online, traditional distribution and packaging for tourism businesses

PowerPoint Presentation

Emma Page, General Manager

Online, traditional distribution and packaging for tourism businesses

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The 5 stages of travelDreamingPlanningBookingExperiencingSharing

tourismcouncilwa.com.au

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Tourism Distribution

Consider your clients:

tourismcouncilwa.com.auWhere do they come from?What are your markets?How do you distribute?How can I reach potential clients?Directly: You can target visitors directly through advertising, brochure distribution, website, social media, client referrals etc

Indirectly: Another way to promote your business is through a third party (indirectly) by using tourism distribution channels such as retail travel agents, wholesalers and inbound tour operators.

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How the system works - traditionally

How the system works - today

Why work with the travel distribution system?

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Why work with the travel distribution system?Broaden customer base using a limited marketing budgetCan you compete with big name organisations like Expedia, APT?Keyword searches, customer loyalty programs Product included in overseas brochures Can you conduct sales calls across Australia and Overseas?Familiarisation visits for the retail industry and mediaUndertake advertising campaigns aimed at both consumers and retail travel agents

Travel distributors provide market insights and advice

International visitors rely on advice of local travel experts (particularly long haul and emerging markets)International visitors have a higher average spend International visitors have different travel patterns (i.e. Germans in summer)

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Traditional trade/tourism distribution channels

Inbound Tour Operators, Wholesalers and Retail Travel Agents Retail Travel Agent who the customer does business with (VCs, Concierge & Tourist desks act as RTAs)ITOs ground operators or destination management companiesWholesalers link individual tour operators or ITOs with retailersPackages wholesalers achieve lower prices due to volumeAllotments allows a wholesaler to sell freelyTake a commission (10-30%)Building relationships key to successTheir passengers should be treated well, the ITO and Wholesalers are your friends!

Tourism Distribution

Indirect distribution example:


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Visitor Centres (VCs) Benefits of Visitor Centre Memberships/Distribution to the.Customer/Visitor:Like a retail Travel Agent Free advice friendly, local people Trust local, book local Compliant with relevant laws and holds appropriate insurances

Visitor Centres (VCs) Business:Provides local, independent, unbiased and high quality adviceBook your productAccredited Visitor Centres are promoted to WA tourists through a marketing campaign soon to be launched TVC GWN 7, Digital and Print

Visitor Centre Marketing

Visitor Centres (VCs) Value to the region/town: Spend more and Stay longer = More jobs in a region Overall Visitor Centres inject $117 million into the States economy annually creating more then 900 jobs

How to work with your Visitor Centre

Become a memberSeek advice Inform the VC of min numbersGet online Work cooperatively

Onlinedistribution channels


Travel trends and stats for 2016 of online travel search will come from mobile.73.0% of people will use a mobile device to research a trip. 63% of millennials said they booked a place to stay online.66% of Gen Xers did so too.62% of boomers also used online.Asia-Pacific will surpass Western Europe and North America to become the largest digital travel sales market in the world. Most digital travel sales in China will come from mobile. Page # 4

Understanding online distributionPage # 5

Benefits of online distribution24/7 bookingsIncreased exposureMinimise workloadGather valuable intelGood customer serviceGood for SEOSave timeStay in controlPersonaliseMarketingPage # 3

Inventory managementThe way you control how your rooms, seats or tickets are soldIn the past done by spreadsheets time consuming and confusingNow automated through modern online booking systemNo more double bookings!Great examples Tour rezdyAccommodation little hotelierPage # 11

Online Travel Agents (OTAs)

Other online distribution channelsAirbnbStayzExperience gift retailersGroup Buying (scoopon)Australian Tourism Data Warehouse (ATDW)

Aust Tourism Data Warehouse

What is it:


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Aust Tourism Data Warehouse

What are the benefits to operators?


Massive distribution - ATDW contains over 150 travel websites including westernaustralia.com and australia.com

Only supply business information once, this then automatically gets distributed to multiple partners

Control what information and images are displayed in their listing

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Commissions and pricing your product

Industry Rates/Commissions

Do you need third party sellers and can you afford their high commissions?

tourismcouncilwa.com.auDo you achieve 100% occupancy each day of operation?Can you generate 100% of your bookings directly?Can you afford to market on a national and international level?

Retail Travel Agents, Tour Wholesalers and Inbound Tour Operators can open up new markets for you in a very cost effective way.

Commission is usually the major source of revenue for retail travel agents, wholesalers, inbound operators and visitor centres.

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How much should I pay?


2828Commission varies in each category if you have a good ITO you might give them a better commission, to reward them for all their bookings (and encourages them to book more as they make more money).


Where does the commission go?


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Calculating the correct commission


Commission LevelsGross Selling Rate(must be consistent)To calculate nett rate minus the relative percentage:Nett Rate third parties will buy this 10%$257$257 10%$231.3015%$257 15%$218.4520%$257 20%$205.6025%$257 25%$192.7530%$257 30%$179.90

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Calculating average commission


SupplierRate of commissionPercentage of businessFormulaWeighted amount of commissionDirect sales0%50%0 x 0.5 x 1000%Visitor Centre12%15%0.12 x 0.15 x 1001.2%Expedia15%10%0.15 x 0.1 x 1001.5%Booking.com15%10%0.15 x 0.1 x 1001.5%Stayz10%5%0.1 x 0.05 x 1000.5%Airbnb3%5%0.03 x 0.05 x 1000.15%Inbound Tour Operator30%5%0.30 x 0.05 x 1001.5%Average commission paid(this should be factored into your pricing)6.35%

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Pricing your product

Pricing considerations:

tourismcouncilwa.com.auPrice parity across all channels is important to avoid damaging trade relationships

Work your pricing out to allow for up to 30% commission to be taken off, this way when youre paying less than 30% it is a bonus

Factor in third party payment schedules and ensure you have sufficient cash flow to allow for invoices to be paid 30 days after travel

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Pricing your product

tourismcouncilwa.com.auYour prices should factor in the following:

Your competitors ratesAmount customers are prepared to payFixed and variable costsCommissionsYour profit margin (break even point)Seasonality

Visit the Tourism Boost webpage for a tool to help you price your product

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Work together and Package your product

Packaging and/or bundling your productAligning and marketing complementary products together to form compelling and unique experiences for the consumer. A combination of two or more products offered as a single unit of sale to a visitorCan be sourced by partnering with other suppliers or by using a collection of your own productsSum of all components should be cheaper than if purchasing individually

What is tourism packaging/bundling:

tourismcouncilwa.com.auWhy package/bundle?To encourage increased length of stay and spend in a regionConvenience for the consumerWholesale / travel agent appeal ($$ & ease of booking)

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Packaging product

tourismcouncilwa.com.auExample packagesRomanceAccommodation dinner for two river cruiseCulturalAccommodation sightseeing tour IndigenousFamilyZoo minigolf movie vouchersAussieFarm stay BBQ lunch day tourWine/foodDinner wine tour brewery tour cooking classArtTheatre show dinner for two museum entryLuxuryLuxury chalet day spa dinner for twoAdventureHorse riding white water rafting - caving

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Some final thoughts

When developing your product ask yourself..Market Suitability Does the product suit the markets that I am targeting? Unique Selling Points Do you have a point of difference from your competitors?Product Pricing Is the product competitively priced and does it allow for all levels of commission? Is the product profitable?Accessibility how do they get there?

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Research your markets

Where can you find latest research?

tourismcouncilwa.com.auTourism Council WA Tourism Research AustraliaTourism AustraliaTourism Western AustraliaAustralian Bureau of StatisticsVisitor Centre

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Ensure you have all the essential business elementsA marketing/business strategy (online and traditional)Instantly bookable Listed on ATDWAccreditedMember of your Visitor Centre Member of ANW A GREAT website and Social Media

Be a Domestic god/goddess. Firstly, its best to have a strong domestic market foothold before branching to international.Domestic tourism accounts for 65 per cent of all tourism in Australia, although international tourists tend to travel for longer periods and spend more money.Internationally, you are competing against other companies providing similar products, and also other international destinations

Domestic first.

Have great Customer Service


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Where to now?Subscribe to the TCWA and other key newsletter Get accredited Attend training and access program services visit the TCWA Website for dates Attend events, build personal relationshipsTourism Selfie for Tourism Works Comp

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