Distribution and Marketing Channel Cannibalization in the Tourism Industry

18 Jul 2016     |    Blake Ng

Agents are a necessary part of your overall distribution strategy, because the right agents can bring you customers you would not otherwise have access to. However, there are plenty of agents who easily might bring you customers you could get on your own. This is a waste of time and money, and by focusing on incremental distribution channels, you can eliminate this issue altogether.

What are Incremental Distribution Channels?

Fully incremental distribution channels provide tour and activity operators with an opportunity to sell their tourism products to customers they would not otherwise have access to. In most cases, a fully incremental distribution channel will be discovered through an agent who is interested in selling your products for a commission. However, you can uncover your own fully incremental distribution channels. For instance, you might work with local businesses who book your tours and activities for their employees as a reward for hard work and effort throughout the year. You don’t have to pay an agent a commission on the sale, and you probably would not have earned these customers without the incremental distribution channel.

What are Incremental Sales?

Incremental sales are the bookings that exceed the estimated number for a particular time period, or that occur as a direct result of the promotion being offered at the time. Incremental sales are considered to be sales that would not have occurred if there was not a promotion in place.

Which Agents Help Drive Incremental Sales?

Agents that boost incremental sales typically market their tourism products to a large audience. In order to increase your incremental sales, you will probably want to work with these agents:

  • OTAs — Online Travel Agents, or OTAs, have a huge consumer base and they know what their customers want. When you are launching a new promotion, OTAs are the agents you will want to inform. They know who to market your products to, and how to get you the most bookings.
  • GDS — A Global Distribution System, or GDS, is an extensive network of agents and third party suppliers who can reach out to customers you would not otherwise have access to.

How Can Vouchers and Coupons Help Boost Incremental Sales?

Vouchers and coupons are promotional materials that can be used to boost sales, particularly during a time when business is traditionally slow. Travelers can be convinced to book a tour when they have a coupon or promo code to use, because they feel like they are getting a great deal on the experience. Vouchers are an option that works well for local residents, who may not typically book a tour since they live in the area.

Through Rezdy, you can connect with the agents you need to drive incremental sales, and also develop vouchers, promotions and coupons that can easily be redeemed through your online booking system. When you focus on incremental sales, you will earn higher revenue per customer, and you won’t waste nearly as much money on unnecessary commissions. For more information on implementing your distribution strategy, download our distribution ebook today.

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