Unit 1 Task 2 - Introduction to travel and tourism sector cont.
Introduction: In this sector I will be discussing the different chains of distribution and different terms associated with them. I will also be
showing examples such as a diagram and examples of different companies which fall under the horizontal and vertical terms.
Chains of Distribution: The Chain Of Distribution is a chain from the producer or manufacturer which follows through to the
end product/the consumer. For example, in the travel and tourism industry it usually starts with the main products – hotels,
flights, etc. and then is continued by travel agency’s, insurance company’s and finally the consumer – the person buying the
product.
Producer: The producer is the first on the chain as they are the ones that produce the product that is going to be sold. With
out the producer there would be no chain of distribution. However, each step is equally as important as each other.
Manufacture: This means to make the product being sold. For example, the airline can’t sell flights without having the
company in full working order – ie. Make sure the plane works, have a customer service hotline, have insurance for workers,
etc.
Wholesaler: Wholesaler means the company that sells goods in large quantities. Qantas Holidays would be a good example as
they provide ground-only packages that can be purchased as a whole or combined with different airfares.
Retailer: The retailer is the people/company that sells the product to the public. This can be in many different ways such as
online or on a high street shop.
Consumer: This is the person that buys the end product. It could be a package holiday, hotel room or many more.
Simple Chains of Distribution There are four sectors involved with the simple chain of distribution. These are: Principals; Tour operators; Travel
agencies; and customers/consumers, in that order. It helps to show how the different products reach the consumer as an end result.
Principals Principals are at the top of the chain as they are selling the products. The products being sold can included but not be limited to:
airlines, hotels, other types of accommodation, etc.
Tour Operators Tour Operators use independent principles and sell them to their customers. The tour operators will get a bit of income from
selling the consumer the principle.
Travel Agencies The main aim of travel agencies is to sell holidays and flights and activities such as west end performance tickets to consumers.
They can be found online or on the highstreets.
Consumer The consumer is the person that buys the finished product. They can buy it in numerous different ways such as online or in person
and can be from any background, ie. Business, family, etc.
, Unit 1 Task 2 - Introduction to travel and tourism sector cont.
Chains of Distribution Diagram: Vertical
Principals Attractions – Drayton Manor, Hotels – Trump Towers,
Airlines – Emirates, Rail – Great Western Rail
Wholesalers Mass Market - TUI , Specialist- Scandinavia Only, Tour Operators- Trailfinders
Retailers Travel Agents – Hays Travel, Online TA- Expedia, Call centre- Statravel
Consumers Dark Tourism, VFR, Business, Leisure, Health, Religious, etc.
Horizontal
Suppliers Suppliers Suppliers
Car Rentals, Hotels, B&B’s, Airlines Car Rentals, Hotels, B&B’s, Airlines Car Rentals, Hotels, B&B’s, Airlines
