Organizations

1

• Organizations
• in the Distribution System

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
One-Level Distribution Channels

• Simplest straightforward, direct access
  to suppliers (Customer/Tourist Supplier)
• No intermediaries the more people
  involved, the more chance for problems
• Easy to deal directly with many suppliers
• Suppliers like direct no commissions to pay

4
Internet Technology

• Internet enables potential
  tourists to surf websites
  of destinations suppliers
• Take virtual tours of attractions properties
• Compare prices products
• Make reservations, select
  airline seats, etc.
• Has increased ease of one-level distribution
  channels, i.e. airline tix

5
2-Level Distribution Channels

• More complex now 3 moving parts
• Customer (tourist) travel agent supplier
• Has intermediary (middleman) travel agent
• Using travel agent has
  many advantages for both
  customers suppliers

6
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 products\services
• Many tourists now use Internet travel agencies
  Travelocity, Expedia, Orbitz
• But also Impersonal, inhuman, in cyberland

7
Commission Payments

• Travel agencies receive payment in form of
  commissions ( of sales) from suppliers
• TA act as sales offices (branch offices) for
  countless tourism suppliers
• But no money changes
  hands until sales made
• TA must work sell
  products to make money

8
Changes to Travel Agencies

• TAs no longer paid to process transactions
• Airlines lost huge, experienced sales force
• TAs developed new sources of revenue

9
Internet vs. Travel Agents

• Consumers have choice in buying travel products
• Internet is DC of choice for airline tix
• 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

10
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

11
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

12
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
• 3. CRS make airline reservations,
  serve as databases
  for tourism
  suppliers

13
TA 9 Types Characteristics

• 1. Independent
• 2. Agency chains (wholly owned)
• 3. Agency chains (franchised)
• 4. Consortium-affiliated agencies
• 5. Specialty agencies
• 6. Corporate Travel Agencies
  
• 7. Corporate travel departments
• 8. Home-based agencies
• 9. Internet agencies

14
3-Level Distribution Channels

• Most complex level
• Adds another intermediary
  that facilitates
• Tour operators
• CVB
• 3. Tourist travel agent TO/CVB - supplier
• Tour Operators do not get commissions
• TO markup prices of products they resell
• Elements of Tour Packages

15
Common Tour Packages

• Independent tour
• Hosted tour
• Escorted tour
• FIT (foreign independent travel)
• DIT (domestic independent travel)

16
Independent Tour

• Un-hosted tour
• Least structured package
• Tourist sets own itinerary
• Itinerary schedule of times places to visit

17
Hosted Tour

• Includes tourism supplier elements
  provided in an independent
  tour maybe even more
• But also services of local host
• Host gives advice and makes
  special arrangements for you

18
Escorted Tour

• Most structured type of tour with most complete
  set of supplier elements
• All-inclusive tour provides
  almost everything, i.e. meals
• Begins/ends on fixed dates

19
FIT (Foreign Independent Travel)

• Customized tour
• Outbound to foreign countries
• Includes some tourism supplier
  elements, depending on tourists requests
• Often more expensive

20
DIT (Domestic Independent Travel)

• Similar to FIT
• Except travels within your home country

21
5 Reasons to Buy Tour Package

• 1. Convenience
• 2. One-stop shopping
• 3. Cost savings
• 4. Special treatment
• 5. Worry-free

22
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

23
Tour Operators Risks

• TO are unregulated
• No entry requirements for
• Very susceptible to perishability
• Must commit to place,
  products, prices in advance

24
Tour Operators Risks

• Currency fluctuations
• Natural disasters
• Changing consumer tastes
• Security Safety Concerns

25
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

26
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

27
Meeting Planners

• AKA event planners convention planners
• MP are intermediaries in meetings industry
• MP are employed primarily by
• Corporations
• Associations
• 4. Main function detailed planning of business
  corporate meetings, educational meetings,
  association meetings, conventions, trade shows,
  sales meetings, executive retreats, tournaments,
  reunions, incentive travel, etc.

28
Meeting Planners Decisions

• How many people will attend
• Where to host the meeting (which destination)
• Types of transportation needed
• FB functions needed
• Support services needed
• Facilities, equipment,
  supplies needed
• Ancillary activities

29
Dual Distribution

• Suppliers often use more than one distribution
  channel in their marketing efforts
• This is called dual distribution

30
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

31
Familiarization Trips

• AKA fam trip, fam tour,
  inspection tour,
  educational tour
• For tourism intermediaries journalists
• To educate them on destination
  supplier products
  services
• They visit destination attractions suppliers
• Goal increased business from target markets
• Uses in-kind contributions from suppliers, so
  cost is minimal to all concerned great ROI!
• Organizer NTO, airline, resort, tour operator,..

32
Personal Selling

• Creates customer satisfaction
• Cultivates customer relationships
• Missionary sales people call on travel agencies,
  etc., to provide brochures, solicit business,
  answer questions, and educate about company
  products
• Effective salespeople are
• Likeable
• Dependable
• Honest