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Setting the right commission rate for your agents is a tricky task for tours and activities. We break down the essentials of what you need to know to get your rates right in distributing your tour products.
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How to set
AGENT COMMISSIONfor Tours & Activities
For tour and activity operators,
setting agent commissions can
be tricky.
It’s a delicate balance of
It’s a delicate balance of
- Motivating agents to sell
your tours
It’s a delicate balance of
- Motivating agents to sell
your tours
- Remaining profitable
Here’s what you need to know.
#1
#1
Rate Lingo
Retail rate● What customers pay
● Should be consistent across distribution network
● Based on consideration of your operating costs, profit margin, and
distribution network costs
Nett rate● Operation costs + profit margin you want to
make per sale
● The minimum amount you can sell your tour for while still making a profit
● What distributors see to add their commission to
#2
#2
Industry Standard Commission Rates
Direct DistributionCommission is set by you and your
agent (not less than 10%)
Hostel
You
Concierge
Complex DistributionThe tourist contacts a retail travel
agent, booking accommodations and tours for several weeks
Complex DistributionThe retail travel agent plans an
itinerary through a brochure of a tour wholesaler
Complex DistributionThe tour wholesaler contacts an
inbound tour operator to book each element of the tour itinerary
The inbound tour operator plans the itinerary through a brochure of a tour wholesaler and books with individual
suppliers - including you!
Complex Distribution
You DO NOT pay commission to each person
in this process.
Instead, you pay all of the commission to the ITO.
Each agent will then take their cut.
Complex Distribution
Complex DistributionYou pay an ITO 30% commission directly
The ITO keeps 10% and gives 20% to a Tour Wholesaler
The Tour Wholesaler keeps 10% and gives the remaining 10% to the Retail Travel Agent
The Retail Travel Agent retains the 10% commission
30%
10% 20%
10%
10%
#3
#3
Quoting Commission Rates
Use the formula created by Small Business WA. Repeat for each of your
products.
Commission Rate Formula
You may also want to offer additional “over-ride” commission to encourage sales, which is generally 2-3% on top of existing commission rates.
#4
#4
Ongoing Management
Consider how you will manage agent bookings
on an ongoing basis.
Does your online booking software manage agent
bookings?
Does your online booking software manage agent
bookings?
Allow agents to check
availability and book in real time
Does your online booking software manage agent
bookings?
Allow agents to check
availability and book in real time
Manage commission reconciliation payments
Does your online booking software manage agent
bookings?
Allow agents to check
availability and book in real time
Manage commission reconciliation payments
Produce agent sales
reports
Rezdy does.
“[Agents] can see your live calendar, book people in, and bang - you get
the money, they get the commission, and everyone’s happy.”
Colin Thwaite, Owner & Director of Oz Whale Watching
Agents can log in, send you bookings, and get paid - all
based on the commission and products you set for them.
That means less admin, and more time doing what you love.
ABOUT REZDY
ABOUT REZDYRezdy is a powerful online
booking software for over 700 tour operators worldwide
ABOUT REZDYRezdy is a powerful online
booking software for over 700 tour operators worldwide
Want to learn more?
Get in touch!
Get in touch!
Aus: +61 (0) 2 8244 3060USA: +1 415 655 1633
