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How to create a balanced distribution network: the TrekkSoft research take

Posted by Lucy Fuggle on Nov 15, 2016

It’s crucial to balance your distribution network if you want to protect your business in an ever-fluctuating market. Distribution channels come and go, local inter-supplier politics may come into play, and economic and political crises can be unavoidable.

As shown by our recent research into effective distribution networks around the world, it's worth listening to the age-old wisdom and avoiding putting your eggs in one basket.

This is something that more tour and activity companies are listening to, especially when it comes to shifting their distribution network further online. For more details you can download our full free report, or keep reading for the key insights into balancing your tour and activity company's distribution strategy:

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What our research shows about creating a balanced distribution network

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Based on TrekkSoft research of 213 tour and activity companies, most tour operators have a distribution network that’s balanced 6% in favour of online channels.

As expected, direct bookings on a supplier’s own website are ranked as most important. This is closely followed by incoming tour operators, direct offline bookings, and online resellers (OTAs and tour & activity marketplaces).

It’s interesting to note that direct offline bookings are ranked third. While offline marketing tactics are still valuable, most companies now understand the importance of being online. This is especially the case for those wishing to cultivate a balanced distribution strategy.

 

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What can other tour and activity companies learn from this research?

 

Never be dependent on any one source of bookings

Your business needs multiple sources of bookings to thrive and remain sustainable. Create a balanced distribution network with several strong booking sources to avoid the pressure if external factors suddenly work against your favour (which, in tourism, they often will).

 

Maintain a healthy spread of high and zero commission rates

According to TrekkSoft research, a majority of tour and activity providers are reluctant to pay over 15% commission. While it can be difficult to avoid commission entirely – especially if you want to benefit from online travel agents and a partner network – you can ease the strain by maintaining a healthy spread of high and zero commission rates.

 

Never be dependent on any one market for bookings

No matter how secure one market might seem, you should never rely on it alone. Things can all too easily change, so make sure your business is open to multiple markets.

 

Build partnerships, no matter what your business size is

Cross-sell with local partners and promoting each others’ services online to boost your exposure and increase bookings. You can use a tool like TrekkSoft’s Partner Network to cross-sell without having to pick up the phone or send an email.

It's also worth building a valuable network of sales agents and equipping them with the right tools (like the TrekkSoft Point-of-Sales Desk) so that they too can book directly into your system.

 

The key is keep your distribution network diverse and dynamic

 

More handy reading material to help you balance your distribution network:

- 94 places to list your tours- TourismTiger
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The SEO Guide for Tour and Activity Providers - TrekkSoft
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Business development for tour operators- Acteavo
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What a successful distribution strategy looks like- TrekkSoft

 

Get more proven tips for balancing your distribution network in the TrekkSoft research report

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Lucy Fuggle

Written by Lucy Fuggle

Lucy is Head of Content Marketing at TrekkSoft. She tries to read a book a week, travel solo every month, and share ideas on lucyfuggle.com. You can usually find her in Switzerland's Berner Oberland.

Speak to the TrekkSoft team