UNIT 1- Introduction to intermediary companies.

INTERMEDIARY COMPANIES
The term intermediaries can be any dealer who acts as a link in the chain of distribution between the company and its
customers. In the tourism industry, travel agents (wholesale, retail), tour operators… are considered the intermediaries.

HISTORY
Firs step. Supply Creation.
1600’s guidebooks and Grand Tour.
1841 Thomas Cook created the first package.
1920’s emerge of car industry and appearance of trips by car 1930’s emerge of airline companies.

Second Step. Supply Management.

1950’s evolution of airline companies.
1960’s tourism by car.

Third step. Sales & Distribution

1980’s Consolidation of Travel Agencies.
1990’s Websites of travel agencies.

Fourth step. Advance Discovery.

2000’s Online bookings and platforms such as Trivago, Kayak, Skyscanner…

INTERMEDIARY COMPANIES

INTERMEDIARY COMPANIES
BENEFITS
Producers. Are able to sell in bulk and so transfer risk to the tour operator and can reduce promotion costs.
Consumers:
• Can avoid search and costs purchasing an inclusive tour.
• Specialist knowledge.
• Lowe prices.
Destinations. In developing countries where budgets are limited, may benefit considerably from the international
marketing network of tour operators.
STRUCTURE OF DISTRIBUTION CHANNELS

INTERMEDIARY COMPANIES

INDIRECT DISTRIBUTION SYSTEM

• An indirect distribution system is one where there are one or more intermediaries between the supplier and the
customer. The most common intermediaries are discussed in the sections that follow.
• Retail travel agents. These are people who sell tours for wholesalers and operators in addition to hotel rooms, car
rentals, and transportation tickets.
• Tour operator or tour wholesalers. These are people who create a package that might include a variety of tourist
products such as transportation, lodging, meals, transfers, sightseeing… Wholesalers buy these products in bulk from
the supplier at a reduced price and make money by marking up the package. They can sell the package directly to
the tourist (tour operator) or through retailer (tour wholesaler).
• Specialty channelers. People who are intermediaries between the retailer and the customer are known as specialty
channelers. They may represent either the customer or the supplier and include incentive travel firms, meeting and
convention planners, association executives, and corporate travel offices. Incentive travel firms put together and sell
travel as an incentive to increase sales. They sell their ability to design, promote and manage incentive travel
programs. Other specialty channelers are employees who buy travel services at efficient costs for their organizations.

CONCEPTUAL MODELS OF THE PROCESS AND FACTORS INFLUENCING AGENTS’ DESTIANTIONS RECOMMENDATIONS

FROM TOMAS COOK (mid-1880s) to TRIPADVISOR

Disintermediation wake of the online travel (ICTs) Information Communication Technologies)
Reintermediation as the industry adjusts its strategic positioning and continues to reinvent itself.

RETAIL AGENT vs. TOUR OPERATOR/WHOLESALER

Tour Operator
• Tour operator plan arrange, sell, advertise, and operate tours.
• They deal with finer details of the trip like lodgings, meals, tickets…
• Their job ends when you return home from the vacation.
• Make contracts in bulk with hotels, airlines and ground transport companies and assemble them into inclusive tours
communicated to the market through print brochures or the internet.
Key concepts:
• Wholesaler.
• Inclusive tour.
• Easy to purchase, competitively priced and distributed through travel agents or via internet.

History
In Europe, pleasure travel started during the 1840s, when Thomas Cook (1808 – 1892) began conducting tour around
England and later around Europe. Nowadays, Thomas Cook is still one of the most important Tour Operators.

Inbound, outbound and receptive tour operators

Tour operators may be inbound, outbound or receptive.
• Inbound tour operator bring travelers into a country as a group or through individual tour packages (ex.: a package
from China to visit Barcelona).
• Outbound tour operators work within a country to take travelers to other countries (ex.: a package from Barcelona
to the United Kingdom).
• Receptive tour operators are not travel agents, and they do not operate the tours. They represent the various
products of tourism suppliers to tour operators in other markets in a business-to-business (B2B) relationship.
Receptive tour operators are key to selling packages to overseas markets and creating awareness around possible
products.
• Domestic operators tend to focus on particular markets.

Tour- operating cycle

1. Research
• Review market performance.
• Forecast market trends.
• Select and compare new and existing destinations.
• Determine market strategy.

2. Capacity planning
• Tour specifications
• Negotiate with and contract suppliers.

3. Financial evaluation.
4. Marketing.
5. Administration.
• Reservation, staff and accounting.

6. Tour management.

The power and influence of tour operators

A casa study: TUI Group
Tui has been recognized as a leader in sustainable tourism. We have worked hard to embed environmental and social
considerations into business operations, because we believe it is vital to our company’s future.

Travel Agent
A travel agency’s main function is to act as an agent, selling travel products and services on behalf of a supplier.
Consequently, unlike other retail businesses, they do not keep a stock in hand, unless they have pre-booked hotel rooms
and/or cabins on a cruise ship for a group travel event such as a wedding, honeymoon, or a group event.
Companies are required to be licensed as a travel agent.
• Travel agents sell and administrate tour packages.
• They help you to choose a suitable package.
• Their job ends when you start your vacation.
• They have less responsibility than tour operators.

6 companies disrupting the tourism industry (2017)

“The tours and activities segment is one of the largest segments in the travel industry today, second only to flights and
accommodations in terms of annual spending, both in the U.S. and abroad.” The reports reads.
• Getyourguide. GetYourGuide (geryouguide.com) is a travel startup that allows people to book activities, meals and
tours in different countries. GetYourGuide is headquartered in Berlin, Germany.
• Musement. Musement (musement.com) is a digital travel companion that lets travelers discover and book things to
do. Musement is headquartered in Milan, Italy.
• Fareharbor. FareHarbor (fareharbor.com) is an online booking and reservation management platform. FareHarbor
is headquartered in Denver, Colorado.
• Klook. Hong Kong-based travel startup that specializes in helping travelers book trip activities and logistics for when
they are overseas. Imagine walking down a road in Phuket, Thailand: instead of negotiation with an agent, you open
the app and you can book directly with the best price. Klook is headquartered in Hong Kong, China.
• Peek. The average consumer wants to book an activity in a few hour. Peek is headquartered in San Francisco.
California.
• Withlocals. Withlocarls (withlocals.com), a marketplace for personalized travel experiences. Withlocals is
headquartered In Eindhoven, The Netherlands.