WORKING WITH INTERNATIONAL MARKETS

The International Traveller Some facts………. International travellers to NE Victoria are mainly on self drive holidays. They want good quality accommodation – 3.5 stars or more. Love nature based pursuits i.e. cycling. Spend more and stay longer than domestic travellers to regional areas. Will research operators online prior to making a booking. Will book directly with operators who have an online booking system, through an online travel agent i.e. wotif or through a travel agent in their home country.

Market share domestic versus international The domestic traveller will still be the largest part of your customer base. However, the international traveller can be a good source of additional bookings. The Victorian average for operators dealing with international travellers is 29% international bookings and 71% domestic travellers. It is likely that international bookings will be less in NE Vic due to the distance from Melbourne. Of those travelling to regional areas, the majority of come from UK, USA, NZ, Germany & France. The Chinese market is not yet a market for NE Victoria. Whilst it is likely to grow into the future, this market currently travels to Melbourne, does day trips mainly to Philip Island Penguins, Sovereign Hill, 12 Apostles and Crown Casino. They spend 6 to 8 days in Australia, with a standard itinerary being 2 days in Melbourne, 3 days in Sydney and 2 days in Cairns. Source: Tourism Victoria International Mentoring Survey

How the international booking system works Inbound Tour Operator Wholesaler Travel Agent Tourism Operator Internet Option 1: booking via internet direct to operator or via another website Option 2: booking via travel agent in home country

How the international booking system works Inbound Tour Operator (ITO) Wholesaler in OS country Travel Agent in OS country Based in home country i.e. UK, Germany etc. Sell the travel products created and coordinated by wholesalers. Based overseas. Work with ITO’s in Australia who coordinate the bookings for the wholesaler. Produce brochures on a destination & distribute and sell product through travel agents in home country. Based in Australia. Liaise with operators on behalf of wholesales. Place reservations with operators. Pay operators on a monthly basis. Resolve travellers’ issues whilst in Australia.

Commission Structure Wholesaler in OS country Inbound Tour Operator (ITO) Travel Agent in OS country Keep 10% of the commission. Keeps 10% of the commission. Have high costs as they produce expensive brochures and coordinate and market packages and destinations. Keeps 5% of the commission. If you receive a booking through an ITO, the normal commission is 25 to 30% of the booking fee.

Some things to know Whilst the commission rate seems high, given the relatively small number of bookings from the international traveller, it can be a good alternative market to help fill rooms. You must offer the same rack rate (tariff per night) to international markets. You can not put up your prices to cover the commission. If you do the ITO’s will not deal with you. You can specify that your property is available midweek only to the ITO if you do not want to pay commissions on weekend bookings. The travel year for the industry is 01 April to 31 March so rates need to be valid for these dates when supplying rates to ITO’s. When distributing rates to ITO’s, you need to include: Rate inclusions (meals, transfers, equipment hire etc.) Rate validity i.e. 01 April until 31 March Child policy Cancellation policy Contact details

Example rates for an ITO

Where to from here? If you want to work with the international market you need to: Have a great tourism product. Have a well designed, high quality website with excellent photographs of your business. Be prepared to pay the commissions required to operate in the international market. Understand that this market will only be a small percentage of your bookings. Please contact Tourism North East on if you would like to discuss opportunities in the international market further.