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Distribution Channels for Travel and Tourism:

The Case of CreteParaskevi Fountoulaki

Dr. M. Claudia LeueDr. Timothy Jung

Manchester Metropolitan University, UKparaskevi.fountoulaki@stu.mmu.ac.uk

c.leue@mmu.ac.uk, t.jung@mmu.ac.uk

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Background• Dynamic packaging has transformed OTAs into online tour operators • Bringing travel eMediaries in direct competition with the longer established

tour operators – such as TUI, MyTravel or Thomas Cook

• Increased importance of mobile technology for the tourism distribution channel market (Douglas and Lubbe, 2014)

• Online social networks, online review sites as well as mobile location-based services have added additional channels of distribution

• Shifted the power of booking towards the consumer (Scaglione et al., 2013)• After the explosive growth of these new technologies, extranet-XML is the

next step of empowering tourism providers and consumers

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Justification of research• Crete is one of Greece’s leading tourism regions

– a region dominated by coastal tourism – online tour operators and low-cost airlines have experienced significant growth in

the past decade (Garin-Munoz and Perez-Amaral, 2010)

• Buhalis and Law (2008) suggested that scholars should not only take a

theoretical approach but should base their research on empirical data when studying tourism distribution channels

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Aim

• To update the tourism distribution channel model by Kracht and Wang (2010) within the context of Crete, Greece

• To identify additional forms of intermediations and account for technological developments within the online landscape.

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Theoretical Framework

Source: Kracht and Wang, 2010.

Supplier call centre or retail outlet

Other search engine  

Web-able corporate agent

Host Agent

Incoming agent

Destination marketing organisation

Consumer Google Meta-search engine

Webable retail agent

Web. able tour operator

GDS Switch Supplier

Online travel agent

GNE

Supplier website

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Structure of Tourism Distribution Channels (2005-2009)

According to (Kracht and Wang, 2010) model consists :•consumers•online travel agents•web-able corporate travel agents •web-able tour operators•Global Distribution System (GDS) •Global New Entrants (GNE)•incoming travel agents, •switches• destination marketing organisations (DMOs)•web browser, other search engines•suppliers website •meta-search engines•(CRS) Computer Reservation Systems

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Methods• Semi-structured interviews were conducted during the ITB Berlin

between 5th to 9th of March 2014.

• Interviews with 12 participants– managers of all different types of Greek tour operators (traditional and non-

traditional),online booking/review agent and Cretan hoteliers including Tripadvisor, HRS, Hotelbeds, Kuoni Group, TravelZoo, Hotelplan, YouTravel, Low Cost Holidays.com

• Participants with at least 5 years of tourism business experience• Content analysis

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Findings• The Crete hoteliers and the local travel agents are trying to support more the

traditional tour operators• Hotel Sales Manager emphasised that “have a problem with flight… Crete is not a place

like Spain where you can go on a round-trip as you need to travel by plane” …..“tour operators such as TUI, Thomas Cook and Alltours as well as Thompson own the capacity of aircrafts” Importance of traditional tour operators

• The influence of the technology has affected traditional tour operators due to an increased demand for dynamic packaging

• According to a Contract Manager “all the traditional tour operators are following the lead of the model of booking.com because now everybody is getting online platforms… as it is the way to reduce costs and go faster and increase efficiency”…“Thomas Cook has Hotels4U and TUI has Hotelbeds in an effort to get into this part of the business”

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Findings• Contract Manager of one of the online booking engines supported the importance of social media

by identifying that they had to integrate their booking engines via Facebook in order to account for the increased demand on these networks

• Also, mentioned that “everybody goes through these channels (Facebook and Twitter) and they influence a lot of the market”….. “the direction we are going in the future is social media and mobile phones”

• Hotel Sales Manager pointed out that there is a new application – Meine TUI App - that TUI adopted saying “You can do all the business from the day you decide to go for holiday until the departure through your mobile app”

• The change in relationship between tour operators and hoteliers:1. Local travel agencies will disappear2. the appearance of Extranet-XML (Future trend will be B2C ; no more brokers and the customer will

directly make their own reservations, book transportation and excursions)

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Proposed Structure of Tourism Distribution Channels Model (2010-2014)

Meta- search engine

Social media

Mobile

Supplier website

Online

travel

agent

GNE

Web-able tour operator

GDS Switch

Incoming agent

Destination marketing organisation

Supplier

Host agent

Web-able retail agent

Google

Other search engine

Web-able co. agent

Supplier call center or retail outlet

Consumer

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Proposed Structure of Tourism Distribution Channels Model in the Future

Meta- search engine

Social media

Mobile

Supplier website

Online travel agent

GNE

Web-able tour operator

GDS Switch

Extranet-XML Destination marketing organisation

Supplier

Host agent

Web-able retail agent

Google

Other search engine

Web-able co. agent

Supplier call center or retail outlet

Consumer

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Conclusion

.• Theoretical contributions:

– Proposed model, which is based on key players within the Cretan tourism context.

– Identified the importance of Extranet-XML for the future of tourism distribution channels supporting Caber et al.(2013).

– The importance of mobile devices and social media for platforms such as Tripadvisor was confirmed within this study

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Conclusion

• Industry implications:– The updated model as well as the future model show

opportunities and areas to focus marketing strategies on– Understanding the tourist behaviour is important to travel

suppliers and tourism authorities for formulating effective marketing strategies and policies

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Limitation

• Study is only applicable to Cretan context• Not generalisable to other destinations• Not tested quantitatively• Only investigated the supply side perspective

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Recommendations

• To update the tourism distribution channels model on a regular basis

• Further research in different geographical and touristic contexts

• The customer perspective is important to identify in the future

• Future research might investigate the effect of different forms of wearables on tourism distribution channels

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Thank you very much for your attention!