The importance of product distribution policies to tourism enterprises and to tourists

CHAPTER ONE

1.1 Background of Study

Tourism product distribution channels are roots through which products or services are being served from the producer to customers (tourists).That is a producer to customer link.

The tourism distribution system has over the years witnessed both radical and incremental change. Before 1993, the traditional tourism distribution system consisted of consumers , traditional retail agents,  traditional corporate travel agents, traditional tour operators, Global Distribution Systems (GDSs), incoming travel agents.GDSs started as computer computer reservations systems (CRSs) which are electronic intermediaries (Buhalis 1998; Buhalis $ Licata, 2002).

In the airline sector , traditional travel agents enjoyed the benefits of intermediation as a result of their relationship with the GDSs (Malone et al., as cited in Mc Cubbrey .1999).

Traditionally the tourism distribution channels was main B2C known as intermediation in the early eras, producers delivered directly to consumers through manual operations commonly known as the brick and mortar, phone call services placed directly to producers.

Then came disintermediation and the introduction of travel agents, whole salers and tour operators (B2B2C). The B2C system was very limited and became very weak as consumers did not always have time or found it comfortable to go down to travel offices for face to face transactions. Telephone lines could be interrupted coupled with the problem of congestion.

The business class of tourists found it very difficult to present themselves to tourism offices for transactions. All these limitations brought about the B2B2C distribution system for tourism goods and services.

This gave rise to the reign of intermediaries. Intermediaries undeniably facilitated the distribution of tourism products over the years. Since the year 2000, the use of the internet has revolutionized travel agencies intermediary services.

The reintermediation process process brought about a transition from brick and mortar agencies to brick and click as well as the emergence of completely online or website supporter travel agencies called OTAs ( online travel agencies ), E-mediaries, virtual agencies e.g ( COX and Kong’s est in 1750  have the internet now www.cox $ kings.com ( from brick and mortar to brick and click ) , America express 1850 is now www.America express.com.        

The launch of the first GDS Sabre, by American Airlines in the 1960s (Sabre holdings, 2009). Resulting in a major competition: Amadeus, Galileo, Abacus $ World span. With time hotel CRS were connected to the GDS which was facilitated by switches (Choi and Kimer, 2002; Palmer and Mc cole, 1999; Sheldon 1997).

Granados et al (2008) explained that the major GDS has enjoyed significant power in an oligopolistic distribution environment, until technological advances reduced barriers to entry for substitutes. 

The major technological was the internet which had begun operating in 1969 mainly for military and research purposes (Werthner and Klein 1999). The internet became a commercial platform in the 1990s as companies began to interstate themselves.

Since the advent of the web, the commercial application of the in 1993 served as a milestone with the introduction of the web browser which made communication between suppliers and consumers possible.

In travel distribution, power is shifting to search engines, tourists (consumers) who do not know the right URL to punch in or have a particular website in mind tend to find ease in using search engines which have a wide collection of possible sites a tourist might be interested in.

One common example is the Google web browser, named chrome which was launched in September 2008. The text box that normally used for typing a URL can be used both for the Purpose and also for typing keywords (Google, 2009).

These revolutionary changes in travel agencies we can firmly say is to great advantage to both Tourism industries and tourists. To the producer, they boost Sales of travel products and services. They Ease accessibility and are and are able to carry services to a bigger and wider market.

It has been estimated that the global number of users of the internet has grown from 16 million in December 1995 through 361 million in December 2000, to reach 1.8 billion by December 2009 and this has had a major impact on tourism industry especially in well developed countries.

For example in Ireland, while offline channels still account for a significant share of about 50% , there is still a rapid increase in the use of online channels in the Irish community in Europe.

For example the European online bookings for Tourism and unmanaged business travel grew by approximately 20% in 2008 compared to just 3% for the overall industry itself, while the offline sector has not grown since 2002.

This is because segments comprising younger and frequent tourists and those taking last minute trips tend to online channels as the best and fastest means for them.

Online travel agents (OTAs) have become the fastest growing distribution channel and have gained a significant market share in the Irish community, as they provide consumers with access to lower prices, comparative pricing and personalized as well as comprehensive product information.

About 70% of online airline tickets sales and 10% (US) to 80% (EU) of online cat hires are made directly through suppliers website, choosing and planning trips to Ireland, the internet has become the most dominant sourcing of information.

Looking into the tourism distribution polies in Africa, for example Tanzania records many different channels of distribution both home and overseas. According to Peter Judca Mkumbo most tourists prefer sourcing and buying Tanzania tourism products from overseas intermediaries and tour operators or retailers while a few percentage of tourists use direct home based producers.

In Cameroon, Tourism and leisure producers base mostly on intermediaries that is wholesalers and retailers. Most inbound tourists in the country prefer to go through retailers for Tourism products. This is most common for tourism airline services. Also your operators are gaining strong grounds in the Cameroon market.

1.2 Problem Statement

Distribution channels enable Customer to buy or gain access to tourism products; therefore they refer to all aspects linking the business to consumers at any level, whether individual, group or corporate consumers.

As there must be a link between producer and consumer that is also one reason why it is important to evaluate the short comings of this distribution links, taking into consideration the trend in consumers taste and preferences, without failing to bring up solutions on how to perfect or amend the links and better satisfy customers.

 1.3 Research Questions

* Why is it important to evaluate the products of tourism enterprises?

* What are the challenges faced by tourism enterprises in their distribution chains

* What can be done I order to improve on the distribution policies of tourism enterprises

1.4 Objectives of the Study

1.4.1 General Objectives

Being that products are of no use if they don’t reach the final consumer, the goal of this work is to show how evaluating product distribution policies is important to tourism enterprises and to tourists.

1.4.2 Specific Objectives

* To examine the distribution policies of tourism enterprises

* To examine the role played by distribution channels in the flow of products and services of tourism enterprises

* To examine the challenges faced by distribution channels of tourism enterprises

* To bring up solutions to the problems faced in the distribution of tourism products