13 Feb 2015 5 Rookie Mistakes Tour Operators Might Be Making With Agents

Tour and activity operators have long known the importance of partnering with agents to increase online distribution.

Establishing strategic agent relationships will get your name out there, increase the credibility of your business, and – most importantly – get you booked out.

If you aren’t solidifying as many partnerships as you had hoped for, ask yourself if you’re making any of the following mistakes.

1. Playing phone and email tag with agents every time you want to update your availability or lock in a booking.

Why it’s not ideal…

One of the biggest pains that agents experience when booking tours and activities is the length of time it takes to confirm bookings.

Most tour operators offer a 24-hour turnaround time via email, but this is less ideal than an automated booking system.

Without a quick way to check your availability (in real time) and book with you, agents will be unable to confirm it with their customers immediately. Both of you could lose business.

Instead…

Offering instant booking confirmation allows you and your agents to offer better customer service, capturing that customer right at the time that they’re ready to make their decision.

Use booking software like Rezdy which allows agents to log in, check your availability and book on your behalf.

Like Rezdy, your online booking system should provide you with a commission reconciliation report so that your agent’s commission is there in black and white, leaving no room for disputes.

2. Neglecting industry standards when it comes to setting commission.

Why it’s not ideal…

Commission is what matters most to agents, because it’s how they get paid.

There are a few commission rate mistakes that you should avoid:

• Giving the same commission rate to different types of agents.
• Giving only a 5% difference of commission between different types of agents.
• Giving last minute bookings from online travel sites better rates than agents.
• Having different domestic and international distribution rates.

Instead…

Understand the industry standards for agent commission.

There are 2 types of rates; the retail rate (what customers pay), and the nett rate (what agents see to add their commission).

• Retail travel agents get 10%-20% of retail price.
• Tour wholesalers get 25-30% of retail price.
• Inbound tour operators get 25%-30% of retail price.

You may also want to offer additional “over-ride” commission to encourage sales, which is generally 2-3% on top of existing commission rates.

3. Having an ad-hoc quality assurance program.

Why it’s not ideal…

Agents need to see that making sure your tours are consistently delivered to a high standard is a priority for you. Why? Because they are to blame if customers have a bad time.

If people keep complaining to your agents then you can be sure that they won’t recommend you in the future, no matter how high your commission is.

Instead…

Your quality assurance program needs to be structured!

• Create standards for your business, referring to regulations and your obligations to your customers.
• Create policies and procedures that line up with your standards.
• Create a document which describes your quality assurance program, detailing frequency of procedures and reporting.
• Create some sort of feedback loop from your customers, and set up a time to review this feedback regularly with other staff members.
• Create an action plan for responding to unsatisfactory performance.

You also need a procedure in place for dealing with customer complaints. Read our blog post on it for tips: How to Manage Customer Complaints.

4. Not working on building a strong local presence.

Why it’s not ideal…

The way you promote yourself in the domestic market will give your agents confidence that you know what you’re doing.

Failure to establish a local presence sends the message that it’s too early to partner with you to distribute your tours to the masses.

Instead…

Even if you’re a small business that’s just starting out and pressed for resources, you can at least work on:

• Building your online reviews on TripAdvisor, Google, and Facebook
• Partnering with Visitor Information Centres
• Networking at trade shows
• Partnering with OTAs (online travel agencies)

It makes much more sense to figure out how to tackle the domestic market before venturing overseas. If you make a mistake, it will be less costly.

5. Diving into international markets without doing any research.

Why it’s not ideal…

It’s not smart to launch into a new market without researching that particular market. Markets differ and they may respond to your product differently.

You risk wasting tons of marketing dollars launching a product that has an offering that’s not appealing to that new market – whether it’s the price point, or the distribution channel, or the tour product itself.

Instead…

Instead of rushing into it, research needs to be conducted to figure out what your competitors are doing, and whether a new tour product needs to be created to better suit the needs of those international markets.

For example, if you know that most Chinese travelers are interested in luxury and shopping, you can fit a stop at a local market into your itinerary.

There are a host of things to consider when partnering with overseas agents. Make sure you carefully assess who you are working with.

Looking for online agents to partner with?

Rezdy connects your business to the world’s biggest OTAs. Sell your inventory in real time to millions around the globe, through distribution channels such as Viator (a TripAdvisor company), Tours4fun (a Ctrip company), RedBalloon in Australia, and Great American Days in the US. See how it works.

Also, through Agent Desk, you can give existing agents access to your inventory, and get found by a growing network of agents who are actively looking for new products to resell.

We also have a free ebook for you to access if you want to keep learning about distribution channels.

Topics distribution, online travel agents, tour operator