What is the difference between a DMC and a tour operator?

sat mexico difference tour operator and dmc in mexico

Tour Operator History

In the middle of the 19th century, after an ideological change brought about by the Industrial Revolution, the need for leisure and recreational activities arose, allowing the consolidation of tourism as a developing industry.

In 1841 the first group trip in history was registered, planned, and organized by “The Father of Tourism,” Thomas Cook (1808-1892).

Time after, he would create the first travel agency, the oldest in the world, “Cook and Son.” These revolutionary ideas would have an impact on modern tourism in the not-too-distant future.

The arrival of globalization and the evolution of transportation means motivating a phenomenon known as the “Tourist Boom” (1950-1973). This exponential growth gives rise to the need to manage destinations.

The tourist can acquire different principal and complimentary services just by contacting a tourist agent. This allowed the development of other organizations or companies in charge of integrating packages to market them and provide a better service to the tourist. And this is when the figure of Tour Operator was created.

The first to emerge are travel agencies, retail companies that offer tourism products or services with or without intermediaries; they are focused on the client’s needs, conceive, create, plan, organize and execute tourism packages for small groups to a mass-market (DATATUR, 2006). Unlike other agents, their priority is to sell and manage package programs for their portfolio of clients.

With time and the expansion of mass tourism, the need to mass-produce to satisfy the destination’s demand was born. Tourist agents had to adapt by creating wholesale tourist products, setting up agencies where the experience and service have been reduced for a more accessible price.

These agents are known as tour operators, organizations that participate in tourism activities as intermediaries between the final consumer and the tourism product (WTO, 1998).

In other words, within the tourism market, they are the creators and distributors of tourism products in destinations that are generally commercial, integrating principal services (lodging, transportation, and food) and complimentary services (tours, excursions, guided visits, etc.).

Whose function is to facilitate trips that are difficult to arrange independently, creating large-scale tourism packages and circuits, marketing them to wholesalers at a single price, or distributing them directly to the client.

Benefits of contracting a Tour Operator

  • Affordable prices. 
  • Provides a selection of destinations in a specific region
  • Facilitates travel, packages, and transportation to market trends
  • The convenience of acquisitions. The tourist purchases all the necessary services (lodging, transportation, food, tour activities) from a single tour operator.

DMC History

In Europe in 1977, Tom Wibecker began to use the term Destination Management Company (DMC) to describe organizations that destroy the standards of traditional tour operators or wholesalers they seek to provide a quality service to the customer. In the mid-’80s, the Society of Incentive & Travel Executives (SITE) acknowledged the peculiar meaning of DMCs.

Destination Management Company (DMC) are professional tour operators and product managers, offering the best principal and complimentary services thanks to their extensive knowledge of the destination.

A DMC company is a specialists in the planning and organizing of any event, designing itineraries and logistic programs based on the client’s needs, capable of coordinating all local suppliers.

Their vast experience allows them to provide consulting services, in addition to their excellent logistics and management. Their dedicated anticipation of the event elements is another crucial point, ensuring comfort and safety. Successful execution will bring a good reputation for the DMC, exceeding the expectations of all participants. 

There are three types of DMCs based on the design and needs of the client that hires their services, that is, by the nature of the group: business (congresses, conventions, fairs, and incentive trips), specialized (they organize pre-designed trips with a focus such as cultural, sun and beach, ecotourism, romance, among others). And the mixed (combination of the two previous ones).

Benefits of contracting a DMC

  • Personalized service generating an added value in the tourist’s experience.
  • Design of unique and creative products tailored to the customer’s needs.
  • They perfectly know the characteristics and conditions of the destination, can provide access to exclusive locations.
  • Negotiation capacity to determine the costs associated with the requested requirements.
  • They are skilled in planning, coordinating, organizing, and supervising events.
  • They provide advisory and consulting services.
  • High quality (hygiene, attention, reception, orientation).
  • Solid relationships and connections that maximize the budget.
  • In addition to functioning as network generating elements through the concentration of the global supply of tourism services provided by small local businesses (Jamal and Getz, 1995), they also function as network generating elements through the concentration of the global supply of tourism services provided by small local businesses (Jamal and Getz, 1995).

So, what is the difference between tour operators and DMCs?

In short, the tour operator creates products for a mass market where the main objective is sales volume with limited customer service. On the other hand, the local integrated travel agencies or DMC’s have a specialized approach by niches and provide personalized attention, and customer satisfaction is their principal objective. 

Christopher H. Lee, president of ACCESS California, uses a peculiar analogy to refer to this type of organization’s work. His philosophy poses contrasts aspects of a DMC with an architect since this organization can design an event thanks to its vast knowledge and experience in the field to satisfy the requirements of the meeting, convention, congress, or incentive trip, in addition to meeting the client’s expectations by optimizing the destination’s resources and limiting itself to the infrastructure of the area.

With the digital era, tourism has evolved towards new technologies, creating new distribution channels through networks such as the Internet, modernizing its services, and offering new tourism products.