By Taz Bareham — 31 Dec 2015
With Rezdy’s marketplace growing and more and more OTA’s starting to focus on tours and activities, it is important to know how much commission you should pay your agents in 2016.
Agents who resell tours and activities for a living rely on their commissions in order to earn their income. So, the bottom line is, if they don’t earn a commission from your sale, they are not going to promote your product.
As a tour and activity operator, you should rely on industry standard commission rates in order to establish your own commission rates for your products. The key to success is setting commission rates that motivate agents to sell your products, but that do not have a negative impact on your profit margins.
These are the predicted industry standard commission rates for 2016 that you can use as a guideline as you establish your rates for the coming year.
Retail travel agents earn a standard commission rate of 10%-20% of the retail price. A retail travel agent is an agent who sells tours and activities directly to customers. They may be an individual who operates their own travel agency, or perhaps an employee at a visitor information centre. In many cases, tour and activity operators do not deal with retail agents directly, but you may find a few through the Rezdy marketplace that want to promote your services.
Tour wholesalers earn a standard commission rate of 20%-30% of the original retail price. Tour wholesalers are a different type of travel agent, because they do not work directly with the consumer. Instead, the tour wholesaler connects the supplier with the retailer by packaging travel products together. For instance, a wholesaler might create a program that includes your tours and activities as well as a stay at a local hotel, a rental car and a flight. They package that product together, and market it to retail travel agents.
Inbound tour operators earn a standard commission rate of 20%-30% of the retail price. Inbound tour operators are a local resource that can be used to connect with a global market. An inbound tour operator is based out of your country, and they will package your tours and activities with other products in order to sell them to overseas travel distributors. Inbound tour operators generally focus on special interest tour programs, such as food and wine tours, adventure tours and religious tours.
An online booking system makes it easier for you to keep track of the established commission rates and ensure that every agent is being paid the commission that they deserve for selling your products. Through Rezdy, you can set specific rates for different products.
Through the marketplace the agents can view your live availability, sell your products and earn their commission after the order has been fulfilled. Since it will be so easy to book your tours and earn commissions, they will be extra motivated to sell your products.
Rezdy’s Marketplace is free to use for agents, you can re-sell tours online or in person, commission payments are automated and guaranteed. Learn more how Rezdy works for agents.
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