tourism and pricing distribution, tourism cafe, tourism cafe prices

What You Need to Know About Tourism Pricing and Distribution

We outline what every business needs to know about tourism pricing and distribution including systems, working with booking agents and commission rates.

Tourism Pricing and Distribution 101

When it comes to what you need to know about tourism pricing and distribution when it comes to your tourism business, there are three important things to know, particularly when it comes to pricing because profit is not something that is added on at the end, it is something to plan for in the beginning.

Extending from the topic of working with online travel agents and being prepared to pay out commissions for the privilege of working in this space, in tourism pricing and distribution there are three tourism industry-specific things to know and understand when developing experiences.

1. Distribution Systems

Distribution systems are a complex, global network of independent businesses that play a specific role to process three key components of Australian tourism experiences:

  • Develop the experiences
  • Promote the experience
  • Purchase and make experiences easily bookable

New technology and consumer behaviours have significantly changed the traditional distribution channels and online book-ability remains a key criterion for all travel and tourism experiences.

2. The role of Booking Agents

Whilst a significant proportion of your customers will find you by themselves, (online or through your own promotional activities), it’s important to know about the role of the different booking agents and that they exist as a powerful way to extend the reach of your product.

3. Commission Rates

To operate within an international or domestic distribution network you must allow for a percentage of the total cost to be distributed to the booking agents who booked and confirmed your product. Selling your product through the travel distribution system means factoring in commissions.

What you must know about your pricing and commissions include:

  • Each level receives a different rate of commission
  • Your product MUST allow for these levels of payment
  • The commission is paid only once the sale has been made
  • Be prepared to pay up to 30% per booking

tourism pricing and distribution, calculator

In summary, pricing and commissions negotiated with your third parties is a private affair and must be kept confidential. Important to always factor in your costs and profit margins and always know that your net rates are only marked up by tour third party agents and must never exceed your usual gross/retail rate sold publicly to the consumer.

ACTION: To give you a clear indication if you are commission ready create a spreadsheet of what your nett rates will look like when commissionable at every level of distribution at 10%, 15%, 20%, 25% and 30%. From here you can create a pricing strategy to be well set up to work in this way and distribute your product.

FREEBIES: Grab your free resource + bonuses!

Pop your details below to download your free resource and our extra bonuses, which include cheatsheets, our Smart Tourism Marketing System email course and monthly grant funding opportunities! 

0 0 votes
Article Rating

How to get the best answer from our team

Be as precise as possible so that our team can provide you with the best answer. Use the below for screenshots/screenrecording and paste the link in your question. You will receive an email when we have responded to your question.

Subscribe
Notify of
guest
0 Questions
Inline Feedbacks
View all comments

Latest posts

Image of graph on computer

Getting your mojo ready to transition to the new Google Analytics

Get ready to transition from Universal Analytics to GA4… you still have time but the transition can be tricky so follow these recommended steps

Read More →
Add or Update Your Business Listing On 3rd Party Websites

How To Add or Update Your Business Listing On 3rd Party Websites – Google Business Profile, Tripadvisor and ATDW

Your goal is to drive online traffic that leads your customer to your website and whether you are a tourism or trades business, these tips …

Read More →

Grab our Freebies

Click here to access a number of free checklists and resources available to Tourism Operators.

Brisbane
Head office

Suite 1,
57 Woodfield Rd
Pullenvale QLD 4069 
Australia

Sydney

Suite 101,
18-20 Victoria St
Erskineville NSW 2043
Australia

Melbourne

5 Molesworth St
Hawthorn East VIC 3123
Australia

Adelaide

120 Kenilworth Rd
Parkside SA 5063
Australia

Agnes Water

139 Bicentennial Dr
Agnes Water QLD 4677
Australia

Europe

36C Rte de St Cergue
1260 Nyon
Switzerland

aboriginal-flag

Our team would like to acknowledge the traditional custodians of Country throughout Australia and their connections to land, sea and community. We pay our respect to their elders past, present and emerging and extend that respect to all Aboriginal and Torres Strait Islander peoples today. We acknowledge that the sharing of knowledge has occurred across the lands and waterways of Australia for many thousands of years. As we continue to share stories and support small tourism businesses we try to listen to the knowledge and practice that has always existed here and consider how we can contribute to the preservation of culture and Country wherever we live and work.

© proudly brought to you by Digital Coaching International   ABN: 45 153 766 771 All prices are in Australian Dollars

Terms & Conditions  | Privacy Policy

0
Would love your thoughts, please comment.x
()
x