Distribution

• Provides a continuous stream of costumer

• Can make the difference between being a market leader and struggling to survive

• Companies must develop increasingly complex distribution networks

  • Because in the current competitive environment, having a reservation center or a dedicated sales force is not enough

• "The basic function of distribution, as a marketing tool in ourism, is to increase the accessibility of potential consumers to information about our services and facilitate their ability to make advance reservations."

• Set of independent organizations involved in the process of making a product or service available to the consumer or to another company acting as a customer

• Delivers goods from the manufacturer to the consumer, reducing or eliminating time and place differences that

  separate items and services from those who want to use them

Information: Collect and distribute market studies about the company's environment.

Promotion: Develop and disseminate persuasive (verbreiten persuasiv) communications about an offer.

Contact: Seek and communicate with potential buyers.

Matching supply and demand: Shape and adjust the offer to the needs of the buyer.

Negotiation: Agree on the price and other terms of the offer so that ownership or possession can be transferred.

Assumption of risks: Undertake financial risks, such as those derived from the impossibility of selling the inventory in its entirety.

Channel 1: direct distribution channel, with no intermediary (Vermittler) levels. Involves a manufacturer selling directly to the consumer.

• Example:

  • A hotel sells rooms directly to guests via its own website.

  • A restaurant serves meals directly to customers.

  • An amusement park sells tickets directly at the entrance..

Channel 2: has one intermediary level. In consumer markets, this level is typically a retailer.

• Example: a tour operator, an airline, a hotel paying a commission to the travel agency selling its products.

Channel 3: has two intermediary levels. In the consumer market, typically involves a wholesaler and a retailer.

• Example: a vacation hotel or an airline selling capacity to a tour operator, who then sells it through travel agencies.

Channel 4: has three intermediary levels. The provider sells capacity in large quotas to another provider, responsible for selling to another wholesaler.

• Example: airlines and hotels selling capacity to a broker, who sells to a tour operator, who, in turn, sells to retail businesses.

From the manufacturer's perspective, the higher the number of intermediaries in the channel, the less control, greater complexity in management, and higher costs.

Every company must choose the intermediaries that will make up its distribution system, as well as the number of levels that such a system will have

• Travel agencies

• Online Travel Agencies (OTA)

• Tour Operators

• Global Distribution Systems (GDS)

• Tourist consortia

• Reservation centers or bed banks

• Brokers

• Companies that engage in mediating and organizing tourism-related services and products

• Can produce tourism products and services, mediate (vermitteln) in the sale of tourism products or services, and provide advice on such products.

• The revenue of a travel agency is generated through fees and commissions for the reservations it makes. The commission varies depending on the supplier, the type of product, and the agency's negotiation ability with the suppliers.

• Intermediary margins have decreased because of competition levels and the expansion of direct distribution

• Trend in this sector is: growth of large travel agency networks, such as Viajes el Corte Inglés, Viajes Ecuador, B the Travel Brand, etc.

• Major threat is selling products online directly to consumers. Faced with this situation, travel agencies are forced to redefine their role in the industry and offer advisory and informational services that no online company can provide.

• Travel agencies can be divided into

  • Receptive agencies

    • Handle the needs of tourists once they arrive at

    • Dealing with services such as tourist transfers, organizing excursions and currency exchange, and vehicle rentals.

  • Outbound agencies

    • Target customers who are purchasing individual tourism services or a package destined for a geographic area different from where the agency is located.

  • Receptive-outbound agencies:

    • engage in both activities.

• Represents a new category of operators entering the sector by leveraging (nutzen von) advantages provided by new information technologies.

• Examples include Expedia, Booking, etc.

• Wholesale travel agencies

• Large business groups formed through vertical and horizontal integration with retail travel agencies, airlines, accommodation companies, etc.

• Use their property for accommodation and/or transportation, saving part of those costs

• Create different brands to market the various products they offer

• Operate on an international scale

• Produce package tours, conducting research to stay aware of consumer needs. Will be distributed through retail travel agencies or directly to the public.

• They focus primarily on the holiday market and constitute the main distribution channel for most vacation hotels and independent charter companies.

• Computerized reservation systems that allow real-time access to booking major services such as flights, hotel rooms, and car rentals, as well as additional services like tourist attractions, train tickets, insurance, etc.

  • Currently, Amadeus, Sabre, and Travelport are the main Global Distribution Systems

• In addition allow management operations by incorporating programs for accounting, quality control, customer management, etc.

• Essential intermediary between airlines and travel agencies

  • Because it enables the airline to have global reach, with information about its flights reaching thousands of sales points worldwide

• For hotels, connecting to GDS helps open new markets

  • for many establishments, especially smaller ones, the costs of connecting to these systems can be too expensive

    • cost for a hotel consists of an annual fee and a fixed amount per booking.

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• Independent tourism companies or organizations that come together to market their products while reducing costs

• Mainly formed in the hotel sector

• Usually established among companies that do not directly compete with each other

• Membership in a consortium allows many individual hotel establishments to access international distribution.

• Examples include hotusa, leading hotels of the world, relais-chateaux, design hotels, etc.

• Intermediaries that any type of hotel can join in exchange for payment of a commission.

• These centers facilitate reservations by travel agencies.

• Additionally, through the reservation center, hotels gain access to agencies in all international markets that would not be easily accessible otherwise.

• Examples include utell international, hotelbeds, etc

• Primarily operate in the flight sector and partially in hospitality

• Business is based on in-depth knowledge of the industry and extensive contact

• Act as wholesale intermediaries, buying and reselling seats or simply connecting supply and demand

• Are usually tour operators

• Work stably with only a certain number of companies, so when they need specific hotel or flight seats, they turn to brokers