COMPETITION IN THE MARKET FOR TRAVEL INFORMATION SERVICES

Abstract: The market for travel information has changed dramatically since the intro-duction of Computer reservation systems (CRSs), the real-time computerized travel in-formation databases on fares and availability accessed by travel agents. At the time CRSs were introduced, most were airline owned and most travelers purchased their tickets— via their travel agents—through computer reservation systems. Today, the airlines have divested themselves of their CRS businesses. Travel agents and final consumers now have immediate access to substitute providers of travel information via the Internet that includes a menu of alternative itineraries and fares available directly from air carriers. The non-CRS distributors competing with CRSs provide travel agents alternate access to seat availability of a given airline as well as this information for competing carriers. Not only is this substitute to CRSs available, but it is actually being used by consumers to book an increasing share of airline tickets. Because consumers, in addition to travel agents, can search at low cost the substitute distributors of travel information, bilateral competition between carriers and CRSs effectively organizes and disciplines this market. Key Words: travel information, competitive search, access pricing. 1