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Tour Operating and Retailing

Tourism Distribution
– 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:

 DIRECTLY - You can target visitors directly through advertising,

brochure distribution, website, social media, client referrals and so on.

 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
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Components of Travel Services

I. Travel Agencies

i. A travel agency is a business that operates as the intermediary

between the travel industry (supplier) and the traveler
(purchaser). Part of the role of the travel agency is to market
prepackaged travel tours and holidays to potential travelers.
The agency can further function as a broker between the
traveler and hotels, car rentals, and tour companies. Travel
agencies can be small and privately owned or part of a larger
entity.

ii. A travel agent is the direct point of contact for a traveler who
is researching and intending to purchase packages and
experiences through an agency. Some travel agents operate at a
fixed address and others offer services both online and at a
bricks-and-mortar location. Travelers are then able to have
face-to-face conversations with their agents and also reach
them by phone or by email.

Types of Travel Agents

According to their scale of operation, travel agents may be of following
types:

1. Independents

These are generally local travel agents and they do not form die part of a
nation-wide chain. They usually have one retail unit. Those businessmen are
classified as retail travel agents who quote fares and rates, makes reservation,
arranges, travel documents and acts on behalf of tourism vendors. While they
cannot provide a wide choice to their customers, they develop a niche market.
Sometimes they may develop specific target groups to sell customized holiday
packages.

2. National Multiples

These are nation-wide chains with branches in the different regions of the
country. They design packages and sell them to the customers either directly,
or through 215 retail units, thus acting as marketing intermediaries. They can
offer discounts and other benefits by the virtue of their size and cater the mass
market.
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3. Regional Multiples

These agencies have a number of branches in one region - basically

performing the same functions at the National multiples but on a smaller scale.
They enjoy close ties with their customers.

4. Business Travel Agents

In the era of globalization, travel - both national and international, for business
purposes have become common. These travelers are on a well-planned
schedule, attending exhibitions, conferences, meetings and trade fairs and
often squeezing in a boat of sightseeing. The business travel agents arrange for
all this. Of course, in case of certain companies, the volume of business travel
may be so high that they have a separate in-house travel department to cater to
the business needs of their employees.

 Today, travelers have the option of researching and booking

everything they need online without the help of a travel agent. As
technology and the internet are increasingly being used to market
destinations, people can now choose to book tours with a particular
agency or agent, or they can be fully independent travelers (FITs),
creating their own itineraries.

II. Online Travel Agents (OTAs)

Increasing numbers of FITs are turning to online travel agents (OTAs),
companies that aggregate accommodations and transportation options and
allow users to choose one or many components of their trip based on price or
other incentives. Examples of OTAs include Booking.com, Expedia.ca,
Hotwire.com, and Kayak.com.

 Take a Closer Look: Expedia – The Future of Travel Report

Expedia is the largest online travel agency in the world. Formed in 1996,
Expedia Inc. now oversees a variety of online travel booking companies.
Together they provide travelers with the option to book flights, hotels, tours,
and transportation through mobile or desktop online functions.
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III. Tour Operators

A tour operator packages all or most of the components of an offered trip and
then sells them to the traveler. These packages can also be sold through retail
outlets or travel agencies. Tour operators work closely with hotels,
transportation providers, and attractions in order to purchase large volumes of
each component and package these at a better rate than the traveler could if
purchasing individually. Tour operators generally sell to the leisure market.

i. Inbound tour operators - These tour operators handle

incoming foreign tourists directly by providing various
ground services such as transfers, transportation,
accommodation, entertainment, sightseeing, shopping,
currency, documentation, insurance services etc. They
often collaborate with foreign tour operators. They
contribute valuable foreign exchange earnings.

ii. Outbound tour operators - These operators specialize

in designing and marketing multinational tours. They
generally sell package tour of foreign countries to the
216 people of his own country, but may sometimes
create customized tour packages.

iii. Ground operators - These operators provide various

services and arrangements at particular destination.
They are also called reception operators, destination
management companies or handling agents.

IV. Destination Marketing Organizations

Destination marketing organizations (DMOs) include national tourism
boards, state/provincial tourism offices, and community convention and visitor
bureaus around the world. DMOs promote “the long-term development and
marketing of a destination, focusing on convention sales, tourism marketing
and service”
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What Is A Retail Travel Agent?

– Retail travel agents sell travel services directly to customers and act on
their behalf to book and purchase holiday packages, travel,
accommodation, tours and so on. It is not feasible for small retail
travel agencies around the world to have specific information and up-
to-date rates for every tour operator in Western Australia. To source
this information they go to tour wholesalers who literally wholesale
tour products.

What Is A Tour Wholesaler?

– Retail travel agents sell travel services directly to customers and act on
their behalf to book and purchase holiday packages, travel,
accommodation, tours and so on. It is not feasible for small retail
travel agencies around the world to have specific information and up-
to-date rates for every tour operator in Western Australia. To source
this information they go to tour wholesalers who literally wholesale
tour products
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Functions of Travel Agents

– Design predefined packages and sell them to the customers

– Every step of booking tickets, on trains, aero planes or ships, arranging

for transfer and car hire is the next job of the travel agents

– In the event of cancellation of trains or flights, delays, loss of baggage

etc., The travel agency represents the client and it is their responsibility
to juggle around the tour schedule to make up for the delay and to
claim compensation.

– Organizing sightseeing tours, excursions and shopping trip

– Arrange foreign exchange

– Supply the customers with complete information regarding transport,

– transfers, accommodation , sightseeing, meals shopping as well as any

regional specialties

– Arranges for necessary documentation and insurance

Questionnaire:

1. It sell travel services directly to customers and act on

their behalf to book and purchase holiday packages, travel,
accommodation, tours and so on.

2. It is a business that operates as the intermediary

between the travel industry (supplier) and the traveler (purchaser).

3. This includes national tourism boards, state/provincial

tourism offices, and community convention and visitor bureaus around the
world.

4. They design packages and sell them to the customers

either directly, or through 215 retail units, thus acting as marketing
intermediaries.

5. These tour operators handle incoming foreign tourists

directly by providing various ground services such as transfers,
transportation, accommodation, entertainment, sightseeing, shopping,
currency, documentation, insurance services etc.