CAPE Tourism Unit 1
Module 2 – Objective 2 Lecture Notes
The Eight Sectors of the Tourism Industry – Travel Trade & Intermediaries
(a) Definition of Travel Trade and Intermediaries.
In the tourism industry, travel trade intermediaries act as bridges between tourism suppliers (like
airlines, hotels, and attractions) and consumers (tourists). They facilitate the sale and distribution
of tourism products and services, effectively acting as middlemen in the tourism supply chain.
These intermediaries can include travel agencies, tour operators, wholesalers, and online travel
agencies (OTAs).
(b) Trade Associations.
In relation to travel trade intermediaries, a trade association is a group of businesses within a
specific sector of the travel industry that come together to represent their collective interests and
promote the shared goals of their members. These associations act as a voice for the industry,
offering support, advice, and representation to their members, while also advocating for their
interests with government and other stakeholders.
(c) Intermediaries.
Intermediaries are businesses that act as a link between tourism suppliers (like hotels, airlines,
and attractions) and consumers (travelers). They facilitate the booking and selling of travel
products, such as flights, accommodations, tours, and experiences. Common examples include
tour operators, travel agencies, and online travel agencies.
(i) Global Distribution System (Transit Route).
In tourism, a Global Distribution System (GDS) is a computerized network that connects travel
suppliers (like airlines, hotels, and car rental companies) with travel intermediaries (like travel
agencies and online travel agencies). It provides real-time access to inventory, pricing, and
availability information, enabling these intermediaries to book travel products on behalf of their
customers.
(ii) Booking Agencies.
Businesses that act as intermediaries between travel suppliers (like airlines, hotels, and tour
operators) and travelers, facilitating the booking of travel services and packages. They offer a
variety of services, including pre-packaged tours, personalized travel planning, and access to a
wide range of travel products.
(iii) Travel agencies.
In the travel trade, a travel agency acts as an intermediary between travelers and various travel
service providers. They essentially act as a broker, connecting individuals and groups with
airlines, hotels, car rentals, and other tourism related businesses.
(iv) Tour operators.
In the realm of travel trade intermediaries, a tour operator is a company that designs, packages,
and sells complete travel experiences, often combining various components like transportation,
accommodation, activities, and meals. They act as intermediaries, purchasing travel components
in bulk and creating itineraries that are then sold to consumers, either directly or through travel
agents.
(v) Tour wholesalers.
Tour wholesalers are intermediaries within the travel trade that purchase travel products and
services in bulk from suppliers, then resell them to other travel trade businesses, such as travel
agents, at a marked-up price. They essentially act as a middleman between suppliers (airlines,
hotels, etc.) and the final retailer who interacts with the consumer.
(vi) Internet.
(d) Trends Related to Travel Trade & Intermediaries in Tourism
- sharing economy
- disruptors - Entities that challenge and alter established practices and business models within
the travel trade intermediaries sector. These disruptors often leverage technology and new
approaches to reorganizing demand and supply, disrupting traditional market dynamics, and
forcing traditional intermediaries to adapt.
- advanced technologies
- Blockchain - blockchain technology represents a shift towards a more secure, transparent, and
potentially more cost-effective system for managing travel bookings and transactions. It's
essentially a decentralized, digital ledger that records transactions, making them verifiable and
difficult to alter. This can benefit intermediaries by streamlining processes, reducing fraud, and
potentially lowering costs.
(e ) Issues Related to Travel Trade & Intermediaries in Tourism
- Internet penetration
- advanced technologies
- data protection.
