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TPC2 - Module 3

The document discusses travel intermediaries and distribution channels in tourism. It explains the roles of different intermediaries like travel agents, tour operators, and consolidators. It also describes direct and indirect distribution channels and how they work.

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Neil Cutter
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117 views

TPC2 - Module 3

The document discusses travel intermediaries and distribution channels in tourism. It explains the roles of different intermediaries like travel agents, tour operators, and consolidators. It also describes direct and indirect distribution channels and how they work.

Uploaded by

Neil Cutter
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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TAGBILARAN CITY COLLEGE

College of Business and Industry


Tagbilaran City, Bohol

Course Code TPC2 Instructor Mary Ann B. Buga


Course Title Tour and Travel Email [email protected]
Management
Course Credits 3 units Contact Number 0917-811-2350
Course Tourism Consultation
Classification Professional Core Hours
Pre-Requisite(s) THC3, THC4, Consultation
TCBMEC2 Venue

Learning Module 2: Travel Intermediaries


Duration of Delivery: February 1-5, 2021
Due Date of Deliverables: February 8, 2021

Intended Learning Outcomes:

 Understand better the nuances of distribution channels


 Explain the nature of distribution in tourism
 Recognize the functions of distribution channels in tourism
 Identify the intermediaries in tourism and their significance in it.

Travel Intermediaries

The travel intermediary’s role is fast changing the outlook of the tourism business. The
flourishing growth of the travel intermediaries business is not only impacting the global surge
of the travel and tourism industry, but it is also impacting the marketing outreach of several
hospitality companies. Tour operators are calling the shots in different tourism industries
across the world and the large tourism enterprises are compromising on their profit margins to
stay afloat in the industry. Experts believe that this is also affecting the overall economy of
tourism destinations. There is a wave of new travel portals which is challenging the
development of the travel intermediaries business. But industry observers say that the tour
operators or the travel intermediaries are adapting to this technological change to reap the
benefits from the evolving global tourism industry. Travel intermediaries businesses are
upgrading their technology by incorporating software such as GDS, which is an extremely
helpful platform to detect customer behaviour and market upsurge.

The in-depth knowledge of travel intermediaries on destinations is an added advantage


for travellers. This knowledge not only helps them ensure traveller safety but also gives them
a leverage to win the confidence of their customers.
Distribution Channels

Like most industries, being a part of the tourism industry requires you to have industry specific
knowledge to create and run a successful business. Understanding the distribution systems,
recommended rates of commission, and the roles of various booking agents is essential for a
successful business. This section has been designed to aid you in your understanding of the
tourism industry.
To explain it simple, there are two ways of reaching potential customers:
1. DIRECTLY - You can target visitors directly through advertising, brochure distribution,
website, social media, client referrals and so on.
2. INDIRECTLY - Another way to promote your business is through a third party
(indirectly) by using tourism distribution channels such as retail travel agents,
wholesalers and inbound tour operators.
TRADITIONAL TOURISM DISTRIBUTION CHAIN
A TOURIST has seen footage of beautiful Western Australia on
TV and also heard about it from his friends. He decides to find
out more.

He tourist visits his local RETAIL TRAVEL AGENT to enquire


about Western Australia, and ends up booking an eight-week
adventure including accommodation.

The travel agent plans a comprehensive West Australian itinerary


through the brochure of a TOUR WHOLESALER and then
proceeds to book all tour operations through them.

The tour wholesaler contacts the INBOUND TOUR OPERATOR


(ITO) to book each individual element of the tour itinerary, such
as accommodation and tours.

The inbound tour operator contacts individual LOCAL TOUR


OPERATORS to book accommodation and tours directly.
The following constitutes the elements of distribution channels.

1. Agents and brokers – act as principal intermediaries without taking ownership of the
product offering. They mainly aim to bring seller and buyer together, and in turn,
negotiates purchases, sales, or both.
2. Middlemen – are independent business firms that operate as a link between
producers and ultimate consumers and organizational buyers.
3. Merchants – act in a similar way to agents, but take ownership as well
4. Distributors or dealers – offer value through services associated with stocking or
selling inventory, credit and after-sales service, and their prime duty is to distribute
product
5. Franchisees – hold a contract to supply and market a product as per the requirements
of the franchisor
6. Wholesalers – stocks goods before the next level of distribution and takes both legal
title and physical possession of the goods.
7. Retailers – their responsibility s to sell directly to the consumers.
8. Infomediaries – Internet based intermediaries, their primary task is to provide
information
9. e-mediaries – represents a range of intermediaries present on;ine who engage in one
or more tasks of the intermediaries.

One-Level (Direct) Distribution Channels


 Simplest form of distribution, no intermediary between supplier and customer
 Most tourism suppliers utilize one-level distribution channels
 Purchase directly from the supplier
 World Wide Web is increasing the direct availability of information and purchase
 Airlines encouraging the use of the Web and ticketless travel
Two-Level Distribution Channels
 Intermediary between tourism supplier and tourist
 Most common form of tourism supplier
 Travel agencies are the department stores of the travel industry
 Improving service delivery through cooperative systems
Global distribution system (GDS)
Computer reservation system (CRS)

Three-Level Distribution Channels


 Add another level of intermediary such as tour operators to low-level channel
 Some travel agencies have entered tour packaging business
 Tours
A package of two or more tourism services priced together
Four primary forms of tours
Independent
Foreign/domestic independent
Hosted
Escorted
 Tour Operators
Purchase tourism services in bulk and then mark up the price and resell in packaged
form
Plan, prepare, market and often operate vacation tours
Also termed tour packager or tour wholesaler
Many financial risks in the tour packaging business
Receptive service operator is local company that handles group’s needs while in its
location
 Consolidators and Travel Clubs
Consolidators buy excess airline capacity and resell at discounted prices.
 Travel clubs perform similar function for their members plus offer discounts on other
tourism services Meeting Planners
Professionals employed by corporations, associations, etc. to organize all the details
entailed in meetings
Meeting planner must balance meeting costs with meeting attendee desires

Reference:
https://www.tourismcouncilwa.com.au/tourism-distribution
https://wikieducator.org/images/a/ae/Tourism_Distribution.pdf

ASSESSMENT:

Conceptual Activity.
Draw the Traditional Travel Distribution Channel

Quiz. Identify the following.

1. They act as principal intermediaries without taking ownership of the product offering.
They mainly aim to bring seller and buyer together, and in turn, negotiates purchases,
sales, or both. Agents and brokers
2. These are independent business firms that operate as a link between producers and
ultimate consumers and organizational buyers. Middlemen
3. They act in a similar way to agents, but take ownership as well Merchants
4. They offer value through services associated with stocking or selling inventory, credit
and after-sales service, and their prime duty is to distribute product Distributors or
dealers
5. They hold a contract to supply and market a product as per the requirements of the
franchisor Franchisees
6. These simplest form of distribution, no intermediary between supplier and customer.
Direct Distribution Channel
7. They purchase tourism services in bulk and then mark up the price and resell in
packaged form. Tour Operators
8. They buy excess airline capacity and resell at discounted prices. Consolidators
Most common form of tourism supplier. Two-Level Distribution Channels
9. These Internet based intermediaries, their primary task is to provide information.
Infomediaries
10. This represents a range of intermediaries present online who engage in one or more
tasks of the intermediaries. e-mediaries

Prepared by: Noted by:

MARY ANN B. BUGA EMMYLOU PALACIO-NOEL,MBA


Faculty Member Academic Program Head (TM)

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