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The International Market - Tourism North East

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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

Tourism Operator

Internet

Wholesaler

Travel Agent

Option 2: booking via travel agent in home

country

Option 1: booking via

internet direct to

operator or via

another website


How the international

booking system works

Inbound

Tour

Operator

(ITO)

Wholesaler

in OS

country

Travel Agent

in OS

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.

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 home country i.e. UK, Germany

etc. Sell the travel products created and

coordinated by wholesalers.


Commission Structure

If you receive a booking through an ITO, the normal commission is 25 to 30% of the

booking fee.

Inbound

Tour

Operator

(ITO)

Keeps 5% of the commission.

Wholesaler

in OS

country

Travel Agent

in OS

country

Keeps 10% of the commission. Have high

costs as they produce expensive brochures

and coordinate and market packages and

destinations.

Keep 10% of the commission.


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 0357 28 2773 if you would like to

discuss opportunities in the international market further.

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