When should you switch to a fixed payment plan?

When does a commission based plan stop benefitting your tour or activity company

Published by Nicole Kow on Oct 13, 2017

When looking for a booking software provider for your tour or activity business, pricing is usually one of the biggest factors that affects decision making. From commission based plans to monthly or annual subscriptions, there's a plan for companies of all sizes. 

With Pay As You Go or commission based plans, there will come a point in your business where it no longer makes sense to pay as you go. As your business grows, a 6% transaction fee on each booking you take in can significantly impact your bottom line. 

For example, Motorboat Adventures generates 2 direct online bookings a day with an average basket size of €200. The company could make a total of €146,000 per year. 

Subtract the 6% booking fee, and they've generated €137,240 in revenue. 

Over the course of a year, they've paid their booking software provider a total of €8,760 through commissions and booking fees. That's no small sum.

(For the sake of simplicity, we will not take into account how some booking software providers also charge your customers a booking fee upon checkout.)

While it is impossible to eliminate the costs of a booking software altogether, there are software providers who can provide you with a more comprehensive set of tools for a better rate. For those thinking of minimising costs by building your own booking solution, remember that it requires a large upfront investment to hire a developer to build the system. Not to mention all the costs that come with regular updates, bug fixes and long-term maintenance. 

Switching to a booking software provider that offers a fixed monthly plan can end up being more cost effective for large companies. 

One thing to bear in mind is that most companies that offer fixed plans will still charge you a transaction fee, but at a much lower rate. 

Taking the same example of Motorboat Adventures, say they switch to a fixed price plan that charges them €199 a month and 3.5% plus €0.60 per transaction, their booking fees would total up to €7,936 a year. That's almost €1,000 in savings. 

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At TrekkSoft, we recommend that companies who generate more than 400 bookings a year sign up for a fixed subscription plan because it is not only more cost efficient, it also provides users with the full suite of tools and features, a dedicated account manager and 24/7 support. 

These plans were designed to provide medium to large tour and activity operators and marketplaces the tools and support they need to grow, without a hefty price tag. Learn more about our plans here

Interested in learning more? Arrange a phone call with our expert team to find out more about TrekkSoft. 

 

We'll show you around. Book a demo

 
Nicole Kow

Published by Nicole Kow

Having graduated from the UK, Nicole travelled around Europe before joining TrekkSoft's marketing team. She is now based in KL and regularly blogs about her travels at Next Train Out.

Topics: Business advice

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