Pieman River, Corinna
Tourism Tasmania and Rob Burnett
Understanding travel distribution
Travel distribution is the network that connects your Tasmanian tourism product with customers in markets across Australia and around the world.
You can sell directly through your own marketing and sales efforts, or you can work with third party distribution partners who sell or resell your product to their customer base. Most tourism businesses do a mix of both.
Why work with distribution partners?
Put simply, distribution partners allow you to broaden the reach of your product across domestic and international markets. They have established networks, marketing budgets and customer bases ready to go. Their job is to generate bookings on your behalf.
Partnering with a distributor typically involves a contractual agreement where you provide rates, and the distributor adds a margin to cover their sales and marketing costs which you pay in the form of commission.
The Truffle Farm, Deloraine
Jess Bonde
Here's what working with distribution partners can do for your business:
Broaden your reach: Distribution partners connect you with customers in domestic and international markets, extending your product's visibility to new audiences.
Diversify your market mix: Working with a range of partners across different markets gives you a broader customer base and more consistent booking sources.
Speak the local language: Distribution partners can sell your product in their customers' language, providing the advice and context that makes booking easier.
Drive year round bookings: Partners can help generate bookings throughout the year, supporting occupancy during mid week, off season and shoulder periods.
Working with distribution partners allows you to continue to generate your own bookings. Distribution partners complement your direct sales by adding marketing reach and sales infrastructure across a wider network of markets.
Festival of Voices, Big Sing Bonfire, Hobart
Kristina Vakova
Types of distribution partners
Distribution partners come in many forms
- Retail travel agents
- Wholesalers
- Inbound tour operators (ITOs)
- Online travel agents (OTAs)
- Visitor information centres
- Local tour operators
- Other businesses such as large hotels offering concierge or tour booking services
Which partner is right for me?
Local, Australian and international tour operators
Think about what makes your product stand out. Exclusive activities or value added experiences can make the difference when a tour operator is deciding which businesses to include in their programs.
Commission structures vary and are usually negotiable based on the volume of guests a tour operator brings to your business.
Retail travel agents
RTAs attract a broad customer base, often supported by well visited websites and cooperative marketing campaigns with wholesalers and airline partners. Some serve the Australian domestic market, while others have a global reach.
The average commission RTAs expect is typically around 10 to 15%, though this can vary.
Visitor information centres
The average commission VICs expect is typically around 10%, though this can vary.
A list of Visitor Centres in Tasmania is available on the Tasmanian Visitor Information Network (TVIN) website.
Online travel agents
A few things to keep in mind when working with OTAs:
You may need to upload and maintain your product information on each platform, which can be time consuming if you're listed across multiple sites.
Keep track of affiliate sites through which an OTA might sell your product, and monitor where your rates appear online.
The average commission OTAs expect is typically around 7 to 30%, depending on your product type and their marketing reach.
Wholesalers
Internationally based wholesalers often book tours, attractions and accommodation through Australian based inbound tour operators (ITOs).
The average commission wholesalers expect is typically around 20%, though this can vary. Some wholesalers also operate as retail travel agents, so it's worth clarifying through which channels your product will be sold to determine the right commission rate.
Inbound tour operators
ITOs develop programs, itineraries and product advice for wholesalers to market through their international networks. Many ITOs catering to non English speaking countries also translate your product information for their overseas agents.
Working with ITOs takes patience. Building rapport is important, and it often takes several years of relationship building before you see consistent bookings. You may also need to be flexible and willing to customise your products to suit ITO requirements.
The average commission ITOs expect is typically around 25 to 30%, though this can vary.
Understanding this network of distribution partners and the different roles they play can take time. Getting your head around how it all fits together is an important step before deciding how you want to engage with the travel distribution industry.