DISTRIBUTION

CHANNELS IN THE
TOURISM
INDUSTRY

DISTRIBUTION SYSTEM
A distribution system is theplace aspects of the
companys marketing mix. It provides adequate
framework for making a companys products or
servicesavailable to the consumers.
Distribution systems are often use to move the
customer to the product. A core nation of different
distribution channels makes up the distribution
system.an effective distribution system makes the
difference because a market share leader and company
struggling for survival.

Distribution channels are a set of the

independent organizations involved in
the process of making a product or
service available to the consumer or
business user ( Hudson 2008).

FACTORS THAT INCREASE ITS

IMPORTANCE
COMPETITION- there is a growth of
both local and international competitors.
GLOBALIZATION- with globalization
and the growth of foreign partnership,
systematic distribution networks need
to be developed to enhance competition

ELECTRONIC DISTRIBUTION
TECHNIQUES- the growth of technology
has given to international reservation
system which give consumer better access
to the products and services.
PERISHABILITY OF THE PRODUCTSthe concern on tourism products
perishable maybe addressed by easier
access to its purchased through the
availability of the contribution channels.

DISTRIBUTION CHANNELS AND ITS

FUNCTIONS

A distribution channel is a delivery

arrangement used by a supplier, carrier,
or destination marketing organization.

INFORMATION
Are exposed to the information about
what the market needs and wants.

MATCHING
Know what the product can do and what
the buyer needs.

NEGOTIATION
Represents the company to the
consumer during negotiations, they
equip to settle the pricing and the other
terms for purchase of products and
services.

FINANCING
Capital outlay of distribution channels
should cover the cost involved in the
actual distribution of the products.
RISK-TAKING
Comes with financial risks such as
inability to sell inventory at full margin,
losses etc.

THE ROLE OF THE INTERNET

The internet is becoming a highly
effective tool for hospitality and travel
companies.
Distributing travel products and services
are:
* Reservation, purchases and payments
can be made online.
* Companies are not subject to office

_It is able to access a wider market who

are money rich but time poor.
_It is able to queueing process or waiting
time.
_It save on labor cost.
_Product comparison and evaluation of
alternative can be facilitated using the
internet.

STATISTICS ON ONLINE
BOOKINGS
ONLINE TRAVELBOOKING
STATISTICS

DATA

Number of travel booking made on

the internet each year

143.3 MILLION

Percent of all travel reservations

made on the internet

57%

Percent on same day hotel

reservations made from a
smartphone

65%

INTERNET SOURCE OF HOTEL BANKING

SHARE OF
BOOKINGS

Website where distribution is operated and managed

by the brand

65.45%

Merchant website

19.5%

Opaque website

11.3%

Retail website

3.7%


ONLINE TRAVEL SALES REVENUE

Hotel reservations

39%

Air ticketing

37%

Packaged tour

17%

Corporate travel

4%

others

3%

MARKETING INTEMEDIARIES
Is a types of indirect distribution channels which
are independent organizations that helps distribute
products and services.
TRAVEL AGENTS
These are the most widely used marketing
intermediary in the tourism industry.
-Distributions and sales network
-reservation and ticketing
-information provision and travel counselling
design and individual itineraries.

TOUR OPERATORS AND

WHOLESALERS
These are the organizations that offer
package vacation tour to the general
public targeting and leisure market.
TRAVEL SPECIALIST
Are organization that focus on one or
more functions of the distribution
system

HOTEL SALES AND

REPRESENTATIVES
They sell hotel rooms, function rooms,
and hotel services in a particular market
area.
G0VERNMENT TOURIST
ASSOCIATION
National, regional and local tourism
agencies are excellence to bring

CONSORTIA
A consortium is a group of hospitality
organizations that is allied for the
benefits of the members.
RESERVATION SYSTEMS
Are entities that provide a central
reservation system in hotels.

GLOBAL DISTRIBUTION SYSTEM

(GDS)
System such as Amadeus and galileo
are computer reservation systems that
serve as product catalog for travel
agents.
CONCIERGES
The hotel front office staff are usually
the most frequently asked employees

CHANNEL CONFLICTS
Conflict may arise between channel
members when one member of the
distribution system perceives another to
be engaged in one behavior that may
hinder the other member from
achieving their goals.

SELECTING CHANNEL MEMBERS

Knowing the needs of the customers.
Attracting channel members.
Studying economic feasibility.
Maintaining control.

BUSINESS LOCATION AND ITS

IMPORTANCE
_Understand the marketing strategy and
target market of the company.
_Analyze the regional location and select
geographic market areas.
_Select the area within the chosen
graphic region taking into consideration
in demographic and psychographic
characteristics of the market in the area.

FRANCHISING
Is a method of doing business by
which franchise is granted the right to
engaged in offering, selling or
distributing goods or services under the
marketing format which is designed by
the franchisor.
The franshisor lend its name, branch
and reputation to the franchisee.