Unit 35 Chain of Distribution Management in the Travel Industry

Introduction

This unit is designed to provide students with an understanding of the complex chain of distribution in the travel industry.

Students will learn about the roles and relationships between components of the travel industry’s chain of distribution, the changing role of travel agents, the development of channels of distribution, including direct-bookings, the use of call- centres and, particularly, internet distribution.

The unit will cover the nature of relationships between organisations at different stages of the chain of distribution: principals, wholesalers and retailers. Students will research interrelationships and how these have changed owing to a range of factors including increased integration, technology and consumer trends.

Case studies and a range of organisations will be researched in order for students to make justified recommendations for organisations to better distribute their services and better sustain their role as distributors.

Learning Outcomes

By the end of this unit students will be able to:

Analyse the interrelationships between components of the travel industry chain of distribution
Evaluate the significance of changes in the travel industry’s chain of distribution
Evaluate the importance of effective distribution management
Recommend improvements to distribution strategy for a tour operator.

Essential content

LO1 Analyse the interrelationships between components of the travel industry chain of distribution

The chain of distribution:

Primary suppliers/principals, wholesalers, consolidators, retailers, distributors The role and purpose of intermediaries

The role of tour operations in the channel of distribution

The nature of relationships and contractual agreements, including commission and distribution agreements

LO2 Evaluate the significance of changes in the travel industry’s chain of distribution

Changes in the chain of distribution:

The structure of distribution channels Development of Global Distribution Systems (GDS)

Growth and decline of travel agency chains and traditional package holidays The impact of vertical and horizontal integration

The growth of direct bookings and multi-media booking platforms

The application and impact of digital and mobile technologies on the chain of distribution

Successes and failures as a result of changes

LO3 Evaluate the importance of effective distribution management

Facets contributing to effective distribution management: Relationships between suppliers and distributors and customers Demand management, forecasting and planning

Achieving sustainable goals Effective procurement strategies

Vendor relations:

Giving consideration to negotiations, contracts and terms of payment commission structures, distribution agreements, marketing agreements

Joint ventures Personal relationships

The benefits of effective distribution management

LO4 Recommend improvements to distribution strategy for a tour operator

Recommendations:

Identification of weaknesses

Strategies to address: margin, costs, profit, cash-flow, sustainability, market share, growth, new markets

Strategies for achieving sustainable goals Organisations at different stages of chain of distribution

Learning Outcomes and Assessment Criteria

Pass	Merit	Distinction
LO1 Analyse the interrelationships between components of the travel industry chain of distribution
P1 Examine the role of organisations at different stages and levels of the travel industry chain of distribution P2 Analyse the interrelationships between organisations at the same and different stage of the travel industry chain of distribution	M1 Critically analyse the position of leading travel industry organisations in the chain of distribution	LO1 LO2 D1 Make valid judgements and conclusions on the future implications of factors for the position of leading travel industry organisations in the chain of distribution
LO2 Evaluate the significance of changes in the travel industry’s chain of distribution
P3 Evaluate the impact of increased travel industry integration on intermediaries and channels of distribution	M2 Critically evaluate the significance of a range of factors on the travel industry chain of distribution
P4 Evaluate the impact of technological developments upon the structure of channels of distribution
LO3 Evaluate the importance of effective distribution management
P5 Evaluate the importance of effective distribution management from the perspective of customers, suppliers, distributors and retailers	M3 Critically evaluate the importance of effective distribution management with relation to relevant case studies	LO3 LO4 D2 Make justified recommendations for improvements to a distribution strategy for a tour operator business to meet sustainable goals at each stage of the chain of distribution
LO4 Recommend improvements to distribution strategy for a tour operator
P6 Make recommendations for improvements to a distribution strategy for a tour operating business	M4 Critically evaluate each stage of the distribution chain within a tour operating business and make recommendations for improving those areas of weakness identified