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Everything You Need To Know About Working with Online Travel Agents (OTAs)

For small tourism businesses, working with online travel agents could exponentially grow your business and increase your exposure. Learn more about the benefits here.
First published on September 14, 2021
Last updated on September 16, 2021

There are many and great reasons to working with online travel agents and distribute your tourism products and experiences via online and travel distribution networks.

What it means to distribute your product is setting up a new business model for your business to allow a third party to sell your experience on your behalf.

If your business has online book-ability and is already using an online booking system to manage your inventory and manage direct online website bookings you will already have the added benefit of having this available to you.

For many reasons, there are many operators who still don’t have an online booking function and relying on manual processes to manage their day to day and forward bookings. If you are in the latter camp and don’t have an online booking solution it may be the year to start seriously making this consideration.

If that is the case you may want to check out our Online Booking Systems course which includes a checklist of requirements.

Much like setting up your ATDW listing to create further reach and increase leads for your business working with online travel agents help you to achieve the same with a key and core difference that they are highly sophisticated in the art of conversion.

One very important caveat of working in this way is that in order for you to work with any third party agent is you have to be prepared to price your product accordingly to allow for commissions to be paid back to the agent.

That is the number one thing to know and understand when it comes to working with online travel agents, that your gross rates, also known as your full or rack rate is where the commission amount will be deducted.

The commission payable can be anywhere from 10% to 35% which can be a daunting proposition if you are not well set up for this.

As daunting as parting with your revenue can be initially, it is very important to note that the payment of commission is only done when a sale is made and you have delivered the experience.

5 Benefits of working with online travel agents include:

  • Increase your reach and brand awareness to new audiences
  • Make your product available in markets you may not have the resources to have access to independently
  • You only pay commission on sales
  • Online reputation and credibility booster
  • Increase the quantity of sales conversions

In summary, working with trade is a natural next step for any small tourism operation to open new doors, new audiences and new relationships within the industry to sustainably grow your business.

ACTION: When it comes to working with trade the most important action is to check if your pricing and margins can sustain commissions against your expenses. Take stock of your numbers and the cost in every dollar to deliver your experience and work back from that to achieve distribution success.

If you want to connect with like-minded tourism operators and compare experiences, insights and learnings join our Small Tourism Business Help Group.

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