So, I spend a lot, of my time out there speaking to tour and activity operators from all over the world.
And one of the things I notice often is that many are lukewarm on the idea of selling their tours and activities via travel partners.
They tell me either:
- their commissions are too high
or
- they just don’t know which travel partners are the right ones to work with and which ones are actually going to deliver bookings and justify their commissions.
As such they prefer to focus on getting direct bookings – they tell me that they’d rather keep that 20%, 25% or 30% that they would be paying in commission to a travel distribution partner in their pocket.
To this I say….but how much is it costing you to market your tour and generate that direct booking?
What is that direct booking actually costing you when you take into account SEO or website improvements, or Facebook and Google Ads or any other marketing expenses that you’re incurring?
What impact are these expenses having on the profitability of your tour?
I would suggest that a commission to a travel partner should be considered a marketing expense – like various advertising channels or SEO.
If your tour retails at $100 and you’re selling it to a travel partner for $75 who is in turn onselling that tour to the consumer, you can be confident that $25 is being put to good use marketing your tour.
In my tour business selling our tours through carefully selected travel partners was where we decided we were going to grow our business from day one – and it paid off for us big time.
We were able to scale our business to $2million plus in revenue as a result.
Therefore, here are three reasons why I would argue that building relationships with, and selling your tours and activities through the right travel partners can deliver you long term success:
1.International Exposure
The international exposure you’ll receive for your tours or activities is invaluable. Quality travel wholesalers or inbound tour operators that you’re working with take part in multiple internationals trade shows, workshops, roadshows, sales calls each year. When they are out there meeting, pitching, doing deals, networking and building relationships, they are talking about their business…and they are talking about you – the tour and activity operators in the destinations that they are experts in.
Added to that, if they’re good, their vast experience and their in depth understanding of tourism products and the market that these products best fit means that they’re regularly out there pitching your product to the right international travel partners that will LOVE what you do and will buy it through them.
2.Inclusion and Participation in Brochures and Campaigns
They produce brochures, they create campaigns and they get you in them and get you involved. Their marketing reach is beyond that of any small operator. Some you’ll need to pay for. Others you won’t. Some you can pay for via a contra deal – ie when you generate bookings as a direct result of the campaign or brochure inclusion.
- A Consistent Revenue Stream
Once you get your relationship with the right travel partners humming along, you’ll discover that the ones you really connect with can deliver an ultra consistent and reliable revenue stream – one that you can rely on year in year out and one that allows you to make really great business decisions – decisions on staff, equipment, vehicles, trade shows, marketing activities and more.
This kind of consistency is gold for a small tour operator.
Consider this. In the year before we sold our tour business in 2017, our top 5 travel partners were worth $700,000 annually. Our top 10 were worth over $1million in revenue annually. This had grown by 11% in 2015, 14% in 2016 and 12% in 2017. This revenue and this consistency in growth allowed us to easily make super important decision that helped propel our business forward.
So for all of you tour or activity operators out there thinking about other distribution channels that you could be using to grow your business…I hope this helps 🙂