Podcast
Questions and Answers
What is the primary advantage of horizontal integration for tour operators?
What is the primary advantage of horizontal integration for tour operators?
- Direct access to niche markets by partnering with specialized service providers.
- Increased profit margins by eliminating retailer commissions.
- Greater control over supply chains and service standardization.
- Enhanced economies of scale through bulk purchasing and integrated marketing. (correct)
Which type of integration involves a travel business entering a service that supports its package holidays, such as offering travel insurance?
Which type of integration involves a travel business entering a service that supports its package holidays, such as offering travel insurance?
- Diagonal integration (correct)
- Horizontal integration
- Lateral integration
- Vertical integration
In level 2 distribution, what is given to intermediaries (retailers) for every travel product or service they sell?
In level 2 distribution, what is given to intermediaries (retailers) for every travel product or service they sell?
- Equity
- Commissions (correct)
- Vouchers
- Discounts
Which of the following exemplifies vertical integration in the context of the travel industry?
Which of the following exemplifies vertical integration in the context of the travel industry?
A large tour operator decides to purchase a fleet of luxury yachts to offer exclusive cruises to high-end clients. Simultaneously, they invest in a software company specializing in booking platforms for travel agencies. Which integration strategies are being implemented?
A large tour operator decides to purchase a fleet of luxury yachts to offer exclusive cruises to high-end clients. Simultaneously, they invest in a software company specializing in booking platforms for travel agencies. Which integration strategies are being implemented?
Which of the following is NOT a core component typically included in package holidays?
Which of the following is NOT a core component typically included in package holidays?
What is the defining characteristic of a 'static holiday'?
What is the defining characteristic of a 'static holiday'?
Which type of package holiday combines two or more destinations into a single trip?
Which type of package holiday combines two or more destinations into a single trip?
What distinguishes an 'escorted tour' from other types of package holidays?
What distinguishes an 'escorted tour' from other types of package holidays?
In what way does a 'guided tour hosted package' differ from an 'escorted tour'?
In what way does a 'guided tour hosted package' differ from an 'escorted tour'?
What is the most accurate description of an 'all-inclusive' holiday package?
What is the most accurate description of an 'all-inclusive' holiday package?
A family wants to experience both the historical sites of Kyoto and the beaches of Okinawa in a single trip. Which type of tour package would best suit their needs?
A family wants to experience both the historical sites of Kyoto and the beaches of Okinawa in a single trip. Which type of tour package would best suit their needs?
A travel agency aims to create a package targeting budget-conscious travelers who also value a degree of independence. Which package holiday would be most suitable, considering this demographic's preferences and willingness to navigate destinations with some support, rather than full supervision?
A travel agency aims to create a package targeting budget-conscious travelers who also value a degree of independence. Which package holiday would be most suitable, considering this demographic's preferences and willingness to navigate destinations with some support, rather than full supervision?
What is the primary role of a 'host' in the context of a tour package?
What is the primary role of a 'host' in the context of a tour package?
Which type of tour package is designed for tourists who prefer to travel independently without a group?
Which type of tour package is designed for tourists who prefer to travel independently without a group?
What is a key characteristic of tailor-made tour packages?
What is a key characteristic of tailor-made tour packages?
A 'land package' typically includes:
A 'land package' typically includes:
What does a 'Free and Easy' tour package usually include?
What does a 'Free and Easy' tour package usually include?
Which of the following best describes 'Hotel Accommodation Only' arrangement?
Which of the following best describes 'Hotel Accommodation Only' arrangement?
A traveler books a 'Hotel Accommodation with Add-ons' package. Besides the hotel stay, what might this package include?
A traveler books a 'Hotel Accommodation with Add-ons' package. Besides the hotel stay, what might this package include?
What distinguishes a 'customized package' from a standard land package?
What distinguishes a 'customized package' from a standard land package?
A travel agency offers both 'Hotel Accommodation Only' and 'Hotel Accommodation with Add-ons' arrangements. Under what circumstances would a traveler specifically choose the 'Hotel Accommodation Only' option?
A travel agency offers both 'Hotel Accommodation Only' and 'Hotel Accommodation with Add-ons' arrangements. Under what circumstances would a traveler specifically choose the 'Hotel Accommodation Only' option?
A client requests a tour package that includes a visit to at least three different Philippine islands, various cultural immersion activities, and specific dietary requirements met at each location. Which type of package would best suit these comprehensive and personalized needs?
A client requests a tour package that includes a visit to at least three different Philippine islands, various cultural immersion activities, and specific dietary requirements met at each location. Which type of package would best suit these comprehensive and personalized needs?
What distinguishes a Seat-in-coach (SIC) tour arrangement from a private tour arrangement?
What distinguishes a Seat-in-coach (SIC) tour arrangement from a private tour arrangement?
What is the primary characteristic of compulsory tours offered by tour operators?
What is the primary characteristic of compulsory tours offered by tour operators?
A tour that combines visits to two or more locations is best described as what?
A tour that combines visits to two or more locations is best described as what?
Which type of tour package focuses on the organization of events such as conferences and seminars?
Which type of tour package focuses on the organization of events such as conferences and seminars?
Which of the following booking conditions requires immediate finalization without reservation?
Which of the following booking conditions requires immediate finalization without reservation?
If a tour package includes breakfast and lunch, but excludes dinner, it is best described as which of the following?
If a tour package includes breakfast and lunch, but excludes dinner, it is best described as which of the following?
Outside of destinations, what significantly shapes a tour operator's offerings?
Outside of destinations, what significantly shapes a tour operator's offerings?
A travel agency offers a '4D3N' package. What does this typically indicate to a customer?
A travel agency offers a '4D3N' package. What does this typically indicate to a customer?
Which element does NOT directly constitute package holidays?
Which element does NOT directly constitute package holidays?
An extremely savvy traveler notices a tour operator advertising a 'guaranteed departure' on a 30-day trans-continental tour for only $999, all-inclusive. They also notice the fine print indicates penalties apply for opting out of any included excursions. What critical assessment should this traveler make first?
An extremely savvy traveler notices a tour operator advertising a 'guaranteed departure' on a 30-day trans-continental tour for only $999, all-inclusive. They also notice the fine print indicates penalties apply for opting out of any included excursions. What critical assessment should this traveler make first?
In the traditional chain of distribution for travel products, what role is typically fulfilled by a tour operator?
In the traditional chain of distribution for travel products, what role is typically fulfilled by a tour operator?
Which of the following best describes the function of a 'broker' in the context of the airline industry, according to the text?
Which of the following best describes the function of a 'broker' in the context of the airline industry, according to the text?
What is a key characteristic that differentiates consolidators from other types of brokers in the travel industry?
What is a key characteristic that differentiates consolidators from other types of brokers in the travel industry?
What defines 'Level 1' distribution in the chain of distribution for travel products?
What defines 'Level 1' distribution in the chain of distribution for travel products?
Which of the following is an example of a travel product being distributed through Level 1 distribution?
Which of the following is an example of a travel product being distributed through Level 1 distribution?
What is the primary advantage for travel agencies and other tour operators when purchasing airline seats or hotel rooms from brokers?
What is the primary advantage for travel agencies and other tour operators when purchasing airline seats or hotel rooms from brokers?
According to the distribution chain model, which entities primarily engage with consumers?
According to the distribution chain model, which entities primarily engage with consumers?
What is the critical difference between Level 1 and Level 2 distribution channels regarding intermediaries?
What is the critical difference between Level 1 and Level 2 distribution channels regarding intermediaries?
Imagine a scenario where a technology company creates a new platform that directly connects consumers with independent hotels and local tour guides, bypassing traditional tour operators and travel agencies. How would this new platform disrupt the traditional chain of distribution?
Imagine a scenario where a technology company creates a new platform that directly connects consumers with independent hotels and local tour guides, bypassing traditional tour operators and travel agencies. How would this new platform disrupt the traditional chain of distribution?
A large hotel chain decides to eliminate travel agent commissions, hoping to drive more direct bookings through their website and call centers. Analyze the potential long-term consequences of this strategy on the broader travel distribution ecosystem.
A large hotel chain decides to eliminate travel agent commissions, hoping to drive more direct bookings through their website and call centers. Analyze the potential long-term consequences of this strategy on the broader travel distribution ecosystem.
Flashcards
Package Holiday
Package Holiday
An arranged combination of at least two travel components like transportation, accommodation, meals, tours, and guide services.
Convenience
Convenience
The primary principle that makes package holidays attractive to tourists.
Static Holiday
Static Holiday
Package holidays where the trip takes place in a single fixed location.
All-Inclusive Holiday
All-Inclusive Holiday
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Multicenter Holiday
Multicenter Holiday
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Guided Vacation
Guided Vacation
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Escorted Tour
Escorted Tour
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Guided tour hosted package
Guided tour hosted package
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Tour Host
Tour Host
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Independent Tour
Independent Tour
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Tailor-made Package
Tailor-made Package
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Hotel Accommodation Only
Hotel Accommodation Only
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Hotel Accommodation with Add-ons
Hotel Accommodation with Add-ons
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Land Package
Land Package
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Customized Packages
Customized Packages
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Free and Easy (F&E) Tour
Free and Easy (F&E) Tour
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Seat-in-coach (SIC)
Seat-in-coach (SIC)
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Compulsory Tours
Compulsory Tours
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Combo Tours
Combo Tours
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MICE
MICE
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3D2N
3D2N
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4D3N
4D3N
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5D4N
5D4N
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Book and Buy
Book and Buy
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Reservation
Reservation
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Full Board Meal Package
Full Board Meal Package
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Level 1 Distribution
Level 1 Distribution
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Level 2 Distribution
Level 2 Distribution
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Horizontal Integration
Horizontal Integration
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Vertical Integration
Vertical Integration
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Diagonal Integration
Diagonal Integration
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Wholesalers & Retailers
Wholesalers & Retailers
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Tour Operator
Tour Operator
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Brokers (Tour Operators)
Brokers (Tour Operators)
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Consolidators
Consolidators
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Direct Distribution (Level 1)
Direct Distribution (Level 1)
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Direct Sell
Direct Sell
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Principals (Tourism)
Principals (Tourism)
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Retailers (Travel)
Retailers (Travel)
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Indirect Distribution
Indirect Distribution
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Leisure/VFR Consumers
Leisure/VFR Consumers
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Study Notes
- Package holidays (package tours or tour packages) involve combining at least two travel components.
- These components include: transportation, accommodation, meal plans, sightseeing tours, tour coordinator, and tour guide services.
- Package holidays are more convenient, effective, less expensive, safer, more comfortable, and more secure than DIY travel.
- Package holidays are divided into regular tour packages and ad-hoc tour packages.
Static Holidays
- Static holidays or single-destination holidays occur in one fixed location.
- These are known as all-inclusive holidays if the price includes all meals, beverages, snacks, facilities, and services at a hotel or resort.
- The level of all-inclusiveness depends on the brand and target market of the company.
- An example is El Nido Resorts in Lagen Islands, Palawan.
Multicenter Holiday
- These combine two or more destinations into one trip, which allows tourists to see more than one place.
- Ex: Magellan's Cross Tour in Cebu, then Shangri-La's Mactan Resort and Spa.
Tour or Guided Vacation Categories
- Tour or guided vacations happen in several destinations, and include escorted tours and hosted packages.
- Escorted tours are prearranged travel programs led by a tour manager or leader, providing services and information, possibly with local expert tour guides.
- Cordillera Escorted Tour in Banaue, Batad, and Sagada is an example.
- Guided tour hosted packages offer independent travel with guidance from a host in the tourist destination, who acts as a representative or ground agent.
- This host provides meet and greet services and assists with planning, transfers, tour guides, and ticketing.
- 7-day Palawan Tour an example: Puerto Princesa to El Nido with host from STI Travel and Tours.
Independent and Tailor-Made Tours
- Independent tours are package holidays for independent tourists traveling without a group.
- Travel components are selected based on tourist profile and requests, including services like sports, cultural events, and excursions.
- Ex: Exploring Volcanoes: Mt. Pinatubo, Taal Volcano, and Camiguin.
- Tailor-made packages involve customizing all aspects of a package holiday to meet client needs.
- These packages are designed to fit client requirements, and they may be more expensive.
- A tailor-made example can be a Siquijor Island Getaway for Dela Cruz Family.
Other Types of Tour Packages
- Other tour package types commonly applicable in the Philippines include accommodation, destinations, duration, booking, and meals.
Land Arrangement
- Hotel Accommodation Only is hotel accommodation on a per-room-night basis, typically including breakfast.
- Hotel Accommodation with Add-ons is a hotel booking that includes one or two extras like airport transfers.
- Land Package (hotel with breakfast, transfers, and tours) includes a complete land arrangement set, including city tours for clients.
- Customized packages are tailored to clients with specific itinerary requests.
Destinations and Tours
- Free and Easy (F&E) tour package includes a single destination with non-compulsory day tours.
- Arrangements are usually on a Seat-in-coach (SIC) basis, not private.
- Private arrangements can be made with extra charges.
- Compulsory tours are cheaper packages with required city tours, with penalties for those who opt out after availing it.
- These are also on an SIC setup.
- Combo tours combine two or more destinations with optional day tours.
- Meetings, Incentives, Conferences, and Exhibitions (MICE) tour packages specialize in planning, booking, and facilitating conferences, seminars, and other events.
Duration of Stay
- 3 DAYS 2 NIGHTS (3D2N) is a tour package lasting three days and two nights.
- 4 DAYS 3 NIGHTS (4D3N) is a tour package lasting four days and three nights.
- 5 DAYS 4 NIGHTS (5D4N) is a tour package lasting five days and four nights.
Booking Details
- Book and buy reservations can't be held and must be finalized to be able to make the reservations.
- Reservations can be held until a certain deadline, when they will be automatically cancelled or finalized .
Meal Inclusions
- Full Board Meal Package includes breakfast, lunch, and dinner.
- Half Board Meal Package includes breakfast and lunch.
- Breakfast Only Package includes just breakfast.
Operating Environment
- Tour operators must adapt to changes in their environment.
- Activities depend on current issues and events in their country and the destinations they develop.
- Tour operators align with market demand from their base country and other countries.
Chain of Distribution
- Package holidays mainly consist of basic travel components.
- Distribution goes through intermediaries, which are wholesalers or retailers.
- Tour operators are wholesalers.
- Travel agencies are retailers.
- Tour operators can be brokers or consolidators.
- Brokers are tour operators in the airline industry offering accommodations and other travel services.
- Consolidators are brokers in the airline industry buying tickets directly from airlines and reselling to travel agents or consumers at discounted rates. -Tour operators are able to give commissions to retailers, for a greater profit margin.
Levels of Distribution
- Level 1 distribution is direct distribution, cutting out assistance from intermediaries.
- Level 2 distribution involves retailers selling and promoting tour operator packages, earning commissions on sales.
The Need for Integration
- Horizontal integration is when companies merge with other companies at the same level in the distribution chain.
- This most often occurs via companies offering similar products.
- Vertical integration is when a company develops its own operations or merges with another component from a different level within the distribution chain.
- Diagonal integration occurs when a travel business tries to enter another service that may assist its package holidays and other travel products.
- Types of integration help tour operators and travel agencies to survive in the travel industry.
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Description
Package holidays combine travel components like transportation and accommodation. Static holidays occur in one fixed location, while multicenter holidays combine multiple destinations into one trip. They offer convenience and security compared to DIY travel.
