In Part 1 Michelle dealt with how to target international markets using the internet. The other way to reach these markets is through what is referred to as ‘traditional channels’. In a nutshell this means you need to understand and be able to work with international travel wholesalers and inbound operators (IBO’s). Sounds easy right?
Well yes it’s not too hard – once you understand how things work. And more importantly what the ground rules are. Why? Because in the international market place there can be many parties involved in the transaction before the booking comes to your business. Each one invests time and money in advertising and marketing NZ, your region and (potentially) your own product. So unsurprisingly they all want their cut or ‘commission’ for doing so.
Before you go any further therefore you will need to understand that in return for the (hopefully) higher volume and consistency of business you will receive through these sources – your product must be priced in order to be able to offer around 20-25% commission and this must be based on your published rack rate.
The distribution chain
So what we have been talking about above is commonly referred to as the distribution chain (or distribution system). Below is a diagram that helps to identify who these people might be. You will find that there are many variations of this particularly between different markets, however the most common one works like this.
Diagram by New Zealand Tourism Industry Association www.tianz.org.nz
So where to start?
Presumably you have a product that is already established for the NZ market. This is a good place to start from as you should already have good sales materials – brochures, website, images etc.
Ask yourself the following questions:
- Do you already know which international markets you wish to target?
- Do you understand the requirements of travelers from those markets?
- Do you know which inbound operators work in those markets?
- Do you know what activities your local RTO is involved in which relates to those markets?
If you are unsure of the answers to any of these questions then the best place for you to start is by setting up a meeting with your local Regional Tourism Organisaton (RTO). They will be able to offer advice on taking your product to market. They may also be able to offer opportunities to participate or dovetail into their activities. They will already have many of the important contacts that you need to get started, so boost your chances of success and make a bee line for them now!
Another easy way to get started is by working through New Zealand based IBO’s. They know and understand the markets in which they specialise intimately. They have established contacts and relationships and could help you to access your target markets if you can encourage them to sell your product.
How to go about this:
- Introduce your product to them by means of a sales call or by participating in a regional trade update if your RTO offers this (many regions do this on an annual basis)
- Prepare and distribute information on your product and rates (this will need to be at least 2 years out for most inbounds)
- Familiarise yourself with their website www.itoc.org.nz – it contains a lot of information on how their work with their members as well as detailed information on individual members and the markets that they specialise in.
- Be aware that not all IBO’s pay to become members of ITOC, so gathering these contacts will be an ongoing process.
Tourism New Zealand (TNZ)
This is Tourism New Zealand’s trade website which contains a huge amount of useful information. The site is continually updated and in particular offers information on how to get started in international markets as well as detailed information on key markets
Be sure to register your product on TNZ’s trade site http://www.register.nztb.co.nz/ This is regularly used by the international trade.
There are many more things that you can do to reach international markets – too many to mention in this blog so talk to your RTO, talk to other local tourism operators, get involved in familiarisation visits, host international visiting media, stay current and network!