Thought leaders and business owners alike agree that Online Travel Agencies (OTAs) can be an effective way to optimise sales and increase reach alongside your own website and in-destination network of resellers. It's a great advertising tool and door opener to new markets.
Thus far, everything is clear. However, the preparation work and set-up might be a bit trickier. In fact, many established companies are still figuring out their optimal OTA formula.
Over 175,000 bookings processed by TrekkSoft in 2018 were generated by OTAs, we know what good collaboration looks like from a tour company's perspective. Below we have listed best practice guidelines for a prosperous partnership - putting you in the drivers seat.
1. Choose the right OTAs for your business
Before looking at the available options, take a step back to try and define and profile your product offering and company. What kinds of experiences do you provide, for whom and at what scale? Once you have a clear picture of your business, the OTA hunt can begin!
These are the factors to consider:
-
Does the OTA offer a segment you couldn’t reach direct? Will you benefit from its geographic and demographic target? Utilise OTAs to reach new audiences!
-
Decide what customer connection you want or need. Is there a need for this connection - and can your OTA facilitate - direct contact with your customers?
-
Is there an operational fit? Does the booking process and ticket distribution support your business? Will there be a consistent customer experience for direct vs. OTA bookers?
-
Does this OTA work with direct competitors or big players that could impact your application or bookings?
Christian Landis, General Manager at Best of Switzerland Tours, recommends tour operators to choose multiple OTAs for their distribution strategy.
2. Know what you're signing up for
-
Are their Terms & Conditions right for your business? Are they reflective of your types of tours or are there areas where they will hold you back?
-
Does their cancellation policy/timeframe work? Does this reflect your business' needs to prepare for the tour and to secure income?
-
What is their refund policy under different circumstances? How much flexibility is given to both parties and how will you be compensated for no-shows?
-
What payout currencies do they offer? Will you be paid in your local or preferred currency, or do you have to deduct conversion fees from your profits?
Keep in mind that the application from the OTAs side can take a while to be processed.
3. Decide how much this business is worth to you
-
What is your commission cap? Set up beforehand how much you are willing or able to pay in commission. Read more about our guidelines and benchmarks: How much commission should you pay?
-
Do you have leverage you can use to negotiate? What makes you stand out and what can you bring to the table? In what ways are your activities important to the destination, those travelling there and the OTA?
-
How much availability will you offer? How much of your offering can you set aside to OTAs?
-
Can you afford a best price guarantee or seasonal offer? How flexible or reluctant are you to price amendments by your chosen OTA? Even though promotional pricing can be an effective way to drive sales, small percentages add up - especially for multi-day or personalised tours. Look up beforehand how much of your profits you are willing to give up and for what potential pay-off.
Next step: talk to us about how to manage your OTAs through one channel
