As with all business partnerships, there are definite pitfalls you must avoid to make sure you stay in full control of your tour or activity business.

While working with online travel agencies (OTAs) is a great idea to distribute your tour and activity products,  stand your ground against OTAs who insist on…

1. An exclusive agreement

We have heard of OTAs who try to enforce exclusivity on tour and activity suppliers – not just by saying you cannot work with other OTAs, but even dictating what booking software you must use.

They threaten to stop reselling your tours and activities if you don’t comply.

exclusive-tour-ota-agreements

Under Australian law, this is completely illegal, and you can contact the Australian Competition and Consumer Commission:

“A business with a substantial degree of power in a market is not allowed to use this power for the purpose of eliminating or substantially damaging a competitor or to prevent a business from entering into a market. This behaviour is referred to as ‘misuse of market power’.”

As it is your business, who you choose to work with is completely your decision.

What should you do about it?

  • Assert your rights! If you feel pushed into a corner by an OTA that is misusing their market power, contact the ACCC.
  • Steer clear of OTAs who want exclusive agreements. You don’t want to put all your eggs in one basket, so the more agents you have, the better!  You can counter offer a ‘preferred’ relationship with higher commission instead. If you find it to be ineffective, then bring the commission back down to what it was.

2. An outdated booking system

Live availability is a new advancement for OTAs, so very few have caught on. Unfortunately, most OTAs still ask tour and activity suppliers to manually update their availability.

This can be through a login, or via phone and email.

 

outdated-booking-system

 

The risk here is overbooking your tours or activities, which results in unhappy customers and even more admin trying to rectify the situation.

While the OTA can easily find a similar product to satisfy the customer, you lose out.

What should you do about it?

Partner with agents that can manage your distribution channels through direct integration with booking software.

Agents that are quick to adapt include Viator and RedBalloon, who already provide live availability to their customers by partnering with third party booking engines (including Rezdy).

If your booking software doesn’t integrate with any distribution channels, consider switching to increase your online distribution. Rezdy is constantly integrating with distribution channels to help tour operators increase their reach (take a free trial or request a demo).

3. Excessive commission

Commission is necessary because that’s how agents get paid. Anywhere from 10-30% commission is standard for tours and activities.

toomuchcommission400

While you should pay commission to your agents, you shouldn’t pay too much. When is commission excessive? When that agent doesn’t bring you plenty of bookings, making them an ineffective distribution channel.

This doesn’t mean you should be a penny pincher, either. Realise the benefits that OTAs bring you.

What should you do about it?

Base your decisions on data. Assess every partnership’s contribution to your overall revenue, and adjust your commission accordingly.

Your booking software should be able to provide you with the rich reports you need to make those tough decisions. There’s no need to jump to conclusions.

To keep reading about distribution channels for tour operators, download our ebook on distribution.





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Simon Lenoir, Founder and CEO of Rezdy Online Booking Software
About Simon Lenoir

Simon has over 15 years’ experience as an IT professional. He also has extensive experience in the travel industry from being an around-the-world traveller and managing a dive centre in Southeast Asia for over 3 years. Simon is now dedicated to providing the best online booking solution for tours and activities operators; he is the brains behind Rezdy.Outside office hours Simon is a true activity addict – mountain biking, sailing, swimming, beach volleyball – just to name a few. But most of all he loves diving in Australian waters.

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3 Mistakes Tour Operators Should Avoid When Working With OTAs

, , ,

As with all business partnerships, there are definite pitfalls you must avoid to make sure you stay in full control of your tour or activity business.

While working with online travel agencies (OTAs) is a great idea to distribute your tour and activity products,  stand your ground against OTAs who insist on…

1. An exclusive agreement

We have heard of OTAs who try to enforce exclusivity on tour and activity suppliers – not just by saying you cannot work with other OTAs, but even dictating what booking software you must use.

They threaten to stop reselling your tours and activities if you don’t comply.

exclusive-tour-ota-agreements

Under Australian law, this is completely illegal, and you can contact the Australian Competition and Consumer Commission:

“A business with a substantial degree of power in a market is not allowed to use this power for the purpose of eliminating or substantially damaging a competitor or to prevent a business from entering into a market. This behaviour is referred to as ‘misuse of market power’.”

As it is your business, who you choose to work with is completely your decision.

What should you do about it?

2. An outdated booking system

Live availability is a new advancement for OTAs, so very few have caught on. Unfortunately, most OTAs still ask tour and activity suppliers to manually update their availability.

This can be through a login, or via phone and email.

 

outdated-booking-system

 

The risk here is overbooking your tours or activities, which results in unhappy customers and even more admin trying to rectify the situation.

While the OTA can easily find a similar product to satisfy the customer, you lose out.

What should you do about it?

Partner with agents that can manage your distribution channels through direct integration with booking software.

Agents that are quick to adapt include Viator and RedBalloon, who already provide live availability to their customers by partnering with third party booking engines (including Rezdy).

If your booking software doesn’t integrate with any distribution channels, consider switching to increase your online distribution. Rezdy is constantly integrating with distribution channels to help tour operators increase their reach (take a free trial or request a demo).

3. Excessive commission

Commission is necessary because that’s how agents get paid. Anywhere from 10-30% commission is standard for tours and activities.

toomuchcommission400

While you should pay commission to your agents, you shouldn’t pay too much. When is commission excessive? When that agent doesn’t bring you plenty of bookings, making them an ineffective distribution channel.

This doesn’t mean you should be a penny pincher, either. Realise the benefits that OTAs bring you.

What should you do about it?

Base your decisions on data. Assess every partnership’s contribution to your overall revenue, and adjust your commission accordingly.

Your booking software should be able to provide you with the rich reports you need to make those tough decisions. There’s no need to jump to conclusions.

To keep reading about distribution channels for tour operators, download our ebook on distribution.





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