Three challenges facing tour operators online


For a long time, future travelers have the opportunity to search, find and make basic bookings of flights and hotels online. Only recently have these same travelers been able to book products to their destination, such as sightseeing tours and attraction tickets, also on line. However, despite this trend, there is still no primary distribution system; this means that most travelers have to visit many different individual sites to purchase the products they prescribe.

For a tour operator, one of the most important goals is to sell seats. The challenge is how to sell more seats and what systems to use to manage those sales. There are several problems faced by individual tour operators when choosing their products through their website or through the booking portal. The first task is to decide which solution to use. There are primarily two types of online booking systems available. One is standalone, which means it is installed directly on the website, the other is hosted, which means it is installed and operated by another company. Generally speaking, self-booking engines require a pre-license fee and require the tour operator to have access to hosting, IT experience, and the ability to install and manage software.

The key advantage of a standalone solution is that the tour operator has complete control over their system and can customize it to suit their specific needs. The biggest drawback of the independent living system is that the tour operator’s products are only available on their website and cannot be distributed openly. Standalone systems can also be very expensive, requiring both software and specialized hardware. Hosted solutions are sometimes referred to as “software as a service” solutions and are rented out on a monthly basis. Because many users share collaborative solutions, they tend to have a lower cost, though not always, and do not support settings. While some solutions support product distribution through a proprietary portal website, few actually allow open distribution of destination products through some global distribution system.

The second main problem for tour operators is to decide on the use of a system that charges a fixed fee or commission. This can be a more difficult task to overcome, as both hosted and stand-alone systems charge both fixed fees and commissions. Therefore, once the tour operator has chosen the technology, it must decide whether the cost matches the system. The advantage of a commission-based system is that, as a rule, the tour operator costs very little until the sale is made, and then the tour operator pays an average of about five percent commission for the sale of its products through the system. In some cases the commission may be from one per cent to twenty-five per cent. This may seem attractive because there are no upfront and fixed costs, but the cost of the commission system can add up quickly. Fixed fee systems are harder to find as they are for some reason not the norm for the travel industry. Fixed fee systems charge a regular monthly fee and a fixed booking fee, typically between twenty-five cents and one dollar per booking. When compared to the commission system, one can understand why the fixed fee system is so attractive. A tour operator sells ten bookings a week at a retail price of $ 350 per booking using a commission system that charges 10%, costs the tour operator $ 1,400 per month compared to a fixed fee system that charges forty dollars a month and seventy-five cents. for booking.

The third and perhaps most important task is to distribute products through several sales channels online and offline while managing inventory. Surprising this problem is surprisingly not so difficult, primarily because there is so little choice for tour distribution systems. Major GDSs do not currently support destination products and focus almost exclusively on the distribution of major airlines, hotels and cruises. There are other consumer-based travel product sites that will sell products on behalf of tour operators, but in almost all cases, these tour booking sites are just travel agencies that charge a huge commission or require an exclusive price. The best option for a tour operator is to find a system that allows you to manage inventory, streamline the sales process, provide the ability to sell through your own website and provide a basic distribution network that allows you to resell your products through both online and offline sales.

So there are a huge number of tour operators who have not yet made the leap based on software solutions for inventory, sales and customer management. Although the number of solutions that provide some or all of these requirements is growing, they all represent their own strengths and weaknesses. The best and most flexible solution can present itself as a solution made with an integrated distribution system. The solution will allow tour operators to manage their inventory, bookings, customer information and provide a lot of reporting. Ideally it will be a fixed fee system that charges a monthly fee depending on the volume of the operator’s bookings rather than charging a commission.

However, the system will still allow the operator to set a commission for products sold through independent resellers so that they can properly offset profits. It would have a built-in consumer booking mechanism that would give the tour operator the ability to customize the look of their website. Finally, the system will also have an open application interface that will allow operators to be more technologically savvy to fully customize their consumer booking experience and integrate products in unique and engaging ways.