MARKETING THE INDUSTRY SEGMENTS

1
MARKETING THE INDUSTRY SEGMENTS

• 4.07 Explain travel agencies.

2
Travel agent A wholesaler who is authorized to
represent buyers and sellers of the travel
industry for a commission
Travel agency A business that employs travel
agents who make travel arrangements for clients
for a commission or service charge
3
Travel Agencies

• American Express
• AAA of the Carolinas
• Mann Travel Cruise
• Thomas Cook

4
American Express

• Independently owned and operated travel agencies
  licensed to provide travel and travel-related
  products and services
• American Express TravelFunds Card
• New, safe way to carry money
• Not linked to your bank account
• Prepaid, reloadable card
• Balance refunded on lost or stolen cards

5
American Express (cont.)

• American Express Travelers Cheques
• Available from banks
• Can be ordered online up to 1,000 in combined
  Travelers Cheques and foreign currency
• Customer service support available 24/7
• Value refunded on lost or stolen cheques
• Accepted practically everywhere

6
AAA of the Carolinas (American Automobile
Association)

• 25 offices in the Carolinas
• Member benefits
• Travel assistance with destinations and
  reservations
• Road service
• Insurance
• Assistance with automotive purchase, maintenance,
  and repair

7
Mann Travel Cruise

• Founded in 1975
• Largest locally-owned travel agency in the
  Carolinas

Thomas Cook

• 3,600 travel agencies
• Services supported by 28,000 employees across 5
  continents
• Third largest travel group in the world

8
Historical events in the travel industry

• Thomas Cook started the concept of the travel
  agent in England in 1841.
• Ward Foster introduced travel agencies to the US
  in 1888.
• Airline Deregulation Act was passed in 1978 and
  had impact on travel agencies.
• Commission cap was established reducing the
  travel agents profit.
• Travel agents had to diversify and began offering
  tourism services that were not dependent on
  airline reservations.
• Agents began to charge for their services.

9
Types of travel agencies

• Independent agencies Small, unaffiliated
  agencies that serve clients from a walk-in office
  location or over the telephone
• Agency chains Semi-independent agencies
  affiliated with one another through franchise
  agreements
• Consortium-affiliated agencies Independent
  agencies linked to gain the resources and
  financial benefits of a chain but with lower fees
  and commissions. Examples World Travel
  Affiliates and Hickory Travel Systems
• Commercial or corporate travel agencies
  Agencies that provide services to business
  clients for a commission on reservations made or
  for a management fee

10
Types of travel agencies (cont.)

• Home-based agencies Agents who conduct business
  from their homes using electronic technology
  rather than from the traditional office
• Internet agencies Agencies that may or may not
  be home-based and that serve clients primarily
  through the use of the Internet

11
Internet travel intermediaries Internet
agencies that act as a mediator between the
travel industry businesses and customers at a
lower price per transaction than either the
business or a traditional travel agency may be
able to provide

• Priceline.com
• Travelocity.com
• Expedia.com
• Orbitz.com

12

• Pioneer Internet intermediary of the hospitality
  industry, organized as Priceline Hotel Service in
  1998 and allows customers to negotiate prices
• Customers enter data stating destination, minimum
  quality star rating, and price they would like to
  pay.
• Priceline only considers hotels at or above the
  quality tier the customer has specified.
• Priceline negotiates to match the offer that best
  accommodates the client.
• Priceline receives a service charge.

13

• A giant search engine that allows consumers to
  enter a request and receive comprehensive data
  about options available
• Offers multiple ways to search for economy class
  travel
• Does not act as a negotiator

14

• Worlds leading online travel service
• 4th largest travel agency in the US
• Carries the Good Housekeeping Website
  Certification Seal
• Does not act as a negotiator

15

• A travel website formed by five airlines sharing
  a mission to provide better online customer
  service
• The award-winning flight search engine makes
  finding the lowest fare easy
• Searches hundreds of airlines to find the best
  flights for the customer
• Offers the largest collection of discount
  web-only airfares from dozens of airlines
• Provides a comprehensive selection of hotel
  rates, including discounted Orbit Saver rates
• First travel site to monitor travel conditions
  for travelers
• Does not act as a negotiator

16
Advantages of using a travel agent

• The agent has knowledge of a geographically
  diverse marketplace.
• The agent saves the customer time by researching
  the product mix that best meets the customers
  request.
• The agent can recommend price considerations.
• The agent may use Global Distribution Systems
  (GDS) to make reservations. GDS is a worldwide
  inter-organization information system that maps
  destinations for travel associates use in
  selling tourism services.

17
Disadvantages of using a travel agent

• The customer may be asked to pay a service
  charge.
• The agent may not have current information and
  prices.
• The agent may not work in a timely manner.

18
Challenges facing travel agencies

• Agents are no longer just order-takers making
  reservations at the customers request.
• Agents have to market themselves and the agency.
• Agents now have Internet competition.
• Agents earn commissions on reservations they
  make.
• Travel agents spend much of their time
  researching travel products.
• Agents must be culturally diverse and able to
  relate to customers personalities.

19
Package tour A prepaid travel arrangement that
includes transportation, accommodations, and at
least one other component such as meals,
transfers, sightseeing, or car rental, and that
is sold for a single all-inclusive price. Most
tours are arranged using the services of a travel
agent.

• Itinerary The predetermined schedule and
  arrangements for a trip.
• Independent tour The least structured tour
  package allowing purchasers to set their
  itineraries themselves. It is usually more
  costly for the customer and results in higher
  profits for the agent.
• Escorted tour The most structured tour package
  with a predetermined itinerary and a guide or
  host.

20
Tour rates

• An all-expense tour offers transportation,
  lodging, meals, and sightseeing for a
  pre-established price.
• Group rates or bulk fares are available only to
  tour organizers or agents who request a specified
  block of rooms or seats.

21
Resources available to travel agents

• Trade publications Print media associated with
  the travel industry. Examples Todays
  Traveler, Travel Weekly
• Trade associations Professional organizations
  associated with the travel industry. Example
  American Society of Travel Agents (ASTA)
• Tour associations Professional organizations
  associated with travel agencies that specialize
  in tours. Example National Tour Association

22
Marketing strategies for travel agents

• Marketing is vital to the successful travel
  agent/agency.
• Between 5 and 10 percent of an agencys total
  budget should be spent on promotion.
• Advertising is paid for by the agency.
• Agents must make a commitment to market
  themselves and the services they provide.

23
Advertising for Travel Agencies

• The objective of the agency must be determined
  before deciding how and where to advertise.
• The agency must consider the target market.
• The agency should consider the current client
  database.
• Broadcast media
• Print media
• Internet

24
Sales Promotion for Travel Agencies

• Contests
• Sweepstakes
• Incentive programs

25
Publicity/Public Relations for Travel Agencies

• Can be positive if initiated by the travel
  agent/agency or a satisfied customer
• May be negative if communicated by a dissatisfied
  customer
• Example Travel column written by a travel agent