Video #24 Tourism Distribution (12 narrated slides, 9:18)
Channel: Stan McGahey
Date: 07/09/2015

URL: https://youtu.be/AzdudvBftm0
S-01: Welcome to video #24 in my series of presentations that attempt to “demystify tourism”.  I’m Dr. Stan McGahey, the creator and narrator. The content is based on my experiences worldwide in more than 80 countries on 6 continents.  
S-02: Because tourists make advanced reservations, and prepay for many of the major products they consume during their travels, they utilize various components of tourism’s distribution system. Tourism products are scattered worldwide in businesses, both large and small, using many systems, languages, and currencies. Tourism’s distribution system ranges from direct sales at ticket counters and branch offices, to intermediaries and middlemen located online or in major cities, destinations, and gateways. 
S-03: Tourism’s distribution channel has 3 levels. The simplest is level-1. Tourists buys products directly from suppliers. Levels 2 and 3 are indirect. Level-2 distribution is going through a travel agency, either online or in an office. Level-3 is using a travel agency and a tour operator or event planner.  
S-04: A typical retail travel agency represents companies in all 4 operating sectors. Tourists purchase many products online, but agencies add value via knowledge and experience, access to discounts, and ability to bundle products into money-saving packages. They also have the power to help solve problems or seek reimbursement.   
S-05: Travel agencies vary per ownership, market, and focus. They can be individually-owned, part of a chain or franchise, or an independent member of a consortium. They can be a brick and mortar office, online, or home-based. They can serve all travelers, or specialize, such as a cruise-only.  Most agencies serve both pleasure and business travelers. Some specialize in corporate travel.  Agency staff are called travel agents, consultants, or counselors.
S-06: Tour operators are also known as tour companies, packagers, and wholesalers.  They plan itineraries and arrange its components.  Some specialize in a destination, such as Hawaii, or a special interest, such as pilgrimages, and incentive houses specialize in motivational travel.  Most offer itineraries to various destinations with sights and activities of interest.  
S-07: Some tour operators are departments of airlines or travel agencies, but most are independent businesses. As tourists gain more experience, tour operators evolve to serve their needs. Some people want to travel on their own but want a package tour with basic components, such as flights and lodging. Others want a customized tour with a specific itinerary on specific dates they will do on their own or with contracted guides as needed. Hosted tours provide similar arrangements and independence on a set itinerary with a host or guide to help at major destinations. Escorted tours are the most elaborate and expensive. They are group tours with a set itinerary, many components, and a tour guide.   
S-08: Receptive operators AKA inbound operators, local operators, and ground handlers. It is not practical for tour operators to open offices at each destination on their itineraries, so they use receptive tour operators to handle details.  RTOs are experts in local culture, language, law, business practices, and the tourism industry.  Their duties include contracting local transportation, sightseeing and event tickets, hotels, meals, and guides, as well as monitoring the tour quality and suggesting improvements.
S-09: Event planners arrange various events for people, organizations, associations, and companies. They create a schedule of activities based on a central theme or purpose at a specific destination and venue. Event planners arrange flights, hotels, meals, entertainment, and ancillary events, such as sightseeing, golf tournaments, and pre- and post-event tours, so they work with all 4 operating sectors and DMOs.  
S-10: In the highly-competitive, widespread tourism industry, it pays to have multiple distribution outlets. While dual distribution means 2, in tourism it means more than 1.  Today tourism’s dual distribution is online and brick and mortar, but each has numerous outlets that continue to grow. 
S-11: Keeping track of airline seat inventory and making reservations on multiple airlines throughout the world is a complex task.  A Computer Reservation System (CRS) does that. Add in access to hotels, cruises, trains, car rentals, and other tourism products and you have a Global Distribution System (GDS).  Travel agencies utilize both. Tourists enjoy access to tourism products via company web sites, apps, and online distributors.  
S-12: Tourism suppliers utilize many distribution channels, especially online.  Travel agencies are the big box stores of the tourism industry, where customers buy virtually anything, while tour operators are the boutique shops that offer specialized products.  Now I invite you to watch Video #24: Tourism Research.  Thank you!