By Rezdy — 13 Nov 2023
Tourism distribution refers to the ways in which tourism products, tours, activities and services are made available to customers. Tourism distribution can be achieved through direct or indirect channels. A tourism distribution channel refers to the stakeholders and methods involved in taking a tourism product from the supplier to the consumer. Direct channels are mediums that your business has control over, or indirect channels, which involve intermediaries such as travel brokers.
Tourism distribution channels play a vital role in making sure your travel products are seen by the right audiences. By aligning your business with existing distribution channels, you connect with important stakeholders in the industry. Partnering with a variety of tourism distribution channels allow you to gain efficiencies from your marketing budget and the flexibility to test different systems from different organisations, to ultimately grow your tour and activity business.
There are several types of tourism distribution channels that cover both direct and indirect classifications. Combining distribution channels allows your offerings to be seen by a broader customer base, leading to more exposure and more uptake.
Online travel agencies (OTAs) allow you to combine all elements of tourism distribution into one place. Online travel agencies allow customers to plan, book and pay for their flights, accommodation, rental cars and activities at the same time, which can work out a lot cheaper than booking them all individually. However, some customers may be dissuaded from doing so by the risk of overbooking and subsequent cancellations. Tour companies may also find the idea of paying commission to an OTA a downside.
Tour operators allow your offering to be seen by new markets. Generally, tour operators boast a high volume of guests, which allow you to accurately forecast sales and profits. However, if the tour operator fails to bring in the desired number of customers, your company suffers alongside the operator themselves. This loss of control may be a turnoff for your business, particularly if it is a small startup.
Leveraging your internal communication channels is a great way to maintain control over your marketing at a low cost. It can also bring in higher profits as there are no overheads to pay an intermediary. However, this is balanced out by the need to internally invest in advertising. Your business may also find it challenging to connect with customers directly, depending on your existing reach.
Social media is a hugely popular method for advertising your business to an active, broad public. It is a cost-effective marketing tool and holds significant visual appeal. Social channels also enable the possibility of user generated content (UGC), which can itself be a valuable marketing tool. However, social media is susceptible to vicious algorithm changes and overwhelming market saturation. It is also very sensitive to trends.
Search engines offer the ability to finely target the reach of your tourism offering. You can also control the amount you spend on advertising more accurately by using a search engine. They also offer internal tracking metrics, which can be advantageous for a startup without an accounting department. However, competition is fierce and many people use adblockers, meaning that they may miss out on seeing your offering if it is advertised through a search engine. There is also limited space for a large number of brands, meaning keyword optimization is key to spreading your brand.
Metasearch engines give your offering increased visibility to a targeted audience. Generally speaking, they are also more trusted by online users. However, metasearch engines still suffer from stiff competition, and some will charge customers booking fees which may dissuade consumers from using them.
Making the right decision on the distribution channels in hospitality and tourism is critical. Here are a few parameters you should consider:
Consider the target demographics of your offering. Are they a broad audience interested in a niche subject? Are they likely to be active users of social media? Is value for money an important factor? Answering these questions about your target audience will help shape the best tourism distribution channels for your brand.
Think about how much your organisation has to spend on its distribution channel in hospitality and tourism. Finances will often dictate which distribution channels will work for your organization, ruling out online travel agencies and tour operators and focusing more on internal strategies pertaining to social media and direct sales.
Finally, consider your organisation at large. What does its online presence look like? Does it have its own assets, such as social media accounts, websites and app to leverage? Does the complexity of the product or service dictate which channels are used to market it?
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With so many different ways of reaching your audience, effective management of tourism distribution channels is essential. Here are eight ways you can keep your business running smoothly.
Ensure your business has clear direction. For each tourism distribution channel, set long-term goals and create a list of objectives to help you get there.
If your business relies on inventory, make sure its quantity and availability is recorded on a database so that you and your staff are able to process bookings easily. Keep this database up to date and share it with any of your distribution partners
Your distribution partners are essential to the functioning of your business. Keep on top of any issues they may bring up, and inform them of any changes to your business or stock.
Considering pricing in your tourism offering is paramount. Multi-channel distribution allows you to clearly analyse what competitors are charging, and whether your pricing strategy needs any refinements. If your business is creating commissions with any of your channel partners, try to price them favourably.
Customer service sits alongside pricing as the lynchpins to a successful business. Be attentive to any reviews that are left, whether they be via email, online or through one of your distribution partners. If using a multi-channel distribution network, this may be more time consuming, but it is important to ensure that you engage with feedback from all channels.
Running a tourism business can be difficult. Seasonality, disease outbreaks and politics are just some of the issues your business may face. It is important to keep a positive mindset in times of reduced custom, and make any changes to your business model that may encourage more traffic.
Keeping track of your performance is essential to your business’ success, both internally and through your distribution partners. Some channels will be easier to monitor than others. For example, using the Google search engine affords access to their inbuilt tracking metrics, whereas you may have to request the data from an OTA or tour operator.
The steps outlined above are essential for success in your business but they are time consuming and complicated. To streamline the process, you may wish to use a distribution channel management platform. Depending on your business’ needs, Rezdy offers a wide range of distribution management software to assist with bookings, ticketing, reselling and channel management.
Using Rezdy’s booking management software such reduces the strain on your administrative staff by improving efficiency in a number of areas.
Booking confirmations and tickets are essential evidence of payment for both consumers and businesses. However, creating these items can be painstaking and time consuming. Rezdy offers an all-in-one booking and ticketing system for tour and activity operators, centralizing the heart of your business and allowing customers to book online 24/7.
Rezdy’s automated software allows your business to be more accurate and efficient. The Rezdy Channel Manager centralises your business’ distribution network, allowing you to manage all your channel partnerships in one place.
Utilising the Rezdy Channel Manager allows you to access all your business data and reports in one place. Review, analyze, monitor and learn from the data Rezdy produces on revenue, transactions and product availability.
Rezdy’s Channel Manager keeps your business’ administration management in one place, simplifying your channel management and automating payments, commissions and refunds.
Rezdy’s Channel Manager connects your business to your selected distribution channels, including major OTAs, tour operators and regional and local resellers.
Your business can receive updates to its inventory in real time through the Rezdy Channel Manager, automating the amount of stock you have available to customers.
Manage the costs of your business centrally through the Rezdy Channel Manager, including commissions and automated payments
The Rezdy Channel Manager provides centralized real-time tracking data for your business across all your distribution channels.
Rezdy’s Channel Manager combines your bookings, distribution channels and analytics into one clean, clear interface.
Rezdy’s Channel Manager for Suppliers provides solutions for tour operators to connect with their resellers and proactively manage their communications.
Tourism distribution has a bright future, as people continue to indulge their passion for travel. Operators of tourism businesses will continue to require the use of multiple channels to advertise their offerings in the chain of tourism, travel and tourism. Rezdy will continue to develop its channel management software to ensure it remains the default platform for centralizing the management of your tourism business.
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