Learning Objectives: Chapter 13 The Distribution Mix and the Travel Trade

1. Learning Objectives: Chapter 13The Distribution Mix and the Travel Trade • Define the terms distribution mix and travel trade. • Explain why the distribution mixes in the hospitality and travel industry are different from those in other industries. • List the major travel trade intermediaries. • Explain the roles played by each of the major travel trade intermediaries. • Identify the major online travel services and the customer benefits in using them. • List the steps involved in marketing to the travel trade.

2. The Distribution Mix and the Travel Trade: Definitions • Distribution mix: the combination of direct and indirect distribution channels that a hospitality and travel organization uses to make customers aware of, to reserve, and to deliver its services. • Travel trade: a term commonly used in the hospitality and travel industry to describe all intermediaries.

3. Distribution Mixes in Hospitality and Travel are Different • Services are intangible. • There is no physical distribution system. • There are a variety of unique intermediaries in the hospitality and travel industry (e.g., travel agents and tour operators).

4. The Distribution Mix Two main components: • Direct distribution: the organization assumes total responsibility for promoting, reserving, and providing services to customers. • Indirect distribution: part of the responsibility for promoting, reserving, and providing services to customers is given to one or more other hospitality and travel organization.

5. The Major Travel Trade Intermediaries • Retail travel agents. • Tour wholesalers and operators. • Corporate travel managers and agencies. • Incentive travel planners. • Convention/meeting planners.

6. RETAIL TRAVEL AGENCY Business that sells travel related products and services, particularly package tours, to end-user customers on behalf of third party travel suppliers, such as airlines, hotels, tour companies, and cruise lines. In addition to dealing with ordinary tourists, most travel agents have a special department devoted to travel arrangements for business travellers Rely heavily on Computer Reservation System (CRS) IATA for those who issue their own tickets, ATOL for those who order tickets in, ABTA for those who sell package holidays on behalf of a tour company.

7. Retail travel agency Global Distribution System (GDS)-to provide up to the minute detailed data on tens of thousands of flight, hotel, and car rental vacancies Sabre Amadeus Worldspan dynamic packaging toolsto provide fully bonded (full financial protection) travel at prices equal to or lower than a member of the public can book online.

8. Roles Played by Travel Trade Intermediaries Roles of retail travel agents • Expanding the distribution network for suppliers, carriers, and other intermediaries. • Retailing the services of suppliers, carriers, and other intermediaries at locations convenient for travelers (primary). • Providing specialized, knowledgeable advice to travelers on destinations, prices, facilities, schedules, and services (primary).

9. TOUR WHOLESALERS & OPERATOR middleman between the manufacturer and retailer Typically combines travel components to create a holiday. Plan, prepare, market and administer travel packages Normally do not sell directly to end consumer Wholesalers sell their packages (to the consumer) through retail travel agents, not to them. In some cases tour wholesalers may sell direct to the public, generally through their own retail travel agency outlets.

10. Tour Wholesaler & Operator A tour wholesaler decides what type of "tour packages" would appeal to travellers, package the services accordingly and sell them. Packaged tours are made attractive to potential travellers through lower prices than what travellers would pay if purchasing directly from the supplier In some instances a tour wholesaler secures large blocks of advance reservations on airlines and for ground services such as hotels and sightseeing tours.

11. WHAT A TOUR WHOLESALER DOES FOR THE OPERATOR A tour wholesaler links the various components of a tour or holiday to a particular destination(i.e. transport, accommodation, sightseeing, transfers etc.) and puts them together as a total package. A tour wholesaler then designs a brochure topromote the package(s) and distributes it for sale. A tour wholesaler supports the brochure with:- An industry launch on its release Travel agency familiarisations (to enable its "sales force" to experience first hand the product) Journalist familiarisation tours (to gain PR and editorial exposure) Consumer and travel trade advertising. A sales representative force to call on travel agents.

12. Roles Played by Travel Trade Intermediaries-CONT Role of tour wholesalers and operators • Expanding the distribution network for suppliers, carriers, and other intermediaries. • Assembling vacation packages by bringing together an array of destinations and the services of suppliers and carriers at all-inclusive prices (primary). • Operating and guiding group tours (primary for tour operators).

13. CORPORATE TRAVEL MANAGERS Act as procurement centre for all business travel activities Objectives Cut business travel expenses Provide better services to business travellers Increase corporate purchasing power Incentive travel planners A specialised tour wholesale targeting businesses for travel as motivational tool

14. Roles Played by Travel Trade Intermediaries-CONT Corporate travel managers and agencies • Expanding the distribution network for suppliers, carriers, and other intermediaries at locations convenient for travelers. • Coordinating corporate travel arrangements to maximize the efficiency of corporations’ travel expenditures (primary).

15. Roles Played by Travel Trade Intermediaries-CONT Incentive travel planners • Expanding the distribution network for suppliers, carriers, and other intermediaries at locations convenient for travelers. • Tailor-making incentive travel trips for corporations and others (primary).

16. Roles Played by Travel Trade Intermediaries-CONT Convention/meeting planners • Expanding the distribution network for suppliers, carriers, and other intermediaries at locations convenient for travelers. • Organizing and coordinating conventions, conferences, and meetings for associations, corporations, and other organizations (primary).

17. The Major Online Travel Services • AOL Travel Channel • Expedia • Internet Travel Network • Travelocity • Yahoo! Travel • Priceline

18. Customer Benefits from Using Online Travel Services • Ability to self-book online • Assistance in planning travel trips • Availability of online pricing comparisons for hospitality and travel services • Convenience of accessing travel information at home or work • Immediate confirmation of travel bookings • Instant access to travel information • Potential of securing lower prices on hospitality and travel services

19. Steps Involved in Marketing to the Travel Trade • Suppliers, carriers, and destination areas must treat travel trade intermediaries as a separate target market or markets. Steps in travel trade marketing: • Research and select trade segments. • Decide on positioning approach and marketing objectives. • Establish a promotional mix for travel trade intermediaries.

20. Promotional Mix for Travel Trade Intermediaries A separate promotional mix must be developed for the travel trade consisting of; • Trade advertising. • Directories and computerized data bases. • Trade promotions. • Personal and telephone selling. • Merchandising and brochures. • Public relations and publicity. • Cooperative marketing (partnerships).