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In the ‘resetting your tourism business’ webinar today we received a comment with regards to the commission levels operators pay to 3rd party distributors.
Domestic commission levels still range still between 10-25% (Visitor Information Centres/Retail 10%, RAA 15%, domestic wholesalers 20-25% and OTA’s between 10-25% depending on what products you sell (accommodation/tours/attractions).
ITO’s (Inbound Tour Operators) have always asked for commission levels between 25-35% given they need to pass on 20%++ commission to overseas wholesalers. If you deal with ITO’s pivoting to the domestic market and selling via domestic retail agents, their commission levels should be in line with (20-25%) commission that you would traditionally pay domestic wholesalers (to pass on 10%+ to retailers).
My recommendation is to look at commission levels across an annual average instead of individual contracts to take into account different commission levels and your direct sales.
Let me know your thoughts and experiences, Siggi