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Chapter 6

Chapter 6. Travel and Tourism Intermediaries. Travel and Tourism Intermediaries. by Pro. Jin Ciping Bachelor of Science in Tourism Management (H54050020)

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Chapter 6

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  1. Chapter 6 Travel and Tourism Intermediaries

  2. Travel and Tourism Intermediaries by Pro. Jin Ciping Bachelor of Science in Tourism Management (H54050020) Nanchang University School of Economy and Management Department of Tourism Management

  3. Learning outcomes • Understand the functions of travel and tourism intermediaries • Be able to identify some of the major organizations

  4. Contents 1. INTRODUCTION 2. THE TRAVEL ORGANIZER ---A NEW CATEGORY OF INTEMEDIARY 3. DISINTERMEDIATION

  5. 1. INTRODUCTION ＊Intermediaries ＊Company integration

  6. Intermediaries (1) • Definition of intermediaries: Intermediaries, who ‘package’ ( put together ) several different sectoral components ( e.g. accommodation, transport and ancillary service . The tour operator is one of the largest categories of intermediaries. • The tour operator is one of the largest categories of intermediaries

  7. Intermediaries (2) • The largest tour operators in Europe: ﹡Thomson ﹡ First Choice ﹡ Airtour ﹡ TUI ﹡ Kuoni • These companies achieve financial economies of scale through the bulk purchase of aircraft seats and hotel rooms for a whole season.

  8. Intermediaries (3)Tour operators and customers Customers can benefit in two ways: • lower cost in a package holiday to the individual arrangement of the components • Purchase conveniently through a high street travel agent, by telephone or internet

  9. Company integration (1)

  10. Examples of integrated tourism companies and their brands

  11. Examples of integrated tourism companies and their brands Thomas Cook Group Airtour First Choice Thomson

  12. Vertical integration

  13. Horizontal integration

  14. Complementary integration

  15. Diagonal integration

  16. The advantage to a tour operator of strategic links with overseas-based companies With the globalization of economy, the tour operator should be linked strategically with the overseas-based company to strengthen its financial rooting to participate in the global tourism business competition in the following ways: 1. enlarge distribution channel --- offer a wider range of products 2. get supports in many fields , such as product promotion and sales, booking of aircraft seats and hotel rooms, etc. 3. It can get a promise that the advanced management arrives at it as soon as possible. ﹡technology help ﹡management help ﹡personnel training ﹡personnel help ﹡financial help

  17. 2. THE TRAVEL ORGANIZER --- A NEW CATEGORY OF INTEMEDIARY • It is a new tourist organization within the EU • Its definition: any individual or company who creates a package consisting of two or more components from accommodation, transport or other key tourist service as long as it is provided for a duration of 24 hours or overnight.

  18. The travel organizer • Its role: 1. This travel organizer was created due to protect consumers within the European Union. 2. It is a tour operator. Many of these organizers are not ‘outbound’ operators, merely arranging different elements within the country. • The Directive on Package Travel Regulations, implemented in Britain in 1993, is intended to provide greater financial protection for the consumer and makes the travel organizer contractually liable for the components of the package.

  19. 3.DISINTERMEDIATION ＊Definition ＊Disintermediation

  20. Definition Suppliers of travel products can eliminate the need to use an intermediary (agents) and sell products directly through the World Wide Web, Travelocity website, etc. Disintermediation starts the twenty-first century’s scale of business conducted over the internet.

  21. Disintermediation • Since the travel organizer appeared, disintermediation has began to have an impact. • Disintermediation is affecting both leisure and business ( corporate ) travel. • While disintermediation is clearly a thread to traditional travel agencies, the internet has also created opportunities for some small companies

  22. Disintermediation Disintermediation offers two benefits to business travelers: ▪ the elimination of the traditional agency, so cost is saved ( the travel products are sold not through the traditional agency, so the cost is saved ) ▪the ability to make their travel arrangements on the office computer

  23. Example • American Airlines-owned SABRE is a Global Distribution System, featuring data on hundreds of airlines, and is now available to the public through its Travelocity ‘website. The best trading period in 1999, for this operation, was ‘three straight weeks with $3 million each week in sales’ • Wu Yuan, Jiangxi sells its ecotourism products directly through the internet, attracting more and more tourists. So in 2005, it applied to sell through the World Wide Web.

  24. Topic discussion • How has Disintermediation changed the way of the supply of tourist products? • Talk about the company integrations, using examples

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