Why Do You Pay Commissions When You Do Your Own Travel Bookings?

When you buy a travel package, tour or service your price may include a number of levels
of commission added to the original pure cost of the product direct from the supplier.

To give an example of such:

Let’s take a tour operated in Australia at a cost direct from the operator of say $1,000:

1. This tour may be listed with an Inbound Tour Operator.

2. The ITO buys for $1,000, marks up 10%, sells to Wholesaler, tour price now $1,100.

3. The Wholesaler buys for $1,100, marks up !0%, sells to Retailer, tour price now $1,210.

4. The Retailer buys for $1210, marks up 10%, sells to Traveller, tour price now $1,331,
(prices changes if percentages are higher, or less if the ITO is not in this equation)
(without the ITO the retail price would be $1,210 at 10% or $1322 at 15%).

The commission element, without the ITO at 10% mark-up is $210 per tour per person (21%).

The commission element, without the ITO at 15% mark-up is $322 per tour per person (32%).

So the Traveller pays variable levels of middleman commissions.. When you have 2 or 3 or a
family of travellers, this is a considerable amount of cash and if you have a tour costing in
excess of $1,000, just do the math.

Similarly, brochure prices have guides-info.org built in to them for the retailers of 10 – 25%.

If a consumer goes to an Outlet Store they expect outlet prices, if they go directly to the
Manufacturer they expect ‘go-direct’ prices, so why not handle travel arrangements in a
similar way?

Because, it is only fair that each level of the product sales cycle earns revenue for the
business involved and these businesses are necessary and needed to ensure that some
products are marketed, promoted, brochured and sold to consumers around the world who
may not be comfortable with handling their own bookings and need the assistance of an
expert professional travel consultant.. However, with the growth of the internet and the ability
to now find the source of travel products, travellers who handle their own arrangements should
get a fairer deal on the pricing as a middleman is not needed in the purchasing process.

It does not make sense for most travel operators to show different prices on their websites,
Retail, Wholesale or Internet Direct etc as this could undermine their supply chain by deterring
the efficient middlemen from representing their products, so we have to find a way for all of the
‘do-it-yourself’ bookers to get a fairer price.