The structure and organization of the travel and tourism industry

Tutorial 3
Questions
1) Explain the chain of distribution and how this applies within the industry
The alternative term marketing channel can also be used to describe this system. Traditionally,
products are distributed through the intercession of a number of intermediaries who link producers or
manufacturers with consumers. These intermediaries are either wholesalers (they buy in large
quantities from suppliers and sell in smaller quantities to others further down the chain), or retailers
(they form the final link in the chain and sell individual products or a bundled set of products to the
consumer). Producers, of course, are not obliged to sell their products through this chain. They may
instead choose to sell direct to consumers or retailers, thus avoiding some or all of the intermediaries.
Wholesalers, in turn, sometimes sell products direct to the consumer, avoiding the retailer.

2) Who are ancillary providers?
Apart from producers, wholesalers and retailers a wide variety of ancillary and support services
interact within the distribution system. For convenience, these can be divided into public-sector
organizations (those funded, controlled or organized through central or local governments) and those
that are privately owned.
The former include national tourism organizations, such as tourist offices, publicly owned airports or
seaports, passport and visa documentation and other ancillary services such as public education and
training institutions offering courses in tourism.
3) What does it mean by integration? Who does this apply to the tourism sector?
A notable feature of the industry over recent years has been the steady process of integration that has
taken place between sectors of the tourism industry. integration as being either horizontal or
vertical in character. Horizontal integration is that taking place at any one level in the chain, while
vertical integration describes the process of linking together organizations at different levels of the
chain.

4) What does mean by vertical integration? Do you think there are benefits for a small hotel chain
in forward integration?
vertical integration is said to take place when an organization at one level in the chain of
distribution unites with one at another level. This integration can be forward (or downward
in the direction of the chain), such as in the case where a tour operator buys its own chain of
travel agents or it can be backward (or upward, against the direction of the chain), such as in
the case where a tour operator buys its own airline.


5) Tourist attractions maybe owned by the public rather than the private or voluntary sectors.
Investigate the tourism attractions in your local area to find examples of those owned by the
public sector. Explain why governments may choose to own and operate tourist attractions.

Despite increasing instability induced by economic, political, and environmental
challenges, tourism is expected to remain a significant driver of future economic
growth. Policymakers who concentrate on their countries most prominent assets
and are able to leverage them most effectively are best positioned to turn volatility
risks into opportunities for long-term stability