Before investing time and money in targeting specific markets, you need to make sure your tourism product or service is trade ready.
Do you understand and have the policies in place to work with and sell through the travel trade? You may need to develop and refine your tourism product or service to be attractive to visitors. In doing so you need to ask yourself the following questions:
- Have you thoroughly researched markets to establish where your product fits?
- Have you considered the travel styles, language and cultural differences of travellers and understand the needs of travellers from target markets?
- Do you understand the international distribution system?
- Do you understand online distribution channels?
- Do you understand the concept of commissions and net rates?
- Do you have booking mechanisms in place?
- Work within tour operators’ booking and cancellation policies.
- Confirm and guarantee booking quickly or within 24 hours.
- Accept vouchers on arrival supplied by the travel trade to their customers (known as ‘free sale’).
- Do you have an active quality assurance program?
- Do you have marketing (promotional) material in foreign languages?
- Are you prepared to work cooperatively with other businesses and organisations in the region?
If you can answer YES to these questions, then you are on your way to becoming trade ready.
If not, do not fear - read on for information on how to prepare for working with the trade.
How do I price my products for travel distributors?
To work with travel distributors, you need to factor commissions into your pricing. The commission is the fee paid to the tour operator, wholesaler, online or retail travel agent to market, distribute and sell your product and is only paid once a sale has been made. Depending on the travel distribution route you select, the commission rate could vary from 10% - 30%.
Understanding the difference between net and gross rates:
- It’s important you understand the difference between net and gross (or retail) rates and protect your rates by providing the correct rates to each level of the distribution system.
- Rates should be clearly marked as either gross (retail) or net. Gross Rate = Net Rate + Commission.
- The gross or retail rate of a product is the amount that the consumer pays and should be consistent across all distribution channels. For example, a customer should pay the same price if they book direct, via an international travel agent or via the internet.
- Consumers will not purchase the product from a travel agent in advance if they know they can purchase it directly from you at a reduced price.
- Agents will not promote and market your product if they know the consumer is not going to buy from them.
How do I pitch my product?
The aim of an effective pitch is to start a conversation, or dialogue, with the travel trade buyer and address their specific interests and questions. It should be a short, concise summary of your product. Your pitch needs to explain clearly how your business or product will benefit the distributors’ clients and inspire them to choose you over your competitors.
Tips for presenting your business / product:
- Tailor your pitch to your listener and don’t assume they know about your business/product.
- Provide a brief overview of your destination
- Provide an overview of your product
- Highlight your unique selling points - what makes you different from your competitors?
- Discuss the appeal of your product to relevant segments / consumers
- Highlight the quality of your product – are you part of the VisitScotland Quality Assurance scheme?
- Outline how your product is delivered and priced
- Summarise the benefits of working with you (based on what you now know about their needs!)
- CLOSE - ask for the business!!!
Working with other tourism businesses
Working together with other tourism businesses to promote a destination or a newly developed product can be hugely beneficial to you and the travel trade.
Building relationships with the trade
Once a business relationship has been established between you an operator, it is imperative you maximise the benefits of the relationship. Initially the volume of business done together will be on the low side, but this could increase significantly over time.
- Provide trade partners with first-hand knowledge of your property by inviting them to visit your property.
- Communication - stay in touch after the sale and provide regular product updates.
- Keep pricing confidential between your business and trade operator.
- Be professional at all times.
- Remember it can take a number of years to get into a product with some of the operators.