1. INTERMEDIAR
IES
PREPARED BY M
: a'am L

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”.

6. INCLUSIVE TOUR
Normally includes:
Accommodation

Transportation

Tour guide services

Transfers

Insurance

Food and Beverage

Destination / Attraction


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