Tourism distribution channels and capacity management: the case of the Brazilian Island of Fernando de Noronha, a World Heritage Site

This research investigates the tourism distribution channels of Fernando de Noronha, an island off the Northeast coast of Brazil recognised by UNESCO as natural World Heritage Site. The novelty of this study is the examination of capacity management of this destination as a factor influencing supplier’s distribution channels. With this main purpose, the structures of the channel mix and the factors influencing them were identified. The research took a supply-side perspective, recognising the challenges of both suppliers and intermediaries when selling the destination. 41 in-depth interviews were conducted with suppliers, intermediaries located at Recife and Natal and governmental organisations (local, regional and central). A mass-market approach on selling the destination is in place by both the public and the private sector. Most of the tourists to Fernando de Noronha make use of indirect channels (via online reservation websites or travel agencies) or utilize the internet to reach suppliers. There are many factors influencing the structures of distribution channels. These were classified in three categories: general factors (market opportunity, partnership issues, price of channels, product’s characteristics, reputation of the channel, business capacity and experience), the use of direct distribution (get higher profitability, market trend, ease and good results of word-of-mouth) and the reasons for indirect distribution (to get higher customer numbers, provision of payment ease for customers and price of information provision to consumers). Although the carrying capacity measures of the destination were created in order to protect the natural resources of the Island for future generations, this is having an impact on the businesses when selling the destination and on tourists' travel decisions. The reason for this are: the payment of a conservation fee to gain access to the destination, the limited number of regular flights to the island (and regulated number of seats available), the restricted amount of airlines allowed to provide flights for the island and the controlled number of people that can get to the destination by plane and cruise ships each day. The capacity management of the destination is influencing supplier’s distribution channels because it increases the price of the destination, it means a lack of flight tickets in the high season and consequently it creates an image of expensive destination. As a result, it is making suppliers (especially accommodation providers) be obliged to work with tour operators (and their respective travel agencies) due to the tour operators holding the transportation tickets (by sea on a cruise ship or by air) to the destination in advance. Thus, stakeholders of natural world heritage sites, national parks and islands should think of distribution channels as a key tool to strategically reposition their product in order to provide sustainable development for the destination and preserve its natural resources. Also, capacity management must be considered as an external constraint influencing stakeholders' distribution mix choices