Middlemen play an important role in the tourism industry by acting as intermediaries between consumers and suppliers. Various middlemen include travel agencies, tour operators, and online travel agencies. They perform key functions like providing information to customers, making reservations, assembling travel packages, and marketing excess inventory. Using middlemen has advantages for both consumers and suppliers by reducing costs and providing expert assistance with trip planning and booking.

1. Middlemen are intermediaries between consumers
and suppliers.
Tourism industry has been traditionally
characterised by its use of intermediaries.
Various middlemen that are included in the travel
and tourism industry are travel agencies, travel
clubs, hotel marketing and booking schemes,
incentive travel organisations, sales
representatives, computerised reservation
system (CRS), global distribution system
(GDS) etc.

2. Functions of Intermediaries
• Provide info about tourism products
• Contact current & potential customers
• Make reservations & other arrangements
• Assemble services to meet customer needs
• Prepare tix & make confirmations
• Provide databases on customer behavior
• Reduce cost of acquiring new customers
• Market excess or distressed inventories
• Take risks by buying (or reserving) products &
then reselling them to individuals or groups

3. • Customer (tourist) – middlemen –
supplier
• Using middlemen has many advantages
for both customers & suppliers

4. Travel Agencies
• Travel agent = person
• Travel agency = company
• Provide important info & sales links
• Links between: tourists & tourism suppliers
• Using TA, one of most common (popular) ways
to buy tourism productsservices
• Many tourists now use Internet travel
agencies: Travelocity, Expedia, & Orbitz

5. Internet vs. Travel Agents
• Consumers have choice in buying travel
products
• Increases scope & reach of options
• Open 24/7
• But requires more work & knowledge by
consumers
• TA have expertise & human touch
• Can save clients time, money, & energy
• Can manage entire trip & its details

6. Travel Agencies
• Via websites & emails TA compete with each
other regardless of their physical location
• Do not own products they sell, so they have little
or no inventory or cost of goods sold
• As commissions dwindle, markups increase
• Large volume agencies often earn override
commissions (above the normal percentage)
• Destinations experts; make recommendations

7. Global Distribution Systems
• Majority of TA business is done via GDS
• GDS provide extensive data on suppliers:
• Schedules
• Rates & fares
• Space availability
• GDS can also:
• Make reservations
• Print itineraries, tix, & invoices

8. Computer Reservation Systems
• TA are linked on-line via one or more computer
reservation systems (CRS) built & operated by
airlines
• Among them are:
• Amadeus
• Sabre
• Galileo
• Worldspan
• CRS make airline reservations,& serve as
databases for tourism suppliers

9. Tour Operators
• TO: business organizations engaged in planning,
arranging, marketing, & operating vacation packages
• AKA: tour wholesalers, tour companies
• TO work with all sectors of tourism industry
• They perform many functions:
• Planning , Sales and reservations , Representatives
/guides
• They organise and put together package trips and
holidays.

10. • Reasons to Buy Tour Package
• 1. Convenience:
• 2. One-stop shopping:
• 3. Cost savings:
• 4. Special treatment:
• 5. Worry-free:
•

11. Tour Operators Risks
• TO are unregulated
• Very susceptible to perishability
• Must commit to place, products, & prices in
advance
• Currency fluctuations:
• Natural disasters:
• Changing consumer tastes:
• Security & Safety Concerns

12. Receptive Service Operators
• RSO are part of tourism distribution channel
• AKA receptive tour operator, ground handler &
inbound operator
• RSO: a local company that specializes in
handling needs of groups traveling to it
destination

13. Consolidators & Travel Clubs
• Are combinations of wholesalers &
retailers
• They perform a unique function within
tourism distribution channels
• Consolidators buy excess inventory of air
tix, then resell them at reduced prices via
TA or directly to travelers

14. Tourist Information Sources
• Travelers need info before, during, & after a trip
about tourism product benefits, prices, &
availability
• Marketing communications provides this via:
• Advertising, public relations, & personal selling
• Information is available from national tourist
offices (NTOs), convention & visitor bureaus
(CVBs), and chambers of commerce
• These sources have tool-free phone numbers,
websites, & welcome centers/TICs