The Tourism Industry and Travel Trade
The distribution chain
Understand how tourism products reach the consumer. Principals (hotels, airlines, attractions) create the product. Tour operators combine components into a package and take commercial risk. Travel agents sell on behalf of principals for commission and act as intermediaries, not risk-takers. Tour wholesalers, consolidators, destination management companies and online travel agents (OTAs) also sit in the chain. Be able to explain disintermediation (principals selling directly, cutting out intermediaries) and reintermediation (new intermediaries such as OTAs appearing).
Transport and regulation
Know the main transport modes - air, rail, road, sea - and their roles in long-haul versus short-haul travel. Learn why regulation matters: licensing, consumer protection, aviation rights, visa and passport requirements, and health formalities. Recognise industry bodies such as national tourism boards, tour operator associations and the role of the UN World Tourism Organization in statistics and standards.
Package travel and pricing
A package combines at least two elements (for example transport plus accommodation) sold at an inclusive price. Understand commission, mark-up, deposit and cancellation terms, and the importance of clear contracts.
Traps in questions
- Saying a travel agent takes commercial risk - the tour operator does.
- Confusing a tour operator with a tourist guide; the guide delivers on the ground.
- Mixing up disintermediation with reintermediation.
Rule of thumb
Ask who carries the risk and who owns the product. Worked example: a guest books a flight and hotel together on an airline website at one inclusive price. The airline is acting as a tour operator for that package (it assembled the components and carries the risk), while a separate high-street shop selling only the flight would be a travel agent earning commission.