Many tour providers and suppliers use Adventure Engine’s Summit tour management system (TMS) for direct to consumer bookings (B2C) but there may be a whole world of sales you are missing if you only sell direct.
There are some tourism suppliers or providers that choose to not work business to business (B2B) with travel agents, group tours companies, or other tour operators for strategic reasons, but if you don’t fall into this category here are some ways you can penetrate this market and then separate yourself from your competitors with service.
First, you must analyze where you want to be in the B2B supply chain and what you are willing to trade to get there. Travel agents are the next closest group to consumers and despite the fact that there has been a large shift from brick and mortar agencies to online bookings, travel agents can be great ally’s if you are willing to learn about them and how to work with them. The advantages are you will have a more diverse market base, the commissions paid will be less than other travel operators and you can forge some very good long term (ie repeat) business with them. The disadvantages are that there are many agencies and few will be set up to work with local operators, so you’ll need to conduct your marketing further from your own base. You may want to by-pass agencies and sell to bigger intermediaries, like group tour companies and wholesalers. These would typically be companies like Intrepid, or TUI, or G Adventures. The advantages are these companies can often bring stability and predictability to your cash flow, and they can bring a global market to your business. The disadvantages are they will demand 20 to 30 per cent commission, or discount off your rack rate.
As a case study example, I was working as a tour provider and decided to go after the wholesale market. I learned a lot and found we had a good fit for the Australian travelers. I was able to make a good wholesaler contact, and after some reasonable adjustments, we were selling many more seats through the wholesaler than just selling directly. I did raise my rack rates to be able to manage the higher commissions, and I was concerned about the local effect, but the reality was that I did not lose that many direct passengers. The upside was that that although my over-all blended commission rate was 17% compared to 13% before, but my sales over a few years multiplied 5 fold.
It was great, but I could have improved even further if I would have had a tour management system (TMS) with online access. The cost of the system back when I was selling tours was quite high and you had to get a custom database programmer and and online interface to make it work. It was a minimum $20,000 investment. Now though, with cloud based services, the costs of a TMS have dropped so dramatically that any tour provider selling in the B2B channel can get into the game. So what services are needed?
The list below are some of the typical things wholesalers would like to have primarily to better serve their customers.
- Extranet login – agents manage bookings, payments, pax info, and other details that you do by hand
- Trip portals – show your product on a local website
- Automated document delivery – vouchers, tickets, joining instructions
- Graduated payments – deposits and balances due set according to a schedule with automated reminders
- Real time inventory availablity 24/7 with instant confirmation – the most beneficial feature as it allows them to close sales instantly, and move on to other files rather than waiting to hear, sometimes 24 to 48 hours
- Pax can input information on a centralised location – ideal for activities that need to be personalised in some way
- Sales reports
These features and many more are available with Adventure Engine. The key advantages are that you offer a better service – faster response, more accurate, with better control without impacting your own human resources and this can be a factor in profitability.
If you are in a growth phase, using a tour management system can give you a big leg up in developing B2B relationships with overseas agents and wholesalers who deal in large volumes and value speed and accuracy. If you’d like a no obligation consultation, we can go through a step by step cost analysis with you to see if a system makes sense. Just contact us below.