Porter's Five Forces

Due to the introduction of the online booking, the travel agencies are going through negative period. Nowadays more and more people book tickets on the Internet, the number of websites which offer this option is huge, from the airlines websites (BA, Alitalia, Ryanair) to travelling search engines (eDreams, Expedia, VolaGratis).
Porter’s five forces give a clear explanation on what happened to those agencies after online booking had been employed by airlines companies.

• Power of suppliers: the power shifted from the middleman (travel agencies) to the suppliers (airlines companies) which now can reach the final users.
• Power of buyers: as the consumers are not interested from whom they are going to buy and as they tend to compare costs in order to find the best option, their power increased thanks to the online booking. Moreover, the switching costs are lower and, consequently, the buyers became even more powerful.
• Rivalry/competition: is high in this sector, at the present, almost all companies offer the possibility to book tickets online.
• Barriers to entry: are low, a characteristic of the Internet is that it breaks down regional barriers.
• Availability of substitutes: the threats generate by the availability of substitutes are high due to the large number of airlines companies which are doing the online booking.