By Rezdy — 21 Nov 2014

It’s only natural for tour operators and activity providers who want to participate in online distribution to first wonder how much it will cost.

If that sounds like you, then here’s what you need to know about the costs involved so you can budget better.

What tools do you need for online distribution?

Tour operators and activity providers will need an online booking system that allows you to manage all of your bookings.

Modern systems are actually built with software as opposed to hardware – this means it’s accessible from any device, as long as you have an internet connection.

The online booking system should also have a channel management feature, meaning it will manage your live inventory across all of your distribution channels.

That way, your availability is up to date and accessible to all of your agents. You avoid overbooking your tourism products while maximising your revenue.

Costs

Online booking software providers typically charge

  • a commission per booking;
  • a flat fee per booking;
  • a flat monthly fee; or,
  • a mix of all three.

While commission-based software is OK when you’re just starting out, it doesn’t scale well and will actually cost you more in the long run. It’s better to save yourself the hassle and start with a system that you won’t have to change later on.

You should also take into account additional costs like user fees and setup fees. Some software providers like Rezdy allow you to have unlimited users.

Make sure you look at customer testimonials, request demos and take free trials before you make your final decision.

Additional Resources

What agents do you need for online distribution?

Tour operators can sell tours and activities online through:

  • Online travel agencies (OTAs)
  • Experience gift retailers
  • Daily deal sites

The benefits of working with these agents is that they will be the one to deal with all customer changes, cancellations and refunds.

There are also places to list like government tourism websites which can attract tourists to your business.

Costs

Of course, your agents expect to be paid for helping to distribute your tours and activities. Typically there are three types of fees:

  • Listing fee (fixed/monthly cost to be listed on distributor’s website)
  • Booking commission (percentage of the value of the transaction)
  • Booking fee (fixed fee charged for providing the booking)
  • Combination of all three

OTAs, daily deal sites, and experiential gifting sites tend to work off a commission percentage model. However, you can also pay your agents using a flat nett rate. This is when you sell your tour/activity for a flat fee that is less than retail price, and the agent marks it up. For example, you sell your tour direct to consumers at $100. You sell it to your agent for $80, and allow them to sell at $100 or whatever price they want.

Government websites can be free but some will charge you to list with them.

Additional Resources





New Call-to-action