Tourism distribution channels for peripheral areas: a case study of Southland, New Zealand

Abstract

This thesis explores the structure and functioning of distribution channels for the peripheral region of Southland, New Zealand. Using a comparative destination approach, tourism suppliers and representatives from tourist organisations in Southland discussed the structure of distribution channels for their particular businesses and areas. Studying distribution channels from a peripheral region perspective highlighted some of the challenges faced by suppliers in distributing their products. It was found that there were differences in channel structures across sub-regions, industry players, sectors and forms of tourism. Most importantly, it was found that the majority of suppliers in Southland are small and medium sized enterprises (SMEs), with limited marketing budgets and distribution strategies, and consequently focus on individual and independent visitor markets. It found that there are relatively few links between SMEs and offshore intermediaries (including inbound tour operators, wholesalers and travel agents), with suppliers generally preferring to reach international visitors after they have arrived in New Zealand. This results in power in distribution channels resting with the destination-based channels such as information centres and booking agents. Group package markets are also found in parts of Southland; and the larger suppliers use conventional distribution channels to reach them, utilizing New Zealand-based and offshore sales staff. Distribution channels for the independent and individual markets are much more varied and complex, being found in the generating market, while travelling and at the destination. These are used by both large suppliers and SMEs in various ways to reach these markets. The research has highlighted the value of taking a comparative approach to establishing the structure and functioning of distribution channels for peripheral areas, along with the role location plays in their composition. It was found that some factors typical of peripheral areas such as limited accessibility, external control of transport linkages, low levels of tourism infrastructure and high seasonality of demand all impact on the size and types of markets able to be accommodated. Furthermore, other challenges such as negative perceptions of the periphery by New Zealand sellers were seen to have an impact on distribution channel structure and the volume of business generated for suppliers in some areas. The research has also highlighted the role tourist organisations play and their importance for SMEs in marketing destinations and industry education. The Internet was also found to play a primary role in distribution for Southland tourism products, with almost all suppliers interviewed able to provide information and receive bookings via the Internet. The Internet was found to be a primary distribution tool for SMEs and a secondary tool for larger suppliers with strong links with offshore intermediaries and substantial group markets. It was also found that most SMEs gather little market intelligence from the Internet, an issue that can be easily addressed. Overall, for all suppliers in Southland, the Internet is playing a growing role in distribution and will continue to be an important information and booking tool, allowing peripheral areas to reach their markets at a reduced cost in terms of time, money and effort.