This paper examines industrial relationships in the distribution channel of tourism. Distribution becomes one of the most significant elements of tourism marketing as it determines all other aspects of the marketing mix. This paper concentrates on the conflict experienced in the distribution channel between hoteliers and tour operators in the Mediterranean summer/seaside resort context. It attempts to illuminate the area, to identify significant variables for its assessment and to provide a solid background for further research on the topic. Research in Greece demonstrates that Mediterranean hoteliers increasingly find the power of tour operators from Northern European countries very challenging. Similarly with other intermediaries, in order for tour operators to remain competitive in the marketplace they reduce the profit margins of their suppliers at destinations and thus reduce the profitability levels of enterprises and the economic impacts at destinations.