travel and tour operators

Three Challenges Facing Tour Operators On line
Executive Summary travel tour operators by Stephen Joyce

The challenge is how to sell more seats and what systems to use to manage those sales. There are several challenges facing individual tour operators providers when choosing to sell their products through their website or through a booking portal. There are primarily two types of on line booking systems available. The biggest disadvantage of a stand-a-lone system is that the tour operator’s products are only available from their website and cannot be distributed openly. Hosted solutions are sometimes referred to as “software as a service” solutions and are rented on a monthly basis. Although some solutions support distribution of products through a branded portal website, very few actually allow for the open distribution of destination products through some kind of global distribution system.

The second major challenge for tour operators is deciding whether to use a system that charges a flat fee or a commission. This can be a tougher challenge to overcome because both hosted and stand-alone systems charge both flat fees and commissions. So once the tour operator has chosen a technology, they must decide if the cost of the system is appropriate. The benefit of a commission based system is that there is generally very little cost to the tour operator until a sale is made and then the tour operator pays on average about a five percent commission on the sale of their products through the system. Flat fee systems charge a regular monthly fee and a flat booking fee, generally between twenty-five cents and one dollar per booking. When compared with a commission based system, one might see why the the flat fee system is so attractive. A tour operator selling ten bookings a week with a retail value of a $350 per booking using a commission system which charges 10% would cost the tour operator $1,400 per month, compared to a flat fee system charging forty dollars per month and seventy-five cents per booking.

There are other consumer based tour product websites that will sell products on behalf of tour operators, however in almost all cases, these tour booking websites are simply travel agencies that charge a hefty commission or require exclusive net pricing. The best option for the tour operator is to find a system that allows them to manage their inventory, streamlines their sales process, gives them the ability to sell through their own website, and provides an underlying distribution network that allows them to resell their products through both on line and off line sales channels.

The best and most flexible solution would present itself as a hosted solution with an integrated distribution system. The solution would allow tour operators to manage their inventory, bookings, customer information, and provide lots of reporting. Ideally it would be a flat fee system that charges a monthly fee based on the operator’s volume of bookings rather than charging a commission.

Booking Online – Killing Solution For Tour Operators?
Executive Summary travel tour operators by George Kuipers

Nowadays, moving a business from offline to online becomes a sort of good-style marketing among large and medium companies. If a company does not have at least a promo-website, that is considered to be either as oldie ignorance or as a scoped marketing. Indeed, the Internet sales are in the speedy reincarnation after the painful 2002 dotcom-crash. No doubt, doing business online becomes profitable and less-costly than selling stuff from offline shops or stocks.

Lets look what consequences this trend brings to the touristic sectors. The trend kicks first of all the so called tour operators, that organize and provide a complete tour packages including tickets, accommodation and excursions. In the old (no-Internet) days, that was a great offer for a traveler. Get one tour package that includes everything, without any calls and organization issues

– that was great and easy. Therefore, we can see so many tour operators jumping from nowhere around us last decades.

However, with introduction of the internet-order-opportunities the tour operators are in danger. There are number of factors that lead a tourist to use the online-services instead of going to the tour operator office or website:

- Online booking services provide lower rates because they (a) have direct agreement with hotels, car rentals or airlines, (b) do not need to rent offline offices, and (c) they just have larger turnover.

- Normally, the international booking services (for instance for hotels – Booking, Hotels.com, Orange Smile Tours, HRS, Venere, HotelsDiscount) have much larger amount of hotels and provide extensive choice for their clients.

- A client can control his travel arrangement right from his home computer, without going to the operator office and signing the package.

- The online reservations can be easily canceled sometimes even 12 hours before check-in.

These beneficial factors actually turn more and more people towards the online services. In order not to be forgotten and abandoned, some tour operators already started looking at the ways to bring their business to the online. Their mobility in this aspect might play an important role in their survival. Future will show how effective the tour operators can be in the online business. Anyway, our prognosis concludes that in several years we probably will not notice the standard tour-operator-offices at our streets anymore.

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