`
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`Starbucks, Ex. 1072
`Starbucks v. Ameranth, CBM2015-00099
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`Marketing
`Leadership
`in Hospitality
`
`
`
`FOUNDATIONS AND PRACTICES
`
`Second Edition
`
`ROBERT C. LEWIS, Ph.D.
`Professor of Marketing and Graduate Coordinator
`School of Hotel and Food Administration
`
`University of Guelph, Guelph. Ontario
`
`RICHARD E. CHAMBERS, MBA
`President
`-
`
`Directional Marketing
`New York, New York
`
`HARSHA E. CHACKO, Ph.D.
`Associate Professor
`School of Hotel, Restaurant and Tourism Administration
`
`University of New Orleans, Louisiana
`
`VAN NOSTRAND REENHOLD
`I®P A Division of International Thomson Publishing inc.
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`1
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`ii
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`Starbucks, Ex. 1072
`Starbucks v. Ameranth, CBM2015-00099
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`Copyright © 1995 by Van Nostrand Reinhold
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`Library of Congress Cataloging-in-Publication Data
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`Starbucks, Ex. 1072
`Starbucks v. Ameranth, CBM2015-00099
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`Channels of Distribution
`
`681
`
`rates, the travel agency role in meeting plan-
`ning is bound to increase.
`
`The Travel Agent Role
`
`The travel agent is faced with a blizzard of
`changing conditions in the marketplace. Air-
`lines, collectively, are reported to change fares
`as many as 80,000 times a day. To recommend
`a hotel, the agent needs knowledge of location,
`rates, amenities, dining, entertainment, park-
`ing, ground transportation, recreation facilities,
`and more. The technology of the industry is
`changing at a furious pace in an attempt to keep
`up with all this information. Thus, the travel
`agent relies heavily on systems we have pre-
`viously discussed, plus some others.
`Agencies that were on manual systems only
`a short time ago, now have sophisticated data-
`base equipment to manage their bookings. (Al-
`most 100 percent in the United States, but not
`so in Europe and Asia, as shown in Table 16-1.)
`Figure 16-23 shows one example of such sophis-
`tication. Other automated systems are, in fact,
`largely reservation terminals provided by the
`airlines (e.g., Apollo by United Airlines and Sa-
`
`.ln the United States, 96% of all agencies are automated. They make $10.5 billion yearly in
`kings, half of which are CRS transactions.
`
`. ilropean agency market consists of 40,000 agency locations,. producing $9 billion in hotel
`.-Six countries account for 75% of these agencies: the UK, Germany, France, Italy, Spain,
`den. Mega-agencies dominate and tend to specialize in either business or leisure/passage
`y 40% of agencies are automated. In the UK, 22% of agents are automated. Germany is
`_pe’s most technologically advancecl—-~70% are equipped with Amadeus’ Start System. Only
`el bookings in Europe are made via CRS.
`
`Pan, Hong Kong, Australia, and Korea—account for 80% of all travel activity The
`market is dominated by mega-agencies. Four account for half of the travel business. Japan
`J1 is the world’s largest travel agency, followed by Kintetsu, Nippon Travel Agency, and
`__ Automation is clearly on the rise, yet few hotel bookings are conducted through CRS.
`Japanese agencies have CRS systems, only 30-40% outside Japan have access to CRS.
`
`‘-113. Hotels, November, 1993, p. 82. Courtesy of Hotels.
`
`
`
`
`
`riety of hospitality needs. The travel agent is
`compensated in the form of a commission, usu-
`ally based upon the rate of the service pur-
`chased. As a rule of thumb in most cases, a 10
`percent commission is paid to travel agents who
`. book cruises and hotel rooms, while airlines and
`' ental car firms pay a lesser rate. '1}:-ivel agen-
`ies also form consortia, using the strength of
`any individual agencies to combine marketing
`nd negotiating clout as a channel member. As
`channel of distribution, the travel agent is
`econd to none. Table 16-1 shows the status of
`
`_1-lmarily oriented toward the individual trav-
`ler, be it for business or pleasure This practice
`3 been changing, and agents are handling
`re meetings and group itineraries each year.
`The travel agency also is more of a full—service
`annel whereby hotel-booking may be iiiciden-
`5to the airline and ground transportation al-
`ly arranged. Because of this, travel agencies
`actively soliciting corporate meeting ac-
`ts, especially when they have previously
`dled the company’s
`individual business
`1 By promising more clout in negotiating
`
`
`
`
`
`
`
`lvlarheting Manager
`
`“V i_:raveLOCiIx GUI technology accesses databases that can be coupled with
`/ 1
`"Ix" visual presentation that educates the user by providing information
`/ ‘\descrihed in the "thousand words“ ofa picture.
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`FIGURE lé-23 ’I'raveLOG1X’s CRS technology
`
`bre by American Airlines), creating a direct link
`between travel agents and the airlines control-
`ling this distribution channel. Figure 16-24 is a
`sample directory page from the Sabre system.
`Like the hotel systems, these have been called
`central reservations systems (CRS), but are
`now being called global distribution systems
`(GDS). Table 16-2 shows GDS computer screen
`data that travel agents would view for the
`
`offering thousands of packages, incentives, an
`varying rate structures to varying people 8-
`varying times, makes booking a difficult taska __
`
`The rental car industry has followed Suit
`with the airlines and hotels, offering special’
`promotions and incentives every day. Many of‘
`these promotions have conditions attached to
`them, such as booking an airline seat 30 days in
`
`myriad
`
`
`
`
`
`Channels of Distribution
`
`683
`
`SABRE ASOCIATES RFERENCE 1994
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`.42 Choices, whether to take airline, ho-
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`ISBN U-—'-G‘-IE-DLEBE-l::
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`9 80442 018887
`
`Starbucks, Ex. 1072
`Starbucks v. Ameranth, CBM2015-00099