Question

1. Discuss how the distribution channels have changed in the hospitality and travel industries based on the following factors.

• Technology
• International travelers

2. Why is franchising such a fast-growing distribution channel in the hospitality and tourism industry?

• Select one field (food, lodging, entertainment)
• You don't need to select a specific company, you can discuss franchising in general based on the field you picked.

Answer 1

Disribution Channels in Hospitality & Travel Industry

Distribution channels are sequences of businesses through which a product or service moves till it reaches the end user. Examples are retailers, wholesalers, techonolgy, suppliers. Channels are divided into 2 parts one is the direct channel where a product is purchased from the manufacturer directly and the other is indirect channel where the product is purchased from wholesaler or retailer.

The distribution channels that Hotels, States of every Country, restaurants etc use to attract the tourists in their country has variuos channels. Technology is one of the key channels now.

- Technology

Digitization is need of the hour. The investments hospitality industries like hotel, lodging, restaurants, tourist spots put in technology aids then significant revenue generation. These days hotels receive more bookings through internet than direct walkin or through travel agents. The tourist entries are booked online in that city or state's website to avoid extra time of standing in a que.

Some of the important online distributors are as follows

1. A hotel's website is the most important distribution channel. Having an own website is a cost effective marketing tool. Once the website is working and the development fee is paid, the only requirement is the cost of website maintenace which is not high. Hotel's website provides an ideal platform for the travellers to check the room availability, online booking, surfing the gallery and facilities available in the hotel. It is the only online distribution channel that can generate direct sales instead of paying a third party or a travel agent to do so.

2. There are various travel websites where a hotel or a tourist place, restaurants can register themselves and link their website to that travel site. These travel websites provide feedbacks and ratings helping the hotels, resaurants etc to improve their services. One can also check the discounts provided by their competitors to plan and promote self business appropriately.

3. There are online travel agents websites where a hotel, transport service company can resgiter themselves and get an advantage of being promoted. Many travellers book through these online travel agency thus giving another source of revenue generation to the hotels though a percent of commission is shared with the online travel agent which is not too high. These online travel agent, give the travellers overall idea about the reviews, hotel area, the low priced as well as high priced hotels and transport services.

- International Travelers

The travelers play as a reverse channel in channel of distribution. The final product or services is offered to the travellers who are the source of revenue generation for tourism industry. With the help of technology advancement in tourism and hospitality industy, it becomes easier for the travellers who want to travel internationally to do the booking online as well as check the reviews and discounts. There are many onlien travel agents tied up witht he hotels, restaurents, transport services who make it easier for the travellers to do the booking and travel.

Franchising is Fast Growing Distribution Channel in hospitality & tourism industry

Franchising is a kind of marketing done by an organization where a franchisor (owner) gets his distribution of product or services done through a dealer (Franchisee). Nowdays there are many eatery joints who once grown to be a successful establishment and popularity expand their businesses by allowing investors to use their name, brand product in form of franchisee of that company in exchange of a franchisee fee. The franchisee will generate revene throught he business and pays the percentage of royalties decided to the franchsior.

Food industry is one of the fast growing distribution channel in hospitality & tourism industry. Many successful fast food outlets give their franchisee to intrested investors in different countries, cities ets. This help the main company to market its brand as well as reach out to the larger number of audiences. There are international food franchise brands which has a reach accross more than 15-20 countries. This helps the international travellers who refer for branded outlets for food to reach out to them. The Brands also cater to the local tastes in each country's franchisee as a part of promotion.