This post summarises key findings from our research into the distribution landscape for tour and activity companies. You can download the full report here.
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 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.
Creating a balanced distribution network
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.
What can tour and activity companies learn from our findings?
1. Never fully depend on a single 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).
2. 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.
3. 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.
4. 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-Sale Desk) so that they too can book directly into your system.
The key is keep your distribution network diverse and dynamic.
Get more handy reading material to help you balance your distribution network:
Find out how you can improve your distribution strategy with TrekkSoft