Travel Trade 101 - AZ Communications Group

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Travel Trade 101
&
Working with Receptive Tour
Operators
Don Prince
Prescott Office of Tourism
Don Prince
 28 years in Travel & Tourism
 Arizona Office of Tourism

Deputy Director, Director of Travel Industry
Marketing & International Marketing Mgr.
 Sales & Marketing Consultant to hotel groups,
resorts and destinations.
 Tour Operators and Cruise Lines
Travel Trade 101
Travel Trade
 The hierarchy of businesses that operate between
the long-haul/international traveler and the
destination.
 aka: Travel ‘Middle – Men’
Travel Trade 101
 Access to long-haul / international markets





U.S. long-haul markets (Midwest, East Coast)
Canada
Mexico/Latin America
Europe
Asia Pacific
Travel Trade 101
 Access to long-haul / international markets





USA
Canada
Mexico/Latin America
Europe
Asia Pacific
 Navigate the International Protection Laws
Travel Trade 101
 Access to long-haul / international markets





USA
Canada
Mexico/Latin America
Europe
Asia Pacific
 Navigate the International Protection Laws
 GUARANTEED RETURN
ON INVESTMENT!
Travel Trade 101
 LEISURE TRAVELER

FIT – Fully Independent Traveler, or
 Foreign Independent Traveler
- a person traveling independently
who is not part of an organized
group tour
Travel Trade 101
 LEISURE TRAVELER

Group - an organized group tour that
has a tour leader/guide, and where
transportation, accommodation,
admissions and meals are generally
included
Travel Trade 101
 BUSINESS TRAVELER


MICE – Meetings, Incentive travel, Conference
and Exhibition attendees
Incentive Trips – ‘gifts’ that businesses provide
to clients or employees and are 100% paid for by
the company
Travel Trade 101
Tour Operators - the term represents 3
different business models:
1. Tour Operators – either contract products, ground and air
services from a Receptive Tour Operator or a Tour Wholesaler or
they may contract directly with the Supplier. They then package these
products and resell to the Consumer. They market these products
through brochures, websites, advertising and promotions. They often
work through Travel Agents to sell their products, but there are also
many Tour Operators that sell directly to the public, bypassing
the Travel Agent.
Travel Trade 101
Tour Operators - the term represents 3
different business models:
1.
2.
Tour Operators
Tour Wholesalers – may contract products and
services from either Receptive Tour Operators or Suppliers
and then resell them to other Tour Operators or Travel Agents.
They do not traditionally sell directly to the public.
Travel Trade 101
Tour Operators - the term represents 3
different business models:
1.
2.
3.
Tour Operators
Tour Wholesalers
Receptive Tour Operators
Travel Trade 101
 Receptive Tour Operators (RTO)

are ‘business to business’ U.S.-based Tour Operators who
contract products and services with U.S./Arizona Suppliers.
They resell these services to an International Tour Operator,
who then resells these services to the Consumer, sometimes
via a Travel Agent. Traditionally, they package individual
services into multi-day packages for individuals and groups
but they also sell stand-alone products and services.
 A RTO is one of the strongest marketing
partners a Supplier can have!
Travel Trade 101
Travel Agents – sell or arrange trips or tours for
consumers. They book services directly with suppliers
and with tour operators and receive a commission
for the booking.
Travel Trade 101
 Travel Agents
 Airlines - access by air is a key component in the
success of the Travel Trade for a particular market
Travel Trade 101
 Travel Agents
 Airlines
 Media - articles in newspapers, magazines and online
are a reliable means of generating interest in a market
Travel Trade 101
 Specialized Travel Companies

On-Line Travel Companies (OTAs) sell
individual travel services or complete packages on
their website. They generally contract products and
services directly from the Supplier or Tour Operator.
Will generally receive payment in the form of a
commission from the supplier.
Travel Trade 101
 Specialized Travel Companies


On-Line Travel Companies
Destination Management Companies
(DMCs) – are companies that arrange ground
services and events for business groups and
conferences. They generally only service the region
in which they are located.
Travel Trade 101
 Specialized Travel Companies



On-Line Travel Companies
Destination Management Companies
General Sales Agent (GSA) – is an appointed
sales representative of a company or tourism
organization, usually located in an international
market.
Travel Trade 101
 Specialized Travel Companies




On-Line Travel Companies
Destination Management Companies
General Sales Agent (GSA)
Consolidators – are companies that buy large
volumes of travel services (usually airline tickets) in
order to secure a preferred rate and override
commissions.
Consumer
Tour Operator or
Tour Wholesaler
20%
10%
Travel Agent
Commission
20% Net
Net
Receptive Tour Operator
30% Net
Supplier
(Hotels, Attractions, Transportation, Activities)
10%
Commission
Travel Trade 101
 Commissions – a percentage of the booking paid
by the supplier (usually to Travel Agents)
 Net Rates – an established rate for individual or
packaged products and services made available to
Tour Operators, typically 15% to 35% less than retail
or rack
Travel Trade 101
Net Rates – develop at a variety of price points
to meet the needs of TO’s versus RTO’s
Travel Trade 101
 Net Rates
 Develop a Marketing Plan – identify and
communicate with appropriate members of the travel
trade (those that compliment your product). Trade
shows such as NTA, Go West Summit, International
Pow Wow are excellent for establishing a presence in
the international marketplace.
Travel Trade 101
Work with AOT and your local DMO.
 AOT and most DMOs attend a variety of domestic
and international trade shows.
 AOT and DMOs communicate with the travel trade
throughout the year – your new product/service is
NEWS! Tell us about it.
Receptive Tour Operators
How receptive operators can make
your life easier…
Receptive Tour Operators
Sales Chain:
 Supplier
 Receptive Operator / Wholesaler
 Overseas Wholesaler
 Overseas Retail Outlet / Travel Agent
 Consumer
Receptive Tour Operators
What is an RTO ?
 There are a wide range of sizes and types of
Receptive Tour Operators but the common feature to
all is that they buy U.S. Tourism products. Products
are presented in confidential tariff’s or through
customized quotes.
Receptive Tour Operators
The Overseas Wholesaler
 These are tour operators outside of the U.S. which
may buy a U.S. land package from an RTO and add
on the air transportation. They produce glossy
brochures which are distributed to the travel agents
and into the hands of the consumer.
Receptive Tour Operators
The Travel Agent (overseas)
 This is where the tour product reaches the consumer.
The travel agent will discuss which of the multitude of
different products will best suit their desires.
Types of Receptive Operators
 Geographic Market. The demands of the overseas markets vary
considerably which requires specialized knowledge from the RTO.
 Destination Area. Some RTO’s specialize in one state or region, ie;
the Southwest USA and at the opposite end of the spectrum they
represent the entire country.
 Product Type. One of the main differences here is whether the RTO is
selling to Groups or FIT (Individual Travelers)
 Size. Smaller companies are usually more specialized by market,
destination or product types. Usually the larger the operation the
greater number of markets they reach and the wider the product range.
Receptive Operator Organization
 Product / Contracting
 Sales and Marketing
 Operations
Advantage of RTOs to Intl. Operators
 One Stop Shopping
 Cost Savings
 Reliable U.S. Partner
 Protection of Interests – Tourism Laws
 Marketing of New Products
 Destination Education
 Adaptable Tour Products
Advantage of RTOs to Suppliers






Exposure to International Marketplace
Less Volume Fluctuations
Efficiency
Customer Service
Packaging of Your Product
Accounts Receivable
Why Work Direct?
 Control Over Client Relationship
 Promotion of Your Product
 Higher Price
Some Things To Remember
 You Can Work with Both!
 Loyalty, Trust, Respect
 Pricing Structure is Important
Commission Structure
 U.S. Receptive Operator = 20% to 30%
 Overseas Tour Wholesaler = 15% to 20%
 Travel Agents = 10%
 Consumer Price Should Match Retail
Why 25% to 30% off Retail?
 Marketing Costs
 Communication Costs
 Questions / Complaints
 Payment Issues
 Expertise and Experience
 Packaging with Other Products
Sales Cycle
 RTO Produces a Tariff
 Meet with the Overseas Tour Operators
 Finalize Product for Their Brochure
 Overseas TO Produces a Brochure
 Distribute Brochure to TA’s
 Traveler Buys a Vacation Package
Lead Times
 International Markets Require Advance Pricing
 RTO’s Tariff Production
 Products and Prices Require 12-18 Months in Advance
Making Your Product Export Ready
 Description
 Pricing – 12 Months in Advance
 Terms and Conditions
 Consistent Rates
 Consistent Product
 Key Contact
 Images (High Resolution for Brochures)
Other Issues
 Consumer Protection Laws
 Inventory (Hotel Block Allocations)
 Liability
 Assumption of Risk
 Safety
 Languages
Marketing Your Product
 Research the RTO’s
 Book a Sales Call
 Follow Up
 Make Presentations to RTO Staff
 Offer Familiarization Tours to RTO Staff & the
Overseas TA’s via RTO Requests
Which Type of RTO is Best Suited
for Your Business?
Supplier Type:
 Hotels
 Lodge / B&B
 Restaurants
 Boat Charters
 Coach
 Attractions
 Adventure product
 Limo’s
 Regional TO
RTO’s Focus:
 All
 FIT & Small Groups
 Groups & Incentive
 Groups & Incentive
 Groups & Incentive
 All
 All
 FIT Only
 All
Other Resources
 Your Local DMO (CVB or Tourism Office)
 Arizona Office of Tourism

Mary Rittman, Dir. Trade & Media Relations

Jennifer Sutcliffe, Travel Industry Marketing

Kristin Swanson, TIM Specialist
 USTA
 DMAI
My Contact Information
Don Prince, Director
Prescott Office of Tourism
[email protected]
928-777-1221
visit-prescott.com
prescott-az.gov
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