Working in market

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.

Wholesalers/ Large Agents

Commission Level: 20% - 30%

There are more than 1,500 wholesalers in the USA. Of these, around 300 have some form of program for Australia, although a small group of approximately 10 operators account for 20 per cent of the leisure travel market to Australia.
The relationship between Australian wholesale operators and specialised travel agents is becoming closer, as online channels and the request for custom FITs are forcing operators to become more specialized and knowledgeable.
Major wholesalers selling Australia currently include About Australia, Aspire Downunder, Down Under Answers, Down Under Endeavours, Goway, Springboard Vacations, Swain Destinations, and Travel2.

Retail Agents

Commission Level: 10% - 15%

Retail agencies are adapting to change and continue to restructure their businesses by moving away from low commission products to more profitable products and services. The structure of the retail industry is also changing as single location agencies continue to consolidate into larger chains and consortia groups.
There are approximately 100,000 US travel advisors in the USA, producing approximately 50 per cent of USA tour and package sales for international travel. Less than one per cent of these retail sales are to Australia.
The key retail consortia groups in North America include Virtuoso, Signature Travel Network, Internova (which includes The Travel Leaders Network, Nexion and Pro Travel), American Express, Ensemble Travel Group. Each retail consortia network has their own exclusive list of preferred Australian airline, hotel and cruise suppliers. Tourism Australia and regional STOs have partnerships with several of these consortiums, which are annual cooperative marketing programs comprised of a combination of D2C and B2B marketing activities supporting destination training for their preferred agent networks and driving leads back to these specialists.
The key retail consortia groups in North America include Virtuoso, Signature Travel Network, Travel Leaders Group (TLG), American Express, Ensemble Travel Group. Each retail consortia network has their own exclusive list of preferred Australian airline, hotel and cruise suppliers. Tourism Australia and regional STOs have partnerships with several of these consortiums, which are annual cooperative marketing programs comprised of a combination of D2C and B2B marketing activities supporting destination training for their preferred agent networks and driving leads back to these specialists.

Aussie Specialists

The Aussie Specialist Program (ASP) is the primary platform for Tourism Australia to train and develop front line travel sellers to best sell Australia.
As at November 2021, there were 2697 qualified Aussie Specialist agents in the USA.

Online

The online market is dominated by Expedia (who has acquired both Travelocity & Orbitz, now operating all three brands) and Priceline with other online travel agents (OTAs) having varying degrees of Australian product. Distribution of hotels, resorts, lodges, attractions/tours, and car rental through major OTAs to Australia has increased as they continue to expand their long haul product offerings.
Sites that market and sell on-the ground activities and tours, such as Viator and Tourico Holidays, continue to grow and add value to those consumers who initially booked air and land components then research what to do when they arrive.

Inbound Tour Operators

Commission Level: up to 35%

Major North American wholesalers and increasingly more so direct retail agents continue to use the services of either their own inbound office in Australia or preferred independent inbound tour operators.

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.

Planning a visit to market

Top tips for sales calls

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 '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 the USA.

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:

An overview on the travel distribution system
A quick reference on key booking and travel periods for markets
USA 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

Working in Market - USA