Distribution system

The United States of American (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 many wholesalers in the United States (US) market, of which approximately 20 per cent have an Australia program. 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 Free and Independent Travellers (FITs) are forcing operators to become more specialized and knowledgeable.
• Major wholesalers selling Australia currently include Down Under Answers, Goway Travel, 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 retail industry's structure is also changing as single-location agencies continue to consolidate into larger chains and consortia groups.
• There are approximately 100,000 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 and Travel Leaders Network. Each retail consortia network has their own exclusive list of preferred Australian airline, hotel and cruise suppliers. Tourism Australia and regional State and Territory Tourism Organisations (STOs) have partnerships with several of these consortia, 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.
• Tourism Australia’s key distribution partners working in the retail space include Aspire Down Under, Down Under Endeavours, Springboard Vacations, Direct Travel and About Australia. Key wholesalers also working in the D2C space include Swain Destinations, Down Under Answers, and Goway Travel.
• Partners who have recently added Australia to their programs include Authentic Vacations and Avanti Destinations.

Online

• The online market is dominated by Expedia (who has acquired both Travelocity & Orbitz, now operating all three brands) and Priceline with other 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, continue to grow and add value to those consumers who initially booked air and land components then research what to do when they arrive.

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. 
• There are over 4000 qualified Aussie Specialist agents in the USA. This includes 33 ‘Premier Aussie Specialists’, recognised with Premier status for their extensive knowledge of the destination, commitment to selling Australia and ongoing learning via the Aussie Specialist Program. 

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.
• The total trip spend on leisure travel to Australia by Americans was AUD$3.1 billion in 2023, growing by 140% compared to 2022, while the average trip spend was AUD$2,842, growing by 16% compared to 2022 (Source: IVS 2023).
  
• OTAs have increased their long-haul travel offerings, including Australia, to open 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 travellers 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 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, Abercrombie & Kent, 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, cultural attractions, 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 late for 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.
• Many travel companies have implemented fully remote or hybrid working arrangements for their staff post-pandemic, meaning a sales call for training purposes may not be well-attended.
• 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'.