how to set agent commission for tours & activities

How to set

AGENT COMMISSIONfor Tours & Activities

sales@rezdy.comwww.rezdy.com

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!

sales@rezdy.comwww.rezdy.com

Aus: +61 (0) 2 8244 3060USA: +1 415 655 1633