Millions of people have the time, money, motivation, and means to travel, whether for pleasure or for business. Consequently, a complex industry has evolved to promote travel and to serve the needs of travelers.
To a person who is new to the industry—and even to those who are a little more seasoned—navigating the waters can be tricky. For a deeper understanding of the entities and how they relate to you, be sure to investigate our Magellan Gold award-winning TRIPKIT.
Think of the travel industry as an ecosystem that is constantly changing, evolving, and innovating with many industries, businesses, people, and, at the center of it all: The Traveler. To understand this ecosystem, TRIPKIT breaks it down into these main categories: suppliers, distributors, and supporting businesses and organizations.
- Suppliers are companies or businesses that provide the services needed for travel. This includes things like airlines, hotels, car rental companies, cruise lines, and tour operators. Restaurants, nightclubs, museums, theaters, and others also may be considered suppliers, though on a smaller scale.
Your job as a travel advisor is to help your clients choose the service or supplier best suited for their needs. Because there are thousands of suppliers, it’s important that you develop preferred relationships or take advantage of existing preferred partnerships through your agency or consortium. These relationships will benefit your client, the suppliers, and you by creating an alliance of trust, quality, and reliability.
- Distributors, such as tour operators, travel agencies (including online travel agencies or OTAs) that act as the go-between or intermediary between suppliers and travelers, helping travelers buy or obtain the goods and services owned by suppliers. They also help suppliers promote their products in the marketplace where travelers can find them.
A travel agency is a distributor because it acts as the intermediary between the client and the supplier. Your role as a travel professional is to understand the clients’ needs and match them to the best supplier of services. A travel agency also acts as the marketer or seller of supplier products to the client. Other distributors include tour operators/packagers, consolidators, and destination management companies (DMCs).
- Supporting businesses and organizations provide travel-related services, such as global distribution systems (GDSs), customer relationship management (CRM) systems, and travel insurance companies. Others regulate and support the industry, like American Society of Travel Advisors (ASTA), which lobbies governments; International Air Transport Association (IATA) and Airlines Reporting Corporation (ARC), which oversee air travel; and The Travel Institute and Cruise Lines International Association (CLIA), which provide education and certification. National tourism offices (NTOs) promote travel to their countries, while travel consortia offer support, education or training, marketing, networking, and preferred supplier arrangements.
These categories are closely connected, but they don’t always stay in their own segment. For instance, airlines as suppliers provide seats and services for air travel, but they also sell their tickets directly to consumers through their websites and apps, making them distributors as well as suppliers. And large companies might own businesses in each part of the travel industry, like hotels, rental car companies, travel agencies, and software companies.
Remember that an educated travel professional saves travelers’ time and money and provides peace of mind for agents and clients alike. To start building a solid foundation on the critical areas all travel professionals must have to be successful, check out TRIPKIT today.
