The History Of Travel Agencies

Published Date: 23 Mar 2015 Last Modified: 27 Apr 2017

Travel agencies exist mainly as intermediaries among suppliers of travel services such as carriers and hotels, and customers. Travel agencies do not deal with tangible products but with information where it is different from other distributors in many industries (Cheung & Lam, 2009). As for the travel agent it is best defined as an individual who undertakes a work for another individual, who is being the 'principal'. The principal in such an affiliation not only sets the aims of the work, such as selling tickets, however can also control the means and way in which the work is completed (Cheung & Lam, 2009). Cheung & Lam (2009) added that modifications in the business over the past ten years have affectedly changed the environment and significance of info in the travel industry and, subsequently, the role of travel agency.

Lately, the technology advancement has brought changes in tourism industry. Why did the Internet so affectedly affect the travel industry? What impact do the changes have on travelers? (Harrell Associates, 2002). The Internet has revolutionized the method in which customers make their travel choices (Anon, 2012). Customers nowadays have several additional selections because the Internet offers providers additional chances to generate direct customer relations and allows a varied range of pricing (Harrell Associates, 2002). The Internet offers an influential atmosphere for the conception of virtual representations of tourism destinations permitting indirect experience that really exceeds the potentials of traditional travel agents (Bogdanovych, Berger, Simoff & Sierra, 2005). Currently the Internet is the perfect connection among customers and dealers, over hundreds of websites, travelers have sufficient information for their travel preparation (Ortega, 2008). According to Travel Industry Association of America (TIA) over 75 million online travelers used the Internet for their travel planning such as to look for places to stay, rental car prices, also searching for maps and driving directions, searching for airfares and schedules and other information about tourist destinations (Ortega, 2008).

According to Ortega (2008), he said that the travel planning and booking on the Web are among the greatest popular online activities in best important e-commerce markets and online travel sales are rising at an explosive amount (over $115 billion this year) in the US, Europe and the Asia-Pacific regions. Therefore, because of the growing of the e-commerce in the tourism industry, the tourists have numerous selections provided by the Internet to obtain online, in the ease of their houses or offices, touristic services and products (Ortega, 2008). Furthermore, the Internet assists to locate low prices in tourist services such as air tickets and hotel rooms. In conclusion, it offers tourists a remarkable total of information to make an exclusive trip.

According to Vrana (2010), she claimed that a main forte to travel agencies is the capability to offer personal information and assistance to tourists endlessly, along with consultancy service for corporations and will keep on secure if their advice-offering ability remained supported by the existence of the Internet. Even though there are many online travel services, a traditional travel agent is as far a vital part of the trip as ease is to traveling! (Will, 2012). The travel industry is comprised of over a dozen related industries: airlines, restaurants, hotels/motels, travel agencies, gift shops, auto rentals, and a host of other businesses that may not be even recognized their dependence on travel and tourism since travelers are usually indistinguishable from local customers (Cheung & Lam, 2009). Will (2012) also stated that, the part of a travel agent has remained growing with the eras and currently most people are reliant on them for fulfilling most of their travel plans so that they can rest calmly and just relish their trip.

This study aims to examine the factors involves in sustaining travel agency's operation in order to survive in this tourism industry and evaluate their performance or sales of travel agency that can affected by the uses of technology such as Internet.

1.1 RESEARCH ISSUES

Tourism has become the second largest economy contributor after manufacturing. One of the factors that contributes to the boom of tourism market is the advancement of technology. Travel industry are comprises of variety related industries, such as airlines, travel agencies, restaurants, hotel/motel and more (Cheung & Lam, 2009). More or less, each of the related industry will get at least a little impact from the technology advancement, notably these travel agencies. There is some research that indicates that tourism product is popular to be bought through online (Nysveen & Lexhagen, 2001). Online tourism has grown rapidly as the consumer nowadays are using the advancement of technology to acquire information and also purchasing tourism products and services (Dixit, Belwal & Singh, n.d).

There are many reasons why consumer tends to choose Internet as one their medium in purchasing tourism product and services. One of it is Internet are giving them cost-saving convenience (Cheung & Lam, 2009). Cost-saving convenience means that there are no efforts required for the consumer to spend their time and money to seek for information needed about a certain package. Some of the consumers also choosing Internet rather than looking for travel agencies because of the flexibility that Internet has to offer. The consumer are seeking flexible tourism product to suit their travel needs (Harris & Duckworth, 2005). Based on their research, the consumers buying pattern recently has change rapidly to independent travel from the typical package holiday. To support this statement, they are adapting a research done by Mintel, in UK independent travel has conquered the travel market in 2004 with 55%.

The other reason why consumers tend to choose Internet over travel agencies is because of online experience has greater potential in visualizing travel destinations (Bogdanovych, Berger, Simoff & Sierra, n.d). They also stated that online technology offers 3D interactive tours that can deliver clearer image on the destination. Interactive videos can also be shown online without interrupting other customers. Based on a study done by Daugherty, Hairong & Biocca (2005) which they wanted to get consumers reaction on the product presentation method. The two choices are indirect experience (virtual presentation), and direct experience (direct product manipulation). The results proved that, product knowledge and decision quality made by the consumer are both significantly higher when they are exposed to interactive 3D products than to static products presented in a form-based way.

Despite from all the factors, travel agencies which are at stake need to survive in order to sustain their spot in the travel industry. They have to differentiate themselves more than what technology advancement has to offer. Based on the statement of research problem, we want to conduct a research on how travel agencies can sustain their operation. There are a few factors that make travel agencies can sustain themselves in tourism industry in Malaysia. These factors can determine the sales of the travel agencies because the trade travel agency community has sustained substantial losses due to the mutual effect of the growth of Internet (Cole, 2009)

1.2 STATEMENT OF RESEARCH PROBLEM

Generally, in real world, an increasing competition from other channel had caused the number of traditional travel agents nearly decrease (Buhalis, 2003). The Internet is changing the industry's structure and the consumer's behavior. Widely used of technology in tourism industry has affect the operation of the travel agencies in Malaysia. The usage of Internet by travelers has decreased the number of travel agencies' sales in Malaysia. Besides that, Internet also has caused the high street travel agencies to close, thus creating job losses within the businesses (Anon, 2010).

Many studies have looked into The Internet Travel Industry: What Consumers Should Expect and Need to Know, and Options for a Better Marketplace (Harrell Associates, 2002), Travel Agents vs. Online Booking: Tackling the Shortcomings of Nowadays Online Tourism Portals (Bogdanovych, Berger, Simoff & Carles Sierra, n.d), Evaluating the Adoption and Use of Internet-based Marketing Information Systems to Improve Marketing Intelligence : The Case of Tourism SMEs in Jordan, AL-allak, 2010), Attitudes Towards Internet Use Among Travel Agencies In Greece (Vasiliki, Costas & Savvas) and Travel Agents Fight A Losing Battle With the Internet (World Airline News, 2008). Unfortunately, there is no specific study that evaluates or observes on the factors that lead to the methods of sustaining the travel agencies operation in Malaysia regarding on the technology advancement.

1.3 RESEARCH OBJECTIVES

1) To identify the factors that capable to sustain the operation of travel agencies in Malaysia

2) To identify whether the performance or sales of travel agency are affected by the uses of technology such as Internet or not.

1.4 RESEARCH QUESTION

1) What are the factors that can sustain the operation of travel agencies in Malaysia?

2) Does the performance or sales of travel agency are affected by the uses of technology such as Internet?

1.5 CONCEPTUAL FRAMEWORK

Independent variables Dependent variable

Sustainability factors:

• Human Touch

• Negotiation Power

• Interpersonal Skills

• Niche Market

Travel agency's operation

Figure 1: Proposed framework for the study

1.6 SCOPE OF THE STUDY

The scope of the study is using the travel agencies around the Klang Valley area. All the travel agencies that took part in this study offers wide-range of services and products in their company. These travel agencies have been selected according to their location that located in Kuala Lumpur and Selangor. Most of the travel agencies are located in Kuala Lumpur.

1.7 SIGNIFANCE OF THE STUDY

This study will basically benefit few categories of organizations that play important key roles in the tourism industry. Firstly, the government bodies such as the Ministry of Tourism, Tourism Malaysia and travel agencies in Malaysia. Secondly, this study will benefit the educational institution especially academicians and students in the tourism line. Therefore, it is hoped that this study can act as a guide and reference in future studies. There might be some filed in this study that is not investigate thoroughly due to constraint of time and funding and therefore it is welcome for any future researcher to examine those intended field.

1.8 LIMITATIONS OF THE STUDY

For this study, we were using online survey. In order to deliver the questionnaires, we need to use an email. We took the email address of travel agencies from MATTA website, MOTOUR website and also their own website, however, some of the emails are not valid. This problem leads to the difficulty in collecting the information and giving us some difficulties in processing the result. Other than that, some of travel agencies did not give cooperation to us. They were not answering the questionnaires even though we already stated that all information are confidential and only use for study purposes. Lack of the cooperation and resources limit the researchers to gain extra information to enhance the study.

1.9 SUMMARY

This chapter has presented the background of the research and research problem, outlining the research objectives and questions relevant to the research topic. This chapter also covered the scope of the study together with the importance in conducting the research.

CHAPTER 2

LITERATURE REVIEW

2.0 INTRODUCTION

This study aims to discover the factors that can make the travel agencies in Malaysia sustain its' operation in this tourism industry. In order to achieve the objectives of the study, literatures regarding the sustainability factors will be examine.

2.1 HUMAN TOUCH

According to a professor of psychology, Dacher Keltner from a University of California, Berkeley, he says that, touch is "our richest means of emotional expression". The researcher found out that, touch interconnects in ways that words cannot (Moll, 2012). In retail store settings, concisely touching customers has been shown to rise the consumers' shopping times, store valuations and purchase volumes (Lynn, Le, & Sherwyn, 1998). According to Jochman (2009) in his article title 'The Benefit of Human Touch', he said that the quantity of body contact plays an important role in people's physical growth and mental as infants and in our happiness as an adults as shown by the scientists. Human touch has experience of working with banks, credit unions, insurers and other financial service providers to increase awareness of how service excellence can have a dramatic impact on their bottom line (Anon, 2012). A service representative asking the right questions and being sensitive to a customer's needs can make all the difference between the sale of a financial product and the loss of that business to a competitor (Anon, 2012). In the years of computer-generated workplaces, where e-mail, teleconferencing and fax machines increase, something is missing that American business people need to close a deal the human touch (Seaberry, 2000). In other words, handshake and looking at each other's eyes are still needed by the business people.

According to James J. Green (2012) in his article, he said that the personal touch-the person-to-person touch-that you offer to your clients the one that distinguishes you. He added that talking to your peers, in person, provides you with perceptions that you cannot get electronically. Individuals play an important role in any business relationship because it is actually managed by individuals (Nguyen & Nguyen, 2011). In manufacturer-distributor relationships, personal interactions talk about the communication at the individual level between distributors and manufacturers' vital contact people (Ulaga, 2003). Furthermore, research has shown that personal interaction can play a critical role in distributors' valuations of suppliers' performance (Ulaga, 2003). As said by Kaufman (2012), automation is vital for growing and speeds up service in many industries. However, he added that when individual care or courtesy is required, customers require contact with real people. Once human energy flows and connects, good things can get completed and you can increase customer experience to your advantage (Kaufman, 2012).

Scholars in marketing and organizational behavior are present giving increasing attention to the personal interaction among the customer and the employee on the frontline of service businesses (Mattsson, 1994). The personal interaction is recognized to be one of the important subjects in business and industrial marketing, both in terms of practice and theory (Mainela & Ulkuniemi, 2012). Mainela and Ulkuniemi (2012) also stated in their journal that, personal interaction is also required to exchange social values and it may weaken the involvement of price in determining the behavior of the two parties. According to Pinnington and Scanlon (2009), business relationships are actually managed by individuals and there is extensive personal interaction in any business relationship (Pinnington & Scanlon, 2009). Research has shown that a lot of companies are moving from transactional separate relations to relational ones (Nguyen & Nguyen, 2011). In addition, Tho D. Nguyen, Trang T.M. Nguyen (2011) said that, committed relationships are among the most durable because they are difficult for competitors to comprehend, to duplicate, or to relocate. Thus, scholars and practitioners have agreed that two-way relationships between buyers and sellers represent a source of competitive advantage (Nguyen & Nguyen, 2011).

Travel agent might look similar to a profession of the past, just like elevator operators and milkmen, however they are not merely hanging on, certain of them are successful. In actual fact, the February/March topic of Shop Smart magazine has a story on travel agents, saying that they are a lot better than online travel services (Williams, 2008). In the article title 'Travel agents: Hong Kongers prefer the real thing', Hong Kong travelers blame the online trend and continue to choose for humans when booking vacations (Li, 2012). Li (2012) also said that, Hong Kong is not a huge city; it is appropriate for people to make straight contact with travel agents as they are the expertise and backing that an offline travel adviser can convey additional value to the holiday. Travel agents will make sure that you will have an incredible experience on your trip. They are excited and will show their enthusiasm in helping you, their clients, have the best vacation possible (Bow, 2012). Travel professionals are individually invested in seeing your trip come to be a success trip. This personal interaction with existent, live agents undermines the frequent dull experience of doing it yourself online (Bow, 2012). As soon as you book a trip or a holiday with a travel agent, you create a personal as well as a business rapport with that travel agent. If something goes incorrect, your travel agent is your personal representative who has an entrusted concern in resolving the problem to your satisfaction (Morris, 2012). According to Geoff Williams (2008), if you are afraid that you will need to change your flight or your travel plans at the last minute, a travel agent might be capable to talk to an airline directly and will save you away from those worries and stresses.

Even though growing numbers of people turning to technology, specialists on both sides of the bureau are saying that there will always be a space for the human touch (The Syedney Morning Herald, 2007). Wherever travel agents remain incomparable is in their capability to offer a personal service. Naisbitt (2001) refers to it as 'high-touch', the antidote to 'high-tech'. Moreover, it is becoming increasingly evident that agencies will need a 'high-touch high-tech' strategy to satisfy the customers of the future (Naisbitt, 2001). A website cannot provide what the travel agent can offer such offering help, advice and also that "personal touch" to your travel planning experiences (McNally, 2007). According to the technology advisor Mary O' Haver, the experience that travel agent has is part of the personal touch that travel agents can offer. Besides that, according to Hoffman (2012) who is an online travel expert and managing director of the world's largest online travel agency, expedia.com.au, people will always like to walk into a store and get personal service. He also said that, the more complex the trip, the more cooperative an experienced agent will be. He continued that, an agent can guide an inexperienced traveler over foreign travel or travel to exotic destinations. When travel in less developed tourism destination, the travel agents may have more knowledge of travel about that destination (Morris, 2012). Complicated arrangements like various destinations on one ticket or group travel might turn into difficult and an agent with experience can help (Morris, 2012).

According to Olmsted (2012) in his article, between the several main advantages of high-powered agents carry to the table is individual connections and influence. If you have problems while you remain away, your travel agent is there to help you in resolving your concerns. If you make a booking with a travel agency, you are less likely to experience flight, city, or accommodation changes by the tour company, as they know the agent will be there to stand behind you (Travel Café Inc, 2012). If you have at present reserved your trip but before you go to travel you want to adjust some details, your travel agency can assist you by get all the required steps complete, leaving you without the difficulty and confusion (McNally, 2007). Travel agencies take care of all travel particulars form reserving tickets to booking hotels that can give the tourist sufficient time to plan the travel (McNally, 2007).

According to Donvan & Lieberman (2011), the human touch that makes travel agencies different is when something goes wrong with our trip; we have someone to call or refer to solve the problem. Compared to persons who booked their accommodation or flight tickets online, there was no one for them to refer to help them resolve that situation. Secondly, according to them, travel agents are giving services by giving real information or their personal experience on the destination spots they send people to. They can also give travel tips that maybe useful where we cannot get them from online information. If a person booked online, if there is any mistakes happen during their bookings, they will have to carry the burden for themselves. But, using by the travel agents, they will do anything in order to personalize the needs and wants of their customer (Travel Café Inc, 2011). Besides that, the travel agents are giving their specialized expertise that an individual does not have, or might forget during a trip. For example, visas, insurance, currency exchange and also custom regulation of a destination (Cole, 2009). Travel agents can help you to arrange and organize any compulsory official papers that you possibly will need in order to travel outside of the country (McNally, 2007). Rand McNally (2007) added that, travel agents know the necessary documents that you may need for your traveling such as visa and they can direct you to your local passport office too. Furthermore, travel agent can give extra services that an individual cannot get from online booking. One of the example is they have the ability to source and different travel experience and help to book hard booked restaurant (Talwar, 2011). Other than that, when you call with any problems during your trip, an online travel agency is not going to pick-up the phone but then a travel agent will remains to give you that personal care even though you are away (McNally, 2007). Building that personal relationship provides you the assurance that you can reliance on your agent's expertise and no matter the situation, they will be around to assist you to find a resolution (Bow, 2012).

Additionally, if you should have any enquiries after booking your trip, you know exactly how to contact your travel agent and can escape the uncertain FAQ section on a website (McNally, 2007). The services that serve with the human touch and worth deal will make the travel agency retain in the business. According to Geoff Williams in his article, he said that as soon as the tourism space getting bigger, you are going to have a choice in the middle of a thinking, helpful individual and a capable unfeeling internet site that does not surely care if you travel on Saturn whereas your baggage bursts into flames on Mercury. As for that, who are you going to trust? Smart Money magazine summarized the whole thing moderately well on the cover of the June 2007 edition. "FORGET ONLINE! TRAVEL AGENTS GET BETTER DEALS".

2.2 NEGOTIATION POWER

In general, negotiation mean bargaining process between two or more parties seeking to discover a common ground and reach an agreement to settle a matter of mutual concern or resolve a conflict (Business Dictionary.com). According to Fisher & Ury in their book Getting to YES: Negotiating Agreement without Giving In, negotiating is a basic way in getting what you want from other people (1981). While in Oxford Dictionary, negotiation means discussion is aimed at reaching an agreement. In Women Are Getting Even (WAGE) website, they interpret negotiation as conversation between two parties in order to make an exchange. According to Rusk (2006), the meaning of negotiation is "discussion intended to produce an agreement". It also can be referring as common solutions that used to make a decisions and settle down the problems (Moore, 2012), a process which is two or more parties attempt to agree on the rate of goods and services that they exchange (Robbins & Judge, 2003). Conflict and negotiation are a fact of everyday work-life, yet it often produces anxiety (Cutts, 2012).

The UK Border Agency has announced that there are still technical problems with online booking service (Kelly, 2012). This statement shows that sometimes online booking faced a problem such as lost record (Kirschbaum, 2009), security issues (Fane, 2010) and technical issues (Scoot, 2012). There are problems that faced by customer when they used online booking system. Despite the fact that all the respondents (except for one) use computers almost every day, 14% believe that booking online is not securing in general (Bogdanovych et al, 2006). Conflict happen because of these problems. Conflict happen when people did not agree with the issue, it will create a friction or tension between that individual or groups (Nahavandi, 1999). Negotiation is a process that examining the facts of situation, exposing the interest of both parties involved and bargaining to solve the conflict as many as possible (Moore, 2012). Negotiation permeates the interaction of almost everybody in the organization (Robbins & Judge, 2003). According to Lucas (2008), conflict might occur because of differing perception, inadequate or poor communication and also contrary expectations. These problems often happen when dealing with customer especially in travel agency. In tourism industry, negotiation is an important process to gain a mutual agreement of something, especially for the travel agencies. It is crucial for them to confirm what their customer wants and need. Through negotiation conflict between travel agency and customer can be reduced. Negotiating through areas of conflict can often lead to win-win situations agreeable to parties, reducing ill felling and conflict (Queensland Government, 2011). Travel agents have the negotiation power because they have maximum choice to offer to their clients (Travel Café Inc 2011). This means they have variety of choices that they can get from their travel suppliers and they can give us the best deal with best value of possible. Online booking lack of firsthand knowledge and rarely gives customer opportunity to speak with someone knowledgeable about service that they are booking (Morelock, 2012). The clients and travel agents can assists us to get what we need in our vacation and help us to get the best offer.

Online booking allows customer to make all travel plans on the Internet means they can do it any time of the day or night at home or while they're on their lunch break at the office (Oakley, 2012). It is true when we are doing booking online we can make a booking everywhere and anytime, where it will be more convenient to us, but we cannot negotiate the price of the tourism product that we wish to book. If we are negotiating with travel agents, we have the chance to get lower prices as possible. Price negotiation usually occurs during purchasing of materials or supplies (Francois, 2012). For example, if a travel package to Cameron Highlands costs about RM300 for two nights, the clients can negotiate to get the lower price and finally they will get the offer around RM250 only. With negotiations, both parties will receive their own benefits and it is a win-win situation (Rusk, 2006). When customer asks an agent to negotiate, means customer are essentially asking the agent to subsidize their vacation (Brock, 2009) but through online system, customer had no change to negotiate with an agent because the price is fixed. The Marriott International, Hilton Hotels, Sheraton Hotels & Resorts and others was charged in San Francisco Federal Court on charges conspired to use their market dominance to fix the hotel prices with travel websites like Travelocity, Booking.com and Expedia, a subsidiary of Priceline.com From this case we can see that customer cannot negotiate the price because the price is fixed. The aim of the negotiations is to decide the price that is acceptable for both parties (Francois, 2012)

From price negotiation process it becomes bargaining process. Negotiations commonly follow a process of "positional bargaining" (Cutts, 2012). Oxford Online Dictionary give two interpretation of bargaining, the first is an agreement between two or more people or groups as to what each will do for the other. The second is a thing bought or offered for sale much more cheaply than usual or expected. There are two types of negotiation which are distributive bargaining and integrative bargaining (Robbins & Judge, 2003). Distributive bargaining also called claiming value, zero-sum or win-lose bargaining is a competitive strategy that is used to decide how to distribute a fixed resource such as money (Spangler, 2003). Honeyman (2012), interpret integrative bargaining as one of platform which party try to understand interests of another party, on the expectation that it will helping the opponent to create solution as responsive its own concerns. According to Tewart (2012), many times people say they don't like to negotiate (bargaining) yet, they still shop around and never pay full price. The word bargaining here does not only mean price negotiation, it is a much differentiated and broader term (Management Study Guide, 2012). Customer also can bargain to build his or her own trip with or without help from a customer care executive (Agarwal, 2012), asking whether travel agency offer travel insurance (trip - Travel Responsibility Informed & Protected, 2012) and a customer can seek redress under certain circumstances commonly referred as the right to repair, replacement or refund (Government of South Australia, 2011). These are things that customer can always bargain with travel agencies.

The freedom for the customer is restricted when they make booking through online system. Customer cannot confirm their specific requirement when make the online booking through the hotel reservation system (Vyas, 2010). For example, when they make booking through hotel reservation system and they have something that they don't understand, there is no place for them to raise the questions. According to Lloyd, booking online doesn't have individual to deal with booking process, it leaf to customer to read and understand the complicated terms and conditions. One of the advantages of booking direct with the hotel, by phone or email, is that customer can request a specific room of the hotel and they cannot normally do that online or with an agent (Trend, 2010)

According to Tewart (2012), most people act in their best interest and most people who say they don't like negotiating, actually still want to. This statement shows that customers still love to negotiate and online booking system prevent them from doing it. Negotiation is needed in order to secure the resources required for successful project completion (Evans & Lindsay, 2008). Through negotiating win-win solutions with customers, it will not only give your company the best chance to succeed but will also create relation between customer and your company for future sales opportunities (Douglas, 2003). Negotiation also can increase clarity about the problem, can lead to innovative breakthroughs and new approaches, involvement in conflict can sharpen approaches to bargaining, influencing, competing and also can focus more attention on basic issues and lead to solution (Wertheim,1996). Solving problems that arise in negotiations is an integral part of collective bargaining. The first task is to recognize what is the problem that occurs and the secondly, is to decide what strategy should be taken to solve the problem (Anon, 2012).

According to Goodale (2007), negotiation is one of the most important parts in business as well as one of the most interesting parts of professional purchasing and is part of the skill and part of the art. Negotiation is a part of business, whether travel agencies are hiring a consultant, agreeing to terms with a customer or ironing out a deal with a vendor, negotiation sets the tone for the relationship (Belsky, 2010). The purpose of negotiation is to create relationship with the customer, whether it will be a in long term or short-term relationship is depends on how we negotiate. Negotiations are two-way communication both parties try to influence how each behaves toward the other in the future (Goodale, 2007). Good negotiation leads to acceptable solutions that work for both parties and will strengthen the relationship with customer (Bader, 2007). The bad negotiation process will affected the relationships. Ionesco stated in his article, if we use negative influencing tactics to make sure we get what we want, we also have to be cognizant of the consequences. A bad relationship will occur and our name and reputation goes with it (2011).

2.3 INTERPERSONAL SKILLS

Tourism has experienced continued growth and deepening diversification in order to become one of the fastest growing economic sectors in the world, over the past decade (UNTWO).

Previously, travel industry focused on the travel agency sales channel. The clients visit the travel agencies near to them and purchase travel tickets or gather information through the help from the agency. However, the advancement of technology, the internet and electric commerce has cause a big impact to the travel agencies (Cheung & Lam, 2009)

According to Cheung and Lam (2009), travel agencies appear to lose in the battle against the technology advancement. They are afraid to enter online market because they think they are at the rear from the internet. The airline also shows that they can overcome the traditional channels by cutting, and in some cases, eliminating commissions. Some of the airline online sites offers cutting of air fares and giving extra services for customer if they booked the ticket online.

Therefore, based on the continued growth, the dynamics of handling a business receive changes due to the combination of technology advancement into the workplace. Currently, meetings and business trip have been transformed with the telephone conference or video conferencing. Telephone calls have been replaced by instant messaging and emails. The advancement of globalization has affected the forms of personal interaction between people. However, with this advancement, an organization saves a lot of money and can pursue distant opportunities (Goessl, 2008)

Interpersonal skill is the skill that we use to communicate and to interact with other people, individually or groups. Interpersonal skills can be defined broadly as "those skills which one needs in order to communicate effectively with another person or a group of people" (Rungapadiachy, 1999). This skill is not only the ability to communicate, but also the ability to listen and understand.

The most important matter in this skill is to have interpersonal communication. Interpersonal communication can be define as the procedure which people use to swap information, emotions and impart through verbal and non-verbal messages (Seth & Sethi, 2009). Interpersonal communication is the skill where you will use your communication skills to communicate with people. For example, the way your employees communicate with the public, or also known as the customers play a big part in this field, and if they are a worst speaker, this can affect your business.

Hartley (1999, p.20) defines that these are the characteristic of interpersonal communication.

• Communication from one person to another.

• Communication which is face-to-face.

• Both the form and the content of the communication reflect the personal characteristics of the individuals as well as their social roles and relationships.

According to (Rungapadiachy, 1999), most authors tend to agree on a number of core areas in which competency is essential for effective interpersonal interactions. The examples of core areas are effective listening, questioning, self awareness, helping or facilitating. These cores are able to help us in implementing better interactions between two people and also help to enhance better communication.

Communications can also be delivered through non-verbal communication. Non-verbal behavior are also considered as communicative activities and it helps to detect and reflect the messages, it is also seen as a central interpersonal skill (Harrigan, Rosenthal and Scherer, 2005)

According to a research from the Institute for Executive Development, lack of interpersonal skill is the first main reason why employees and also managers don't meet performance expectation. Raybould and Wilkin (2005) have done a survey and resulted majority of 371 hospitality managers considers that there was a crucial need for graduates to have a range of generic interpersonal and human relation skills. According to Blades, Fauth and Gibb (2012), soft skills, or also known as interpersonal skills can be seen as stepping stones to securing paid employment.

Confederation of British Industry (CBI) has done a survey recently and resulted that the employers do not anticipate everyone arriving 'job ready' but do expect young people to start literate, numerate and with good employability skills. These employability skills - including problem solving, team working and time management skills - are often considered by employers to be as important as formal qualifications.

According to Wheeler (2005) there is a study that says 90 percent of executives' failure is coming from interpersonal competencies, which means factors such as leading team, developing positive work environment, retaining staff, inspiring trust, and coping with change. Emotional intelligence significantly impact leadership success (Wheeler, 2005).

Good interpersonal skills are important because it acts as invisible glue which binds relationships together. Without those skills, it will cause much pain and hardship for the customer and associates (Sihera, 2007). There are many forms of communication available, such as body language, written word, oral communication, face to face and touch. These are the example of actions that most of the people use every day to convey their messages. Especially to hospitality industry where they will face customers every day.

According to Hodges and Bruchell (2003) when dealing with clients and outside organization, it is important to implement oral and written communication. Therefore, the effectiveness becomes very important in determining the efficiency which shows the performance of an organization as a whole (Sethi & Seth, 2009). Gewerts (2007) cited that even straight A's student cannot rely only on academic skill; they need to learn "soft skill" as a tool for their survival (McElroy, 2007)

According to Fennel (2012) interpersonal skills is made between communications of two or more individuals, which is properly said that it has many functions within business. According to Marketing Institute of Singapore, interpersonal skill will develop positive climate at the workplace and will enable the workers to interact positively within the changing and challenging working environment. Besides hospital industry, other industries also using this interpersonal skill in developing their career. Medical profession as well is in need of using interpersonal skills. Doctors need to develop their interpersonal skills as a vital tool on teaching undergraduate students and post graduate doctors (Ng, n.d)

In engineering sector, coordination is a crucial matter and pervasive characteristic within a number of interpretation approaches to management of engineering such as concurrent engineering and models of the engineering design process (Hazmilah, 2008). So, communication is needed. According to Coates (2004), interpersonal skills are important in order to make sure the coordination and work flow between the engineers is functioning positively. Entrepreneurs are making interpersonal skill essentials in their careers because it is one of main factor to make them successful. To them, interpersonal skill is similar with managing people. If they are able to manage people in a friendly, fair and nice way without making them feel estranged (Phillips, 2008.

For many decades, employers and also educators are complaining on lacking of interpersonal skills or soft skills of their students. Schulz (2008) is doing a research on the importance of interpersonal skills to educators. According to him, soft skills can be use to shape people's personality. All educators want their students, especially from tertiary education institutions not to be good only in their field but matures personalities with balanced, rounded off education. This characteristic only shows in soft skill but not hard skills.

Generation nowadays has grown up being so attached to Internet and we can say that they are depending on it. These people are lacking in fulfilling people sufficient skills to market themselves at work. They are excellent in doing online, but once they are offline, they cannot handle the work right.

Hospitality industry is one of the industries that are in need of having interpersonal skills. According to Whitelaw, Barron, Buultjens, Cairncross & Davidson (2009), it is important for any hospitality graduates and employees to define the skills and competencies in order to reflect the need of the industry. According to Brodrick (2012), to be in the hospitality industry, we have to be a people person. This is because, hospitality industry is about the art and sciences of making people feel welcome and comfortable.

Opperman (2009) has said that it is important for a travel agency to satisfy or meeting their customer needs and expectations today. The travel agencies are receiving pressures from their competitors. The tour operators are excessively trying to sell off their products to their clients in order to received profits for the agency.

Therefore, according to Tas (1988) the skills and activities that are believe important keys in performing jobs are competencies. Brophy and Kiely (2002) also stating attitude is part of competencies. Competencies can be defined as a "bundle" of skills, abilities, and knowledge that can be used as currency out in the workforce (The Department of Education, 2002). According to the World Travel and Tourism Council (WTTC) (2007), the United States' travel and tourism industry is expected to generate $524.5 billion dollars of economic activity with 15 million jobs in 2007, and $851.0 billion revenue with 16.1 million jobs by 2017.

According to a newsletter by C.R Bard Inc (2009), there is from previous study that supported that is the most critical for new employees to posses' interpersonal skills. There are surveys that have been done and proved that the one who have interpersonal skills is the one who is most useful for the job. Great interpersonal skills not only applied with the customers, but also with the top management. The great relationship between subordinates and top management are likely 2.5 percent to satisfy their job, more productive and more engaged with the customer. Thus it will lead to customer's loyalty and increase the volume of sales of an organization. In the newsletter also stated that with great interpersonal skills, it will reduce employee's turnover and therefore will also reduce the time to train and hiring new member to the team.

Therefore, it is highly recommended for all travel agents to master interpersonal skills because interpersonal skills is one of the soft skills required for anyone who wants to achieve great success and it is required for almost every line of work (Tramontano, 2012)

2.4 NICHE MARKET

Niche marketing is the process on focusing a marketing effort on a particular theme or destination. Many travel agents are avoiding this concept because they are scared of having turn away business other than the chosen niche or being too specialized with the niche market. However, niche market is one of the best ways of marketing to a group of clients in an effective and cost efficient way (Earls, 2011)

In order to sustain travel agencies operation in tourism industry, travel agencies should have their own niche market in order to keep them survive. It is true that many people turn down on travel agents when there are online booking trends, but many also come back because of the travel agents expertise, which is online booking's lacking. According to Juma (2009), travel and tour operators are using niche market to capture part of the multi-million tourism business.

So the niche market for travel agency is for those who are not familiar with other options, they are booking less on the internet and only refer to the internet for general information (Sabo, 2011). Sabo also stated that online booking really changed the way individual and business traveler finding their hotels, airfares and discounts on travel packages. He also stated that northern travel agents said that customer who needed customized services and travel agent expertise in travel and tourism keep them in business.

According to Sabo (2011), travel agencies main niche market is still corporate traveler because Internet is not good for complicated travel plans. They are required to hold a seminar or an event which is requiring full attention and consume more time. As a corporate people, there is no time for them to survey on the destination or other tourism requirement to go on a travel. So they will wholly depend on travel agents to do it for them. Most popular corporate travel is company meetings, family days and incentive travels.

Sabo (2011) cited that when more travelers starting to use online booking, the travel agent's revenue is declining for some years, but many has come back for travel agents' expertise (Dave Wendell, 2011). Wendell added that some people are not familiar with other choices they can have, so they are using Internet more on information purposes rather than using it for booking.

One more niche market for travel agencies is the senior citizens, or the elderly. They are the kind that wants to enjoy their life and want to spend their hefty savings for memorial experience. According to Clark (2012), senior citizens are those groups that look forward towards travelling after they retire. They will search for travel agencies because they are not very familiar with technology advancement. Travel agents organize itineraries, look for the best deals for them, arrange tour groups and keep current on travel advisories.

Chipkin (2012) interviewed Bill Todd, a sales trainer and motivational speaker about niche market. According to Todd (2012), focusing on niche market is the best way in selling luxury travelers. It is because, using niche marketing strategy is easier and cost-efficient. It is also more profitable.

In order to develop a tourism product for niche market, it must meet the needs of the market itself and must be based on the understanding of visitor market characteristics and preferences (Sustainable Tourism Online, 2010)

Olmsted (2012) stated that a good travel agent is always there for you. For example, people can book flights, car rental and accommodation by themselves by online. It will go just fine is there is nothing bad happen. What if your flight is cancelled and need to wait in the line to be rebooked? At that time you will wish for a travel agent to help you out in those matters. Olmsted also added that travel agents know more that you do and they have the access of benefits that you wouldn't get. They can plan anything for you and provide safety such as insurance during your travel. Travel agents will make you feel like a VIP, no queuing, private guides, and cheaper airfares.

According to Earls (2011) niche market is one of the ways to help travel agent to focus in locating new customer. It is not necessarily changing your entire business to one type of travel, it is about focusing and segmenting marketing effort to a particular groups of people. He also added that the advantage of applying niche market marketing is. it helps the travel agents to locate their potential clients. If they marketing general travel, this will make all of the clients their potential customer and the travel agent will tend lack of focus in satisfying which client first. For example, if the travel agent's market is "golfers", they know where to find them. This tends to be less costly. By learning more about their niche market, it will let the travel agents understand the people and get to know their preferences and needs, so that they can serve the clients better.

Nowadays it is essential for travel agents to have their own niche markets. For example of travel niche market is spa destinations, food and wine tours, sports tour and book club travel, indirectly will give more power to travel agents to compete in complex and quickly changed travel and tourism industry. It will also provide more value, unique identity in the market and definitely can expand their business (How Travel Agents Can Increase…, 2011)

Niche market is considered important because it appears to be a factor for both customer and agent, as travel agents seek to establish their knowledge and expertise more than their competitors and as customer plans their travel gate away (Glatt, 2009). By capturing the heart of the specified niche market, a travel agent has the advantage of setting themselves apart from the other travel competitors (Fetsch, n,d)

There is a survey done by The Amedeus, that the power of Internet has making the expertise in travel industry to advertise specialized service to potential groups of customer (Crosett, 2009). Fetsch (n.d) claimed that by focusing on special interest groups or niche market, it is one of the certain ways to make profits in today's travel industry, by which if you know the details. He also added that by providing travel experience to a certain group, can be a great asset for the agent.

Hetter (2012) claims that, according to American Society of Travel Agents, there are fewer travel agents in 2010 which is 105,910; compared in 2006 with 111,000. There are also fewer of travel agencies, 14,800 agencies in 2010 compared with 18,850 in 2006 (ASTA). This is because, this is the age where all travelers depends on the Internet to book flights, and hotel reservations. They have lots of access to information, because they want time saving guidance, exclusivity and security in a complicated world. So the agencies need to start offering more service than internet can offer. They can provide expert advice, hidden discount price and more.

Nowadays, there are variety of niche market that are available and will be developed depends on the supply and demand from the client. The development of product should be based on the clients' need and demand. So, the agents need to understand their client's characteristic, behavior and also preferences. The example of demand that has been developed includes Farm and Country Tourism, Ecotourism, Bird-Watching, Cycle Tourism, Indigenous Tourism, Adventure, Health Tourism, Backpacking, Educational Tourism and also Gay and Lesbian (Sustainable Tourism Online, 2010)

The cyclical fluctuations in tourism industry is not the same like usual. The industry need to update their business strategy to make sure their product remain fresh and acceptable in the tourism market which is constantly changing because of new competitors, advanced technology and also the unstable economy (The Times, 2012)

There are many reasons why people still choose travel agent compared to online booking; firstly the online booking is confusing the client on what they are selling. Secondly, there are massive explosion on of restrictions and fees, and more important is despite of being "smarter" and handy than ever, online booking has too way many dead ends. It means that the buyer will have the inability of getting seats together, unable to lock fare in such a short time and they also can experience disappearing fare sales (Why You Still Need A Travel Agent, 2012)

According to Wooldridge (2007), it is true if you book a simple flight ticket, you would not need a travel agent. But for complex itineraries, tours and cruises and other expensive trip, using an agent's can save time, stress free and also saves your money

McCluskey (2012), quoted a research by the American Society of Travel Agents, which shows that travel agents books 85% of all cruises, 70% of tour and packages, 50% of all airlines tickets, 30% of all hotels and 25% of all car rentals. McCluskey also stated that most of the bookings are coming from corporate client.

There is a research statistic from The Bureau of Labor Statistic that estimates that there are about 63,500 travel agents in USA, which many is specialize in niche areas of travel (McCluskey, 2012). He added, those agencies that are focusing on business travel recovers quickly in tourism industry, compared to those who focused on leisure travel.

According to Juma (2009), Travel and tours industry have realized the importance of niche market and now the travel and tour operators are conquering and exploiting the niche market to seek for their customer's attention in order to increase the volume of sales for their travel agency in tourism business.

There are many responses that focus on the opportunity that niche market has provide us and niche market has the strong potential in the next five to ten years. They think by focusing on specialization is the key (Lawton & Weaver, n.d). For example there is one market that is untouchable by world events and such, which are honeymoons and wedding. This is because; people will always get married and wants to go travel for their honeymoons.

According to Garkavenko, Bremner and Milne (n.d), the development of information, communication and technology (ICT) has changed the competitive environment in the New Zealand travel market. It is hard for them to retain their traditional role as the intermediaries. Therefore, the existence of niche market and creation of network are their main strategies for survival in their tourism industry.