Like most industries, being a part of the tourism industry requires you to have industry specific knowledge to create and run a successful business. Understanding the distribution systems, recommended rates of commission, and the roles of various booking agents is essential for a successful business. This section has been designed to aid you in your understanding of the tourism industry.
To explain it simply, there are two ways of reaching potential customers:
DIRECTLY - You can target visitors directly through advertising, brochure distribution, websites, social media, client referrals and so on.
INDIRECTLY - Another way to promote your business is through a third party by using tourism distribution channels such as retail travel agents, wholesalers and inbound tour operators.
TRADITIONAL TOURISM DISTRIBUTION CHAIN
A TOURIST has seen footage of beautiful Western Australia on TV and also heard about it from his friends. They decide to find out more.
The tourist visits their local RETAIL TRAVEL AGENT to enquire about Western Australia, and ends up booking an eight-week adventure including accommodation.
The travel agent plans a comprehensive Western Australia itinerary through the brochure of a TOUR WHOLESALER and then proceeds to book all tour operations through them.
The tour wholesaler contacts the INBOUND TOUR OPERATOR (ITO) to book each individual element of the tour itinerary, such as accommodation and tours.
The inbound tour operator contacts individual LOCAL TOUR OPERATORS to book accommodation and tours directly.
WHAT IS A RETAIL TRAVEL AGENT?
Retail travel agents sell travel services directly to customers and act on their behalf to book and purchase holiday packages, travel, accommodation, tours and so on. It is not feasible for small retail travel agencies around the world to have specific information and up-to-date rates for every tour operator in Western Australia. To source this information they go to tour wholesalers who literally wholesale tour products.
- Retail agents are a one-stop travel shop as they can assist customers with several travel queries and make all bookings at the one location.
- Operators rarely deal directly with a retail travel agent; instead, they go through a tour wholesaler or an inbound tour operator.
- Local visitor centres can also be considered as retail agents.
WHAT IS A TOUR WHOLESALER?
Tour wholesalers operate in a very similar way to wholesalers in other industries. However, instead of supplying tangible products they supply touring options including travel, accommodation, and tours. A tour wholesaler supplies to retail travel agents, they DO NOT sell directly to consumers. Wholesalers link individual tourism operators with retailers. They consider which type of tour program would appeal to a particular market and promote that accordingly.
- Tour wholesalers package products together. Wholesalers are able to achieve lower prices because of the volume of business and exposure they generate.
- National and international tour wholesalers will mostly turn to a local, WA-based, inbound tour operator to book specific touring options.
- Tour wholesalers specialising in Western Australian products will deal directly with tourism operators.
- Every wholesaler will have a different price for operators to participate in their programs.
- Wholesalers will rarely include a product in their brochures that doesn't have a proven track record.
BENEFITS TO OPERATORS:
- A comprehensive brochure is produced and distributed to travel agents in Australia, and often overseas. Plus, an industry launch is usually held to promote the brochure.
- The wholesaler's representatives will conduct sales calls on retail travel agents to promote the program and operators in it.
- Wholesalers have computerised, often global, reservation systems to record bookings.
- Familiarisation visits for the retail industry and media are conducted to give staff an opportunity to experience the product first hand.
- Wholesalers undertake advertising campaigns aimed at both consumers and retail travel agents.
WHAT IS AN INBOUND TOUR OPERATOR?
Inbound Tour Operators (ITOs) are Australian-based businesses that specialise in developing programs and itineraries for distribution through overseas travel distributors. ITOs are a vital link between Australian tourism products and the overseas travel distributors who buy them, including travel wholesalers, direct sellers, travel agents, meeting planners and event planners.
An ITO provides consultation on itinerary planning and product selection, and coordinates the reservation, confirmation and payment of travel arrangements. They do this on behalf of their clients by working with overseas travel companies and with Australian tourism products. They bring the components of accommodation, tours, transport and meals together to create an itinerary.
BENEFITS TO OPERATORS:
- Inbound tour operators conduct a number of activities to attract the interest of overseas wholesalers and retail agents, and to make them aware of the services and products in Western Australia.
- They create individually tailored packages. For example: farm-stay, self-drive, nature-based tourism, special events and so on.
- They attend trade workshops, missions and shows.
- They provide international exposure for your product.
WHAT ARE THE DIFFERENT INBOUND MARKETS?
Inbound tour operators put together different tourism products to create packages to suit the needs of different inbound markets. These include:
Fully independent traveller (FIT)
This individual traveller buys from a wholesale brochure or buys a specially tailored itinerary.
Group inclusive tour (GIT)
Group travellers also buy from a wholesaler's brochure or have a specially tailored itinerary created to suit their needs.
Many businesses reward performance by providing travel rewards to employees as incentives. These travel arrangements usually require a tailor-made product which is at the top-end of the market.
Conventions involve the movement of large numbers of people, and inbound operators can develop pre and post convention tours.
The Australian Tourism Export Council (ATEC) can provide members with a list of ITOs and the markets in which they operate.
TOOLS AND RESOURCES
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