‘The supply chain comprises the suppliers of all the goods and services that go into the delivery of tourism products to consumers. It includes all suppliers of goods and services whether or not they are directly contracted by tour operators or by their agents (incucing ground handlers) or suppliers (including accommodation providers). Tourism supply chains involve many components not just accommodation, transport and excursions, but also bers and restaurants, handicrafts, food production, waste disposal, and the intastructure that supports tourism in destinations. ‘Supply chains operate through business-o-business relatiorships, and supply chain management delivers sustainability performance improvements alongside financial performance, by working to improve the business operations of each supplier in the supply chain. Tour operators have ‘enormous influence over activities throughout the tourism supply chain, since they direct and infuence the volume of tourism, the tourist destinations and facilties that are used. Tour operalors can use this to hep in promoting general improvements in sustainability performance as part of good commercial practice.Serving Traveler’s Needs ®@ Thomas Cook is credited with being the first tourism intermediary, packaging tourism services and then selling the packages to tourists © To attract business, tourism suppliers must provide prospective customers with information on which they will base tourism choice decisions © There are many alternative ways to provide information and services to prospective guests © Three types of distribution channels can be used Three-Level Distribution Channels, continued ® Tour Operators @ Purchase tourism services in bulk and then mark up the price and resell in packaged form © Plan, prepare, market and often operate vacation tours Also termed tour packager or tour wholesaler = Many financial risks in the tour packaging business Receptive service operator is local company that handles group's needs while in its locationrmetwork stracture on tourism Ako a tour operator buy individual travel series or ‘example trangport and accommedation ffom tier 1 suppler (ich as atte and botek) and assembes them in to a singe package, which ate soll 0 the taveles dredly of Htrough avel agents, ‘Tee Werk! Tourism Organization (WTO 1975) states that “a distrbution chamel can be descibed ac 2 ghee conbintion of irermediaee who coopersic in the sab of a product"(Wanli# 1998) stwies dot ~ Ue prixfpal mk of imemmedaries & 1 bing buyers and seers togeter, either to cteate market where they previousty dif wx exit oF to mike exiting markets work more effcemly and thereby to expand musket size”, The tour operstors are the central lik inthe diseitution chain managing accommndsion luansportaion, caring ant emerainment providers. Tour opertors ate the most iniuentsl porter in the bursm industry (Buleanu 1999. Darbuon chanel are the most mportt took in the marketing, as they detemnine the ficiency and effectiveness of an ongnizaion (Crstopher 1991, Gator 1990, Siem ‘ud El-Ansary 1992), In the towism industry, the main disrbutors are the tour operators (hobsabes) and wavel agents (etbrs) who are aims © provide inbemation and sel We tourism packages w touts (Midleton 1994, Baer and Boom 1982, Webum 1987, Holbyay an! Robison 1995) ‘Anes and tourkts can eaable operators to manage sippy ant demand of tourism prodsct and services sharing by shiring information As tourism i a sessoral business of thw and high season ( Yneshus 2000) demand for caste coull help to avoid ncertainty. ‘The mun categoses of intnhers ina ditibutin chuanel ate (Babiute et al2005, Stundulescu 198m! Toguer etal. 1999). Tout service suppers by Tour operators, © Reta turin agencies“The barge tur operaton influence accommodation compants in tems of prise and prot rmurgits especilly in Euope where they control the acconmodation serice providers such as ledges, hotek and resort. Lange tow operators in Europe py a significant role in he intemational tourist market in sebeting tourit desinutious, accommndation and traneport providers baved on the ghbst ‘owist demand, The main reason why Wur operaiows have so rch come over des, hotels ant resons is to increase a bargaining power and contol of the marketing channel As tley can deiner muy tourists, they med a standardize fies and services in ‘cheaper cost which is matcling wih their main types of package, for instance summer sun, sas beach al Il tourism in Kerala ad eopécal shores, uly, each $C partner of the tourism distrdutin has diforent goak ant objectives ‘Tis may kead to tnve kinks of conics: frst pre stategy comic, second vetial iegration conlet, and thd operation contict (Bubalis 20000). A price siategy confi ‘occurs when a medium tcur opemtar tests w increase profis by enharing market share and capaciy. through offering cheaper Iklays packages, whie the hotels have few A. vertical tegration comfict takes phce when 1 Inge tour operstor develops ‘lgopoliic beluvir whikh decreas the arguing power of hoteh. Then at operation contct occurs When a smal hotel operaior fi! 10 Mul mies and reguations of offers the standard service requted by Ketala Tourism Development Board (KTDC), ‘Scam lange low operstors and medium sie tow operstors, though a vertcal iteration tiey had managed to offer fill SC tourism packages ffom transportation (chater ain) hnstel catering and recreation serves, and fey are call a supply chain kader2.62 VERTICAL INTEGRATION Vertes imegration & coordimtion between fines within a speciée busess processes Wwheress a coordimion needs imestnents, intemal inegration & a coondnation between parents within a specif business processes Researchers lave commented that a verical imegratin ithe tour industry has led 10 several benefin auch ar decrease trumaction cost, matiet to best destntions and gain met power (Bull 1995, Sica and Suber 1997) For exampk, a Thorson Travel Group in the United Kington and TUL, a European rmurkot eader and world’s krgst toursm company mamges 81 brands, owns 3700 faceming an agencies, 285 hetels ant resets, operaes 88 air planes, and mumges te Moliterarean regio, Thewsen 2004), SC information tools (ik in software such as ERP or EDI are useful collect, aniyses, and exchange of information ASCM integration could possbly assst a tour operator 0 respond quickly 10 towst weds, bwer cost improve quilty of sonice and addag move ake eg, GubBh shoppig cemer near the destnsiots and providing eattewe services ad isumnee to tourkt especialy during the age market (Cgolini al 2004), ‘The core competences and goals among the SC pamers iy towkm antusey are qute Uren, for instance, ensuring high qualty to the overill SC nawork needs very ferent objectives. High quaty for siines tusiess meas sofey, avoid cameletions of ight and avoid debys, uhoreat in how! high quiliy mess to offre good fod, Helly staff, and good fllies Thevefore, a stuvesfil tour operatar wil be one“Tour Operators inthe UK: Market Research Report The Tow Operaters market research ‘eport provides hey industry analysis and industry statistics, reawures market sie, analyses current ard future industry trends and shows market share for the indutrys largest companies. IIS World publiches the largest coledion of induety reports so you-can Se an industry suppl chain economic drivers and key bayer ad markets Industry Analysis & Industry Trends The past few years have ben challenging for the Tour Operatorsindustiy, which faced eficulties frm ‘the gobal fnancal css and fas in international tourist arvals, UK tourist departures and domestic consumer confderce, With signicart econemic urceraity, ewer UK residents booked tours overseas, while the rumber of foreign tourists booking UK tous also fel. A key theat tothe industry isthe Increasing tendency for people to plan, oxgarise and book their travels using the internet, thereby bypassing tational tour operates and deryng those sales. ‘Overall, UK tour operators have experienced a tough five yeas through 2032-13, as global economic pressures and increased employment uncertanty coftrbuted to greater industry voltlty. Aso, the Increasing prevalence of internet usage has allowed more adventurous customers to asemrle the Own tour packages independently of large operators, while the fancial criss that engulfed the dewdoped world removed alt of organi growth, ‘Over the past five years, industry revenue & estirated to have falen by an average of 1.3% per year, totaling £13 btlonin 2012-3. Vertical integration in the travel industry is when a company has control over other companies that are at different levels in the chain of distribution or in different sectors, for example: > TUI Travel UK owns Thomson and First Choice tour operating businesses, and the Thomson and First Choice travel agenc) ghamns (TUI UK is itself controlled by the German company TUI > Thomas Cook AG (a German group) owns the Thomas Cook and MyTravel tour operating companies (including Airtours), plus the Thomas Cook and Going Places chains of travel agenciesHorizontal integration is when a company owns or has control over a number of companies at the same level in the distribution chain or the same industry sector > For example, many tour operat now part of the ‘big two’ were originally independent companies, e.g. Neilson and Club 18-30 (now part of the Thomas Cook Group), and Something Special and the Holiday Cottages Group (now merged with Thomson) Characteristics of Tour Operator Firms in Chiangmai and Phuket Most tour operator firms in both provinces perform multifunction in their business: including, reserving hotel and air flight (same as the travel agent), develop and selling package tour to group tourist, and selling their own package tour to the individual tourists. The majority of them (91%) are owned by Thai, they mostly have registered capital less than 5 million THB (82%), and employ less than 10 stafts. This implies that most of them are small business enterprise. However, 59% of them have experience of conducting this business more than 5 years. Regarding to the their profitability rate, almost half of them are able to make profit more than 10% from the sale revenue.The Travel Agency Concept + Born after the industrial revolution * Travel became merchandised and in easy reach of an emerging working class * Cox and Kings and Thomas Cook were the pioneers of mass travel * Mass Travel— travel involving large number of peopleCox and Kings Considered the oldest travel company in history Richard Cox — founder of the agency, Cox & Co. worked for Gen. Lord Ligonier in 1740 He was rewarded the title of Military Agent Has successfully established business connections and went into partnership with Mr. Drummond (London Bank) are No) Retail travel agents sell holiday products to the public. They get 2 negotiated ‘commission from the tour operator on sales Some travel agents also organise specialist or group travel and will expect to receive approximately 10% commission on your gross rates for any business they send to you. There has been a huge reduction in the number of retail travel agents and the demise of non-specialist independent retailers due to the role of the intemet in distributing travel products* Online travel agencies = Expedia, — Voyages-sncf.com, = Travelocity, = Orbitz, — CheapTickets, — Priceline, Cheapoair, Hotwire.com. Expedia = WorldHotel-Link — Kayak.com = TripAdvisor — SideStep ‘Avove ey’ man fon 3 an pes av pe a SER on DRA aa Spe Conca we et busses. ey 8 ep 2 ‘Sccxnnans Aps:age eo tee a pUEhSe en 9 ple wks ohare al ura The elo Mae supe ane 3 fcnnt The pt veh rece beteen entrench ete yah eu pes natn sted get ee tbe coominon Inman utes staan companies tsetse ques be era 3 ene ap" Insane cntien stnes he sped ig commis iae genes Tee, ae agence oe cage perenne pean oa a fespersle Hovee se compares a ae senoe pera st te oe Naps campanes can fers eos bea they we 2 ‘mesa ps ata eae, ey woud ome oer ane so anaes aah The acess eS tom FONE. a ceapr ae “onmssensto Yr opens reer Wan gage mao an aan cna ton gansta er commerce pats are nn ee ye gE cans. TES can te ee on ese sre, ot Bs, ns ICAO tees cei ane sees ean on tears ocean te est pop a cerces -Avove ote goss et maria Yor ace Whe uum Hover. Ns ate abo! appeaes hess mae p:90 ey. on same 980 ‘ans seanes dv tO} Speman nh estar choose Net sy Tom Bes On Os arte Dk OM Bc A ava se cannes noncancer path he seri ot‘Dynamic packaging’ is when travellers use the internet to research their holidays and make their own travel arrangements direct with airlines, hotels, car hire companies, etc. It offers people greater flexibility than buying standard holidays from a travel agency and can sometimes work out cheaper as well > Traditionally, a person would visit their local travel agency to get advice and book their holiday. This, of course, still happens up and down the country, but travellers are increasingly using the internet to research their holidays and make their own bookings > Travel companies become integrated to improve their competitive position in the marketplace and increase their market share by having more control and benefiting from ‘economies of scale’, e.g. when a travel agency and tour operator are owned by the same organisation, company functions such as purchasing, finance and human resource management can be carried out by fewer staff, thereby reducing costTour operators try to maintain or even increase their market share in a number of ways: > Through mergers and takeovers — buying a competitor company that offers similar holidays will immediately increase market share and reduce competition > By reducing prices — this can increase business and is often used when new companies start up > Increasing promotion — can raise awareness of a tour operator and lead to increased sales > Improving quality — this can improve customer satisfaction and increase repeat business and recommendations to friends/family > Training staff — allows tour operators to improve customer serviceWhy do people travel at all? * Push Factors: Why go? — Needs and Wants — Self-fulfillment ~ To learn and to experience * Pull Factors: Why there? — Attractions in destination — Needs and wants fulfillment — Gains: real or perceived!Maslow’s needs and motivations Maslow states that there is a hierarchy in human needs. When a lower need is fulfilled, than a person is motivated to pursue a higher need. From low to high he distinguishes the following needs: Physiological: Relaxation (Rest, Sunlust) Safety: Security (Health) Belonging: Love (Togetherness, Roots) Esteem: Status (Recognition) * Self-Actualization: Be yourself (Self-discovery) Enhancement 1: To Know and Understand: Knowledge (Culture) Enhancement 2: Aesthetics: Beauty (Scenery) ©2011 Edutour BV 8Maslow’s Needs and Motivations Applied and Enhanced in Relation to Travel Aesthetics To know and understand Self-Actualisation Esteem Belonging Safety Physiological 2