Listing with an online travel agent (OTA) can be an excellent marketing strategy for tour operators. They’re experts in digital marketing, own search rankings and travelers trust them for booking experiences. When you sign up with an OTA, your tour business has the potential to gain exposure with an audience you may not reach otherwise.
OTAs have mastered the element of being able to book, compare and research experiences online, allowing guests from around the world to compare similar options, prices, photos and reviews. For travelers, the perks are simple — ease of choice and flexibility in booking, plus a wealth of options at their fingertips.
However, increased exposure comes with a cost and OTA’s commission fees can eat into your bottom line. Despite this, there are some worthwhile benefits for investing in an OTA as a marketing channel. These benefits include introducing new customers to your tour business and creating packages that draw attention.
As you explore tour listing websites, you’ll notice how having an OTA pricing strategy will focus on listing your tours and activities on channels like Expedia Local Expert, GetYourGuide, Viator and Tripadvisor.
How to make an OTA strategic plan
By signing up as a supplier can enable you to sell more tours and activities to a global audience. This is a strategic move if direct bookings are down since OTAs can help to connect with guests you might not otherwise.
Investing attention into listing your tours and activities through OTAs means increasing visibility. This helps future guests discover your tour business and provides an option that supports your booking goals.
When managed strategically, third-party distribution channels can set you up to have consistent revenue year-round. As an added bonus, you only pay OTAs when a booking is made. All the while more guests have the potential to discover what you have to offer.
Let’s explore 3 tactics you can use to determine if an OTA fits with your tour business:
1. Use OTA marketing to reach capacity
Running a tour business comes with fixed costs — expenses that stay the same no matter how many bookings come through. There’s rent, insurance, equipment, and staff salaries to look after. The best OTAs promote tours and activities on a mass scale, allowing tour businesses to sell experiences to guests quickly and easily.
So if you’re considering signing up with an OTA to reach full capacity — especially in your off-season or shoulder-season — they can be a valuable resource. A full tour at a low-profit margin is better than an empty tour at full price because you still need to cover your ongoing payments.
What happens if you can reach full capacity on your own? Should you even go with an OTA?
Well, the immediate answer is no. Think about it this way — does it make sense to tolerate commissions when you’re able to fill your calendar with direct bookings?
But remember, there’s always a possibility to expand your customer base with an online travel agent. You can use an OTA to connect with customers around the world. So, even if you’re at full capacity, you can still benefit from an OTA’s marketing reach — you’ll just have to compensate for the commission fees by increasing the volume of bookings.
In other words, offering more tours or adding more spaces will make up for the loss in revenue. If you’re able to increase the number of available spaces, there’s no added variable cost. And with the help of an OTA, you shouldn’t have a problem increasing bookings to meet the increased volume.
2. Create an OTA pricing strategy
There are plenty of other tour operators listed on an OTA website. Many businesses tend to lower their pricing to stay competitive. But, creating a low-cost offer is a race to the bottom. Plus, your goal is to showcase your tour’s value rather than undercutting what you offer. Regardless, you can still experiment by listing a low-cost offer on an intro tour.
What is an intro offer? Simply put, you can create a tour specifically to list on an OTA’s website. Try offering a shorter or more basic version of your current or most popular tour.
A lower price may appeal to travelers in search of an incredible deal. One way to do this is by sharing intro offers that are specific to the online distribution channel. It’s a way of getting guests in the door. Then, you have an opportunity to upsell them on more inclusive tours at a later date.
Plus, the tour can serve as an introduction to your tour business. All you have to do is entice them with valuable upsells that heighten their overall experience.
A guest may be more likely to purchase additional products and services if they feel like they’ve gotten a deal. Often, travelers see a good deal as a way of justifying spending on other opportunities — they just need to be appealed to.
To capitalize on this, try offering merchandise, food, drinks, and other activities when they check in. So while you end up increasing your bottom line, they’ll view these add-ons as extras that contribute to a memorable experience.
3. Use OTAs during the low season
Let’s say you’re able to reach capacity on your own, then an OTA may not be necessary — unless you’re looking to increase your volume.
However, if you struggle to book tours in the low season, you may want to consider listing through an OTA.
When you consider the benefits, OTAs have a wealth of marketing resources designed to sell tours and activities quickly. So it’s better to get some bookings during the low season than to just get by — even if commissions are involved — because they’ll help cover your fixed costs.
Once the low season is over, you can revert to focusing on direct bookings. By applying a pattern of an on-again-off-again relationship with OTAs, you can make it easier to acquire bookings all year long.
Keep in mind, all three of the above marketing methods are experiments. Give them a try for a season — keeping online channel management in mind— and then decide if they work for your business. By tracking and analyzing the results, you’ll know whether commissions are worth the payoff.
OTAs benefit from mass amounts of analytics and customer data to help determine booking trends. Explore whether implementing an OTA pricing strategy will assist you in filling available bookings in the slower seasons.
By investing some of your efforts into OTA marketing strategically, you may reach your booking goals faster, year-round.
Successful marketing means discovering what methods work with your tour business and investing in them. When it comes to OTAs, give yourself the freedom to experiment.
Investing in OTAs can be a wise move for your tour business — depending on the time of year and your ability to fill your own calendar with direct bookings.
Keeping online channel management in mind, you’ll want to look at the commissions and time required to accurately publish and sell tours through online resellers. Each season you’ll discover more tactics to expand your visibility. Plus, you’ll have more insight into whether OTAs positively impact your profit margins with increased bookings.
The beauty of selling through an OTA is that you can always re-evaluate and make adjustments to your selling strategy throughout the year. OTAs are an amazing hub for guests to explore reviews and research their next trip, so why not take advantage of their marketing resources to fill up your bookings and delight guests from around the world?