Tour operating and travel retailing
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For tourism to occur, consumers need to purchase, arrange or acquire the means by which they can travel from their home area and (origin area) to a destination. One element in this process is tour operators and travel retailers. Tour operating and retailing tourism products to consumers are key parts in the production, selling and distribution of tourism services. The organizations that do this link the supply to the source of demand. Yet tourism is not like many other products or services. It is intangible; it is often an experience or product that cannot be stored, tried or tested before purchase, and so the consumer often buys as an act of faith, in the belief that what the tourism industry supplies is in line with their expectations and needs. This is epitomized in the following quotation:
The travel industry, according to everybody outside it, is run by cowboys. Despite the abundance of professionally run companies, both big and small, the perception is still that holiday firms rip off unsuspecting customers … ABTA fights gamely to defend the industry, but it’s like pushing water uphill. Even though a lot of criticism is unfair, you can’t help thinking that the industry has brought a lot on itself … But the biggest problem is that operators are often selling a product where the gap between perception and reality is huge. Mass-market holidays are often sold as a dream vacation when they are often anything but. (Source: www.travelmole.com, Issue 226, 17 September 2002: Comment)
One of the main ways in which the tourism industry communicates, trades and interacts with the tourist is through the distribution chain (i.e. the way in which the product is sold to the consumer) using intermediaries – agents that sell products for the industry. Historically, tourism products were retailed through travel agents who offered products from tour operators, known as ‘principals’. In a European context, the official EU statistical agency Eurostat estimated that the greatest concentration of activity by tour operators and travel agents is in Germany (9033 businesses with a €5925 million turnover per annum), Italy (6350 businesses and a €6481 million turnover), France (2279 businesses and a €6866 million turnover) and the UK (6050 businesses and a €14 710 million turnover). Across the EU different distribution forms of travel products are used. Belgian, Danish, German, Greek and Austrian tourists prefer to book direct with operators; in other countries,
travel agents are a preferred form of booking, usually for package holidays. The exception is Spain, where travel agents are also used to book domestic travel, especially for late booking.