According to Clemons and Hann (1999), the drastic changes that are being experienced by the travel industry can be associated with the dynamics of the competitive environment. Before the extent of the impact of these modifications in the wider market is assessed and analyzed from a comprehensive perspective it is necessary to highlight the fundamental challenges which Rosenbluth International currently faces. Clemons and Hann (1999) state that an extensive trend which has been observed within the industry by analysts highlights the alarming situation for travel agents as hotel chains and airlines intend to raise the scope of their revenue generation by launching electronic distribution systems. Furthermore, Carroll and Siguaw (2003) claim that the popularity of internet-based room reservation has allowed hotel owners to gain complete control over various methods of distribution which is threatening to the wellbeing of Rosenbluth International. Another challenge faced by Rosenbluth is not only rooted in external competitive pressures that are posed by other travel agents but is also caused by the commission cuts which have been introduced by hotels and rental companies thereby, prompting the organization to raise its charges by $10 to $15 (McCubbrey, 1999) to soothe the incurrence of unexpected expenditures. An examination of the case suggests that the challenges being faced by Rosenbluth are largely based on an increase in expenses and a decrease in the revenues being generated by the firm due to the introduction of electronic distribution systems by major travel-based businesses and a reduction in commission caps that are being earned by competing organizations. However, once the case is viewed from a varying perspective it can be comprehended that the issues which Rosenbluth is currently experiencing are also a consequence of the widespread availability of substitute services such as bargain prices and the incorporation of effective and pioneering business models such as reverse auction and auction. Given the present scenario and the challenges posed by the competitive environment in which Rosenbluth International operates, it would seem most appropriate to install an online reservation system to equip the organization with the technological tools that are needed to address the challenges that have surfaced in recent years. As suggested by Buahlis and Law (2008) recent trends are indicative of strong growth and expansion in the use of ICT to assist and aid the process that is associated with travel and tourism. Due to the emergence of this aspect, the role of travel agencies and agents in assisting their customers in fulfilling the necessary conditions such as making a hotel reservation or booking an airline ticket before embarking upon their journey has declined drastically (Morrison et al., 1999).
The Comprehensiveness of North American Online Reservation Systems