16. Intermediaries IN Tourism PDF

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. Intermediaries IN Tourism...

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16.INTERMEDIARIES IN TOURISM ● ●

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Intermediaries (Cooper, 2012) The distribution process is achieved through channels- the means by which the tourism product is delivered to the consumer The distribution channel in tourism can be complex, involving several organisations and stages

Typically the channel will involve: ○ ○ ○ ○

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Tourism Distribution Channels ○

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A tourism supplier such as an airline or hotel A tour operator who buys in bulk and packages together elements of supply A travel agent at the point of sale The Customer An operating structure, system of linkages of various combinations of travel organisations through which a producer describes and confirms travel arrangements to the buyer. (Goeldner & Ritchie, 2009:182)

Structure of distribution channels – Cooper et al (2008)

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The Nature of Intermediation ○

Benefits ■ Producers are able to sell in bulk and so transfer risk to intermediaries ■ Producers can reduce promotion costs by focusing on the travel trade, rather than consumer promotion, which is more expensive ■ Consumers can avoid search and transactions costs ■ Consumers can benefit from the specialist knowledge of intermediaries, their market power

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Distribution channels Disadvantages ○ Use of intermediaries by producers will result in the loss of margins and their degree of marketing control and influence over the process of distribution ○ With online booking producers may eliminate the need for intermediaries.

The basis of power in the distribution channel INTERMEDIARIES ○

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and the resulting lower cost of products Destinations can benefit from the marketing, and international marketing, network of many intermediaries

Intermediaries include tour operators who bundle together two or more elements of supply and sell it to the public. Suppliers and tour operators are known as ‘principals’. Principals use a second type of ‘intermediary’ to access the market – travel agents Agents are found on the high street and in cyberspace and are paid commission for sales.

Roles of intermediaries in distribution channels ○ ○ ○ ○

Making markets by matching buyers and sellers Transferring risk of a supplier such as a hotel to a tour operator who purchases their some bedstock in bulk Helping improve the competitiveness of destinations who benefit from the extensive network of the intermediary ing...