Tour and activity providers must network within the industry in order to book as many tours as possible. As part of the distribution strategy, many tour operators work with travel agents in order to sell their tours and activities.

While there is an industry standard for commission rates for specific types of agents, there are sometimes opportunities to develop preferred partnerships with agents. A preferred agent may be offered a a better commission rate.

What is a Preferred Partnership?

A preferred partnership is an agreement that is developed between a tour operator and an agent who is entitled to exclusive reselling rights. In general, a tour operator will only develop preferred partnerships with agents that they know and trust. In most circumstances, certain prerequisites are required in order to become a preferred partner. For example, a tour operator may only allow an agent to become a preferred partner if they sell a specific volume in one season, or if they successfully book a certain number of tours for their company.

Who Receives a Preferred Rate?

A distribution partner who becomes a preferred partner often earns a preferred rate. This is generally a higher commission rate than the industry standard. When determining the preferred rate for a distribution partner, tour and activity providers should create a rate that allows them to maximize their own profit. While it is important to use distribution partners in order to increase bookings, it is not necessary to sacrifice profit in order to do so. Tour and activity operators should create preferred rates that motivate distribution partners while also allowing them to grow their business to the next level.

What are the Industry Standard Commission Rates?

There are standard commission rates for specific types of agents, and it’s important to know these rates when creating preferred partnership agreements. The industry standard commission rates are as follows:

  • Retail agents earn 10%-20% commission.
  • Tour wholesalers earn 25%-30% commission.
  • Inbound tour operators earn 25%-30% commission.

In general, a tour and activity provider may give a higher commission to their preferred partners than they do for their other agents. However, each company needs to decide on a preferred rate that works best for their own particular situation.

New Call-to-action

Once you have established preferred partnerships and set specific commission rates for those agents, you can implement them into your online booking system.

Rezdy is an online booking system that is designed specifically for tour and activity providers. Within Rezdy, you can establish industry standard rates for agents but also outline the terms for preferred partnerships. The software program keeps track of all this information, ensuring that it is easy for agents to resell and book your tours. To find out if Rezdy is the right system for your tour and activity company, begin your free trial today.

By continuing to use this website you agree to the use of cookies according to our privacy policy and terms.