Tourism Export Council New Zealand & Tourism Distribution - - PowerPoint PPT Presentation

Tourism Export Council New Zealand &

Tourism Distribution Channels

July 2015

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 Founded 1971 – Private sector  50 Inbound tour operator members (ITOs)  210 Allied member ‘product suppliers’  Commercially focused – Business 2 Business

Tourism Export Council

who are we, what do we do?

Promotes & sells your product outside NZ TECNZ “buys” your product in NZ

TNZ

Promotes New Zealand

RTO’s

Promotes your region in New Zealand and internationally

TIANZ

Shares information Advocacy Business tools

Qualmark

A business assessment system & mark of quality

Why is tourism considered an export industry?

Tourism, like agriculture is an export sector industry but works slightly differently:

• The product is still developed in New Zealand (just like the apple)
• It is sold offshore (like the apple)
• It is purchased by a consumer in an offshore market (again like the apple)
• BUT it is experienced in New Zealand and therein lies the difference

IRDs definition of ‘export’ is a non-resident who purchases a product or service from New Zealand

NZ Top Export Sectors

Source: Tourism Satellite Account 2014 Note: Up until 2009, Tourism was the number 1 export sector for New Zealand

A Guide To Working With Inbound Tour Operators

A Guide To Working With Inbound Tour Operators

Contents Page:

Traditional Distribution Channel

OVERSEAS OVERSEAS OVERSEAS NZ INBOUND NZ PRODUCTS VISITORS TRAVEL AGENT WHOLESALER TOUR COMPANY Accom, Transport, Act & Attr 10% commission 10-15% commission 5-10% commission Pay 25-30% commission

How does an international visitor book?

A kiwi overseas holiday example

Modern Model of Distribution

Managing the Business Mix

When each commission level is considered, it may seem that agents receive a large proportion of your takings, eroding your profits. It is important to consider the volume

• f

international business coming from each channel as a percentage of your total business, as well as the benefits of working with the international travel distribution system. Your trade distribution strategy should allow for a business mix which will meet your volume and profit targets. The diagram below shows how a commission structure could work. If the supplier honours pricing as per the distribution system and the supplier receives an equal one third of their business from ITO’s, wholesalers and direct from consumers, the average commission works out at 16.67 per cent.

PRICING

You receive You pay BOOKING CHANNELS

• Direct – through front door, website and may include domestic
• Retail – via i-site, accom providers, other operators
• Wholesaler – Anzcro, Grand Pacific Aust
• Online – OTAs and aggregators
• Inbound – NZ ground operators

ITOs have hundreds of downstream relationships with off- shore travel agents. They will do your international marketing for you. Working with an ITO can bring you:

• bulk bookings & repeat business
• on-going (series) bookings
• conference & event bookings
• confidence if any adversity should occur eg. Chc
• enjoyment being part of the tourism industry

Benefits of working with an ITO

Do your homework:  Work with your RTO who will work with ITOs  Visit their website/brochures - check their itineraries ahead of time to determine:  Who are their customers? Check their age and if any cultural considerations  How long do they spend in your area and what do they do?  How many passengers per group or are they FIT/SIT customers?

Know their business before you tell them about your business!

How to work with an ITO?

1-2 minute ‘elevator talk’

• 1. Describe your product/event/activity using

images or what is new this year

• 2. How long does it take to experience your

product/benefit of your accommodation

• 3. How many can you accommodate?

e.g. 2 groups x 20 pax in 3 hours

• 4. Can you package with other operators?
• 5. Provide commissionable price

How to talk to an ITO?

ITOs have adapted

• Change from % group to % FIT (self drive)
• Upgraded technology and work with tourism

aggregators eg. Expedia, Wotif, Booking.com

• Online travel agents (OTAs) able to

have membership to TEC

• Retail/promote other ITO product
• New niche ITO start ups eg. eg.

Education, Golf, Luxury sector

Q10: What percentage % of your business is: INBOUND TOUR OPERATORS

Average rating

Member survey Dec 2014

Q9: What percentage % of your business is: ALLIED PRODUCT SUPPLIER MEMBERS

Average rating

Member survey Dec 2014

ITOs working around the world on your behalf

Number of TEC inbound companies working in market

5 10 15 20 25 30 35

ITOs and Emerging Markets