Why Do You Pay Commissions When You Do Your Own Travel Bookings?
- By: ANTHONY FRANCIS
When you buy a travel package, tour or service your price may include a number of levels of commission added to the original pure cost of the product direct from the supplier.
To give an example of such: Let's take a tour operated in Australia at a cost direct from the operator of say $1,000:
1. This tour may be listed with an Inbound Tour Operator. 2. The ITO buys for $1,000, marks up 10%, sells to Wholesaler, tour price now $1,100. 3. The Wholesaler buys for $1,100, marks up !0%, sells to Retailer, tour price now $1,210. 4. The Retailer buys for $1210, marks up 10%, sells to Traveller, tour price now $1,331, (prices changes if percentages are higher, or less if the ITO is not in this equation) (without the ITO, retail price would be $1,210 at 10% or $1322 at 15%).
The commission element, without the ITO at 10% mark-up is $210 per tour per person (21%). The commission element, without the ITO at 15% mark-up is $322 per tour per person (32%).
So the Traveller pays variable levels of middleman commissions.. When you have 2 or 3 or a family of travellers, this is a considerable amount of cash and if you have a tour costing in excess of $1,000, just do the math.
Similarly, brochure prices have commissions built in to them for the retailers of 10 - 25%.
If a consumer goes to an Outlet Store they expect outlet prices, if they go directly to the Manufacturer they expect 'go-direct' prices, so why not handle travel arrangements in a similar way?
Because, it is only fair that each level of the product sales cycle earns revenue for the business involved and these businesses are necessary and needed to ensure that some products are marketed, promoted, brochured and sold to consumers around the world who may not be comfortable with handling their own bookings and need the assistance of an expert professional travel consultant.. However, with the growth of the internet and the ability to now find the source of travel products, travellers who handle their own arrangements should get a fairer deal on the pricing as a middleman is not needed in the purchasing process.
It does not make sense for most travel operators to show different prices on their websites, Retail, Wholesale or Internet Direct etc as this could undermine their supply chain by deterring the efficient middlemen from representing their products, so we have to find a way for all of the 'do-it-yourself' bookers to get a fairer price.
There is a way. A new service has been introduced that enables travel operators to encourage and reward travellers who are comfortable with direct bookings and for them to get a fair price break for the commission no longer required to be paid out. The new service, operated by TopTravelSites.com, offers TopTravelVouchers for sale that have values equivalent to, or morethan the commission elements on the operator's travel products. These may be purchased by travellers at very deep discounts to their redemption values, getting closer to the direct cost price of the travel product for the consumer... think outlet pricing or go-direct deals.
The Travel Operator still incurs the commission cost by issuing a toptravelvoucher but the beneficiary of the price break is the traveller, not the middleman. By encouraging and rewarding travellers, the operators should get more traffic to their websites.
TopTravelSites can be compared to a retail travel company but it does not sell travel. It only introduces travellers to operators involved with the program and invites them to go directly to the travel websites of its clients. If travellers want to do business directly with the travel providers on the site they can get a price break by purchasing toptravelvouchers online at prices of $30, $50 or $100usd (or equivalent foreign currency). The vouchers have a 100% money-back guarantee and if, after the travel has been completed, the traveller is unhappy with the product, the cost of the voucher is reimbursed and redress is sought from the operator.
Hundreds of vouchers are currently available and new vouchers are being added each month but when you see a voucher valued at 1,500 euros for sale for $100usd it may not be long before you will see thousands of choices. Many other vouchers are available and can be purchased by single travellers, groups or families, leading to very healthy savings for all 'do-it-yourself- bookers.
Many travel operators will continue to sell through a supply chain but there are thousands of travel businesses around the world that want to improve their representation and for their services to be seen by a wider audience of travellers. Most travel operators would always be willing to pay a commission on sales and so this site might offer great appeal to them. It will surely attract travellers booking their own arrangements and being rewarded by rebated commission and as long as the site operator keeps to low overheads (no bricks and mortar stores or expensive brochures) it will also appeal to many more travellers and travel providers. .