Tour Operators. What do Tour Operators do Internet and the economics role of Tour Operators — страница 4

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farm stay, airport transfers with meet & greet services, coach charter, stretch limousines, restaurants, golf, tours, car rental, cruises, interpreters, tour guides, educational tours for overseas students and conventions.”. All these (and possibly other) services and goods conform the tourist product, and for the tourist product to provide high utility (satisfaction) to the consumer, there must be tight coordination of all these services and goods along a series of dimensions, specially synchronically. Any misscoordination along these lines implies a serious break-up and a serious loss of utility for the tourist. Furthermore, in case of a break-up in the coordination, it should be quickly fixed in order to control for the damage and to be able to enjoy a reasonable

vacation. Which is the efficient way to coordinate all (or some of) these components of the tourist product? One possibility is for the tourist herself to contract with all final suppliers (hotels, etc) and ensure coordination by means of contracting the required characteristics and conditions of each of the goods and services. However, since contracts are incomplete such mechanism of coordination will be imperfect and open to error. As a matter of fact, the coordination of the several components (goods and services) of the tourist product are what Milgrom and Roberts) call ‘design attributes’: “coordination problems in which there is a priori information about how the parts of the decision must fit together and in which small failures of fit are very costly are said to

have design attributes.” Then, according to Milgrom and Roberts, a “centralized setting of design variables tends to reduce both the cost of errors and the amount of communication and search necessary to identify an optimal decision”. In our framework, this implies that centralised coordination by the tour operator ensures a more efficient outcome, including a better solution of possible errors and misscoordination that might occur during the vacation. Thus, intermediation by a TO probably solves in a more efficient way the coordination requirements of the tourist product, rather than relying on the final consumer shopping around trying to coordinate by herself all the parts of the tourist product by means of a bunch of contract agreements. 2.2 The tour operator and

tourists’ search for information So as to obtain information about the prices, qualities and characteristics of the tourist products, consumers (tourists) must undertake an expensive search process. The cost of search comprises the money, time and effort that potential buyers incur in obtaining the price, the characteristics and quality information for accommodation, flight schedules, etc. Examples of such costly information gathering are visits to travel agencies, which involve transportation and time costs, telephone calls, buying newspapers, etc As we see in figure 3 below, individual search by each consumer will generate much duplication of search effort and search cost. Each potential tourist must visit or call each final supplier (hotel, bus company) and incur in the cost

(e.g. in time) of searching and gathering information. Such duplication of effort . In here we focus on the organisation of the searching process, and not on the consequences of such searching costs might be minimised using intermediaries such as tour operators and travel agencies who collect, process and store all relevant information. The efficiency enhancing of intermediation by TOs and travel agencies in the search for information results simply from providing a centralized outlet for all sellers. Furthermore, this centralisation does not require that the same content be stored in both sellers’ and the intermediaries storage information, which would be a wasteful duplication. That is, TOs need not provide all same information that hotels and flight companies make available.

Instead, the tourist product information available at the intermediary will have only the necessary information for potential buyers to make their purchase decisions. This way, tour operators and travel agencies also filter information, which further increases the efficiency of the search process. However, no matter how much information consumers receive from sellers prior to purchase, they still have to trust what the sellers say about their products. Often sellers (hotels, airplane companies) may not provide enough information for consumers to fully evaluate their products or services, or the information may be inadequate to judge whether sellers are reputable companies or fly-by-night operators. In light of this, a TO’s role in a search market extends beyond being an