Applying Transaction Cost Economy to Construct a Strategy for Travel Agents in Facing Disintermediation Threats

Globally, businesses have adopted web-based transactions as they allow fast and direct transactions with minimal cost. Many travellers nowadays make their travel arrangements through the web, leaving traditional intermediaries, such as travel agents under serious threat of disintermediation. Travel agents require strategies that will sustain them in their businesses, such as focusing on niche markets and creating close relationships with their customers, possibly using web technology. This study found that travel agents in Brunei are at risk of disintermediation, as travellers tend to buy travel products and services directly from travel providers' websites. However, travel agents still have opportunities to sustain their business by offering interesting packages and improving their services through intensive interaction with their customers. Researchers utilized transaction cost economics and customer relationship management (CRM) 2.0 to understand the change in business environment and construct a model for travel agents to sustain their businesses.