HTT451

PRINCIPLES OF TOURISM
TOPIC 3: INTERMEDIARIES
 Where are we?
❑ Topic 1: Tourism in Perspectives
❑ Topic 2: Tourism Industry
❑ Topic 3: Intermediaries
❑ Topic 4: Travel Motivation
❑ Topic 5: Measuring and Forecasting Demand
❑ Topic 6: Tourism Policy: Structure, Content and Process
❑ Topic 7: Travel and Tourism Research
❑ Topic 8: Tourism Marketing
 Tourism Destination Model • History •
• Impacts
Behaviour
• Types • Issues &
• Academic Challenges
Theories • Research
• Measuring
Travel Agencies
& Tourists - A visitor
• Transportation Tourists Providers Tour Operators (domestic, inbound or
• Accommodation outbound) is classified as a
• Food &TrBeverages tourist (or overnight
• ATTRACTIONS Tourists visitor), if his/her trip
Tourism Organisations
• Indirect Suppliers & includes an overnight stay,
• International
Destinations • National or as a same-day visitor (or
Local Residents • Regional excursionist) otherwise
Destinations - the place
visited that is central to the
Government decision to take the trip
(Federal/State) Tourism - activity of visitors
• Law
• Policies Aminudin, N. (2022)
 Learning Outcomes
At the end of this topic, students should be able to:
a. Explain the importance of tourism intermediaries.
b. Explain the organizations involved in the tourism
distribution process.
 3.1 Why use intermediaries?
Perform a vital function for
tourism service suppliers by
INTERMEDIARIES making the suppliers’ services
available to large numbers of
potential customers in a
cost-effective way.
The intermediaries will receive in the
form of commissions once the services
have been sold or used.
 3.1 Why use intermediaries? (cont.)
Intermediaries in tourism distribution channel perform a variety of
value-adding functions:
1. Provide information
2. Sell business
✔ Buy in bulk
✔ Assemble services (one-stop center)
✔ Reservations & Confirmations
3. Bring in new & more business
✔ Contact potential & existing customers
✔ Encourage repeat use (reduces cost of acquiring new customers)
4. Marketing
✔ Market excess inventories
✔ Provide marketing info to tourism suppliers
3.2 Tourism distribution channels
One-level Two-level Three-level
Service Service Service
Provider Provider Provider
Tour operator
(e.g.,
Travel agent wholesaler)
(e.g., retailer)
Travel agent
(e.g., retailer)
Customer Customer Customer
Figure 4.1: Distribution Channels
 3.2 Tourism distribution channels (cont.)
One-Level (Direct) Distribution Channels
The simplest form of distribution,
providing travellers with direct access to
tourism suppliers.
Rely on online promotions and
advertising to encourage people to
purchase directly.
Traditional direct channels:
call centers
 3.2 Tourism distribution channels (cont.)
Two-Level Distribution Channels
More complex than Save the human and
one-level financial resources
Travel agents serve Simplify the travel
process for consumers
as intermediaries
& more efficient and
bringing suppliers effective for both
and customers consumers and
together suppliers
 3.2 Tourism distribution channels (cont.)
Three-Level Distribution Channels
Tour Operators
Defined as business organizations engaged in
planning, preparing, marketing, and, at times,
operating vacation tours.
Do not typically work Usually buy tourism
They buy large blocks of
on a commission basis products more than a
space (e.g.: airline seats, hotel
like travel agents, but year in advance, which
rooms, admission tickets, etc.)
on a markup basis relieves suppliers the
and services to be resold in the
worry about demand and
form of tours in packages
focus on providing
quality products
3.2 Tourism distribution channels (cont.)
Travel Agencies
Provide a common group of services called a “product mix”
The services: itinerary, transport reservations, tour packages, travel
insurance, event ticketing, and general travel information
Online travel agencies (OTA) has made the possible the servicing of
clients who are thousands of miles away
 3.2 Tourism distribution channels (cont.)
Travel Agency Types***
1. Independent agencies
2. Agency chains
3. Agency chain-franchises
4. Consortium affiliated agencies
5. Specialty agencies
6. Corporate travel agencies
7. Corporate travel department
8. Home-based agencies
9. Internet (online) agencies
*Refer to the additional notes uploaded on Google Drive for the explanation of each
of these agencies as well as the differences among these agencies.
* https://tourismteacher.com/types-of-travel-agents/
* ttps://www.youtube.com/watch?v=_JfK7qySzDM&t=70s
 3.2 Tourism distribution channels (cont.)
Travel Agents
Pre-Internet Role Post-Internet Role
Transactional focus Travel experience focus
Process transactions and concentrate on travel Manage overall travel experience
logistics
Book air, lodging, and car Book air, car, hotel and more.
Majority of compensation from suppliers Majority of compensation from markups and service fees
through commissions
Little or no follow-up with clients Concierge orientation:
• Door-to-door delivery of sports equipment and luggage
• Theatre tickets
• Restaurant reservations
• Golf tee times
• Spa treatments, etc.
 3.2 Tourism distribution channels (cont.)
The word tour: “a trip taken by a group of people who travel together and follow a
pre-planned itinerary” – the United States Tour Operator Association
Type of tour packages:
Factors: what’s included & excluded, presence of tour leader and/or tour guide and client’s level of
independence & freedom
Foreign independent
tours (FITs)/domestic Escorted tour
independent tours The most
Independent tour (DITs) Hosted tour structured tour
The least structured Customized tours type with the most
Provide a number complete elements
tour package. E.g.: including many of tourism supplier
Hotel “escape” elements needed. FITs for the package
elements and the price. A tour escort
featuring and DITs may be services of a local
accommodations, designed by a travel accompanies tour
host to give advice groups throughout
some meals and agent or by a
possibly a rental car wholesaler the tour.
 3.2 Tourism distribution channels (cont.)
Why would a traveler prefer to purchase a TOUR PACKAGE?
1. Convenience – Allows the decision-making process to be shortened so that the traveler
does not need to spend a lot of time deciding what to do and which supplier to use.
(often ground transfers, tipping, baggage handling are including)
2. One-stop shopping – The buying process is made easier; one payment covers the cost
and paperwork of two or more services.
3. Cost savings – In most cases, tour packages are less expensive than the cost if the
tourist were to purchase all of its elements separately. Tour wholesalers are able to take
advantage of volume discounts and usually pass on some of the cost savings to tour
purchases.
4. Special treatment – Because of the volume of the business tour wholesalers made to
suppliers, tour members tend to receive preferential treatment. (e.g.: special queue lines
or special parks from entrances.
5. Worry free – Travelling on a hosted or escorted tour, tourists are able to concentrate on
 3.2 Tourism distribution channels (cont.)
Consolidators and Travel Clubs
Consolidators buy excess inventory Travel clubs also provide an
of unsold airline tickets and then inexpensive and convenient outlet for
resell these tickets at discounted members to purchase unused seats at
prices (e.g. Global Travel Savings). the last minute (e.g. TravelClub.my)
Tourism Boards & Other Intermediaries
National tourism offices Tourist information Trade associations
centre
Tourists are always seeking general information about travel and locations from tourism boards.
National, state, provincial and local tourist offices can be accessed to obtain information and updates
on currency, transportation, restaurants, and more.
Familiarization trips (fam trips) – designed to promote tourism in general and acquaint
participants with the specific capabilities of tourism service suppliers. Fam trips are offered to
tourism intermediaries (government agencies, tour guides, tourism boards, tour operators, etc.)
 3.2 Tourism distribution channels (cont.)
ONLINE intermediaries in the tourism industry
Global Distribution System (GDS) Not covered in the
syllabus, but this is
just for your
Internet Distribution information (FYI)
System (IDS)
Watch this video for
Central Reservation a brief
System (CRS) understanding of
online intermediaries
Metasearch Engines https://www.youtube.
com/watch?v=qhyt9v
Social media gdJtw
 Summary and references
Topic 3 provides insights into:
a. The importance of tourism intermediaries.
b. The organizations involved in the tourism distribution
channels.
References:
1. Fletcher, J., Fyall, A., Gilbert, D., & Wanhill, S. (2017). Tourism: principles
and practice. UK: Pearson. ISBN: 9781292172361.
2. Goeldner, C. R., & Ritchie, B. (2011). Tourism. ISBN: 9781118071779.
End of Topic 3
CHRISTY BIDDER
HTT451/FPHP/UiTM SABAH
[email protected]