Tourism Industry: Key Characteristics, Distribution, and Organizations

Posted on Jan 13, 2025 in Business Administration and Innovation Management

Main Characteristics of the Tourist Product

  • Perishable
  • Subjective
  • Intangible
  • Rigid
  • Heterogeneous
  • Complementary

Travel Distribution

GDS (Global Distribution Systems)

  • They operate in a B2B environment.
  • They are very useful booking engines for suppliers, especially airlines.
  • They charge a fixed fee to the supplier and a variable fee to the agency, depending on the number of bookings made.

GSA (General Sales Agents)

  • They operate in B2B and B2C environments.
  • Their mission is to promote the products of the suppliers to both travel agencies and consumers.

Hotel Reservation Centers (Call Centers)

  • Independent hotels can join an international reservation center, paying a fixed fee and a variable fee.
  • They operate as both B2B and B2C.

Air Brokers

  • They intermediate between airlines and travel agencies/tour operators, mainly on charter flight operations.

Destination Management Companies (DMC)

  • A DMC provides ground services based on local knowledge of the destination.

DMO (Destination Management Organization)

  • Organizations responsible for the management and/or marketing of destinations.
  • They can operate at different levels: National, Regional, and Local.
  • Their revenues are based on membership fees, taxes, and bookings.

Organizations Related to Travel and Tourism

Government Organizations

  • UNWTO (United Nations World Tourism Organization)
  • ICAO (International Civil Aviation Organization)
  • IMO (International Maritime Organization)
  • WHO (World Health Organization)
  • UNEP (United Nations Environment Programme)
  • UNESCO (United Nations Educational, Scientific and Cultural Organization)

Multi-sector International Organizations

  • WTTC (World Travel & Tourism Council)
  • PATA (Pacific Asia Travel Association)
  • CTO (Caribbean Tourism Organization)

Multi-sector Organizations in Spain

  • Exceltur
  • Mesa del Turismo
  • Tourism Commission of CEOE

Travel Agencies/Tour Operators

  • International: UFTAA (United Federation of Travel Agents’ Associations)
  • International: IFTO (International Federation of Tour Operators)
  • Europe: ECTAA (The European Travel Agents’ and Tour Operators’ Associations)
  • Spain: CEAVYT (Confederación Española de Agencias de Viajes y Turoperadores)

Organization in Travel and Tourism

Hotels

  • International: IH&RA (International Hotel & Restaurant Association)
  • Spain: CEHAT (Confederación Española de Hoteles y Alojamientos Turísticos)

Cruises

  • CLIA (Cruise Lines International Association)

Tourism Boards

  • ETC (European Travel Commission)

Airlines

  • IATA (International Air Transport Association)

Railways

  • UIC (International Union of Railways)

Travel Professionals

  • AEPT (Asociación Española de Profesionales del Turismo)
  • WFTGA (World Federation of Tourist Guide Associations)
  • IATM (International Association of Tour Managers)

Academic

  • International: AIEST (International Association of Scientific Experts in Tourism)
  • Spain: AECIT (Asociación Española de Expertos Científicos en Turismo)

Outbound Travel Agencies

Two main functions:

  • Production/operation of inclusive tours on offer.
  • Production/operation of inclusive tours on demand (tailor-made). This function responds to specifications given by the consumer. The agency quotes a price and can modify it if specifications change.
  • Mediation between final suppliers and consumers. This function is affected by the fact that suppliers are looking for direct distribution, avoiding intermediation costs.

Inbound Travel Agencies (DMCs)

Two main functions: mediation and operations. There is a tendency toward vertical integration between inbound and outbound travel agencies.

Tour Operators

Tour operators are the organizers and providers of package holidays. They make contracts with hoteliers, airlines, and ground transport companies, then print brochures advertising the holidays that they have assembled.

  • Tour Operators seek massive distribution:
  • Wholesalers: throughout all the network retailers.
  • Retailers: throughout their own retailer network.
  • Mixed: throughout both their own network and all the network of retailers.

Vertical Integration

  • A system is vertically integrated when the processes of production, transport, distribution, and sales of a given product are made by the same group of companies.
  • They seek to introduce a value chain by having full control of the customer in the whole process: production, supply, and distribution.