Selling to the Holiday Market
The Tour Operator or Wholesaler is the 'manufacturer' of the holiday product. He designs and compiles the ingredients of the holiday, he prints the details in a glossy brochure, which he distributes through selected Retail Travel Agents or direct to the customer. The Tour Operator has to plan and price his holiday package well in advance of the holiday season. During the summer months the Tour Operator enters into contracts with hotels, car hire firms, coach operators, visitor attractions and airlines for the following season. Then in the late summer the company goes to print ready to have the brochures out in October/November. This timing may vary slightly from market to market.
Tour Operators in Britain and North America generally deal directly with you. Whereas, Tour Operators in Continental Europe and Australasia tend to use Irish Incoming Tour Operators (spoken about further on). There are lists available from the Fáilte Ireland Promotions Department of the Tour Operators who have programmes to Ireland from each market, including a breakdown of the holiday packages on offer.
The Retail Travel Agency is a 'shop' where the holiday product is sold to the public. Retailers get a negotiated commission from the Tour Operators on any holiday packages they sell. Retailers also receive a fee from the Tour Operators in order to carry their brochures. Other sources of income for the retailer are the sale of airline and ferry tickets and commission, normally 10%, from hotels and car hire firms, etc., when making individual arrangements for the client. These commissions do not add any cost to the client. Some retail travel agencies are owned by Tour Operators or vice versa.
The Irish Incoming Tour Operator (also known as handling agent) can be an invaluable source of business. They are active promoters in the marketplace. The Incoming Tour Operator helps the overseas Tour Operator put his programmes together, he packages the ground arrangements to which the Tour Operator adds the air or sea ticket. The Incoming Tour Operator is normally based in Ireland and often acts as the Tour Operator's representative in the country looking after the interests of his clients and processing invoices.
The Incoming Tour Operator also services the requirements of ad hoc groups which come direct or through a retail agent who is involved in group business.
Contacting the Incoming Tour Operators should be the first step in selling to the package holiday market as they can promote for you to their operators in the markets, particularly in Europe where most Tour Operators use an Incoming Tour Operator. A list of Incoming Tour operators is available from Fáilte Ireland - contact the Promotions Department.
Pricing and the travel trade
You can sell your product through the three main trade channels:
You will need to adjust your pricing to each of these specific groups.
Incoming Tour Operators
Your best net price, about 30-40% less than your normal price should be reserved for the Irish Incoming Tour Operators as they will need a margin of profit when they sell the ground package to the client. You should never undersell the Incoming Tour Operator by quoting the same price or less to an overseas Tour Operator as this undermines their position in the market. Their valuable promotional role in the marketplace should be appreciated and supported, particularly by smaller producers who cannot afford to market themselves overseas.
Overseas Tour Operators
In some markets, and particularly in Britain and North America, Tour Operators tend to deal directly with Irish producers. Again they will look for keen net rates similar to the Incoming Tour Operator. Whether dealing with Incoming Tour Operators or not they need these keen rates to cover the costs of print, distribution, promotion and commission to Retail Travel Agents. Rates can be adjusted according to the volume of business expected. Big volume Tour Operators will expect much keener rates than lower volume Tour Operators.
Specialist Departments in Retail Travel Agencies
Pricing for Retail Travel Agents is much simpler in that they expect to receive approximately 10% commission on your gross rates for any business they send to you.
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