Travel Planning: Searching for and Booking Airline Seats on the Internet

Abstract

This article is based on a survey of 374 airline passengers sampled at an airport. We examine how travelers search for and then buy airline seats, determine which distribution channel dominates, calculate what percentages of online searches convert to actual bookings on the same website, and report why people switch. We also examine which travelers book, and then rebook airline seats, and why. We then measure the differences in how travelers view several Internet and website issues, the differences between Internet users and nonusers, between business and pleasure travelers, and between men and women. We update the most important reasons for airline choice, in an era when online bookings predominate. Finally, we report our findings (some counterintuitive) and their implications for airlines and third-party websites (online travel agents).

Expectations vs Experience: Managing the Adverse Effects of Service Failures on Customer Satisfaction in the Airline Industry

“…Load factor is a measure of productivity that captures the number of seats filled by passengers. Consistent with previous literature (Lapré 2011;Toh and Raven 2003;Truitt and Haynes 1994), load factor is computed as the ratio of the passenger miles flown to the seat-mile available in a quarter, that is, the ratio of RPM to ASM. ASM represent the airline carrying capacity available to generate revenue (Lapré 2011;Wang, Lu, and Tsai 2011).…”

“…Advertising constitutes an integral component of airlines’ marketing strategy and is intended to make the brand name more recognizable (Kim, Kim, and Hyun 2016). Advertising expenses are justified because, by enhancing the brand image and perceived brand equity, advertising attracts new customers, generates future cash flows (Chen and Tseng 2010; Grewal, Chandrashekaran, and Citrin 2010; Mun and Jang 2018; Schultz 1972), enhances purchase intentions (Jeng 2016), and establishes brand credibility and commitment (Squalli 2009; Toh and Raven 2003). Advertising also raises customer perceptions about the quality of the service, which results in favorable evaluations of the brand image (Chen and Tseng 2010; Grewal, Chandrashekaran, and Citrin 2010; Kim, Kim, and Hyun 2016; Truitt and Haynes 1994).…”

The indirect distribution dilemma: assessing the financial impact of participation in Booking.com for hotels

“…The often-contentious relationship between hotels and OTAs has been well studied in the academic literature [see, for example, Beritelli and Schegg (2016), Ford et al (2012), Gössling and Lane (2015), Law et al (2015), Myung et al (2009) and Talwar et al (2020)]. However, the majority of research has been carried out from the consumer perspective [see, for example, Chiappa (2013), Law (2009) and Toh et al (2011)], with little addressing the issue from the viewpoint of suppliers. While the benefits of OTA use for consumers are well understood (Thakran and Verma, 2013), considerable confusion and debate remains as to whether OTA participation is beneficial for hotels (Beritelli and Schegg, 2016).…”

“…Thus, it can be seen that, although a competitive necessity, working with OTAs remains controversial (Toh et al , 2011). Many question whether hotels have become dependent on these quasi-monopolistic online platforms and whether their net effect is positive or negative for channel participants.…”

“…Such costs are sunk in that, unlike pay-per-performance OTA fees, they must be paid irrespective of whether they result in bookings (O'Connor, 2016). In addition, such an approach ignores the additional sales that come from being listed on OTA sites (at least some of which must be marginal) which, while increasing distribution costs because of their associated commissions, increase gross revenues by a larger amount, offsetting transaction costs and resulting in higher overall profitability (Beritelli and Schegg, 2016; O'Connor and Murphy, 2008; Toh et al , 2011).…”