How to work in United States of America Market

How To Work in Market:

United States of America

Distribution System

The USA travel distribution system is large and complex, with only a relatively small number of operators specialising in selling Australia. While consumers have increasingly turned to Online Travel Agencies (OTAs) to book some or all of their holiday, traditional distribution channels remain important for customised itineraries and booking ground arrangements.

Working in Market:

Indonesia

DISTRIBUTION SYSTEM

Whilst there are a number of channels available to Indonesian consumers for planning and booking travel, most consumers book through traditional retail travel agencies. The internet is primarily used as a research tool, with many Indonesian travelers not yet comfortable with booking online. The Free and Independent Travel (FIT) segment is also growing in the Indonesian market.

Wholesalers/ Large Agents
Commission Level: 10%- 15%	> 12 active wholesalers have developed their own packages to promote Australia. > Key wholesalers include: Avia Tour, Antavaya tour, Bayu Buana Tour, Celindo Tour (Surabaya), Dwidaya Tour, Golden Rama Tour, Monas Tour (Surabaya), Panen Tour, Panorama Tour, Smailing Tour, Haryono Tour (Surabaya) and Wita Tour. > The travel trade in Indonesia continues to operate under the traditional retail system, although the larger retail agents often take on the role of wholesalers. These retail agents market their own programs with links to inbound tour operators (ITOs), on-selling to smaller agencies.
Retail Agents
Commission Level: 10- 15%%	> Most retail agencies handle both leisure and business events in a highly competitive market. However, there are a few agencies that solely concentrate on incentive business.
Aussie Specialists
» The Aussie Specialist Program (ASP) is the primary platform for Tourism Australia to train and develop frontline travel sellers to best sell Australia. » As at March 2017, there were 393 qualified Aussie Specialist agents in Indonesia.
Online
» Anecdotally, a large percentage of the Free and Independent Travel segment use the internet to search for information on holiday destinations. However, the majority of consumers book through travel agents. » Likewise, the internet is primarily used by travel agencies as a source of information and communication, not for making bookings. Agents generally prefer to make reservations via traditional computer reservation systems, wholesalers and ITOs. » Recently, airlines have increased their emphasis on internet bookings
Inbound Tour Operators
Commission Level: *ITOs will usually offer a net rate to agents*	» ITOs are still responsible for the vast majority of group holiday business into Australia, including incentive bookings from agents.

Trends

Distribution

» The travel trade and distribution system in North America is large and fragmented.

» The distribution system has undergone substantial change and continued consolidation of wholesalers/retailers, with many wholesale companies looking to market direct to consumers to increase margins and profit.

» OTAs have increased their long haul travel offerings, including Australia, to open up new revenue streams outside a saturated domestic market. Online and direct bookings continue to grow.

» Despite the increase of online distribution, retail agencies are still an integral distributor of Australian travel in the USA, particularly for the 45+ age segment, as travelers are increasingly looking for destination specialists who can customise an Australian itinerary.

Planning and purchasing travel

» Customised holiday experiences continue to be very important for Americans who often research all the elements of their Australian holiday online and then work with a travel agent for planning and booking.

» Like the market itself, the purchase cycle in the USA is fragmented and varies. With the increase in consumer confidence in the US, the window for consumers to make a long haul decision on where to travel and through what distribution channels they will book with is currently trending 3-12 months in advance.

Special Interest

» There is a segment of the USA leisure market, particularly amongst those over 45+ years of age, looking for premium travel experiences. Retail consortia groups such as Virtuoso, American Express and Signature Travel Network specialise in high end travel and have a number of preferred wholesale and inbound tourism partners specialising in custom, high end journeys in Australia including Swain Destinations, The Tailor, Southern World, Epic Private Journeys Abercrombie & Kent, TCS Expeditions and Southern Crossings.

» The Signature Experiences of Australia program packages and promotes Australia’s outstanding tourism experiences within a variety of niche areas and special interest categories. Signature Experiences of Australia currently comprises wineries, luxury lodges, golf courses, walks, Indigenous experiences, fishing adventures and wildlife. In each case Tourism Australia has partnered with select industry collectives that have a compelling marketing proposition and share a common goal and vision. An increasing number of wholesalers in market targeting travellers looking for authentic and uniquely Australian experiences in these spaces.

» Key youth operators include Go Overseas, STA Travel and Student Universe (recently purchased by Flight Center). University and college students tend to research their summer holiday options in the early part of the year and book soon afterwards. July is the most popular month for student travel to Australia, consistent with the USA summer holiday period.

Planning a visit to market

Top tips for sales calls

» State and Territory Tourism Organisations (STOs) manage and maintain a website to assist Australian product suppliers in planning and carrying out independent sales call trips to North America. This online manual also provides details on travel trade events. Visit www.coastnorthamerica.com.

» The USA market values strong relationships and loyalty, which take time to build.

» The USA trade value punctuality. It is a common courtesy to call the operator if you are going to be more than 10 minutes late to a meeting.

» Americans value straight talking and getting to the point.

» Structure your proposals to emphasise quick wins rather than long term objectives, although these should be included.

» It is common to leverage events in market for pre or post sales calls, especially around the Australia Marketplace held in Los Angeles. Additionally, the best time of year for ad hoc sales calls is from April to August. These are traditionally the low season periods for bookings.

» For more information on sales calls, key market centres to visit and general planning of a visit to market, please see Tourism Australia’s Planning for Inbound Success ebook at www.tourism.australia.com/inboundsuccess.

Key trade and consumer events

For a calendar of activities hosted by Tourism Australia, all State and Territory Tourism Organisations, Regional Tourism Organisations, and the Australian Tourism Export Council as well as other industry bodies please visit Tourism Australia’s corporate website at http://www.tourism.australia.com/en/news-and-industry-tools/events/australian-tourism-industry-events-calendar.html

Where to find more information

Tourism Australia’s activities in the United States are managed from its Los Angeles office. For more information visit Tourism Australia’s corporate website at www.tourism.australia.com.

Australian State and Territory Tourism Organisations operating in the USA include: Destination NSW, South Australian Tourism Commission, Tourism and Events Queensland, Tourism Northern Territory, Tourism Tasmania, Visit Victoria, and Tourism Western Australia.

Also see:

USA Country Brief published by the Department of Foreign Affairs and Trade at: www.dfat.gov.au/geo

For the latest arrivals statistics, visit: http://www.tourism.australia.com/statistics/arrivals.aspx

For additional statistical reports refer to the ABS and TRA websites, www.abs.gov.au and www.tra.gov.au

Trends

Planning and purchasing travel
> Most consumers book through traditional retail travel agencies. The internet is primarily used as a research tool, while consumer generally purchase through travel agents, as they seek assurance that someone will take responsibility for their purchase should there be any issues. > Indonesian are increasingly booking tickets during consumer travel fairs to get good promotional fares and other benefits from the banks (cash back, double points rewards, Shopping voucher, Souvenirs). Travel agencies also give special offers and large discounts for Hotels, Tour series packages and FIT packages. > There is a shift towards Free Independent and Travel (FIT), with many consumers still choosing to book flights through agents, but making fewer bookings for accommodation prior to departure. > Groups tend to travel during peak season when the major holidays such as school holiday, Lebaran and Christmas occur. The lead time is three to four weeks prior to the peak season. FITs travel more during the off peak months and have a shorter lead time than group travelers. > There are two consumer segments in Indonesia. One segment is price driven and more inclined to switch travel agents to get a better deal. The other consists of affluent consumers who stay loyal to travel agencies who provide a customised service. > Jakarta is the main source market for Australia. The city has the highest concentration of people able to afford travel, as well as the best connectivity with both non-stop services and direct services to Australia. > Surabaya is the second largest city to developing market for Australia. The market is more traditional than Jakarta with a preference for group tours.

Planning and purchasing travel

> Most consumers book through traditional retail travel agencies. The internet is primarily used as a research tool, while consumer generally purchase through travel agents, as they seek assurance that someone will take responsibility for their purchase should there be any issues.

> Indonesian are increasingly booking tickets during consumer travel fairs to get good promotional fares and other benefits from the banks (cash back, double points rewards, Shopping voucher, Souvenirs). Travel agencies also give special offers and large discounts for Hotels, Tour series packages and FIT packages.

> There is a shift towards Free Independent and Travel (FIT), with many consumers still choosing to book flights through agents, but making fewer bookings for accommodation prior to departure.

> Groups tend to travel during peak season when the major holidays such as school holiday, Lebaran and Christmas occur. The lead time is three to four weeks prior to the peak season. FITs travel more during the off peak months and have a shorter lead time than group travelers.

> There are two consumer segments in Indonesia. One segment is price driven and more inclined to switch travel agents to get a better deal. The other consists of affluent consumers who stay loyal to travel agencies who provide a customised service.

> Jakarta is the main source market for Australia. The city has the highest concentration of people able to afford travel, as well as the best connectivity with both non-stop services and direct services to Australia.

> Surabaya is the second largest city to developing market for Australia. The market is more traditional than Jakarta with a preference for group tours.

PLANNING A VISIT TO MARKET

TOP TIPS FOR SALES CALLS

> Avoid sales calls in the peak seasons (June – July school holiday season, Lebaran and Christmas holidays) and during consumer travel fairs (March – April, September – November). The best time for sales calls is January to early March and late July to early September.

> Trust and relationship management is important in the Indonesian market as it helps to build loyalty.

> The key market for sales calls is Jakarta. Due to heavy traffic conditions, plan a realistic program.

> Plan and combine visits that are in the same geographical area so you can maximize the number of sales calls and minimize commuting times.

> For more general information on sales calls and planning a visit to market, please see Tourism Australia’s 'Tourism Export Toolkit'.

Key Distribution Partners

Tourism Australia is a partnership marketing organisation and works closely with airlines and travel companies on cooperative marketing to drive conversion in all priority markets.

These targeted travel companies, including wholesalers, retail and online travel agencies, form Tourism Australia’s Key Distribution Partner (KDP) program with the intention to increase total booking value of visitors to Australia.

Each KDP is selected based on the fit with Tourism Australia’s market strategy, a shared target customer profile, shared funding of marketing activity, a commitment to training their frontline sales team through the Aussie Specialist Program and a commitment to selling quality Australian product and experiences.

Below are a selection of Key Distribution Partners that Tourism Australia is partnering with from Indonesia for the 2017/2018 financial year.

CANADA

WHERE TO FIND MORE INFORMATION

Tourism Australia’s activities in Indonesia are managed from its Singapore office. For more information visit Tourism Australia’s corporate website at www.tourism.australia.com.

Australian State and Territory Tourism Organisations operating in Indonesia include: Tourism & Events Queensland and Tourism Western Australia.

Also see:

An overview on the travel distribution system
A quick reference on key booking and travel periods for markets
Indonesia Country Brief published by the Department of Foreign Affairs and Trade at www.dfat.gov.au/geo
For additional statistical reports refer to the ABS and TRA websites, www.abs.gov.au and www.tra.gov.au

Key Trade and Consumer Events

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