The variety and intensity of ICT usage in the T&T industry is increasing by leaps and
bounds, resulting in the transfer of accurate information demanded by customers at the right time
(Connolly & Lee, 2006; Singh &Kasavana, 2005). ICT has become the must-have factor for
operations in the T&T industry. As Poon (1993) stated, ‘a whole system of information
technologies is being rapidly diffused throughout the tourism industry and no player will escape
information technologies impacts’. Unlike manufacturing firms, which have a uniform adoption
process, the T&T industry has variations in terms of level of adoption and uses of ICT among the
members of the value chain, resulting in a high level of complexity in the diffusion process of
ICT. The nature of ICT adoption in the T&T industry, coupled with increasing investment in
ICT, makes it necessary to formulate a holistic method for the ICT adoption process (Law et al.,
2009). There are methods available to measure technology acceptance, popularly known as the
technology adoption model (TAM).

2.1.6. Treat of Internet and ICT on travel agent in digital era

The first impact for a reduced role of travel agent by the information and communication
technologies (ICTs) is not popular as before because consumers can find information on trips or
booking via the Internet, rather than using the services of a travel agent. According to Laverty &
Media, said that “one of the largest impacts on the travel agency has been the rise of online
booking. Customers looking to book a trip no longer need to visit an agency - they can go online
to companies such as Expedia or Priceline and book an entire trip themselves.(World press,
2018)

The second impact for a reduced role of travel agent by the information and communication
technologies (ICTs) is some customer they can find the price of the room or the price of trip
cheaper by themselves. Bug, T. Said that “part of the reason why there is a general perception

17
amongst consumers that the Internet is still the sole source of cheaper travel products and
services than use by travel agents. (World press, 2018)

2.1.7. High competitors of ICT in Travel agent

In the recent years, the Information Communication Technology (ICT) has changed the
competitive environment in travel market by passing travel agents and selling directly to
consumers. So, its effect to travel agent by has more competitors. According to Kibe the study
reported that adopted an exploratory cross-sectional survey design involving managers drawn
from 55 travel agencies operating in Nairobi, Kenya. The number of years of firm only about 7%
had used ICTs for less than five years, 32.7% has used ICTs for 6-10 years, 27.3% had used
ICTs for 11-15 years and 32.7%had used ICTs for over 15 years”(p.4) Moreover, it’s will bring
to a mass-market online travel agencies (OTAs) such as Expedia, TripAdvisor, etc. From
Konwiser said that “TripAdvisor causes Expedia’s stock to plummet about 27% in one-day and
now. It’s down about 20% on the year which being attacked of all side”.(World press, 2018)

2.1.8. Impact of ICT to Travel Agents Changes to Structure of the Organization

In the present internet, social media, online media, and information and communication
technology (ICT) are easy access to have a role in the way of life. In the travel and tourism
industry, this widespread of ICT have many effect to tourism industry such as a changes to the
structure of the organization, changes to the process in the organization, including the problem of
employment. And ICT is effect directly to tourism industry like supplier can contact directly
with customer without intermediary. According to Yamanouchi, (2004) said that “The internet
has provided opportunities for travelers to book their travel directly online thereby circumventing
the traditional travel channels i.e. travel agencies. Nowadays even airlines have started
encouraging travelers to book tickets directly on their websites thus avoiding having to pay 10%
commission to the travel agents. This it has made it an urgent need for traditional travel agents to
find new methods and strategies to stay in business.” So, ICT effected to travel agents or
intermediaries are replacing by online media. (World press, 2018)

18
 2.1.9. Challenges of Travel Agency by ICT evolution
A. Self-Service booking

According to Law R.; et al; (2007) and their citation the supplier perspective of online
marketing: - The Internet is an effective, efficient and low-cost marketing channel. However, it
can also reduce the opportunities for suppliers to have direct human contact with customer
Stockdale (2007) thus proposed using self-service technology to handle customer relationship
management (CRM) to deal with this issue.(World press, 2018)

B. Downside of Internet connection

As stated and cited by Mihajlovic, I. (2012) Travel agents who successfully used internet as
distribution channel had an easier access to global market. In such a way internet created the
possibility to penetrate new market segments, and encouraged global alliance with the aim of
enriching tourist offer, advertising and booking through cross-organizational booking systems.
New distribution channels cannot be seen separately from other operating segments
(Mamaghani, 2009). In the domain of ICT development, displayed either through the
possibilities that internet placed before a modern tourist, or through travel agents that derived
benefit from the inclusion in GDS systems, there is an evident quantitative growth in traffic,
accompanied by a qualitative transformation of travel intermediaries. Especially conspicuous are
those entities that apply ICT in the creation of new offer and affordable trips (Almandari, 2002).

C. Disintermediation (Online discount given by airlines)

According to Kamau, W. (2015) Tourism service providers such as the airlines and tour
wholesalers are slowly by passing the travel agents by selling their products and services directly
to clients. Cited by Kamu, W. (2015) The changes in the distribution chain are mainly as a result
of advances in technology (Cooper, Fletcher, Flyall, Gilbert &Wanhill, 2008; Wang, 2007; Page
& Connell; Davidson & Rogers; Doganis; Sharpley, (2006); Buhalis, 2003). As a result of
disintermediation, the need for TAs has declined (Wensveen, 2007). However, the face-to-face
selling, their expertise and ability to save time on information search give the TAs an added
advantage (Holloway, 2004; Bogdanovych, Berger, Simoff& Sierra, 2006; Goeldner& Ritchie,
2009).

19
 D. Loose link by social media/ other device

As stated and cited by Mihajlovic, I. (2012)Travel agents have to adapt their websites and online
bookings to the overall “experience” and expectations of tourists; moreover, future travel agents
will have to keep up with competing destinations that offer user friendly activities, values and
conveniences (Mamaghani, 2009). This way the technology does not change only one business
segment, but with efficiency and performance of its innovative tools it bears upon the radical
changes in distribution channel and/or methods of its implementation and promotion regardless
of the market entity in question, thus leading to higher or lower competitiveness.Those travel
agents who ignore new technologies or avoid their implementation (due to high costs or lack of
staff expertise) reduce the possibility to compete and adapt to dynamic market environment.

2.1.10. Possible Strategies by ICT

According to Mihajlovic, I. (2012)Travel agents who successfully used internet as distribution
channel had an easier access to global market. In such a way internet created the possibility to
penetrate new market segments, and encouraged global alliance with the aim of enriching tourist
offer, advertising and booking through cross-organizational booking systems. New distribution
channels cannot be seen separately from other operating segments (Mamaghani, 2009). In the
domain of ICT development, displayed either through the possibilities that internet placed before
a modern tourist, or through travel agents that derived benefit from the inclusion in GDS
systems, there is an evident quantitative growth in traffic, accompanied by a qualitative
transformation of travel intermediaries. Especially conspicuous are those entities that apply ICT
in the creation of new offer and affordable trips (Almandari, 2002). Travel agents have to adapt
their websites and online bookings to the overall “experience” and expectations of tourists;
moreover, future travel agents will have to keep up with competing destinations that offer user
friendly activities, values and conveniences (Mamaghani, 2009). This way the technology does
not change only one business segment, but with efficiency and performance of its innovative
tools it bears upon the radical changes in distribution channel and/or methods of its
implementation and promotion regardless of the market entity in question, thus leading to higher
or lower competitiveness. Those travel agents who ignore new technologies or avoid their

20
implementation (due to high costs or lack of staff expertise) reduce the possibility to compete
and adapt to dynamic market environment.

Similarly according to Law R.; et al; (2007) and their citation websites are incredibly important,
mission critical, and cost effective marketing tools for businesses. Having a good website not
only generates more business opportunities, but also enhances a company’s image and supports
the interactivity with both institutional and individual customer. To increase web effectiveness,
web designers should also consider network limitations, demographics, and the culture and soul
of the site (Corfu &Kastenholz, 2005). As stated by Rob Law; et al (2009) the supplier
perspective online marketing: - The Internet is an effective, efficient, and low-cost marketing
channel. However, it can also reduce the opportunities for suppliers to have direct human contact
with customers. Stockdale (2007) those proposed using self-service technology to handle
customer relationship management (CRM) to deal with this issue. Internet has also been
introduced to maintain a close relationship between companies and customers, with research
results showing that the adoption of E-relationship Marketing (e-RM) is positively associated
with the size of hotel companies (Bai, HU & Jang, 2006). The adoption of IT and relationship
marketing (RM) could help tourism organizations maintain competitiveness and improve the
management of business relationships with customers (Alcarez, Martin, &Casiells, 2007). A case
study in Singapore showed that the majority of Singapore’s hotels were at the “database
collection” level in RM (Gan, Sim, Tan & Tan, 2006), and that customers with different socio-
demographic characteristics has a significant willingness to provide contact information for
permission marketing. To attract customers to provide such information, the means by which
customer contact information is collected should be varied (Brey, o, Kim & Morrison, 2007). Hu
Han, Jang and Bai (2005) stressed that both the hospitality and tourism industries and academic
institutes need to maintain a good relationship with their prospective customers.

As cited by Rob Law; et al (2009) the ultimate focus of a business is performance and the
maximization of profit. Computerized yield management systems can help managers increase
their revenue and yields to improve profitability and financial performance (Emeksiz, Gursoy,
&Icoz, 2006). In a similar way the empirical research findings by Januszewska, M., et al (2015)
state that The effects of ICT use by tourism enterprises (the case of Lower Silesia entities)

21
Development of ICT has an undeniable impact on development possibilities of tourism
enterprises, on a local scale, as well as globally. It is estimated that the world’s 40% turnover in
tourism sector results from the application of ICT techniques, which are most often associated
with travel agencies’ web sites or aggregators of these agencies offers which provide electronic
transactions and online booking systems for hotels and airlines.

IAB Europe research indicated that in 2012 in the world approx. 75% of airline tickets sales
occurred online. As many as over 13% of plane tickets purchased in Poland in 2013 were booked
on-line. 42% of the Internet users choose to pay by means of electronic banking facilities, over
50% of Poles travelling by planes decide to invest in budget airlines, which can be booked only
on-line. 40% of the Internet reservations are made outside the hours 10 a.m. – 6 p.m., 15% of on-
line bookings are done on Saturdays and Sundays, every second ticket booked on the Internet can
be issued completely automatically. The above information confirms the significant role played
by ICTs with regard to activities performed by tourism enterprises and their extensive influence
on such entities’ functioning. In the RaportPhoCusWright (2012) it is estimated that the value of
tourism market in Poland has grown up to about 4 billion USD in 2013. Major part of this
amount originates from selling the available offer by traditional distribution canals. However, the
dynamics of on-line tourism services sales is extremely high. According to performed
estimations Poles spent about 850 million PLN on purchasing tourism services via the Internet,
including about 300–350 million PLN on airfares. It is estimated that in 2013 the value of
tourism offer on-line sales amounted to over 1 billion PLN.

2.2.Empirical Review
Wahab, (2017) analyze the role of information technology in tourism industry: impact and
growth. He used a descriptive research design in order to answer the stated objectives. The
findings of his study revealed that Information Technology or IT has played a critical role not
just in the advancement of tourism, but it has helped in spreading the phenomenon of tourism to
every part of the world and has made travel safer. IT brought in some radical changes that have
altered the scenario of travel and tourism, making travel easier, bridging the gap between
customer as well as the seller and by providing the right information at any point in time. The
finding further revealed that one of its major contribution lies with the increase in the supply of
information to be shared with a larger audience. Secondly, IT helps in reducing the cost

22
inculcated in the dissemination of knowledge. It has also reduced the inefficiencies pertaining to
the spread of information. Thirdly IT has greatly helped in the reduction of barriers caused by
distance and time.

Mihajlović, (2012) made a survey analysis on the impact of information and communication
technology (ICT) as a key factor of tourism development on the role of Croatian travel agencies.
He used a descriptive approach and data were collected from 200 travel agencies. The paper
further seeks to understand the mission and the usage of ICT through its influence on the
development of tourism subjects supply, especially intermediaries on tourism market. The
occurrence of the phenomenon of tourism is the result of socio - economic conditions related to
the development of technology and innovations. The analysis revealed that the integration of
personal approach with ICT is significant, with new technologies having complementary and not
substitutive function. Benefits of new technologies enable development of travel agencies and
make communication with customers and other entities easier, which is the foundation for
building competitiveness. The study further revealed the role of ICT in strategic formation of
travel agencies in the context of understanding the necessity to apply ICT in all business
segments all the way to the level of coalition of new technologies in the market through the
launch of proper or someone else’s products (travel arrangements) and/or services. Technology
considered as a means of partnership, and not as a threat in the eyes of respondents, is a valuable
result of this survey which shows that there is room for self-development of agencies and for
overcoming the barriers sometimes created by technology due to knowledge deficit and low level
of IT awareness.

Tichaawa, Mhlanga and Sicwebu, (2017) assess the impacts of information communication
technologies (ICTs) on tourism businesses. A case study approach was followed; and a
questionnaire survey was carried out where the questionnaires were measured in Likert scale.
The results show that the ICT was perceived to impact relatively little on company image
improvement, tourism businesses should use such technology to improve company image. The
uniqueness of this article lies in it revealing the impacts of ICT on tourism business from an
African country perspective.As stated by Januszewska. M., et al. (2015) development of ICT has
an undeniable impact on development possibilities of tourism enterprises, on a local scale, as
well as globally. It is estimated that the world’s 40% turnover in tourism sector results from the

23
application of ICT techniques, which are most often associated with travel agencies’ web sites or
aggregators of these agencies offers which provide electronic transactions and online booking
systems for hotels and airlines.

Bethapudi, (2013) used a descriptive research design in order to the role of ICT on tourism
industry in India. using purposive sample of 112 managers of tourism, travel and hospitality
enterprises were surveyed through a questionnaire with the Managing Directors, Directors,
General Managers, Team Leaders and Senior Managers. The study explores the business
development, revenue generation, minimization of cost and reaching the customers. The paper
explains the gaps between tourism business and ICT influence and suggests measures to fill the
gaps in tourism enterprises. The findings of the study show that it is essential that the current
information and communications technologies should be updated, upgraded and seamless
integration both internally and externally should be done to improve the tourism business
operations. The integration of ICT in tourism would benefit both, service providers and
customers bringing together other stakeholders as well, on a common platform. The study further
revealed that the selection of right information communications technology tool is crucial to
match the customer requirements with service dimensions. The proliferation of technology
throughout tourism distribution channels and professionals use the new tools in order to retrieve
information, identify suitable products and perform reservations. ICTs integration provides a
powerful tool that brings advantage in promoting and strengthening tourism industry.

Sava and Mateia, (2014) analyze the impact of information technology on travel agents in
Timişoara, Romania. They used a descriptive research design; the analysis revealed that the
online reservations of travel packageswas 24.2% ofthe total number of tourist packages sold in
2013, by 12.6percentage points more than in 2005.With the appearance of Web, users were able
to interact with dynamic websitesoftravel agencies. The analysis further shows that it was
beneficial for smaller agenciesenabling them to promote tourism products withouthaving to
purchase expensive computer programsfor promoting and creating their own websites.
Potentialcustomers now have access to the desired informationthrough cheap portals, such as the
web browser, and theycan choose the best package making an easier and effortlessly comparison
between offers in a short time. Thus, both small travel agencies and customers are favoredby the
appearance, development and use of informationa technologies.In the RaportPhoCusWright

24
(2012) it is estimated that the value of tourism market in Poland has grown up to about 4 billion
USD in 2013. Major part of this amount originates from selling the available offer by traditional
distribution canals. However, the dynamics of on-line tourism services sales is extremely high.
According to performed estimations Poles spent about 850 million PLN on purchasing tourism
services via the Internet, including about 300–350 million PLN on airfares. It is estimated that in
2013 the value of tourism offer on-line sales amounted to over 1 billion PLN.
Shanker, (2008) conduct a qualitative analysis entitles with ICT and tourism: challenges and
opportunities in India. The findings of the study confirm that,the most important benefit
associated with the access to the new technologies is the increase in the supply of information.
Information is shared and disseminated to larger audience. Secondly it reduces the cost of
production. Knowledge is produced, transmitted, accessed and shared at the minimumcost. With
the reduction in the transactional costs, there is also a reduction in the degree of inefficienciesand
uncertainty. Thirdly it has overcome the constraints of distance and geography. The finding
further shows that ICTs have cut acrossthe geographic boundaries of the nation states and buyers
and sellers are able to share information,specifications, production process etc across the national
borders. It enables all to know the comparativeadvantage in the market economy. It leads to the
larger markets and increased access to global supplychains. Fourthly it has led to more
transparency.

Januszewsk et al., (2015) conduct a descriptive research on the effects of the use of ICT by
tourism enterprises. The findings of the study show that online sales in tourism sector amounts to
40%, whereas the relevant level in the overall economy is 17%. Tourism represents the sixth
sectorwhere ICT tools are most often used. The finding further revealed that the differences in
the observed advantages and barriers for ICT implementation by tourism enterprises, which may
represent the effect of both the specific nature of performed activities and the offered product.
Furthermore, tourism intermediaries approach ICT as the means for increasing revenues which,
however, is not pointed out by hoteliers. In spite of ICT importance, emphasized in the subject
literature as the method for transaction costs reduction in running a business in tourism sector,
however the analysis shows that entrepreneurs do not perceive this advantage as crucial. An
individual perception of ICT advantages dominates over the general outlook among the
respondents.IAB Europe research indicated that in 2012 in the world approx. 75% of airline

25
tickets sales occurred online. As many as over 13% of plane tickets purchased in Poland in 2013
were booked on-line. 42% of the Internet users choose to pay by means of electronic banking
facilities, over 50% of Poles travelling by planes decide to invest in budget airlines, which can be
booked only on-line. 40% of the Internet reservations are made outside the hours 10 a.m. – 6
p.m., 15% of on-line bookings are done on Saturdays and Sundays, every second ticket booked
on the Internet can be issued completely automatically. The above information confirms the
significant role played by ICTs with regard to activities performed by tourism enterprises and
their extensive influence on such entities’ functioning.

2.3.Conceptual Framework
The conceptual model focused on the opportunity that ICT offer for the Travel Agency, the
challenges that arise from ICT evolution and possible strategies to address the challenges faced
due to the ICT effect.The frame work has an important basis for application to examine the
nature of response by travel agencies in Addis Abeba as a result of internet innovations and
implications (Figure 1.1). The variables in the framework included Independent and dependent
variables.

Independent Variables The main independent variables in the study included ICT offer that are
improve service quality, fast service, new market, increase number of customer and higher
income. Challenges of travel agency (By ICT evolution) which encompass, self-service booking,
downside of internet connection, Commission caps & cuts, online discount given by airline, Loss
link by social media/other device

Dependent Variable The dependent variable in the study is the effect of travel agency which is
the profit of the organization.

26
Figure2.2: Conceptual Framework

Opportunity of ICT

• Improve service quality

• Fast service
• New market
• Increase number of customer
• Higher income
Challenges of Travel agency (BY ICT
Evolution)

• Self-service booking Effectiveness of Travel

• Downside of Internet Agency business
connection
• Search Online booking • Profit
• Online discount given by • Efficiency
airline(Disintermediation) • Effectiveness
• Loss link by social media/other
Possible strategies
device (ICT)
• Deliver other tourism related
service (travel related)
• Working 24/7
• Improve internet connection
• Increase link by social
media/other device
• Online sales by their website
• Human touch (Face to Face
communication with a client)

Independent Variables Dependent Variable

Source: Own constriction with inputs from S. Chepkoech (2013); (Januszewska. M., et al.2015);
Mihajlovic, I. (2012).

27
 CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

3.1. Research Design
As it is stated in the objective, the very essence of this research is to determine the effectiveness of
ICT on travel agencies business specifically in the city of Addis Abeba and to get an answer for all
mentioned on the research question this research used causal and descriptive research design.As well
for this study the researcher use quantitative research designs, techniques and measures to
produce numerical quantifiable data.

3.2 Research Approach

Further, the study used mixed research approaches, which include both qualitative and
quantitative data. By qualitative data, the description is in words rather than numbers by
believing it helps the study to go beyond the statistical results that are reported in the quantitative
research.

3.3. Population and Sampling Techniques

The target population of this study isthe entire 473 travel agencyCompany found in the city of
Addis Abeba. Further, to address the research question the researcher used probability and Non
probability sampling technique. Probability sampling technique which is specifically Cluster
random sampling because the population have homogeneous character; by taking the population
which are the entire 473 companies found in Addis Abebaand divide into sub-cities like Bole,
Yeka, AkakiKaliti, Ledeta, Gulele, Arada, Kirkos, NefasselkLafto, KolfeKeranio and Addis
Ketemasub-cities that are going to say clusters or geographical cluster, and samples are then
randomly select from each cluster. By Non Probability sampling technique taking a sample
purposively related to my study; purposive sampling conducted.

28
 3.3.1. Sample Size Determination

The sample size for students was calculated basedon Yamane’s formula (Yamane, 1967)

Where, n = the sample size

N= the size of population

e =the error of 5 percentage points

By using Yamane’s formula of sample size with an error 5 % and with a confidence coefficient
of 95% (Yamane, 1967), the calculation from a population of 473 travel agency company came
up to a sample of 218 travel agency found in Addis Abeba. Therefore, 218 travel agency
representatives were selected randomly.

3.4. Source and Procedure of Collection

In order to conduct a successful research and, to answer the research questions raised, primary
data were collected from managers and ticket agents in Addis Ababa and the instrument for data
collection was a self-developed questionnaire and interview. Quantitative data collected through
distribution of a questionnaire which by believing on the respondents was given the reply
genuinely. The questionnaires are delivered on hand and email to the mangers and ticket agents.

3.5. Method of Data Analysis

Upon collection of all data, the data are processed, edited, classified and organized in order to
enable the researcher interpret and summarize the data. Data were analyzed using both
descriptive and inferential statistics techniques. In descriptive statistic the researcheruse
percentages, correlation and frequencies as well as mean and standard deviationthat help to
analyze the data where as in the inferential techniques which is known as regressions particularly
Ordinary Least Square (OLS) method were used, which shows not only the relationships or
associations existing between variables it helps to analyze the extent to which one (independent)

29
variable predicts the other (dependent) variable. Further, the collected raw data were classified
and compiled to make assessment manageable and understandable using Statistical Package for
Social Sciences (SPSS) as well as Excel.

3.6. Validity and Reliability Test

3.6.1. Reliability Test

Reliability is the degree to which an assessment tool produces stable and consistent results,
Cronbach’s Coefficient Alpha method was used to test the reliability of the data, and therefore,
the data was 70.6% reliable

Case Processing Summary

N %

Valid 215 98.6

Cases Excludeda 3 1.4

Total 218 100.0

a. Listwise deletion based on all variables in the procedure.

Reliability Statistics

Cronbach's Alpha N of Items

.706 49

3.6.2. Validity Test

In general, Validity is an indication of how sound your research is. More specifically, validity
applies to both the design and the methods of your research. Validity in data collection means
that your findings truly represent the phenomenon you are claiming to measure. Valid claims are
solid claims. Therefore, in order to measure the validity Pearson correlation method was
employed, accordingly based on the significant value obtained by the sig. (2-tailed) 0f 0.000 <
0.05, so it can be concluded that all of the items was valid.

30
Opportunity of ICT for Travel Agency N Pearson Sig. (2-
Correlation tailed)
Gender .433** .000
Age group .357** .000
Education .348** .000
**
number of years .301 .000
**
job status .322 .000
**
The Travel Agency improves service quality by the introduction of ICT. .202 .000
ICT gives fast service for the travelers. .269** .000
ICT helps the Travel Agency to penetrate to the new market. .162* .000
Due to ICT the numbers of customers are increased comparing from the .538** .000
previous.
The Travel agency generate higher income because of the ICT .167** .0014
revolution
The Travel agencies face a problem by customer’s self-service booking .446** .0032
with the independent of the agency.
The downside of high speed internet connection make difficult to serve .208** .0022
a travelers request on time.
The travelers search online first, then come book with an agent; this .469 .0011
create to challenge for the travel agency.
The online discount given by the airlines and other travel booking .902** .0014
website create downsize of the sales.
The travel agencies have faced a problem on how to keep in touch with .892** .0049
their clientele using a variety of medium like mobile devices and others.
Delivery another travel related service like tour package, rent a car and .843** .000
some others.
Allowing clients the ability to book their trips without the constraints of .764** .000
office hours or worrying about their schedule.
Improved Internet connections and speeds. .762** .000
Travel Agency has to keep in touch with their clients using a variety of .211** .000
mediums.
Create a website and sell by their own website .534** .000
The travel agencies have to create person to person communication with .161* .041
travelers. (i.e. the “human touch”)
The travel agency is still in profitable venture even if there is online .140* .000
booking and discount offer by Airlines.
Using ICT the travel agency produce the intended or expected result .214** .000
(Being effective)
By using ICT the travel agency performs or functioning in the best .136* .032
possible manner with the least waste of time and effort. (Being
efficient)
*. Correlation is significant at the 0.05 level (2-tailed).
**. Correlation is significant at the 0.01 level (2-tailed).

31
 3.6.3. Ethical consideration

The researcher has to know and respect the willingness of the respondents and has not disclosed
the respondent’s identity, and will not have used the information for personal purpose.
Additionally, all participants for the success of the research should be acknowledged. Further,
the researcher seeks informed consent of the respondent and the research data remained
confidential throughout the study and the researcher ensure respondents participation in this
study voluntary.

32
 CHAPTER FOUR

DATA ANALYSIS AND INTERPRETATION

4.1. Demography Characteristics of Respondents

4.1.1. Age Classification of Respondents
Respondents age were categorized in to three age groups, the first groups are those respondents
who are between 20 and 35 years of age which accounts 56.42 percent of the respondents; the
second group were 36 to 50 years of age, this age groups incorporate 40.37 percent of the
respondents and the last and the third group were 51 to 65 years of age which contain 3.21
percent of the respondents. The analysis indicated that most of the employees who work in travel
agent industry belong to young age group.

Table 4.1 Age clasificaiton of resppondents

Age ofRespondent
Freq. Percent Cum.
20-35 123 56.42% 56.42
36-50 88 40.37% 96.79
51-65 7 3.215 100.00
Total 218 100.00%
Source: Own survey, 2018

4.1.2. Education of Respondents

Under this sub-topic respondents were asked if they took any tourism related education trainings
at certificate or advanced level; accordingly, respondents replied based on their qualification and
they choose more than one option if they have both. In line with this, out of the total respondents
112 of them had certificate on tourism related trainings. 55 respondents were diploma holders
and 26 respondents had tourism related advanced diploma. Furthermore, 26 respondents had
International Air Transport Association approved Diploma, 65 respondents also had tourism
related degrees; however out of the total respondents 9 of them didn’t have any tourism related
education. The analysis implied that except a few majorities of the employees who worked in
travel agent profession had both qualification of certificate, diploma and degree, which indicates
the employees, invest more time on upgrading their educational status.

33
Table 4.2 Tourism Related Education/Training

Tourism related education Yes No Total

Certificate 112 106 218
Diploma 55 163 218
Advanced Diploma 26 192 218
IATA approved Diploma 93 125 218
Degree related to Tourism Industry 65 153 218
None 9 209 218
Source: Own survey, 2018

4.1.3. Current Status on TheAgency

The researcher categorizes the current status of respondents in to four; accordingly, 18.80
percent of the respondents were at executive level and 4.12 percent of them were non-executive
status. The rest 27.06 and 50 percent for the respondents were owners and employees. The
statistics show that very few the respondents are the owners of the business; however, majority
of the respondents were employees of the travel agents, furthermore, few amounts of the
respondents were at executive level, this shows that since the higher level officials are bust in
most cases it is difficult to access them; so that the nears employees would be the responsible
guy to respond for such assessments.

Table 4.3 current status of respondents at the organization

Current or most recent

job status Frequency Percentage
Executive 41 18.80%
Non-Executive 9 4.12%
Owner 59 27.06%
Employee 109 50%
Total 218 100%
Source: Own survey, 2018

4.1.4. Experience on Tourism Industry

Respondents were also asked for how many years so far they are engaged on tour and travel
industry in general; accordingly, majority (44.5%) of the respondents stayed in tourism industry
between 4 to 6 years, 32.11 percent of them stayed in tourism industry so far between 1 and 3
years. The rest 12.39 and 11.01 percent of the respondents were stayed in tourism industry for
less than 1 year and above 7 years respectively. The findings indicate that majority of the

34
respondents serve the industry more than 4 years, hence to some extent it is possible to conclude
that the travel agent business is senior and old type of business since the country had many
places to visit.

Table 4.4 Total year of experience in tourism industry

Year of Experience on working in travel industry

Freq. Percent Cum.

Less than 1 yr 27 12.39 12.39
1-3 Years 70 32.11 44.50
4-6 years 97 44.50 88.99
Above 7 years 24 11.01 100.00
Total 218 100.00
Source: Own survey, 2018

4.1.5 Experience on current organization

In the previous sup-topic the researcher tried to show for how many years respondents in general
stayed in tourism and travel industry including different organization. However, in this sub-topic
respondents were asked for how long they were working for their current organization.
Accordingly, 39.91 percent of the respondents stayed in their current organization for less than
one year, again 39.91percent of the respondents replied that they stayed in their current
organization for 1 to 3 years. . The rest 14.68 and 5.50 percent of the respondents worked for
their current organization for 4 to 6 years and above seven years respectively. This implies that
on the travel agency business employees not stay in one organization for longer period of time.
They will catch an experience from one company and sift to their own business or to other
competitor company.

Table 4.5 Current organization experience

Year of experience oncurrent travelagency

Freq. Percent Cum.
Less than 1 year 87 39.91 39.91
1-3 years 87 39.91 79.82
4-6 years 32 14.68 94.50
Above 7 years 12 5.50 100.00
Total 218 100.00
Source: Own survey, 2018

35
 4.1.6 Locations of Travel Agencies
For travel industry location of the company is the most important factor for its success, hence,
the location of sample travel agencies was also analyzed. 21.10 percent of the travel agencies
were exists in Bole sub-city, 9.63 percent of them were in AkakiKality sub-city, and 8.29 percent
of the agencies are addressed in Gulele sub-city. 17.89 percent of the agencies make their
address in Kirkos sub city, 10.55 percent of the agencies were found in Yeka sub-city, 4.13
percent of them were in Lideta sub-city and 11.93 percent of them were in Arada sub-city.
Furthermore, 4.59 percent of the agencies were found in Nefas Silk Lafto sub-city and the rest
5.5 and 6.42 percent of the travel agencies were found in KolfeKeranio and Addis Ketema sub-
city respectively. Although, the proportion of the location seems proportional, however, more
numbers of the agency location is at bole sub-city this is because it is the place that near to the
airport, and helps to catch customers easily compared to the others.

Table 4.6 Current existing location of travel Agencies

Travel agency Location

Freq. Percent Cum.
Bole 46 21.10% 21.10
AkakiKaliti 21 9.63% 30.73
Gulele 18 8.26% 38.99
Kirkos 39 17.89% 56.88
Yeka 23 10.55% 67.43
Ledeta 9 4.13% 71.56
Arada 26 11.93% 83.49
Nefasselklafto 10 4.59% 88.07
KolfeKeranio 12 5.50% 93.58
Addis Ketema 14 6.42% 100.00
Total 218 100.00%
Source: Own survey, 2018

4.1.7 Travel Agencies Daily Booking

Number of daily booking for travel agencies is the most considerable things in their daily
business; the analysis shows that 39.91 percent of the travel agencies had 1 to 10 bookings per
day, 20.18 percent of the agencies had 11 to 20 bookings per day and 13.76 percent of the
agencies had 21 to 30 bookings per day. The rest 26.15 percent of the some agencies had more

36
than 30 bookings per day. This show that how much the travel agency active air ticket booking
and sales and shows lots of travelers in the city of Addis Abeba.

Table 4.7 Description of travel agencies daily bookings

Travelagencybooking perday Freq. Percent Cum.

1-10 87 39.91 39.91
11-20 44 20.18 60.09
21-30 30 13.76 73.85
Above 30 57 26.15 100.00
Total 218 100.00
Source: Own survey, 2018

4.1.8. Adopted ICT and Mode of Communication

Mode of communication in a sense means, what mode of communication is mostly used by the
travel agencies in their everyday business. In this context respondents tick more than one option
if the company employees more than one mode of communication; accordingly, out of the total
sample agencies 190 of them used electronic mail for their mode of communication, 152 of the
agencies used telephone, and 50 agencies used Fax as a means of communication for their daily
operation. Furthermore, 41 and 91 agencies also responded that they used Printed media such as
letters, posters, handouts and face to face mode of communication respectively. In addition to
these, the respondents were also asked what type of information communication technology is
their company used mostly; here also respondents gave a multiple responses sine the company
uses more than one instruments. The findings of the study shows that out of the total sample
agencies, 202 agencies used internet service, 122 used mobile phone and 95 agencies used
Phones i.e land lines. Furthermore, 55 and 200 agencies used Fax machines and Global
Distribution System (GDS) respectively. The implication of the most frequently used
communication device which is computer (email) and telephone shows that the industry is more
comfortable or prefer its simplicity comparing to others. The other thing ICT adoption in the
firm or in the travel industry rely on internet an Global Distribution System (GDS) without
adoption of those ICT’s the travel agency cannot perform everyday business.

37
Table 4.8 Mode of communication and technology adopted

What mode of communication is often used in

everyday business in your firm?
Yes No
Computers (email) 190 28
Telephones 152 66
Fax 50 168
Print media e.g letters, 41 177
posters, handouts
Face to face 91 127

Type of ICTs adopted in your firm

Yes No
Internet 202 16
Mobile Phone 122 96
Phones i.e land lines 95 123

Fax machines 55 163

Global Distribution System 200 18
(GDS)
Source: Own survey, 2018

4.2. Descriptive analysis of Effectiveness of ICT on the performance of Travel Agencies

Business
The effect of information communication technology on travel agency businesses were observed
from three perspective, Opportunity of ICT for Travel Agency, Challenge of Travel Agency due
to ICT evolution and Possible strategies to overcome the problem faced by ICT. Each of the
anticipated issues is discussed below. Furthermore, for likert scale data from 1 (Strongly
Disagree) to 5 (Strongly Agree) if the sample is approximately normally distributed the
interpretation should be for mean up to 2.8 is “Disagree”, mean between 2.9 and 3.2 is “Neutral”,
and mean above 3.2 is “Agree” (Scott 1999). Therefore, the decision of the each variable
statistics is done based on these criteria’s.

4.2.1. Opportunity of ICT for Travel Agency

In this sub topic the opportunity offered by information communication technology would be
discussed. The findings of the analysis shows that more than 90 percent of the respondents
replied that the travel Agency improves service quality by the introduction of ICT, close to 95
percent of the sample respondents also said that the application of ICT helps them to gives fast

38
service for the travelers. In addition to these, 92.2 percent of the respondents replied that ICT
helps the Travel Agency to penetrate to the new market; on top of this more than 91 percent of
the respondents confirmed that due to adopting information communication technology their
numbers of customers are increased comparing from the previous seasons; in addition to these,
majority (91.71%) of the respondents replied that the travel agencies were generates higher
income because of the ICT revolution.

The grand analysis further shows that and as confirmed by 92.74 percent of the respondents of
ICT created tremendous opportunities for travel agencies in terms of generating additional
income and improve service qualities. In addition to this the grand mean of Opportunity of ICT for
Travel Agency is 4.53; as referred by Scott (1999) the mean value is fall on agree level. Therefore,
this indicates that at greater extent the technology of ICT creates a good opportunity for travel
agencies and makes their business more reliable and fast; as a result of this the travel agencies
could penetrate and enter to a new markets which helps them to recruit new customers and
makes more profitable and generate higher incomes.

Table 4.9 Opportunities of ICT for travel industry

Level of Agreement St.

Mean Dv
Items
1 2 3 4 5
The Travel Agency improves 0% 0.92% 5.5% 34.86% 58.72% 4.51 0.6456
service quality by the
introduction of ICT.
ICT gives fast service for the 0% 0% 5.05% 30.28% 64.68% 4.59 0.5868
travelers.
ICT helps the Travel Agency to 0.92% 0.46% 6.42% 32.57% 59.63% 4.49 0.7200
penetrate to the new market.
Due to ICT the numbers of 0.92% 2.75% 5.05% 26.61% 64.68% 4.51 0.7929
customers are increased
comparing from the previous.
The Travel agency generate 0.46% 2.30% 5.53% 21.66% 70.05% 4.58 0.7412
higher income because of the ICT
revolution
Opportunity of ICT for Travel 0.46% 1.28% 5.51% 29.19% 63.55% 4.53 0.6973
Agency
Where level of Agreements: 1=Strongly Disagree 2=Disagree 3= Neutral 4=Agree 5=Strongly Agree
Source: Own survey, 2018

39
 4.2.2. Challenge of Travel Agency Due to ICT Evolution
Apart from the opportunity created by the application of information communication technology
an assessment were performed if there is any challenges confront by the travel agencies due to
the current status of ICT implementation. Accordingly, 53.67 percent of the respondents
confirmed that the travel agencies face a problem by customer’s self-service booking with the
independent of the agency; on the other hand, 34.40 percent of the respondents neither agree nor
disagree regarding the problem by customer’s self-service booking with the independent of the
agency. 50.92 percent of the respondents confirmed that the downside of high speed internet
connection make difficult to serve a travelers request on time, however, considerable (15.145)
amounts of respondent didn’t agreed that the downsize of high speed internet creates a problem
on their activities. 58.26 percent of the respondents said that when the travelers search online
first and then come book with an agent creates a challenge for the travel agency; in this regard
25.81 percent of the respondents neither agree nor disagree. Although 5.07 percent of the sample
respondents said that the online discount given by the airlines and other travel booking website
didn’t reduce the amount of the sales, however, 69.13 percent of the respondents confirmed that
the online discount given by the airlines and other travel booking website create downsize of the
sales. Apart from these, more than 73 percent of the respondents confirmed that the travel
agencies have faced a problem on how to keep in touch with their clientele using a variety of
medium like mobile devices and others.

The overall analysis regarding Challenge of Travel Agency due to ICT evolution implied that,
61.07 percent of the respondents confirmed that the travel agencies are challenged by the current
status of ICT service such as difficulty to serve a travelers request on time, although, small
percentage of respondents denied that. Furthermore,challenge of travel agency due to ICT
evolution hadthe mean score of 3.73; which suggested as referred by Scott (1999) the mean value
is fall on agree level. Therefore, this indicates that at greater extent the evolution of
ICTtechnology make the business of travel agents more challenging; the challenges comes from
two direction, the first classified challenge were the status of the countries internet service, the
speed of the internet is very slow due to that the travel agent got difficulty to contact new and
existing customers; the other perspective of challenge was the access of ICT make things simple,

40
particularly, now a day’s customers contact directly with airlines without needing the travel
agents for their accommodation service and other related thins and this creates a threat for travel
agents.

Table 4.10 Challenges of travel agencies due to limed ICT

Level of Agreement St.

Item 1 2 3 4 5 Mean Dv
The Travel agencies face a 0.46% 11.47% 34.40% 31.65% 22.02% 3.63 0.9663
problem by customer’s self-
service booking with the
independent of the agency
The downside of high speed 1.38% 13.76% 33.94% 34.86% 16.06% 3.50 0.9660
internet connection make
difficult to serve a travelers
request on time.
The travelers search online 0.92% 7.80% 33.03% 42.20% 16.06% 3.64 0.8741
first, then come book with an
agent; this create to challenge
for the travel agency.
The online discount given by 0% 5.07% 25.81% 42.40% 26.73% 3.90 0.8502
the airlines and other travel
booking website create
downsize of the sales
The travel agencies have faced 1.38% 7.34% 17.89% 34.86% 38.53% 4.01 0.9928
a problem on how to keep in
touch with their clientele using
a variety of medium like
mobile devices and others.
Challenge of Travel Agency 0.82% 9.08% 29.01% 37.19% 23.88% 3.73 0.9298
due to ICT evolution
Where level of Agreements: 1=Strongly Disagree 2=Disagree 3= Neutral 4=Agree 5=Strongly Agree
Source: Own survey, 2018

4.2.3. Possible Strategies to Overcome the Problem Faced by ICT

Once the problem is identified a mechanism should be developed in order to tackle the
investigated problems; in line with this respondents were asked to rate the possible strategies that
can contribute for effective and successful travel agency businesses. Accordingly, 70.64 percent
of the respondents agreed that delivery of another travel related service like tour package, rent a
car and some others would contribute more for the success of the travel agencies, whereas 7.8
percent of the respondents didn’t agreed on investing related business. 77.06 percent of the

41
respondents also agreed that allowing clients the ability to book their trips without the constraints
of office hours or worrying about their schedule is the best option to tackle the confronted
problems; others (79.36%) also suggested that improving the current internet connections and
speeds would contribute a lot for catalyzing the business. Apart from this, since it is difficult to
relay on current internet connection speed, travel agencies has to keep in touch with their clients
using a variety of mediums, this was confirmed by 83.95 percent of the respondents; others (82.11%) also
suggested that creating a permanent website and selling the service is the best option for effective travel
agency business.

Generally, respondents were requested whether the mentioned strategies could contribute for the
success of travel agency businesses. Accordingly, the grand analysis suggested that more than 80
percent of the respondents agreed that the above mentioned determine and influence the success
of travel agency business. Apart from these, the grand mean score was 4.14; according to Scott
(1999) a mean score greater than 3.2 falls in the range of agree level; this suggested that
respondents were strongly agreed that the forwarded strategies determine the effectiveness of
travel agency businesses. Therefore, in order to bees more competent and successful travel
agents should incorporate alternative solutions for their business simultaneously; they should
have to create person to person communication with travelers, in order to avoid losing of
customers due to low internet access; further, travel agencies has to keep in touch with their
clients using a variety of medium apart from the internet. In addition to these, travel agents
should deliver another travel related service like tour package; rent a car and some others.

42
Table 4.11 Possible strategies to overcome the problem faced by ICT

Level of Agreement St.

Item 1 2 3 4 5 Mean Dv
Delivery another travel related 0.92% 6.88% 21.56% 43.12% 27.52% 3.89 0.9172
service like tour package, rent a
car and some others.
Allowing clients the ability to 0% 4.13% 18.81% 50% 27.06% 4.00 0.7916
book their trips without the
constraints of office hours or
worrying about their schedule.
Improved Internet connections 0.46% 1.83% 18.35% 47.71% 31.65% 4.08 0.7814
and speeds.
Travel Agency has to keep in 0.92% 1.83% 13.30% 47.25% 36.70% 4.39 .5327
touch with their clients using a
variety of mediums.
Create a website and sell by 3.21% 4.13% 10.55% 37.16% 44.95% 4.16 0.9931
their own website
The travel agencies have to 0% 1.84% 11.06% 36.87% 50.23% 4.35 0.7505
create person to person
communication with travelers.
(i.e. the “human touch”)
Possible strategies to overcome 0.91% 3.44% 15.61% 43.69% 36.35% 4.14 0.794
the problem faced by ICT
Where level of Agreements: 1=Strongly Disagree 2=Disagree 3= Neutral 4=Agree 5=Strongly
Agree
Source: Own survey, 2018

4.2.4. The ICT effect on Travel Agency outcome

Under this sub-topic the overall perception of respondents towards the effect of ICT on travel
agency businesses would be discussed. Accordingly, although 5.51 percent of the respondents
said that the travel agency is not in profitable venture even if there is online booking and
discount offer by Airlines; however 70.18 percent of the respondents confirmed that the travel
agency is still enjoying profit even if there is online booking and discount offer by Airlines.
Apparently, more than 80 percent of the respondents also confirmed that using ICT the travel
agency produce the intended result and by using ICT the travel agencies functioning in the best
possible manner with the least waste of time and effort.

The overall grand mean of ICT effect on travel agencies were 4.14, based on the analysis of
Scott (1999), this particular variable also fall on agree level because, according to him, if the
mean score is greater than 3.2 the mean value represents agree level. Using and adopting ICT

43
make the business of travel agents simple and reliable, by using ICT the travel agencies perform
or functioning in the best possible manner with the least waste of time and effort. This helps
travel agent to be more profitable and helps them to achieve the intended goal.

Table 4.12 The overall effect of ICT on travel Agencies

Level of Agreement St.

Item 1 2 3 4 5 Mean Dv
The travel agency is still in 1.38% 4.13% 24.31% 42.66% 27.52% 4.09 0.8593
profitable venture even if there
is online booking and discount
offer by Airlines.
Using ICT the travel agency 0.92% 4.13% 14.68% 49.08% 31.19% 4.05 0.8406
produce the intended or
expected result (Being effective)
By using ICT the travel 0% 5.05% 8.72% 37.16% 49.08% 4.30 0.8314
agencies perform or functioning
in the best possible manner with
the least waste of time and
effort. (Being efficient)
The ICT effect on Travel Agency .76% 4.43% 15.90% 42.96% 35.93% 4.14 0.8437
outcome
Where level of Agreements: 1=Strongly Disagree 2=Disagree 3= Neutral 4=Agree 5=Strongly Agree
Source: Own survey, 2018

4.3. Correlation Analysis

Apart from the descriptive analysis the correlation analysis is used to see if there is any
association between each variable. The analysis shows effective travel business had significant
association with opportunity of ICT for travel agency and possible strategies to overcome the
problem faced by ICT. Accordingly, effective travel agency business had significant (r = 233, p
= 0.001) and positive association with opportunity of ICT for travel agency. The finding also
shows that there is positive and significant (r = 264, p = 0.000) association between effective
travel agency business and possible strategies. The analysis in the table below further indicates
that opportunity of were positively and significantly ((r = .185, p < 0.007) correlated with
possible strategies of ICT.

44
 Table 4.13 Correlation analysis between each variable

Correlations

Effective Opportunity Challenge Strategy

Pearson Correlation
Effective Sig. (2-tailed)
N 218
Pearson Correlation .233**
Opportunity Sig. (2-tailed) .001
N 217 217
Pearson Correlation -.032 -.176**
Challenge Sig. (2-tailed) .638 .009
N 217 216 217
Pearson Correlation .264** .185** .326**
Strategy Sig. (2-tailed) .000 .007 .000
N 217 216 216 217
**. Correlation is significant at the 0.01 level (2-tailed).

4.4. Regression Analysis

4.4.1. Preliminary Tests

A. Test of Multicollinearity

A VIF test was used to test the existence of multicollinearity problem. The results of the test
indicates the highest VIF is 1.20 with R2 = 0.527; which indicates the model performed with no
major multicollinearity problem among the explanatory variables (table 4.14).

Table 4.14 Multicollinearity Test

Variable VIF 1/VIF

Strategy 1.20 0.832869
Challenge 1.19 0.841378
Opportunity 1.10 0.907931
Mean VIF 1.16
Source: Own survey, 2018

45
 B. Test ofHetroscedasticity

One of the important assumptions of the classical linear regression model is that the variance of
each disturbance term ui, conditional on the chosen values of the explanatory variables, is some
constant number equal to σ2 (Gujarati 2003). Although there are different ways and techniques
to check the existences of hetroscedasticity, for the purpose of this research Breusch-Pagan test
was used. The interpretation of Breusch-Pagan test is done using the p values, if the p value is
less than 5% significant level it is the indication of hetroscedasticity problem; however if the p
value is greater than 5% level of significance it implies there is no a problem of
hetroscedasticity. Accordingly, as shown in the table below the results of the test shows that
there is a problem hetroscedasticity since the p values is significant. Consequently, consequently,
it has been employed weighted least squares to estimates the reasonably accurate test statistics.

Table 4.15 Analysis of heteroskedasticity test

Breusch-Pagan / Cook-Weisberg test for heteroskedasticity

Ho: Constant variance
Variables: fitted values of effective
chi2(1) = 14.82
Prob> chi2 = 0.0001
.Source: Own survey, 2018

C. Test of Normality

In order to run ordinary least square method the error term or residuals must be normally
distributed; therefore, in order to test the normality histogram map was used; and as shown in the
graph below the residuals are normally distributed.
.2
.15
Density

.1
.05
0

-10 0 10 20 30 40
Residuals

46
 D. Autocorrelation Test

Although residuals are normally distributed, however there should not also be serial correlation
between them. Breusch-Godfrey method is one of the means to test this problem, as shown
below in the table the significant value is greater than 5%, therefore, this tells us if it is not
significant it is the indication of no serial correlation between residuals.

Breusch-Godfrey LMtest for autocorrelation

lags(p) chi2 df Prob> chi2
1 10.658 1 0.1100
H0: no serial correlation
H1: serial correlation
Source: Own survey, 2018

E. Linearity assumption

The assumption of linearity says the dependent and each independent variable should have a
linear relationship. Therefore, scatter plot technique was employed to test the linearity
assumption and as shown in the graph below the assumptions are fulfilled.
60

60
40

40
20

20
0
0

10 15 20 25 5 10 15 20 25
opportunity challenge

effective Fitted values effective Fitted values

Effectiveness VS Opportunity Effectiveness VS Challenge

47
 60
40
20
0

10 15 20 25 30
strategy

effective Fitted values

Effectiveness VS Strategy

4.4.2. Results of OLS Estimation

As shown in the previous sub topic all of the assumption was fulfilled except Hetrosckedasticity,
therefore in order to avoid the problem effectiveness of travel agency business was estimated
using the weighted least squares method. As shown in the Model summary and ANOVA table
below the coefficient of determination (R2) for the model is 0.525 (F= 52.075, p < 0.001)
showing that the model explained 52.075% of the variation in the level oftravel agency business
effectiveness and the overall model is statistically significant.

The results of the econometric model estimation revealed that, opportunity of ICT for travel
agency and possible strategies to overcome the problem faced by ICTwere found to contribute
significantly and positively to effective travel agency business. In contrast, challenge of travel
agency due to ICT evolution show negative and significant effective on travel agency business.

opportunity of ICT for travel agency had a positive and significant effect (p<0.05) on effective
travel agency business, the positive coefficient of this variable suggested that, as the application
of new or existing ICT technology by travel agencies increases the business effectiveness of the
agencies also increases. The other perspective were the possible strategies to overcome the
problem faced by ICT, this variable shows positive and significant (p<0.05) effect on effective
travel agent business; findings shows that, the positive coefficients of this particular variable
suggested that when the travel agencies increase the application of those and related strategies
the probability of their success also increases. Unlike to the above variables, challenge of travel

48
agency due to ICT evolution had negative and significant effect on effective travel agent
business; the negative coefficient of this variable indicated that the more the challenges the less
will be the effectiveness of travel agent business.

According to Friaset al. (2008) the development of new ICT will lead to a greater efficiency and
reorganization of both communication strategies and business of tour operators.). This is the way
to improve efficiency and promote interoperability and personalization, accompanied by constant
networking of travel agents. Efficient time management is indispensable for competitiveness of
travel agencies, while the use of ICT in all business segments facilitates activities which are
prerequisite to the coordination of tasks and agency functions, whereas it must be said that partial
efficiency of particular function impacts the overall business performance (Mihajlović,
2012).Wahab, (2017) also argues that Information Technology or IT has played a critical role not
just in the advancement of tourism, but it has helped in spreading the phenomenon of tourism to
every part of the world and has made travel safer. Further, whenever employees had various IT
company devices at their disposal it enables them perform their duties better and the more the
application and use of IT the more is organizational performance(Alex, 2015).The empirical
work shows that information systems are developed coherently with enterprise strategic
imperatives. Moreover, research results provide evidence that such alignment positively affect
the overall business performance.

Model Summary

Multiple R .652
R Square .525
Adjusted R Square .417
Std. Error of the Estimate .192

Log-likelihood Function Value -485.474

Source: Own survey, 2018

From the model summary we can see R Square is 0.525 which shows the dependent variable
explains the independent variable very well.

49
 Anova
Sum of Squares df Mean Square F Sig.

Regression 5.771 3 1.924 52.075 .000

Residual 7.794 211 .037
Total 13.565 214

Source: Own survey, 2018

From the Anova table we can see level of significance which is 0.000 which means it is
significance.

Coefficients
Unstandardized Coefficients Standardized Coefficients t Sig.

B Std. Error Beta Std. Error

(Constant) .587 1.372 .428 .669

Opportunity .253 .049 .283 .055 5.143 .000
Challenge -.138 .044 -.173 .055 -3.147 .002
Strategy .318 .035 .522 .057 9.164 .000
Source: Own survey, 2018
In the Coefficients table we can see the independent variables Opportunity, Challenge and
Strategy are significant.

50
 CHAPTER FIVE

CONCLUSIONS AND RECOMMENDATION

5.1. Summary of Major Findings
This research was carried out in order to assess the effect of ICT on travel agent business using a
cross-sectional data; in line with the research questions the following are the key findings of this
research:

• The first findings of this study were related to the opportunities created by ICT.
Accordingly, ICT created good opportunities for travel agencies in terms of generating
additional income and improve service qualities. ICT creates a good opportunity for
travel agencies and makes their business more reliable and fast; as a result of this the
travel agencies could penetrate and enter to a new markets which helps them to recruit
new customers and makes more profitable and generate higher incomes.
• The travel agent were mainly challenged by two things concerning ICT; the first
challenge face the travel agents were low speed of internet accesses; the low speed of
internet access create difficulty to serve a travelers request on time, the speed of the
internet is very slow due to that the travel agent got difficulty to contact new and existing
customers; the other perspective of challenge was the access of ICT make things simple,
particularly, now a day’s customers contact directly with airlines without needing the
travel agents for their accommodation service and other related things and this creates a
threat for travel agents.
• Travel agencies should do alternative and related business in order to stay in the market
and to be more competent; Therefore, in order to bees more competent and successful
travel agents should incorporate alternative solutions for their business simultaneously;
they should have to allow clients the ability to book their trips without the constraints of
office hours or worrying about their schedule, create a website and sell by their own
website; furthermore, they should have to create person to person communication with
travelers, in order to avoid losing of customers due to low internet access; further, travel
agencies has to keep in touch with their clients using a variety of medium apart from the
internet. In addition to these, travel agents should deliver another travel related service
like tour package; rent a car and some others.
51
 • Opportunity of ICT for travel agency had a positive and significant effect on effective
travel agency business, as the application of new or existing ICT technology by travel
agencies increases the business effectiveness of the agencies also increases. Possible
strategies to overcome the problem faced by ICT had also positive and significant effect
on effective travel agent business; findings show that, when the travel agencies increase
the application alternative strategies the probability of their success also increases.
Unlike to the above variables, challenge of travel agency due to ICT evolution had
negative and significant effect on effective travel agent business; the more the challenges
the less will be the effectiveness of travel agent business.

5.2. Conclusion
The tourism industry is widely acknowledged and accepted to be one of the largest and fastest
growing economic sectors in the world. Thus, the sector cannot be excluded from the current
upsurge in technology and its huge impacts. In line with this study analyzed the effect of ICT on
travel agency business effectiveness using a cross-sectional data. Empirical research has shown
that ICT has strong positive potential for the performance of firms. The analysis confirmed that
the new and existing ICT interventions increase the success of those travel agency enterprises.
The integration of personal approach with ICT is significant, with new technologies having
complementary and not substitutive function. Benefits of new technologies enable development
of travel agencies and make communication with customers and other entities easier, which is
the foundation for building competitiveness. The study further revealed that the opportunity
created by information communication technology increases the business effectiveness of travel
agencies. However, the travel agencies are challenges by the current service of unstable internet
connection and it creates difficulty to keep in touch with their clientele using a variety of
medium like mobile devices and others.

5.3 Limitation of the study

The study is limited in terms of its respondents. The bias and hesitations of respondents affect
the analysis of the survey in a significant manner and the research also limited to one city which
is Addis Abeba.

52
 5.4. Recommendation
Based on the findings of the study the researcher forwards the following recommendations:

• The findings of the study show that the implementation of ICT contributes much for the
success of travel business agencies; therefore, for tourism businesses to increase their
competitive position, the conclusion is drawn that they should incorporate ICT in their
business practice so as to increase their performance and their effectiveness. As a result,
tourism enterprises need to understand, incorporate and utilize ICT systems strategically
in order to: serve their target markets; improve their efficiency; maximize their
profitability; enhance their services; and maintain their long-term profitability.
• To overcome the challenge faced by private travel agent, the best solution is try to be
advanced by Information Communication Technology (ICT) in terms of the use of
communication between customers, travel agents and suppliers. Now tourism industry
becoming more active online and on social networks. Most hotels and travel agents have
their own active Website, Facebook and Twitter page and application which opening 24
hour and available every day of the year with up to date information. They use the
website as a communication channel to interact with customer and to promote themselves
and also build a good relationship with the public. Today ICT allows customer to check
in online before a flight or booking tour program from their computer because of the
options that provide by online travel agents and airlines.
• The country online payment system have to be promote and the government have to
work on to make our bank payment card international and our country will equally
computable to the tourism market like other country.
• By considering that the customers will fear of technology the travel agencies have to
promote very well about the positive impact of Information Communication Technology.

53
REFERENCE

Aldebert, B., Dang, R. J., &Longhi, C. (2011). Innovation in the tourism Industry: The
case of Tourism @ Tourism management, 32(5), 1204-1213.

Alex, K. (2015) Impact Of Information Technology On Organizational Performance :

Case Of Population Services Kenya.

Amaro, S., & Duarte, P. (2013). Online travel purchasing: A literature review. Journal of
Travel & Tourism Marketing, 30(8), 755-785.

Anckar, B., & Walden, P. (2001).Self-booking of high-and low-complexity travel

products: exploratory findings. Information Technology & Tourism, 4(3-1), 151-165.

Ashari, H. A., Heidari, M., &Parvaresh, S. (2014).Improving SMTEs’ business

performance through strategic use of information communication technology: ICT and
tourism challenges and opportunities. International Journal of Academic Research in
Accounting, Finance and Management Sciences, 4(3), 1-20.

Ayazlar, R. A. (2014). Dynamic packaging applications in travel agencies.Procedia-Social

and Behavioral Sciences, 131, 326-331.

Bethapudi, A. (2013) ‘THE ROLE OF ICT IN TOURISM’, Journal of Applied Economics

and Business, (4), pp. 67–79.

Bojnec, Š.,&Kribel, Z. (2004). Information and communication technology in tourism.

Buhalis, D., & Law, R. (2008). Progress in information technology and tourism
management: 20 years on and 10 years after the Internet—The state of eTourism
research. Tourism management, 29(4), 609-623.

Buhalis, D. (2003). eTourism: Information technology for strategic tourism management.

Pearson Education.

Dhaigude, A. S., Kapoor, R., &Ambekar, S. (2016). A conceptual model for adoption of
information communication technology in the travel and tourism industry. Tourism
Recreation Research, 41(1), 49-59.

i
Frias, D. M., Rodriguez, M. A., Castaneda, J. A. (2008). Internet vs. travel agencies on
pre-visit destination image formation: An information processing view, Tourism
Management, Vol. 29. No.1, pp.163-179.

Hojeghan, S. B., &Esfangareh, A. N. (2011).Digital economy and tourism impacts,

influences and challenges. Procedia-Social and Behavioral Sciences, 19, 308-316.

Inversini, A., &Masiero, L. (2014).Selling rooms online: the use of social media and
online travel agents. International Journal of Contemporary Hospitality
Management, 26(2), 272-292.

Januszewska, M., Jaremen, D., &Nawrocka, E. (2015).The effects of the use of ICT by
tourism enterprises. Scientific Journal of University of Szczecin" Service
Management", 16(2).

Kaewkitipong, L. (2010). Disintermediation in the tourism industry: Theory vs. practice.

In Sustainable e-business management (pp. 160-171).Springer, Berlin, Heidelberg.

Kamau, W. (2015). Travel agencies response to internet evolution in Nairobi country: An

analysis of competitive strategies

Kayani, K (2014). Impact of ICT on Bricks & Mortar Agents and Changes in Supply
Chain Positioning.

Lawton, L. J., & Weaver, D. B. (2009). Travel agency threats and opportunities: The
perspective of successful owners. International Journal of Hospitality & Tourism
Administration, 10(1), 68-92

Mihajlovic, I. (2012). The impact of information and communication technology (ICT) as

a key factor of tourism development on the role of Croatian travel agencies.International
Journal of Business and Social Science, 3(24).

Osborne, S., Nagendra, P., & Falcone, T. (2001). The changing nature of the travel agency
industry: technological and agency theory issues. Proceedings of the 2001 United States
Association for Small Business and Entrepreneurship.

ii
Rob Law , Rosanna Leung &DimitriosBuhalis (2009) Information Technology
Applications In Hospitality And Tourism: A Review Of Publications From 2005 TO 2007
, Journal of Travel & Tourism Marketing, 26:5-6, 599-623

Sandoval, E., & Olivares Urbina, M. Á. (2015). Technology and Business Performance:
Travel Agency Case.

Sava, C., &Mateia, A. N. (2014). The Impact Of Information Technology On Travel

Agents In Timişoara, Romania. ImpaCt of Internet on BUSIneSSaCtIvItIeSInSerBIa and
WorldWIde, 23.

Shanker, D. (2008) ‘ICT and Tourism : Challenges and Opportunities’.

Sharma, D. (2016). Enhancing customer experience using technological innovations: A

study of the Indian hotel industry. Worldwide Hospitality and Tourism Themes, 8(4), 469-
480.

Smith, E (2018). Technology Used in Hospitality & Tourism. Small Business -

Chron.com, http://smallbusiness.chron.com/technology-used-hospitality-tourism-
31033.html.

Stanley.C.(2013). Effect of Relationship marketing on Customer Satisfaction in the

Airline Industry in Kenya.

Statista, (2018 ). https://www.statista.com/statistics/238852/online-travel-bookings-

worldwide/

Tichaawa, T. M., Mhlanga, O. and Sicwebu, S. (2017) ‘The Impact of Information

Communication Technologies ( ICTs ) on Tourism Businesses in East London , South
Africa.

Wahab, I. (2017). Role of Information Technology in Tourism Industry: Impact and

Growth. An international Conference on Recent Trends in IT innovations: International
Journal of Innovative Research in Computer and Communications Engineering, 260-263

iii
Wahab, I. N. (2017) ‘Role of Information Technology in Tourism Industry : Impact and
Growth’, International Journal of Innovative Research in Computer and Communication
Engineering, 5(2), pp. 260–263.

Werthner, H., & Klein, S. (1999). ICT and the changing landscape of global tourism
distribution. Electronic markets, 9(4), 256-262.

World press.(2018). Impact of Internet and ICT on travel agent in digital era.Retrieved
from
https://impactsofinternetandictontravelagentandtouristguideindigitalera.wordpress.com/ab
out/.

Zeng, B. (2013). Social Media in Tourism. J Tourism Hospit 2:e125. doi: 10.4172/2167-
0269.1000e125

iv
APPENDIX

St. Mary’s University

School of Graduate Studies

DEPARTEMENT OF GENERAL MBA

Questionnaire to be filled by respondents

Dear respondent,

This questionnaire is designed by a graduate student from St. Mary’s University to

conduct a study in partial fulfillment of a master`s degree program in General
Management. As part of the requirement for the award of the degree, I am expected to
undertake a research study The Effect of Information Communication Technology on
Travel Agency Business, Current practice in Addis Abeba. Therefore, seeking your
support to fill the questionnaires attached. This questionnaire will take about 15 minutes to
complete. Kindly reply all the questions.

The outcome of this study will determine the opportunity that ICT offer for the travel
industry for the city of Addis Abeba. After determine the opportunity examine the
challenges and find out the possible strategies that ICT offer for the travel industry for the
city of Addis Abeba. Participation in this study is voluntary, and all who participate will
remain anonymous. Your name is not required. All information offered will be treated
confidentially, and the results will be presented in such a way that no individuals may be
recognized.

Thank you in advance for the available information you are sharing and the precious time
you are going to spend for this purpose.

If you have any enquiry please don't hesitate to contact the researcher on:

Email- [email protected]

Cell phone: +251 911 247901(YordanosBirru)

v
Travel Agency Questionnaires

vi
Travel Agent Questionnaires
SECTION I: Travel Agent Personal Information.
Kindly fill out all the fields as this will help us to capture accurate data. Please
tickyour selected fields.
1. Gender: a. □ Male b. □ Female
2. Please specify your age group:
a. □ 20 - 35 b. □ 36 - 50 c. □ 51 - 65 d. □ > 65
3. Please specify your highest travel and tourism related education/ training (please
tick all relevant)
a. □ Certificate Program
b. □ Diploma
c. □ Advanced Diploma
d. □ IATA approved Diploma
e. □ Degree related to Tourism Industry
f. □ None
4. Current or most recent job status?
a. □ Executive
b. □ Non Executive
c. □ Owner
d. □ Employee
5. Please indicate the number of years that you have been working in the travel
industry? (tick one)
a. □ Less than 1 year b. □ 1 – 3 years c. □ 4 – 6 years d. □ Above 7 years
6. Please indicate how long you have been working for the current travel agency?
a. □ Less than 1 year b. □ 1 – 3 years c. □ 4 – 6 year d. □ Above 7 years

vii
SECTION II: Travel Agency and ICT usage related Questionnaire
7. In which sub city your travel agency located?
a) □ Boleb) □ AkakiKalitic) □ Guleled) □ Kirkos e) □ Yeka f) □ Ledeta g) □
Arada h) □ NefasselkLafto i) □ KolfeKeranio j) □ Addis Ketema
8. How many travel bookings does your travel agency make in a day? (Those
which actually convert into a sale, please tick one).
a. □ 1 - 10 b. □ 11 - 20 c. □ 21 - 30
d. □ Above 30
9. What mode of communication is often used in everyday business in your firm?
a) □ Computers (email) b) □ Telephones c) □ Fax d) □ Print media e.g letters,
posters, handouts e) □ Face to face
10) Type of ICTs adopted in your firm
a) □ Internet b) □ Mobile Phone c) □ Phones i.e land lines d) □ Fax machines e) □
Global Distribution System (GDS) f) Others (please specify) ________________

SECTION III: Questionnaires regarding opportunity challenge and possible strategy

Information and Communication Technology (ICT) offers for Travel Agency.
Please, indicate your level of agreement on the statements by ticking once as per the
numbers in the column using the following rating scale.

Where level of Agreements: 1=StronglyDisagree 2=Disagree 3= Neutral 4=Agree

5=Strongly Agree

Ser. Opportunity of ICT forTravel Agency Level of Agreement

No
1 Opportunity of ICT for Travel Agency 1 2 3 4 5
1.1 The Travel Agency improves service quality by the introduction of ICT.
1.2 ICT gives fast service for the travelers.
1.3 ICT helps the Travel Agency to penetrate to the new market.
1.4 Due to ICT the numbers of customers are increased comparing from the
previous.

viii
1.5 The Travel agency generate higher income because of the ICT revolution
2 Challenge of Travel Agency due to ICT evolution 1 2 3 4 5
2.1 The Travel agencies face a problem by customer’s self-service booking
with the independent of the agency.
2.2 The downside of high speed internet connection make difficult to serve a
travelers request on time.
2.3 The travelers search online first, then come book with an agent; this
create to challenge for the travel agency.
2.4 The online discount given by the airlines and other travel booking website
create downsize of the sales.
2.5 The travel agencies have faced a problem on how to keep in touch with
their clientele using a variety of medium like mobile devices and others.
3 Possible strategies to overcome the problem faced by ICT in Addis 1 2 3 4 5
Ababa
3.1 Delivery another travel related service like tour package, rent a car and
some others.
3.2 Allowing clients the ability to book their trips without the constraints of
office hours or worrying about their schedule.
3.3 Improved Internet connections and speeds.
3.4 Travel Agency has to keep in touch with their clients using a variety of
mediums.
3.5 Create a website and sell by their own website
3.6 The travel agencies have to create person to person communication with
travelers. (i.e. the “human touch”)
4 The ICT effect on Travel Agency outcome 1 2 3 4 5
4.1 The travel agency is still in profitable venture even if there is online
booking and discount offer by Airlines.
4.2 Using ICT the travel agency produce the intended or expected result
(Being effective)
4.3 By using ICT the travel agency performs or functioning in the best
possible manner with the least waste of time and effort. (Being efficient)

ix
If you have any other opinion, please, specify:
_________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
_____________________________________________

You have completed the survey. Thank you for your valuable time and
opinions.

x
Interviews for Travel Agents

xi
Interviews
Travel Agents
1. Which age range do most of your customers fall into? For example mainly
students or families of the retired?
2. Do you find your customers are Internet savvy or know-how?
3. Does your travel agency give online service? If not why?
4. Do you consider your travel agency to be 'customer centric' - offer
alternative terms.
5. Can you enlarge on why ICT is so important to your business?
6. Schedule convenience - the ability to re-schedule a customer's journey at
short notice - do you find that a valuable service?
7. How important is the web to your business and why?
8. Are there any additional services you think will help bring in the customers?

xii
 DECLARATION

I, the under signed, declare that this thesis is my original work, prepared under the guidance of
WondimenehMamo(Assistant Professor). All sources of material used while working on this
thesis have been duly acknowledged. I further confirm that the thesis has not been submitted
either in part or in full to any other higher learning institution for the purpose of earning any
type of degree.

_____________________________
_______________________________

Name Signature and Date

xiii
 ENDORSEMENT

This thesis has been submitted to St. Mary’s University College, School of Graduate Studies
for examination with my approval as a university advisor.

______________________________
______________________________

Advisor Signature

xiv