Travel distribution benefits

Direct and OTA

Direct and OTA sales can be made right up until the last-minute.

Travel trade partners

It can take anywhere from 6 months to 2 years to work with other travel trade partners.

A luxury travel advisor might be looking to make a booking for a client in around six months.

It will take time to build up confidence and trust in your business to the point that they are comfortable adding you to a new itinerary or adjusting an existing itinerary to include your product.

Most partners are selling to customers who are already planning a holiday for next year. The partners need time to arrange a contract with you, and potentially sell your product to another part of the distribution chain before it reaches the customer.

They also need time to set you up as a supplier on their systems and promote you across their marketing materials.

Remember to consider any additional costs you could incur when working with a travel distribution partner such as attending travel trade events, hosting meetings or familiarisation (FAM) trips, and additional staff to manage relationships and handle enquiries and inventory. This will need to be factored in when setting your prices.

Make sure to check for any additional fees beyond a commission when working with a travel distribution partner.

When you want to start working with a travel distribution partner, you will need to review your prices.

• When you’re selling a product through an OTA, you’ll need to factor in the commission cost.
• When you’re selling a product through a DMC, tour operator or travel advisor, you’ll need a travel trade price that allows space for them to add their commission before selling to another partner or a customer.

Want to know more about how to set your prices? Check out our tips on research, fixed and variable costs, pricing strategies and more.

Remember

Your prices need to be available for around 2 years in advance. As you’re working with travel distribution partners for next year or even the following year, you need to come up with a price that is sustainable long-term. This means factoring in any price rises you might need to make due to rising costs and economic pressures. Otherwise, you’ll have to renege on the agreement with the partner, who may not be willing to renegotiate, and you won’t work with them again.

A travel distribution partner may want to negotiate price depending on what size of group they’re bringing and the frequency of those groups.

Any contract should detail when and how often payment will be made to you when working with a travel distribution partner.

Some travel distribution partners won’t pay upfront for your product. This is due to the risk of cancellations from customers, and not wanting to pay for a product they may not sell. The sales are tallied up and paid at a set time, eg monthly.

You may be tempted to ask for part-payment on booking – but be aware that for some partners, the cost and operational challenges of sending you two separate payments is too complex to make the opportunity viable.

When distributing through an OTA, it is important you carefully manage your inventory and ensure your availability is as up to date as possible for future bookings, i.e. at least a year in advance.

Top tip: Use a modern booking solution to manage your inventory efficiently. This will automatically update your live availability and reduce the need for manual intervention and double bookings.

When you work with a DMC, OTA, tour operator or travel advisor you may be creating a bespoke product that is only available in a particular month or season. It might be a product that is also only available to buy through one specific partner.

If you work with the travel trade, they will gather their own customer feedback. An OTA will take reviews through their website while a tour operator or travel advisor may have their own customer survey or use a review platform such as Feefo. They will usually share that feedback on your business with you.

Customer feedback will be considered by potential customers when booking, so you need to be ready to respond and acknowledge any issues highlighted through an OTA website.

The feedback gathered by a tour operator or travel advisor can impact on whether they decide to continue selling your product. Think about what feedback you might receive, and how you will manage that feedback and show your partner that you are taking this onboard, and are happy to work together to make improvements or adjustments if needed.

You will need to create text, images and video to be used in marketing materials by your travel distribution partners.

OTAs

You will need to create your own product listing for customers with marketing copy, information, images and video and continue to update it yourself each quarter to best reflect your current product and business.

DMC, tour operator and travel advisor

The partner will use the information you provide to create their marketing materials. They may have a different approach to content, so expect to see the information you supplied in a different format, tone of voice or brand style.

Sharing your marketing materials

Think about how you can share your marketing materials with a travel distribution partner.

Consider using a file sharing site (eg Dropbox) to set up your marketing copy, images and videos. It will then be easy to share a link with a partner.

Check they are up-to-date every 3-6 months and refresh your imagery regularly.

Read our article on how to connect with travel trade partners, which includes advice on trade events and more

Check if your modern booking solution can help you connect to a travel distribution partner. If not, you may need to consider a new system with API connections or even a channel manager if you plan to work with multiple partners.

As a modern booking solution can connect with tour operators and OTAs, it makes it the most effective way of sharing availability and reduces the need for manual intervention, e.g. in handling enquiries or confirming bookings. Each distribution partner will have their own preference of a modern booking solution and it’s worth asking what they work with so you can consider it as one of your options.

Read more about online booking systems for experiences or for accommodation and see what would best suit your business.

This is the agreement between you and the travel distribution partner. It could cover:

• the cut-off window – how close to a deadline (eg a tour departure) a distributor can sell a ticket
• cancellations, refunds, and no-shows
• payment terms
• insurance requirements
• how and where the partner can sell your product
• your obligations to the partner
• dates for booking confirmation

You should seek legal advice to check over the terms and conditions to ensure they meet your needs.

Working with a travel distribution partner might give you access to research, insights and trends.

Consider what access you will get to:

• Customer data – will they share useful data such as customer age, gender and location?
• Best practice – what a good listing looks like, and what information you should include.
• Trends - where demand is growing and how you could change your product/service to better meet those needs, or generally when people are booking and what they are booking.
• Advice – on products, features and pricing.

You should also be mindful of what insights you won’t receive – some partners won’t share customer data with you, as it’s a valuable commodity in today’s world. You may need to think about other ways to capture that data yourself (such as on arrival) and whether that is allowed within the terms and conditions you have with them. This could be when a customer first uses the WiFi or signs up to your newsletter.

If you are going to try and collect your own data, make sure you check carefully that it doesn’t breach your agreement. It’s not worth endangering the partner relationship to capture a few customers’ data.

Check what the guidance is about branding – are there opportunities for you to include the partners’ branding in your marketing materials? How will they make use of your branding?

When you first begin your growth journey, consider making it part of someone’s job role to handle all of your work with partners.

This allows a member of staff to grow their knowledge and build relationships with the partners over time. They can attend events on behalf of the business, and also look to share their work with other staff, undertake dedicated training opportunities, and train up other staff members where required. This can be a valuable specialism for staff and may encourage them to stay with your business longer in order to grow their skills in this area.

Your product and wider business will be judged by a customer as part of the partner’s business – so they want to see what you have to offer through a customer’s eyes.

A travel distribution partner may want to come and try out your business themselves. This could be organised through you directly or by them as a mystery shop experience – where they don’t tell you until after they have visited.

Alternatively, they can make a trial booking, bringing a small volume of customers to you. This allows them to see whether customer expectations are likely to be met, the business performs operationally, and what customer reviews might be.

This trial would also give you a chance to try working with the partner – do they pay you on time, were the conditions of the contract met to your satisfaction?