Chapter 19: Selling and Distributing Travel and Tourism

Question 1: When considering retail travel, what is meant by the terms disintermediation and reintermediation?

Answer Guide: The growing use of the Internet to purchase travel products direct from the provider has meant that consumers have begun to bypass intermediaries. The removal of travel agents (as well as tour operators in some cases) from the chain of distribution is termed disintermediation.

Specialist travel organizations (often online) have been established to support customers in purchasing various elements of their travel at their convenience. Such companies allow different elements to be purchased through one site, often providing discounts when more than one element is purchased. The growing inclusion of such businesses within the chain of distribution has been termed reintermediation.

Question 2: What factors have influenced the growth of dynamic packaging?

Answer Guide: By accessing the web sites of reliable suppliers, putting together a package of components that exactly meets a customer’s needs and adding a mark-up allowing them a reasonable level of profit for the expertise agents are fulfilling a new role – dynamic packaging.

This is driven by changes in the market place, as some customer segments seek to tailor different aspects of their holiday. As holidaymakers become more experienced, they may seek greater flexibility in the different elements of their holiday, as they become aware of the wider range of possibilities. Technology has also helped make this possible as real-time access to inventory allows agents to conveniently access products from a range of suppliers.

Question 3: What are the benefits of joining a consortium when establishing a new travel agency business?

Answer Guide: Benefits may include:

  • Better commission rates can be negotiated
  • Discounts for bulk purchase of agency materials are possible
  • Marketing efforts made by the consortium may be larger than any one individual business could afford.
  • The consortium can provide networking and training opportunities.