A Travel Outlet is Born - Pricing and Commissions | THE BUSINESS OF LEISURE

The Business of Leisure with Tony Humphrey

Travel business operators, from the smallest b&b to grand lodges and from day tours to extended international tours all have to add their profit margins to the costs of their respective products and services. Most travel operators have a website or what we will call an ‘Outlet’…..

If the travel product is sold by third-party sellers such as wholesalers, inbound tour operators, retailers or even their local tourism or visitor centres a further amount will be added for sales commissions.

The direct (or outlet price) gives them their required margin of profit but all of the other intermediaries have to have their own mark-up before we reach the actual ‘brochure’ price.

Where can or where should the traveller buy the product? They can go directly to the Operator (Outlet)….they can try Wholesalers but not all will sell directly to consumer or go to Retail Agencies (online or bricks and mortar)…… where all mark-ups may be in place.

In the non-travel world we can visit Costco (if a member) where we expect better prices than from other retail outlets as we have paid a membership fee to buy at ‘wholesale’ prices. In most cases with consumer products we have to use a business that has bought the products from the manufacturer as it is not possible to buy ‘soup from the Knorr Factory’…with travel we can often go directly to the operators.

Travel operators may want or need their distribution system but if their distributors (wholesalers and retailers) cannot fill all of the available space it would seem to be a smart move to also sell directly from the website…..At Retail, Wholesale or Direct (Outlet) Price….that is the question?

As a tour operator I would not want to risk alienating my distributors so I would probably offer my product at retail. If I can sell at retail I will make more profit. If I do not sell that space before the sell-by date, an empty seat on a tour or an empty room is unrecoverable. I would therefore be prepared to discount my product early in the selling process to improve my sales potential. However, I would not want to show a discounted price on my site, unless for last minute deals, that may harm my distributor relationships.

Last minute deals can be created but it makes more sense to sell well ahead of the sell-by date to ensure that the ‘tour full’ or ‘no vacancy’ signs can be raised.

Coupons, droupons, soupons, loupons vouchers or whatever the latest daily deal site is called can and should be considered by travel operators if they allow for acceptable level of profit to be retained or will attract new and repeat business. This may not be possible if the commission on sales is taken from the direct / outlet price….this offer then becomes a loss leader to attract traffic and new clients or merely to recover costs but a contribution to costs may be more acceptable than no contribution at all.

A non-travel business has many options for distribution but travel operators are somewhat limited as their products and services have very critical sell-by dates. That is why, being in the Business of Leisure, we developed TopTravelSites.com and TheTopTravelClub.com, places where any travel business can offer direct booking savings for travellers that do not appear on their own websites. A website service is now available to them that operates in a similar way to Costco - Family Memberships that allow members to buy with direct booking discounts. Travel businesses get courtesy listings when offering direct booking savings for the members.


Tony Humphrey is the CEO / Top Hand at TheTopTravelClub.com which offers its members significant discounts and savings on travel and shopping in over 100 countries. Sign up today for our exclusive 2 for 1 family membership package. Please Click Here.

For more information, please visit Tony's TNNWC Bio.

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Powered By TNNWC Group™

For complete tactical and strategic business planning, marketing, media, lead-generation, technological and capital resources, scalable solutions and tools to support every entrepreneurial start-up, young enterprise, small- to medium-sized business and emerging high-growth company, talk to the Advisors and Experts at TNNWC Group, LLC. We are a collaborative entrepreneurial, creative organization offering you hands-on, personalized assistance in every aspect of achieving your monetization, profitability and financial sustainability objectives, domestically and globally. We don’t just “coach” you or offer you pre-packaged, push-button solutions – we listen to you, analyze your exact needs, and work within your scale of operations and your budget to: (1) create your optimal tool kit , and (2) work as your partner (with our sleeves rolled up) to implement your plan by supporting you in the most efficient and productive use of every tool. Visit our website, which is located at http://www.TNNWC.com To receive your Free Subscription to our critically- acclaimed business newsletters, publications, information bulletins and alerts, simply join us as a Member. Two of our most widely-read publications include The National Networker (TNNWC) Weekly Newsletter, and The BLUE TUESDAY Report. Every Subscriber automatically receives Free Membership. Membership will grant you access to our unique suite of business planning, business-building, business promotion, business cost-reduction, business capitalization and strategic planning services, as well as entry to our expert management consulting services. These benefits are unequalled anywhere. Just go to our home page, and click on the “JOIN US” button. Find out about what WE can do for YOUR growing enterprise -- we are recognized advocates, champions, thought-leaders, writers and keynote speakers on such timely subjects as social networking and relationship-building, traffic -building, social media buzz, branding, developing international trading and joint venture relationships -- and structuring and obtaining alternative forms of capitalization. We are on top of every significant business, regulatory, technological, social and consumer trend worldwide. At TNNWC, we have a specific orientation: We Solve Problems. We Help Our Clients To Achieve Their Goals And Objectives. Prosperity. Peace. Collaboration. Sustainable Solutions For Continuous Growth™. Subscribe. Join Us. Visit Us. http://www.tnnwc.com/. You can access our free supplemental RSS FEED by clicking *HERE*
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A Travel Outlet is Born - Pricing and Commissions | THE BUSINESS OF LEISURE

Changes in the Selling of Travel | THE BUSINESS OF LEISURE

The Business of Leisure with Tony Humphrey

Apart from my obvious enjoyment of Leisure and Travel my background in the industry covers – retail travel, group travel and a dabble with wholesale travel…pre-internet!

With the arrival of the web in the mid 90’s I started to learn about the new ways of reaching out to a wider audience of travellers around the world. My bricks and mortar business was costly and the whole retail industry was being hurt by lower commissions from airlines and the need to adapt to a system of charging fees to clients…..still a hard sell!

One day I could see that using the new online promotional tools, I could reduce my advertising spend in local, regional and national newspapers and magazines. I could also see the opportunity for travellers to ‘go-direct’ to operators via websites leading to a rapid decline in the bricks and mortar retail industry for independent agencies. What I could also envisage is that savvy consumers would expect to get direct booking (outlet) prices as there was no need of an agent or middleman. Although there are many consumers who do not think about the commission element in the price of travel I thought that one day the realization that when they are handling their own travel bookings directly with the source (outlet), they might think “Why am I paying full retail price?”

Another factor in the growth of online travel and the decline in retail agencies was that by going directly to the operators, the consumer would then be able to reap the benefits of knowledge, experience and expertise. They would now be dealing with the source. The ‘source’ would be either an expert retailer or the operator.

The travel industry, led by national tourism bureaux and large travel suppliers, was into a system of ‘specialists’ and readily appointing any agent, who was prepared to take a simple destination or product test, as a destination or product specialist….. “Become a specialist in our destination or our tour products and promote this to your clients” was the cry….. You could now tell your clients that you are a destination or tour specialist, not necessarily an expert with knowledge, experience and expertise or that you have even “been there, done that, got the t-shirt’ – no worries…you are a specialist. This system of specialist travel agents is still alive and well today and in my opinion is detrimental to the reputations and expertise of the real experts with many years of travel experiences. Find these if you can and select different agents for your different wants and needs by destination and/or activity. They are out there!

Reality check: I remember going to a major travel agency flight centre chain for two tickets to Mexico and was only offered two airlines. After I returned home and checked on the internet, I found five airlines. Obviously they only sold their preferred carriers where they earned preferential commissions.

It’s an odd fact that throughout our lives we will probably spend more on leisure and travel than with lawyers, accountants, doctors, builders, plumbers, electricians, hairdressers. But with all of the latter we will make sure that they know their biz! However, rarely do we ask the same of our travel agent.

A Travel ‘Outlet’ is born. I felt that it was time to offer travellers a resource where they could go directly to the source and get a price that did not include the retail mark-up.

Next issue: Outlet prices and commissions and who makes them.

More opportunities in The Business of Leisure can be found by clicking the Welcome in logo at the Club.

Tony Humphrey is the CEO / Top Hand at TheTopTravelClub.com which offers its members significant discounts and savings on travel and shopping in over 100 countries. Sign up today for our exclusive 2 for 1 family membership package… ..Please Click Here.

For more information, please visit Tony's TNNWC Bio.

---

Powered By TNNWC Group™

For complete tactical and strategic business planning, marketing, media, lead-generation, technological and capital resources, scalable solutions and tools to support every entrepreneurial start-up, young enterprise, small- to medium-sized business and emerging high-growth company, talk to the Advisors and Experts at TNNWC Group, LLC.

We are a collaborative entrepreneurial, creative organization offering you hands-on, personalized assistance in every aspect of achieving your monetization, profitability and financial sustainability objectives, domestically and globally.

We don’t just “coach” you or offer you pre-packaged, push-button solutions – we listen to you, analyze your exact needs, and work within your scale of operations and your budget to: (1) create your optimal tool kit , and (2) work as your partner (with our sleeves rolled up) to implement your plan by supporting you in the most efficient and productive use of every tool.

Visit our website, which is located at http://www.TNNWC.com

To receive your Free Subscription to our critically- acclaimed business newsletters, publications, information bulletins and alerts, simply join us as a Member. Two of our most widely-read publications include The National Networker (TNNWC) Weekly Newsletter, and The BLUE TUESDAY Report. Every Subscriber automatically receives Free Membership.

Membership will grant you access to our unique suite of business planning, business-building, business promotion, business cost-reduction, business capitalization and strategic planning services, as well as entry to our expert management consulting services. These benefits are unequalled anywhere.

Just go to our home page, and click on the “JOIN US” button. Find out about what WE can do for YOUR growing enterprise -- we are recognized advocates, champions, thought-leaders, writers and keynote speakers on such timely subjects as social networking and relationship-building, traffic -building, social media buzz, branding, developing international trading and joint venture relationships -- and structuring and obtaining alternative forms of capitalization. We are on top of every significant business, regulatory, technological, social and consumer trend worldwide.

At TNNWC, we have a specific orientation: We Solve Problems. We Help Our Clients To Achieve Their Goals And Objectives. Prosperity. Peace. Collaboration. Sustainable Solutions For Continuous Growth™.

Subscribe. Join Us. Visit Us. http://www.tnnwc.com/.

You can access our free supplemental RSS FEED by clicking *HERE*

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Changes in the Selling of Travel | THE BUSINESS OF LEISURE