As a technology provider we ream off a host of terms to describe “distribution” like: Channel Management, Partner Management, Reseller or Affiliates. The jargon can be confusing and leave you guessing as to what the heck it actually means. Put simply, when we talk about distribution we mean selling through someone else. Tour and activity businesses have been doing this since time began and we know you are very adept at creating partnerships. This post looks at the different types of partnerships available and how you can use your online booking system to increase the number of people you sell through without increasing your workload.
# 1. Vouchers/Daily Deals/Promotions
Vouchers can be a great way to engage customers and sell through third parties for any tour and activity business.
Using your online booking system to generate voucher codes for your vouchers is a fantastic way to track the effect of your flyer campaigns. This is a fairly simple method of identifying key sales channels. For example, if you place flyers in a selection of local hotels, offer the customer 10% off by presenting the voucher at purchase either onsite or on your website, you will then be able to identify which location drives you the most business. Armed with this you could approach the hotel about packaging opportunities and show them the amount of revenue their customers have generated you.
Vouchers are also great for selling through social media and if structured correctly can lead to a steady stream of organic business from domestic customers.
The final aspect of vouchers is selling through the large daily deal providers, such as: Groupon, Living Social or Grab One. These companies have substantial reach and should not be overlooked, but they should not be used at the expense of your own website or direct sales efforts. They are a complementary channel, that can be used to kick start a new product or season launch. They are expensive, so although they can boost revenue, the margins are slim and if the majority of your customers are from the international tourists they are unlikely to lead to a large amount of repeat business.
This is an area that is extremely important for a number of businesses. You create an arrangement with another tour and activity business or the concierge desk at a local hotel to sell your products. This can be a great way to drive tourists to your business as they are looking for good local recommendations from a trusted source. The flip side is that these types of partnerships can create a lot of work and if the partner isn’t sufficiently incentivised, then it’s difficult to get them to promote you.
So what are the main problems:
- Invoicing can be a real pain point: tracking the bookings sent by a hotel concierge or a B&B creates paperwork for you and them, which can often dampen the initial enthusiasm for the initiative.
- Real time availability (“that old chestnut”): again, this can create the communication flow as even if a partner has interested customers they may have to contact you via email or phone to confirm availability. When they do this, you may on a tour or booked out – leaving the customer and the partner with a poor experience.
- Reporting: how do you identify if its worth the effort, without spending hours manipulating spreadsheets to see who is driving you the most business.
There are a couple of ways of dealing with this depending on your relationship with your partner. If you’re dealing with a concierge or tourist office, the best way is to give them a dedicated login to your online booking system, which allows them to log in to your system check availability and make a booking without the need to contact you. The added benefit here is that you can also track each transaction and automate commission payments based on the number of transactions on a 30 day period, for example. This incentives the partner to sell more of your product as they can quickly see their earnings and it allows you to quickly see who is driving you the most business. Win Win!
Ciaran McBride of Irish Luxury Tours describes this as being vital to his business. He deals with a number of hotels, but through the concierge. Ciaran needs to be able to track the individual performance of the individual concierge, so he requires multiple logins for the one property.
# 3. Online Travel Agents and Tour Operators
This is an area that is new to many tour and activity providers, but is growing fast. It involves selling on international websites such as Viator, Getyourguide and Expedia or through tour operators such as TUI, Kuoni or Thomas Cook.
These companies have huge traffic and can generate customers for you from international markets that you haven’t even thought of. The benefits can be huge if managed properly. So what are the pros and cons?
- Large businesses with substantial customer base
- Great to drive cashflow in quiet periods of the year e.g. (get forward bookings for 20% of your summer inventory in February to April)
- Expensive commission rates: 15-30%
- Can be difficult to manage – problems of double booking
- Different rates on your website than on third parties (never let third parties sell below your website)
Channel management can solve a lot of the problems with selling through these channels, it’s been around for the last 5-8 years in the hotel industry (here’s an interesting article on it) and has allowed hotels to balance commission rates and increase the number of channels they can sell on.
Put simply, channel management products allow you to sell on online travel agents without having to update their systems. They use “pooled inventory” which means when a booking is made on your website, all other channels you sell through are automatically updated through your online booking system. This significantly reduces the cost of managing these bookings. From a marketing perspective, channel managers will do the business development and technical effort of connecting you to any number of channels, so investing in a product that provides this is really worthwhile.
Key take outs:
Make your own website your priority – see our previous post on making your website effective
Maintain rate parity – always make sure the best price is on your website
Market internationally – use the bigger companies to drive customers and cash flow to you, but DO NOT use as a replacement for your website and limit inventory available in peak periods, through these channels. Use your online booking system to get the most of your business and increase your distribution.