Market efficiency is an essential concept that students learn in University. Market efficiency implies that the market will work better when there is no obstruction to the transaction between buyers and sellers. This means the market functions effectively when all the buyers and sellers have easy and unhindered transactions and business information. 

Transaction cost is a similar concept to market efficiency. Transaction cost simply includes the time, money, and the efforts, such as product search, price comparison, and even payment and delivery, that buyers and sellers put into finalizing a business deal.

Transaction costs and market efficiency are most visible than in the developing tourism industry. People who travel around the world to places such as Thailand, Vietnam, or the Philippines have to rely on information from travel agents, guidebooks, or second-hand experiences from people.

The lack of business information was so bad that it might take days or weeks to have an effective communication with customer service representatives from bus or ferry hires or rural guest houses around these areas. This often results in miscommunications and variation in prices.

The dawn of technology and travel websites has helped bridge the communication gaps between customers and business owners. It has reduced communication frictions and even encourages new tourism growth in the global economy.

Streamlining Travel: Lowering the Friction of Discovery

The ability of consumers and customers to access accurate and transparent information at the right time improves market efficiency. An example of how timely, accurate, and transparent information enhances market efficiency is seen on the Bookaway travel website.

Bookaway is a travel agency that specializes in ground and sea transportation. The Bookaway website allows users to search and compare with other travel agencies and have a seamless booking experience. The platform is designed like a global travel marketplace that encourages business transparency and keeps consumers well informed before they make their travel booking.

A 2023 study has shown that 74% of travelers currently prefer online booking as opposed to the lesser 38% online booking that was observed about 10 years ago. The percentage increase is because these kinds of websites have a faster and more predictable process. The process of booking previously was more tedious. For instance, in the past, to book a bus from Ho Chi Minh City to Da Nang, you would need to get to the travel station, experience a language barrier, and suffer the price inflation that foreigners experience. It is, however, easier now because booking a ride from whatever location around the world would only require your smart device and an internet connection.

The transportation price regulation and a significant decrease in the cost of transportation, especially in developing countries, have encouraged travelers to explore more second-tier or developing countries. This improvement has reduced the instances of tourists getting stuck in cities like Bangkok or Manila. Tourists can now easily explore Chiang Rai or Palawan since there is an opportunity to book their ride prior to their tour.

Transparency and Trust: Price Comparison at Scale

The price transparency of businesses is one of the major factors that contributes to market efficiency. This is one of the Unique Selling Points (USP) of online platforms. For instance, Bookaway, a travel website, allows customers or tourists to see multiple operations that are available for a single transportation route. This enables consumers to choose the best option by checking the customer reviews on each operator, the departure time, and even the price differences before booking. This development allows customers to make an informed purchase or engagement decision, ensures that operators are constantly on their toes to deliver quality service, and improves healthy price competition.

Lemon problems occur when ineffective products overshadow the excellent products, all because of a lack of effective and transparent information. Price transparency and competition reduce the lemon problem to the benefit of customer satisfaction and global economic development.

The transparent customer reviews, price competition, and product/ service transparency ensure that mom and pop operators in Laos and southern Thailand can word in a more competitive and global market.

Booking in Real Time: A Seamless Global Experience

Before the development of platforms and websites, tourists had to bear high coordination costs. The many complications and frustrations from unanswered emails, challenges of the time differences, and the struggle over price haggling. However, real-time booking has made booking very convenient. Bookaway enables customers to confirm their bookings quickly. These platforms allow travelers to explore multiple countries with air, land, and even sea transportation without fear of disappointment and fraud.

Modern economy and technological advancements have improved tourism growth. The World Travel & Tourism Council (WTTC) has projected that there would be an annual 5.9% till 2027 for international tourism in Southeast Asia. The increase in regional exploration and the reduction of logistical barriers have contributed to advancing the growth in tourism development.

The Case for Efficiency in Emerging Markets.

Online travel websites and platforms are essential in connecting various markets that are initially fragmented. They do more than ticket selling as they are instrumental to the efficiency of the tourism industry, which was previously offline.

There are various countries, such as Thailand, Vietnam, the Philippines, and other countries, whose tourism industry has progressed with the assistance of booking platforms like Bookaway. It is more than just having a smooth journey. It is a fact that tourists and travelers can view the service offers of many travel agencies, such as the ferry operators in Cebu and the van services in Hanoi. 

Conclusion

The concept of market efficiency and lower transaction costs is not limited to textbook theory. These theories have a real-time effect on how people experience the world when they apply to live situations. Bookaway is a platform that has helped reduce communication friction, increased customer and tourist trust/confidence, and allowed access to cities and rural communities in developing countries, and this has helped various regions to be involved in the global tourism economy. Tourists and communities now benefit from the ease of travel because it helps both parties to gain exposure and opportunities. It is also a means for these communities to generate income.