2. TOURISM DISTRIBUTION CHANNEL
The tourism channel of distribution is an operating
structure, system, or linkage of various combinations
of organizations through which a producer of travel
products describes, sells, or confirms travel arrangements
to the buyer.
3. INTERMEDIARIES
Principal role is to bring buyers and sellers together
The task of intermediaries is to transform goods and services to
a form which the consumers would want to purchase
Provides the consumers the opportunity of avoiding the effort
and cost of undertaking the product
4. BENEFITS OF INTERMEDIATION
CONSUMERS
PRODUCERS
Able to sell
products
in bulk
Avoid search
and
transaction
costs
Reduce
promotional
costs
Gain from
knowledge
of the
specialists
Gain from
lower prices
DESTINATIO
N
Internationa
l
marketing
networking
5. TOUR OPERATOR
Organize package tour together and offer them for sale to the
public either through the medium of a brochure, leaflet or
advertisement, or using ICT to display its offering.
Does bulk-buying
They offer package kown as “inclusive tour”.
7. The type of packages are often
segmented according to:
Mode of Travel
Mode of Accomodation
International or Domestic Package
Length of Holiday
Distance
Destination Type
8. The Business of Tour Operation
Tour operators allow different tourism sectors to sell their
capacity in advance.
Tour operators negotiate contracts.
Tour operators traditionaly provides guaranteed level of sales
which allowed principals to fix their costs in advance and
give discounted rates.
Tour operators add a mark-up in the product they are selling
by calculating all the input costs, their overheads, profit
margin and then producing a price.
9. TOUR OPERATOR
Principal Stages of Tour Operating:
Planning, preparation and coordination
Research
Capacity Planning
Financial Evaluation
Marketing
Tour Management
10. STAGES OF TOUR OPERATING
RESEARCH – enable the operator to derive a market
strategy
CONTRACTS - allocation and guarantees
HEDGING – covering risks by anticipating future changes
(exchange rates)
ACCOMPANIMENT – tour managers oversee
arrangements
CORRESPONDENCE – receive and answer consumer's
inquiries, needs, wants and even complaints
11. FACTORS AFFECTING THE TOUR OPERATING
SECTOR
TOURIST AS CONSUMER
Increased use of technology and
acceptance of e-products
GOVERNMENT AND
REGULATION
More trend in niche-products
More flexibility in time poor /
income rich consumers
New types of consumers
(ageing population)
Consumer nd public sector
concerns for tourism and
sustainability
Constraints on infrastructure
development and planning
Concerns over global
terrorism
12. FACTORS AFFECTING THE TOUR OPERATING
SECTOR
BUSINESS ENVIRONMENT
TECHNOLOGY and ICTs
Rise of e-travel, e-mediaties,
low-cost solutions
Competitive industry sector
Declining profits per unit sold
Pace of change and rapidity of
innovation
Wider use of internet
Globalization
Disintermediation
Mergers, Acquisitions and
integration
New market opportunities
13. TRAVEL AGENTS AND RETAILING
The travel agent's role in tourism is to recognize and
highlight that tourism is:
INTANGIBLE - product is conveyed thru
brochures or thru the internet
PERISHABLE – sold for the period it is available
DYNAMIC – forever in a state of flux ; prices can
rise or fall
HETEROGENOUS – not a standardized product
INSEPARABLE – consumed as an over-all
experience
14. THREE IMPORTANT IMPLICATIONS FOR THE
BUSINESS OF TRAVEL DISTRIBUTION
The cost of setting up in business is relatively small
compared to that of other retail business
Agents are only able to sell products made available by
the tour operators or principals, so, in times of peak
demand, they may be competing with other agencies to
find the products that the customers wish to purchase
Agents are not seeking to dispose of products that they
have already purchased
15. TRAVEL AGENTS: ROLE AND ACTIVITIES
Travel Agents receive commission for each sale, and as agents,
do not become part of the contract of sale.
Travel Agents have no stock, acting on behalf of the tour
operators, and so they have little financial risk and do not
purchase products themselves
16. TRAVEL AGENTS : TASKS
Making reservations
Planning itineraries
Calculating fares and charges
Producing tickets
Advising Clients
Maintaining accurate records on reservations
Act as intermediaries where customer complaints occur
17. TRAVEL AGENT-CLIENT PURCHASE PROCESS
ESTABLISH RAPPORT
WITH A CLIENT
UNDERSTANDING CLIENT'S
TRAVEL NEEDS
PRESENTATION AND CLIENT'S
SELECTION OF PRODUCT
COMMITMENT
LOSE CLIENT,
NO RAPPORT IS
MAINTAINED
18. BUSINESS TRAVEL AGENTS
Individual business travel (corporate travel), involving
business trips related to employer needs
Occasional work activities such as conferences,
convention, events and incentive programs
19. THE ROLE OF THE “NEW” CONSUMER
NEW TOURISM is characterized by more experienced
travelers who have growing environmental concern about the
impact of their holiday on the place they visit.
Consumers prefer products that are full of surprise, discovery
and memorable experiences rather than simply a repetition of
last year's beach holiday
20. TRENDS IN TOUR OPERATION
Future growth in internet-only low-cost air travel sales
Online Travel
Continued direct selling by tour operators
Shifting consumer preferences
New markets
Integration, Consolidation and Concentration
21. INTEGRATION, CONSOLIDATION
INTEGRATION
An economic concept describing formal linking arrangements
between one organization and another
1. Vertical integration – tour operator and airline company
2. Horizontal integration – two tour operators or travel
agencies
Consumers and shareholders: major beneficiaries of
consolidation