By Taz Bareham — 2 Dec 2014
As with all business partnerships, there are definite pitfalls you must avoid to make sure you stay in full control of your tour or activity business.
While working with online travel agencies (OTAs) is a great idea to distribute your tour and activity products, stand your ground against OTAs who insist on…
We have heard of OTAs who try to enforce exclusivity on tour and activity suppliers – not just by saying you cannot work with other OTAs, but even dictating what booking software you must use.
They threaten to stop reselling your tours and activities if you don’t comply.
Under Australian law, this is completely illegal, and you can contact the Australian Competition and Consumer Commission:
“A business with a substantial degree of power in a market is not allowed to use this power for the purpose of eliminating or substantially damaging a competitor or to prevent a business from entering into a market. This behaviour is referred to as ‘misuse of market power’.”
As it is your business, who you choose to work with is completely your decision.
Live availability is a new advancement for OTAs, so very few have caught on. Unfortunately, most OTAs still ask tour and activity suppliers to manually update their availability.
This can be through a login, or via phone and email.
The risk here is overbooking your tours or activities, which results in unhappy customers and even more admin trying to rectify the situation.
While the OTA can easily find a similar product to satisfy the customer, you lose out.
Partner with agents that can manage your distribution channels through direct integration with booking software.
Agents that are quick to adapt include Viator and RedBalloon, who already provide live availability to their customers by partnering with third party booking engines (including Rezdy).
If your booking software doesn’t integrate with any distribution channels, consider switching to increase your online distribution. Rezdy is constantly integrating with distribution channels to help tour operators increase their reach (take a free trial or request a demo).
Commission is necessary because that’s how agents get paid. Anywhere from 10-30% commission is standard for tours and activities.
While you should pay commission to your agents, you shouldn’t pay too much. When is commission excessive? When that agent doesn’t bring you plenty of bookings, making them an ineffective distribution channel.
This doesn’t mean you should be a penny pincher, either. Realise the benefits that OTAs bring you.
Base your decisions on data. Assess every partnership’s contribution to your overall revenue, and adjust your commission accordingly.
Your booking software should be able to provide you with the rich reports you need to make those tough decisions. There’s no need to jump to conclusions.
To keep reading about distribution channels for tour operators, download our ebook on distribution.