By Blake Ng — 13 Apr 2017
Tour and activity suppliers have to decipher between marketing costs and distribution costs in order to develop an effective distribution strategy that drives bookings but also maximizes the revenue generated for their company. Understanding the pivotal differences between marketing and distribution in tourism allows tour operators to have a realistic expectation of the commission costs they can expect and why those costs are necessary.
In order to drive direct bookings, you will create a marketing strategy that incorporates traditional marketing materials, online marketing, social media marketing and a variety of other components. As is to be expected, there will be costs associated with implementing this strategy, but the benefit of increasing your direct bookings is worthwhile. Of course, you can make it easier than ever to enact your marketing strategy by investing in an online booking system that automates the booking process.
Given the fact that you earn your direct bookings as a result of your own marketing strategy and technology resources, you will not have to pay a commission fee for these bookings. For many tour and activity operators, direct bookings are preferable because they maximize the revenue generated per booking. However, it’s unrealistic to expect that all of your bookings will be direct. A distribution strategy is necessary in order to appeal to a broad range of travelers and steadily increase your overall bookings.
Whether you are in charge of a corporate brand with a chain of tour and activity offices in different destinations or you are an independent tour operator, you need to create a distribution strategy that allows you to connect with a variety of agents and distribution channels. By doing this, you will be able to take advantage of their marketing and promotional efforts in order to increase your own bookings. The agents within your distribution network will resell your tours for you, but they will expect a commission payment per booking.
This is an additional cost associated with your bookings, but it is a necessary expense as it allows you to reach customers you would not otherwise have access to. An online booking system can help you connect with agents through a channel manager and also can automate the commission payment process.
Diversifying the channels that you utilize and understanding the costs as well as the expectations associated with each channel will help you create a network that is both helpful and powerful when it comes to building your brand. By implementing an online booking system that understands the unique nature of the tour and activity industry, you will be able to develop a distribution strategy with ease and automate many of the administrative tasks that currently take up the majority of your time.
Rezdy is known not only for its innovative software solutions for tour and activity providers, but also for the resources that it provides to its clients. To learn more about the differences between marketing and distribution in tourism, download the Rezdy distribution ebook now.