Middlemen are intermediaries between consumers and suppliers.

Tourism industry has been traditionally characterised by its use of intermediaries.

Various middlemen that are included in the travel and tourism industry are travel agencies, travel clubs, hotel marketing and booking schemes, incentive travel organisations, sales representatives, computerised reservation system (CRS), global distribution system (GDS) etc.

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  

• Customer (tourist) – middlemen – supplier

• Using middlemen has many advantages for both customers & suppliers

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

 

Internet vs. Travel Agents  

• Consumers have choice in buying travel products

• 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  

 

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  

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

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 • CRS make airline reservations,& serve as

databases for tourism suppliers

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: • Planning , Sales and reservations , Representatives

/guides • They organise and put together package trips and

holidays.

 

• Reasons to Buy Tour Package 

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

 

 Tour Operators Risks 

• TO are unregulated • Very susceptible to perishability • Must commit to place, products, & prices in

advance  • Currency fluctuations: • Natural disasters: • Changing consumer tastes: • Security & Safety Concerns

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

 

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

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