There are lots of phrases and acronyms that are used in the travel industry that many of us take for granted. Here are some of the more common ones which we have provided explanation for in case they are not familiar to you. This Jargon Buster is also available as a 'pop up' when you are taking any of Premium Audits in case you need to refer back.
This is a collective term for any businesses that supply services to and buy services from the tourism industry
This is a membership body that represents a specific city or area within a region. DMOs promote their partners and their area in general to both the travel trade and to the public at events or sales missions.
This is a tour operator business that wholesales to agencies and small operators around the world. They will contract with lots of different types of accommodation providers, attractions, service providers (including car hire, transfer companies etc) in order to provide a ‘shopping list’ of products for their international clients to choose from – both via their website and through brochures. It is important to note that a DMC will have an exclusive relationship with their agents and operators, and these international businesses will only buy your product if it is contracted through their preferred DMC.
FITs may be individuals, couples, friends or families that are booking their holidays independently (i.e. not buying a full package). They will look for specific elements that they wish to purchase through the travel trade e.g. attraction passes, theatre tickets, exhibitions, individual attractions, tours or accommodation.
OTAs are defined as tour operators working online. These would include businesses like Trip Advisor/Viator, Get Your Guide, Expedia etc. They will target the FIT market often looking for late availability, special offers etc. Supplier businesses that work with OTAs will need to remain very engaged and ‘hands on’ ensuring that information is kept up to date – usually via a web portal.
Travel trade buyers will often prefer to buy your service or product when they need to rather than have to have an allocation. There are of course exceptions, such as events or attractions that have limited capacity or timed entry.
An allocation is a guaranteed number of admissions/bed rooms etc. that are pre arranged as part of a contract with you. Generally - free sale is preferred unless you have timed entrances, special events etc. where guaranteed tickets would be preferred. This will all be discussed with you in detail when you sign your contract.
Digital transformation is a broad term used to describe the process of positively transforming various aspects of a business —whether that’s how you work internally, the customer experience you provide, or the company culture you promote—via digital technologies.
However, an effective digital transformation strategy isn’t just about adopting the latest and greatest digital technologies and expecting them to work miracles. It’s also about making sure you have the right working culture in place to ensure the technologies are readily adopted and embedded into a company’s values, directly supporting future growth initiatives.
A voucher is a physical piece of paper (or sometimes a screen shot) that will state the name of the tour operator that has made the sale, the number of people that the entrance is valid for (it may be for a whole group and handed over by the guide) or the number of adults and children. It will also state the date of entrance and time as appropriate. It will never show the price or value of the entrance unless it was sold via an OTA. The voucher should be treated as proof of purchase and the client that hands it over should not be charged on arrival. All tour operators, DMCs and OTAs will provide you with a sample copy so that you can ensure front of house teams know what to expect.
A line of credit is standard across the industry. There can be exceptions (e.g. payment in advance) for specific entrances etc. but these will always be agreed at the time of contracting. Payment is usually between 7 days and 30 days after the clients' arrival and will reflect bookings outlined on the travel trade voucher.
The travel trade will buy your product or service at a lower rate than the one sold to the public. This will either take the form of a percentage discount or a fixed price reduction that can form part of a package. Commission percentage levels or net rates vary and will be discussed with you at the point of contracting. In effect, these ‘trade rates’ represent a ‘no win no fee’ provision, as you will only pay it on a confirmed sale. All marketing via websites, brochures , promotions etc is done at the tour operators cost. It is extremely important to ensure whatever product or service that you offer is not available at a better rate through your own direct to consumer marketing than it is through your agreed contracted rates with the travel trade.
Tour operators and DMCs in particular will put out their pricing to clients up to 18 months in advance. It is really important for them to be able to rely on the pricing that you set at the start of your contract for as long as possible – certainly for 12 months.
Tour operators and DMCs may struggle if you offer them individual and group prices. As the number of clients they are booking with you will vary and could fall just above or below your minimum numbers considered to be a group; they will not wish to pay two different rates for their clients. If at all possible have one rate available that covers from one person to the maximum number of visitors you are able to accept for a booking made by the travel trade.
Your contract is an annual agreement between your business and the buyer for the service that you offer and is valid for 12 months at a time. It will confirm the price, the commission you will be paying for each successful sale, booking confirmation dates and every other aspect that needs to be agreed to ensure that everything runs smoothly. They are usually reconfirmed annually via email. Everything should be agreed at the point of contracting as amends during the year can cause problems for bookings not yet completed.
Confirmation is the date by which you will be informed of the final numbers due to arrive. This is usually done via email.
A digital distribution channel is an individual OTA (for example companies such as Trip Advisor Experiences, Tiqets or Musement) that provides a bridge between your product or service and the consumer via a website portal.
A platform (for example TXGB) acts as a consolidator providing a choice of multiple OTAs all in one place.
OTAs will charge commissions on bookings that are confirmed in the same way that traditional tour operators do, but working through a platform may also incur additional commission charges.