eINTERMEDIARIES

A. Karnchana Phakpho
DEFINITION OF TERMS
Firm or a person who acts as a mediator on a link between
parties to a business deal, investment decision, negotiation
etc. Intermediaries usually specialize in specific areas, and
serve as a conduit for market and other types of information.
They are also called the “middleman”. In tourism for example
intermediaries are people or businesses that link the tour
package with the tourist..
OTHER DEFINITION OF INTERMEDIARIES?

To transform goods and services from a form that

consumers do not want into a product that they do
want. Principal role is to bring buyers and sellers
together. Inserted themselves between providers
and customers.
Tour Operator
A tour operator typically combines tour and travel components to provide a
holiday. The most common example of a tour operator’s package would include a
hotel, a transfer from the airport, a specific activity and possibly a flight. Niche tour
operators may specialise in specific destinations, e.g. Italy, India, UK, activities
and experiences, e.g. skiing, music trips, special interest tours, or a combination of
both. For profit, tour operators usually negotiate net rates with suppliers and then
add their own margins onto the package on a percentage or per passenger basis.
★ PRODUCERS
❏ Able to sell products in bulk
❏ Reduce promotional costs
★ CONSUMERS
❏ Avoid search and transaction costs
❏ Gain from knowledge of the specialists
❏ Gain from lower prices
★ DESTINATION
❏ International marketing networking
As agents sell packages on behalf of tour operators financial protection is generally
not required as the consumer’s contract is direct with the financially protected tour
operator. However, many travel agents now wish to provide financial protection to
provide their customers with an added level of protection and piece of mind.
WHAT IS A TOURISM DISTRIBUTION CHANNEL?

The tourism channel of distribution is an operating

structure, system, or linkage of various combinations
of organizations through which a producer of travel
products describes, sells, or confirms travel
arrangements to the buyer.
TOURISM DISTRIBUTION CHANNEL TWO WAYS:

•DIRECTLY - through advertising, brochure distribution, website, social media,

client referrals and so on.
•INDIRECTLY - through a third party (indirectly) by using tourism distribution
channels such as retail travel agents, wholesalers and inbound tour operators.
TOURISM DISTRIBUTION CHANNEL EXAMPLES:

➔ A TOURIST has seen footage of beautiful Western Australia on TV and also heard about it
from his friends. He decides to find out more.
➔ A tourist visits his local RETAIL TRAVEL AGENT to enquire about Western Australia, and
ends up booking an eight-week adventure including accommodation.
➔ A travel agent plans a comprehensive West Australian itinerary through the brochure of a
TOUR WHOLESALER and then proceeds to book all tour operations through them.
➔ The tour wholesaler contacts the INBOUND TOUR OPERATOR (ITO) to book each individual
element of the tour itinerary, such as accommodation and tours.
➔ The inbound tour operator contacts individual LOCAL TOUR OPERATORS to book
accommodation and tours directly.
THE TOUR
OPERATOR
➔ A tour operator will organize
package tour together and offer
them for sale to the public either
through the medium of a brochure,
leaflet or advertisement, or using
ICT to display its offering.
THE TOUR
➔ For a tour operator to offer a
package also known as an “inclusive
OPERATOR
tour”, it will normally have to have
at least two elements which are
offered for sale at the inclusive sale
price and will involve a stay of more
than 24 hours in overnight
accommodations?
★ Normally includes:
★ Transportation
★ Accommodation
★ Meals
★ Entertainment INCLUSIVE TOUR
★ Attractions
★ Sightseeing
★ Activities
● Success of a tour operator depends
on its ability to buy its product in
bulk at a much lower price
● Compared to direct buying from THE NATURE OF THE
customers Such packaging gives BUSINESS OF TOUR
value for money to the customers OPERATION
 1.Tour operators fulfill a major role in
the tourism sector as they allow the
different tourism sectors to sell their
capacity in advance – often a long time
in advance as contracts are drawn up a
THE BUSINESS year prior to tourists using
OF TOUR accommodation or services
2.The tour operator connects together
OPERATION with all the delivered services to
negotiate contracts and deals which will
allow a holiday to be sold and be
delivered on the ground.
 3. Tour operators traditionally have
provided a guaranteed level of sales
which allowed principals to fix their
costs in advance and allow the operators
to achieve economies of scale by giving
THE BUSINESS them heavily discounted rates on their
OF TOUR purchase
4. The tour operator will often add a mark
OPERATION up on the product they are selling by
calculating all the input costs, their
overheads, profit margin and then
producing a price.
 RESPONSIBILITIES OF THE TOUR OPERATOR
● Providing general and specific advice about different travel destinations
● Drawing up complicated travel itineraries and ensuring that all the needs of
the customers are met
● Making arrangements for transport, accommodation, tours, and activities
● Contacting airlines, hotels, and ground transport companies such as coach
operators to make suitable arrangements
● Advising the customer about travel issues including required documentation
and financial matters, such as appropriate exchange rates
● Using the computer database to research information about hotel
accommodation fares and hotel ratings
 RESPONSIBILITIES OF THE TOUR OPERATOR

● Dealing with payments Performing general administration tasks

● Dealing with and documenting complaints in an efficient and diplomatic
manner
● Planning and advertising different promotions
● Making alternative arrangements for customers who have had their trips
interrupted by unforeseen issues
● Evaluating customers’ holidays and issuing appropriate feedback forms
● Every now and then, tour operators travel abroad for research purposes
● Making presentations to travel groups
● Creating and putting up displays at trade shows
Mission Tank // Kelly Capris
Mission Tank // Kelly Capris
 THE
TRAVEL
AGENCY
 TRAVEL AGENTS AND RETAILING

The travel agent’s role in tourism is to recognize and highlight that

tourism is:
● Intangible
● Perishable
● Dynamic
● Heterogenous
● Inseparable
Since the consumer is transported to the product, it is an unusual
form of distribution. There is a need for timely information on all
of the elements as outlined in the brochure
 IMPLICATIONS OF BUSINESS TRAVEL DISTRIBUTION

● The cost of setting up in business is relatively small compared to that of

other retail business
● Agents are only able to sell products made available by the tour operator
or principals, so in times of peak demand, they may be competing with
other agencies to find the products that the consumers wish to purchase.
● Agents are not seeking to dispose of products that they have already
purchased so they may display less brand loyalty towards a particular
product or company.
 TRAVEL AGENTS: ROLE AND ACTIVITIES

● Travel agents have no stock, acting in

behalf of the tour operator, and so
have little financial risk and do not
purchase products themselves.
● Travel agents receive a commission
for each sale and as such do not
become part of the contract of sale,
which is between the tour operator
and the consumer.
 TRAVEL AGENTS: ROLE AND ACTIVITIES

● Travel agents have no stock, acting in

behalf of the tour operator, and so
have little financial risk and do not
purchase products themselves.
● Travel agents receive a commission
for each sale and as such do not
become part of the contract of sale,
which is between the tour operator
and the consumer.
 THE TRAVEL AGENTS: TASKING
● Making reservations
● Planning itineraries
● Calculating fares and charges
● Producing tickets
● Advising clients
● Communicating with clients
● Maintaining accurate records on reservation
● Ensuring racks are stocked with supplies of brochures
● Acting as intermediary when clients complain
 BUSINESS TRAVEL AGENTS
● Individual business travel (corporate travel) involving business trips
related to employer needs.
● Occasional work activities – such as conferences, conventions, events and
incentive programs.
 ON LINE TRAVEL REVOLUTION
● The impact of ICTs on the travel agency sector is likely to see a
reconfiguration of the existing market into three segments. The market
will be categorized by:
1. Larger global players
2. New forms of travel agencies
3. Reduction of convention high street travel agents
 Your report should co5sists of the following
information:
1. Introduction (about your business, location, why
you decided to run this business)
2. Target Market
3. 7P’s (included menu)
4. SWOT Analysis
Final Project 40% 5. Online Marketing Strategies
6. AIDA Analysis
(20% for report, 5% for 7. Facebook Page Analysis
Facebook page post and 15% 7.1 Followers
for presentation - 5% 7.2 Top engagement posts
individual mark and 10% 7.3 others
group mark) 8. Competitor
9. Comparison between your business and 2 main
competitors
10. Limitations and Recommendations
11. Conclusion