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International Marketing
Workshop – Distribution
After this session you should be able to:
Understand the travel distribution system and its rate structure
Recognise the different travel styles of inbound travellers
Develop an inbound rate document for your business
Develop a plan to target international visitors via travel distributors
Session Overview
Why target international visitors?
Their travel patterns vary from domestic visitors → even out capacity
Some international distribution partners also target domestic visitors
International visitors often spend more / stay longer
Their lead time is often longer → easier for you to plan
Tapping a wider network of distribution channels → heightens your business’s visibility
Direct liaison with international wholesalers, their ITOs and visitors → new ideas to grow your business
Luxury and special interest travel is increasing → demand for regional products
NZ Tourism Export Council : Working with an Inbound Tour Operator https://www.youtube.com/watch?v=tiS6fKdgPpc
Discover the ‘perfect match’
for your product
Which type of traveller is best aligned with your offering?
Are they travelling when your business has spare capacity?
What type of traveller seeks experiences similar to your offering?
Can you identify a niche or gap to exploit?
Where will you find research to help?
Understanding Types of International
TravellerShort haul vs Long haul
Group Inclusive Tour / Traveller (GIT)
Partially Packaged
Fully Independent Traveller (FIT)
Visiting Friends & Relatives (VFR)
Backpacker vs Honeymooner
Business Traveller vs Education Traveller
Special Interest Traveller
DICTATES…..
• Experiences Sought
• Accommodation
• Length of stay
• Travel behaviour
How to sell your product
overseas Learn how the travel distribution system works
Understand structure / interrelationships in system
Engage with a mix of distribution partners to promote /sell
Travel distributors include: travel agents, wholesalers, inbound
tour operators and online travel agents
Structure varies from market to market
Increasing crossover in roles
Why work with travel distributors ? Broaden your customer reach, access new markets
Tap their market intelligence / advice on markets
Learn about market purchasing behaviour
Tap huge consumer databases
Supplier
Wholesaler$80
Retail Travel Agent$90
Consumer$100
Consumer$100
Sample Business Mix
Inbound Tour Operator$70
Wholesale Direct $80
Retail Travel Agent$90
Consumer Direct$100
Source: Visit Victoria Tourism Excellence – Pricing & Packaging Product
The Role of Inbound
Tour Operators (ITO) Provide a link between Australian tourism
products and overseas travel distributors who
buy them: travel wholesalers, direct sellers,
travel agents, MICE planners
Provide itinerary planning
Product selection
Coordinate reservation, confirmation,
payment of travel for overseas clients
Blend components into a fully inclusive
itinerary
The Role of
Wholesalers
Usually based overseas
Provide link between travel agents & ITOs or
tourism product
Purchase programs developed by ITOs; OR
Create their own packages for travel agents to
sell.
Can also be direct seller
Can operate own retail outlet; OR
With specific cluster of agents in own country
The Role of a Retail Travel Agent
• Wide, shopfront distribution
• Consumers book holidays
• Can deal direct with ITO or
Australian product
• Chains & consortia
• Wholesalers can run their own
retail travel agencies
• Many are online agents too
Aussie Tours = a
Belgian wholesaler, sells direct and via ITOs
Draws product from Best of Travel
Group Germany
Features accommodation &
rates
Both Aussie Tours AND Best of Travel Group use Goway as their ITO
Also features bookable
itineraries & journeys
10 day self drive tourOvernighting in B&Bs
Optional extras: Horseback Winery
Touring12 Apostles Scenic Heli
flight
Inclusions:• Flinders Hotel Mornington
Peninsula• Captains at the Bay Apollo Bay• Southern Ocean Villas Port
Campbell• Daltons Resort Halls Gap • Hertz rental car• Etc….
CTC is a retail travel agency in Singapore packaging self drive
journeys
Package Inclusions
1 night accommodation in each destination
6 days Hertz car hire Penguin Parade Koala Conservation
Centre Churchill Island A Maze ‘N Things Panny’s Amazing World
of Chocolate Peninsula Hot Springs Green Olive at Red Hill Rayner’s Orchard Healesville SanctuaryEtc …….
CTC uses ETA as their ITO
Package Includes: Yarra Valley Dairy Rochford Winery Yarra Valley
Chocolaterie
Sunlover Holidaysis a domestic
travel brochure published by AOT,
an ITO
Accommodation Room types,
ratesTours
Package includes: 90 min cruise MP Chocs Enchanted
Adventure Garden
Sunny Ridge Strawberry Farm
New Distribution
Channels Tourism has established channels of distribution:
ONLINE ● RETAIL ● WHOLESALE ●INBOUND TOUR OPERATORS
The sales power of each varies, so does the commission rate.
Online technology, real time bookings. Do you have appropriate booking systems in place to handle international requests /payment terms?
Increasing crossover in the roles and functions of the distribution system
A series of intermediaries who play a specific role in the development, promotion and purchasing process of Australian tourism experiences.
Source: Traveltrends.biz; Tourism Australia Tourism Export Toolkit
Activity – Determine Average Commission
Chart all distribution networks you currently use
1
Alongside note their commission %
2
Calculate what % of your total visitors is generated by each distribution method
3
Include # of customers coming to you directly
4
Multiply for each row: commission rate X % of customers generated
5
Total then multiply answer by 100 to find your average commission across your whole business
6
Customer Segment % of Your Business IncomeCommission level paid to intermediary (%)
Multiply the two
column % amounts
Direct Bookings - Walk ins, Phone, Website 40% 0 0
Online booking agent 1 - Booking.com 25% 15% 0.0375
Online booking agent 2 - Expedia 10% 18% 0.018
Conference - booked by intermediary 10% 10% 0.01
Group - booked by intermediary 10% 12% 0.012
International - booked by an inbound tour operator 5% 25% 0.0125
TOTAL - Add the amounts in 3rd column then
multiply total by 100 to Calculate average commission paid across the whole business
0.09
Average commission = 9%
Your Business : Customer & Commission Analysis –
Calculate Average Commission across your business
What are your customer segments?
How much business does each segment give you?
What commission do you pay each referral network?
Add this column up
Multiply total by 100
Activity – Developing a Rate Sheet
What products are you selling?
Determine inclusions for each product
Calculate Gross Rate/ Nett Rate
Any restrictions? Min or max
guests? Block out period?
Draft rate sheet for ITO
and for Wholesaler
Extra charges?
Equipment?
Booking terms?
Cancellation policy
* Source: SATC
How to Provide Rates to Agents1. Determine your GROSS price per product offering. This is the price consumers pay – no matter
where they purchase your product!
2. Wholesale and inbound tour operators will want NETT rates from you = the Gross price LESS
the commission you agree to pay the distributor /agent
3. Your rate sheet becomes a CONTRACT between you and the agent. The agent will hold you to
it!Your Tourism Business Name (letterhead)
Wholesale Rate Sheet (20%)
Gross (incl. gst) Nett (incl. gst)
$AUD $AUD
Product A $ $
Product B $ $
Product C $ $
Your Tourism Business Name (letterhead)
Inbound Tour Operator (25%)
Gross (incl. gst) Nett (incl. gst)
$AUD $AUD
Product A $ $
Product B $ $
Product C $ $
Additional Product & Rate Information to Include
….• Rates guaranteed and final
• Validity period: 1 April till 31 March
• List Gross, Nett rates, Commission %, GST status
• Rate Clarity: per person? Per room? Per vehicle?
• Stipulate per Child/Student /Concession rates, ID required
• List additional charges
• Finalise and distribute rates > 18 months prior
• Groups vs FIT Booking requirements: min # to access group rates? Advance notice?
• FOC policy
• Inclusions / exclusions
• Min night stay?
• Min/Max guest capacity on tour
• Block out periods/ seasonal rates /days not open
• Bedding configuration; extra $ for rollaway
• Tour departure information
• Payment policy and banking details
• Special conditions: e.g. no photography
• Equipment required
* More detail – P.25 Tourism Export Toolkit
How to get your product into the travel distribution
network Discover who sells into your chosen market
Develop appropriate product options to suit your market segments
Create net rates for each tier: Retail agents, ITOs, OTAs, Wholesalers – 18 months ahead
Design Rate Sheet for each tier; include concise T&C.
Develop ‘show and sell’ materials: images, good copy, visual presentation including video, product fact sheets
Contact RTB, Go Beyond Melbourne Inc, Visit Victoria for advice / assistance in distributing your information
Become a member of ATEC
Participate in famils for travel trade; Get involved in the Aussie Specialist Program and offer special deals to encourage agents to experience your product first-hand
Introducing Viator – You can do this immediately!
Viator can help build your business
Consistent booking patterns through low and high periods
Domestic and International distribution
Viator supports businesses big and small
COMPANY CONFIDENTIAL 28
Linking Bookable Products to Businesses TripAdvisor Listings
Viator partner & affiliate network
Travel Sites
Hotels
Travel Agents
Loyalty/
Redemption
Technology
Partners
Airlines
How to get your product into the travel distribution
network Discover who sells into your chosen market
Develop appropriate product options to suit your market segments
Create net rates for each tier: Retail agents, ITOs, OTAs, Wholesalers – 18 months ahead
Design Rate Sheet for each tier; include concise T&C.
Develop ‘show and sell’ materials: images, good copy, visual presentation including video, product fact sheets
Contact RTB, Go Beyond Melbourne Inc, Visit Victoria for advice / assistance in distributing your information
Become a member of ATEC
Participate in famils for travel trade; Get involved in the Aussie Specialist Program and offer special deals to encourage agents to experience your product first-hand
International marketing can require a long term investment
Consistency is Key! Drives loyalty and builds ITO relationships
Confirm bookings with a maximum 24 hours turnaround
ITOs expect you to be flexible, often tailor special offerings
OTAs may also run a number of affiliate sites on-selling packages. Be aware of any affiliate sites and where rates may appear.
Consider joining ATEC to help build relationships with travel distributors
Develop a sales presentation for your product (s) – powerpoint & sales kit
Revisit your product profile online: social and website.
Next Steps / Watchpoints
Alva Hemming
Marketing Manager
Go Beyond Melbourne Touring Route
T: 0417 122 831
www.gobeyondmelbourne.com
