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Chapter 7

HTM 2454 Chapter Notes - Chapter 7: Commonwealth Of Nations, Sports Equipment, Adventure Travel

Hospitality and Tourism Management
Course Code
HTM 2454
Mc Gehee

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Chapter 7: Organizations in the distribution process
Distribution Channels
o Similar to those of other basic industries such as agriculture or manufacturing
o Their products flow to the ultimate consumer through wholesalers, distributors
and middlemen
o Tourism produces mainly services that are intangible
o There is no physical product that can be held in inventory to flow from one sales
intermediary to another
o Instead the product, ex. a hotel room that is available on a certain day, which is
very temporal
o The travel industry landscape is constantly changing and nowhere is this more
true than in travel distribution
Powered by advances in technology
Tourism Operating Sectors
Tour Wholesalers (all 4 kinds)
Travel Agents
o A travel agency is a middleman- a business or person selling the travel industry’s
individual parts or a combination of the parts to the consumer
o A travel agent is an agent middleman, acting on behalf of the client, making
arrangements with suppliers of travel and receiving a commission from the
suppliers and or a fee from the client
o In legal terms, a travel agency is an agent of the principal- specifically,
transportation companies
The agency operates as a legally appointed agent, representing the
principal in a certain geographic area
The agency functions as a broker for the other suppliers
o A travel agent is an expert, knowledgeable in schedules, routing, lodging,
currency, pricing, regulations, destinations and other aspects
o Travel agent is a specialist and a counselor who saves a client time and money
o Travel agents exsist today but in smaller numbers
o Many are being replaced by online travel agencies, which provide info and let the
consumer make the booking
Expedia, Travelocity, orbitz, priceline
o Airlines reporting corporation
Endorsed by the international airlines travel agency network, or appointed
by Cruise Lines international association to do business
o Changing world of the Travel Agent
Travel agent reached its peak in 1997
Today travel agents charge fees for their services
They receive a lot of money from from cruises and tour packeges…
shifting their emphasis to leisure travel
A second major fact to TA decline is the internet
Airlines aggressively use e-commerce
By using online booking, airlines established direct relationships with
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The internet is a distribution channel of choice for airlines
Skilled agents are the best choice for complex travel arrangements
Dimensions of the travel agency business
o Data are available on travel agencies from American Society of Travel Agents
Also look at Travel Weekly
Top ten travel agencies (154)
Airlines reporting corporation no longer gives a true picture of the market
size since travel agencies became less reliant on selling airline tickets
o Agency size
Average ASTA has 8 FT, 3 PT and 12 independent contractors
o Business practices
Phone is number one way for agents to conduct business
Leisure products are 78% of sakes
Corporate sales are ¼
Agencies are specializing in leisure products and destinations
o Another large decrease in ARC agents is people going independent and being
o National Association of Career Travel Agents
The national trade association for independent travel agents, home
based, cruise oriented, outside sales and traditional agencies that
provides services and support to such professionals
Affiliate of the American Society of Travel Agents
o Agents will morph into sellers of more leisure travel services
o Favors high risk and complex transactions with travel agents
The impact of the Internet
o Travel Agents Vs. The Internet
To use the web, a person has to understand where to look and what
questions to ask or lots of time can be wasted
Specialty Channelers
Incentive Travel Firms
Pros and Cons of using Travel Agents (versus doing it yourself)
o Pros
Agents have superiod knowledge of the industry and are aware of various
Save time and achieve savings that more than cover the cost of the
service fee
Travel agents continue to manage the customer’s travel, serving as an
alert system, trouble shooter and customer advocate when supplier
problems occur
Personally know clients and how to serve them
o Cons
Internet can offer multiple price comparisons
Low prices can be found
Internet is winning the marketplace battle
Travel agent trends
find more resources at oneclass.com
find more resources at oneclass.com
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