By Kevin Tjoe — 29 Nov 2021
There’s a dazzling array of ways you can promote and sell your tours or activities these days. But how do you make sense of all the choices? Let’s take a look at the various types of tourism distribution channels, and how each can help you to grow your bookings.
As a tourism operator you might already be taking bookings in two ways:
There’s no doubt direct bookings play a vital role – but just how important are indirect bookings?
Over 58.43% of tour and activity operators in the US and Canada work with agents and third-party resellers. This figure is higher for Australia and New Zealand operators, at over 81%.
With growing competition and changing customer expectations, it’s clear that having a website alone won’t cut it for bringing in quality bookings in 2021 and beyond. It’s for this reason that most tour operators turn to distribution channels.
Tourism distribution channels encompass all of the indirect ways you can market and sell your tourism offerings, from local visitor centers to large online travel agencies such as TripAdvisor and Expedia. These distributors (or resellers) help get your amazing products to market and in front of more customers.
While direct bookings may still account for a large part of business, branching out through additional distribution channels can help you to maximize your brand exposure, reduce risk and ultimately boost your bookings. Many distribution channels will have access to much larger marketing spends or broader customer bases, which can lead to more quality bookings for you.
Typically speaking you’ll provide your tour or activity availabilities to distribution channels, and they’ll, in turn, bring in bookings at a pre-agreed commission rate.
What are the main types of tourism distribution channels? These can be grouped into either offline or online categories.
Offline tourism distribution channels include many of the traditional ways to book a travel experience, such as hotels, restaurants, in-person travel agents, and trade events. You might ask to leave flyers, brochures, or discount codes with the reseller, and they can cross-promote or recommend your tours or activities.
Online travel distribution services include review sites like TripAdvisor, daily site deals like Groupon, and online travel agents such as Viator and GetYourGuide. OTAs may be:
In 2020, the global online travel agent market was worth approximately USD $432 billion. This is forecast to reach over USD $833 billion by 2025, presenting a huge opportunity for the tourism operators who choose to work with them.
It makes sense to form strategic partnerships with a mix of both offline and online distribution channels, and these partnerships can be rewarding for all parties.
You might partner up with fellow tourism operators to offer appealing holiday packages at great rates. Connect with hotel concierges in your area and ask them to recommend your experiences to guests. Set up commission rates with multiple OTAs, and reach out to travel bloggers to write about your tours or activities. Multiple, varied partnerships can be a great way of finding what works best for your business.
It can take a lot of time to form and manage strategic partnerships with multiple resellers. Luckily, technology is here to help. A channel manager such as Rezdy’s Marketplace makes it simple to negotiate agreements and manage commissions with a vast range or resellers, from local visitor centers to the big-name OTAs. This also shows live availability of your tours or activities from one dashboard, dropping the risk of pesky double bookings.
Read more: A guide to industry standard commission rates
What is the chain of distribution in travel and tourism? This chart (adapted from Tourism teacher) demonstrates how the different organizations in the travel and tourism industry tend to work together. Rather than a rigid structure, this is more of a guideline, because the industry is in constant evolution.
Suppliers are the operators who directly produce travel or tourism products. These can include tour and attraction operators, accommodation providers, travel insurance providers, airlines and car hire companies.
Wholesalers develop packages of travel products for retailers to sell on, though in some cases they may actually sell directly to the consumer. These packages or itineraries might include tours, activities, accommodation, transport, and/or travel insurance. Wholesalers can include:
Resellers are organizations that sell travel and tourism products directly to the consumer. These can include in-person and online travel agents, visitor centers, or B2C tour operators such as Intrepid Travel and Contiki Tours.
Customers are – you guessed it – the guests who ultimately buy the travel product. These could range from business to leisure travelers, and from domestic to international.
The way consumers find and book their travel experiences is in constant flux. In fact, these days it’s entirely possible that consumers might connect with travel distribution services at any tier of the chain of distribution. This is one of the reasons it’s so important to maintain a diverse distribution strategy for your tourism business.
We’ve said it before and we’ll say it again: there really is no such thing as a one-size-fits-all distribution strategy. It’s very useful to maintain a sense of balance in your distribution network and use a variety of distribution channels, so you’re not reliant on any one provider.
So how do you find the right mix for your tour or activity business?
Consider these questions when considering working with any distribution channel:
It’s also important to ask a few key questions about distribution channels when choosing your tour booking platform, as your choice of platform could either limit or expand your access to resellers. Be sure to ask:
As always, the Rezdy team is here to help with any questions you might have about boosting your bookings. You can book a free demo with a product specialist, or start your free 21-day trial and start connecting with distribution channels straight away.
Enjoy 21 days to take a look around and see if we are a good fit for your business.
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