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Traditionally, retail travel agencies have acted as intermediaries between primary creators/suppliers of travel products and the consumer, largely as a function of taking upon themselves the transaction costs for the consumer to find and select appropriate travel facilitators. Internet-related technologies dramatically change transaction costs in communication-based activities and raise both challenges and opportunities for this business sector relating to issues of the nature and value of intermediation. Two major threats currently perceived are the disintermediation of retail agencies by primary producers, and the emergence of new virtual intermediaries.

The potential for structural changes in the travel sector highlights the need for travel agencies to actively select between business models which can best support an effective online strategy …