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

DOING BUSINESS IN CHINA: Out for the Holidays

Doing Business In China with Dan Paulson

In the US, we may take it for granted that the holidays we celebrate are also celebrated elsewhere. In China this is not so and if you’re not careful, you may find yourself in a pinch.

With the holiday season upon us, I am reminded how different cultures can be when it comes to celebrating. Seasoned travelers understand that what we celebrate here often isn’t celebrated somewhere else or vice versa. You can imagine how things change around the holidays in the US. During this time of year, retailers are in full swing. There’s a reason why Black Friday is such an important day for this industry as most of the profits earned by retailers starts just after Thanksgiving. In some industries, trying to do business this time of year is virtually impossible as business-to-business transactions come to a screeching halt.

In China, the holidays there are considerably different than they are here. The Chinese have seven holidays (see table) that are recognized nationally. During these celebrations, work in China comes almost to a complete standstill. With the exception of New Year’s, no other holiday aligns with ours here in the states. If you are doing business with China, it will be important for you to remember these dates and understand their significance.

Festival	Date	Legal Holidays	Holidays of 2010	Holidays of 2011
New Year’s Day	Jan. 1	1 day	Jan. 1-3	Jan1-3
Spring Festival (Chinese New Year)	Based on Lunar calendar	3 days	Feb. 13-19	Feb. 2-8
Qingming Festival	Apr. 4 or 5	1 day	Apr. 3-5	April 3-5
May Day	May 1	1 day	May 1-3	May 1-3
Dragon Boat Festival	The fifth day of the fifth lunar month	1 day	June 14-16	June 4-6
Mid-Autumn Day	August 15 according to the lunar calendar	1 day	Sep. 22-24	Sep 10-12
National Day	October 1	3 days	Oct 1-7	Oct 1-7

In addition to the seven legal holidays, there are four other national festivals where workers may get time off, plus there could be numerous recognized local and regional events that could impact workflow.

Recently we were working with a company in the states that wanted to purchase products from China. This company is very client centered and deadline driven. While they were used to working with these tight deadlines, they had not done much business with China.

We were asked to assist them with finding a suitable manufacturer and making the contact for them. We began our process in early fall and shortly after starting work, were asked to place an order that had to be in the United States by early October. At the time the order was placed, it was approximately two weeks before National Day which is the equivalent of our Independence Day. Keep in mind the products had to be made, passed through customs, shipped, pass through customs in the U.S.A. and delivered in this time. What transpired in the coming weeks was enough to give anyone gray hair and I earned my share as different unexpected challenges popped up.

The shortened version of the story is the products, though they were made in time were tied up in shipping and customs, and ended up arriving late. Even our best efforts couldn’t control all the variables from what would be a normal workweek in China. The problems compounded themselves with the holidays. Here we have been spoiled in recent years. There was a time in our not too distant past when nothing would happen on a national holiday. You spent time with friends and family. If you needed to go to the store or get something done, too bad. In China, it is still much like that. Everybody stops to celebrate, and while early October might not be a big deal to us, it is very important to that culture.

So here’s wishing you a happy holiday season. If you are looking at expanding internationally, be sure to know that nation’s culture and what they celebrate as well. It could lead to profitable relationships for years to come!

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

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DOING BUSINESS IN CHINA: Out for the Holidays

Networking Your Way Through the Silly Season

By Terry Bean

Social Networking Editor

I know it’s October and it seems way too early to be talking about holiday parties, but I suspect that within 2 days of reading this, you will see holiday decorations at your local stores. If retail can rush the Holiday season, then damn it, I can too!

To that end, I have come up with a quick list of thoughts pertaining to networking and partying during the holiday season. Consider this a “do or do not” kind of list. Just always remember, “There is no Try” (Adam bet me a dollar I couldn’t get the word Yoda into a post).

So here’s the list:

10. Host your own network gathering- Bring your network to your office, house or favorite joint and introduce them to one another. It’s a great way to help many at once.

9. Learn other culture’s holiday greetings- I speak to a lot of people who miss saying “Merry Christmas”. So say it, but also be able to wish others a festive holiday of their choosing too.

8. Setup weekly 4 tops for lunch between now and holidays- This is a great way to bring your network closer together. Look for the synergies and let them happen at the table in front of you.

7. Instead of sending clients cards and gifts, send them referrals- What can I add to this?

6. Get the attendee list in advance- You will be able to make the most of your networking time by having this information. Hopefully that adds to your cheer.

5. Use your holiday networking time to help get a jump start on your new year- Start filling up your January calendar with the folks you are meeting now.

4. Don’t be that GUY* at the party...you know the one who either is throwing their card in everyone’s face or falls down because they drank too much.

3. Know what your follow up plan looks like before needing it- If you know your target client and target business partners, you will know who the people you need to follow up with immediately.

2. Help others connect by introducing them to the people you know they need to meet- Listen. Understand how you can help and make the appropriate connections. Both parties will appreciate it.

1.5 Ask the host "who are the three people here that I must meet"?- They know everyone so they are in the right space to play matchmaker.

And the real # 1…Don’t Network in the Punchbowl!- It’s just bad form

*GUY is an acronym for Gender Undetermined Yet
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Networking Your Way Through the Silly Season