How to get the best out of the Tour Operator / DMC Business Relationship

I was lucky enough to be invited by Lyn Hughes at Wanderlust Travel Magazine to speak on a panel at their Adventure Travel Conference in London. I was on a panel with John Telfor from www.Explore.co.uk and we were being interviewed by Derek Moore who founded Explore.

The panel was entitled, “Product suppliers (DMC or Inbound Tour Operator) and Outbound Tour Companies: How to make working together a win/win.” 

Here is a quick summary of some of the questions and my answers to them. I would love to receive your comments and ideas to build additional advice onto these.

If you would like more detailed information on any of these points do take a look at my website www.travelkinship.com contact me on [email protected]

1. How does a DMC (Inbound Tour Operator) make contact with an outbound tour operator? 

• See also my article 6 Top Tips for Sales and Marketing for DMCs
• Ask non-competing DMCs that sell similar destinations and products to you to recommend operators that they do good business with that they think would be the right kind of clients for you. If possible ask them to make an introduction. ATLAS Travel (Active Travel in Latin America Specialists) is a great example of where like-minded adventure travel companies have come together to support each other’s growth and development.
• Ask Hotel Representation / Marketing companies for the same thing in your key markets.
• Hire a representation company if you can afford it – especially for countries where the language culture and way of doing business is particularly different to your own. 
• Pick the niche travel shows that best match your destination and product and the kind of Tour operator you want to meet. Trade Travel Shows exist for luxury travel, for certain areas of the globe, family travel, student travel, MICE (Meetings, Incentives, Conferences, Events) and so forth. E.G for luxury PURE, Emotions, Remote, LuxExperience. Check the “Buyer” list on the website to see who is attending. Even if you are not attending yourself you can make a note of these for marketing purposes.

KEY TIP – when you are in the “setting meeting phase” of a travel show do take the time to download or make notes on ALL the buyers attending that you think are a good match for you. Then if you don’t get to meet them you can still contact them in networking sessions or after the show – that data is most often not available online once the meeting process time is over.

• Join Travel Groups and Associations and use their events and forms as a way to engage and network – eg LATA, ATTA (Africa), ATTA (Adventure)
• Web search – use key words that best match what you offer and what you are looking for in a TO and see who pops up. Then call them and ask to speak to their product manager.

2. How does a DMC (Inbound Tour Operator) initially engage with an outbound tour operator? 

• See also my article 6 Top Tips for Sales and Marketing for DMCs
• You have to make doing business with you as easy as possible for the Tour Operator and help them look AMAZING to their customers.
• Stand out – be clear on how you can add value to their operations 
• Ask lots of questions – find out exactly what they are like and what they need from you – then ensure you deliver that for them.
• Provide as much information, example itineraries, products, images and rates and maps as possible to help them get up to speed and start selling as quickly as possible. (Amazing images – videos if you can, Example itineraries for every theme under the sun, Rate books, 24hr hotline, online training resources, offer FAM trips, offer digital content etc)

3. Once a DMC makes contact with a tour operator, what questions should a DMC ask? 

• Ask lots of open questions and do a lot of LISTENING - you need to find out exactly what the tour operator is like. What kind of customers do they have? What kind of products and services do they need? What is the level of service and price point that they need?

Most of any initial discussions with an operator should be to get them to talk as much as possible about their company – what their values are, what kind of clients do they get, what types of products do they need, what sells best for them AND SO ON. As a DMC you need to be sure that they are the RIGHT tour operator for you. Winning a contract with a tour operator that can’t actually sell what you offer is a worse than not having them. You end up spending time money and resources on product development, quoting, answering questions, training etc on a company that rarely sells you. Low conversion rate is a killer for a DMC and it is vanity to just be happy that you have “won” a client if they are the wrong one.

• Once you are actually working together you can get into nitty gritty stuff like how they like to receive invoices, payment terms and conditions, how you will deal with cancelations, health and safety requirements, on-going product development, how you can best support their marketing activities for your destination and so forth. You will also want to know what software and systems they use in case you can link and improve efficiency of operations

4. What makes a good DMC / Inbound Operator?

The three basic, most important elements are safety, speed of reply, excellent destination knowledge, they completely understand their clients and what they need.

• DMCs must understand what the Tour Operator’s brand and values are like. They understand what your customers are like and what they will and will not want and at the same time know that every customer can be different even if they come from the same TO client.

Other key areas DMCs should always work on improving and optimising include:

• Sustainable, Responsible, Ethical Operations – be able to prove it
• Understand and offer Experiences
• Support client’s digital marketing efforts by providing content ideas and resources – be prepared to invest in joint venture marketing efforts such as video, decent and unique images, copywriting / storytelling and so forth.
• Product Development – keep up to date on international travel trends and work on continually developing new products to help you both stay ahead of the curve.
• Ask for, listen to and use your feedback to work clients to continually improve operations and develop business relationships
• Be amazing at solving problems for you and your customers when they are in country and something goes wrong.
• Operate as much as possible themselves – have AMAZING guides
• Be able to prove to clients how you choose and audit your 3rd party suppliers

5. What makes a good Outbound Tour Operator?

As I always say for DMCs / Inbound Tour Operators… not all business is good business and it can pay to be fairly selective about who you work with. A great client…

• works very closely with their DMCs to look at sales conversion rates and work out just how they can improve not just enquires, but actual conversions
• works very closely with their DMCs to look at customer feedback, say well done where deserved and work out ways to jointly improve performance on customer experience
• looks at joint marketing for emerging as well as popular destinations
• helps to develop their DMCs by offering support and best practice in areas such as sustainability, safety, product development, proiects 
• invests in sending their sales team on FAM trips to your destination regularly – collects and shares with the DMC feedback from each trip.

They apply the idea of sustainable/responsible travel to their own supply chain and not just a “Foundation” that donates to local charities.

• A great tour operator client includes the relationship they have with the DMC as part of their sustainable/responsible travel program. They don’t squeeze the DMC on price only to put extra profits into their “foundation” as a marketing tool to display how sustainable and responsible they are.
• Often TOs treat their DMCs badly by squeezing them on price and not actually supporting and pushing our more sustainable products - which are often more expensive due to their very nature - and then make themselves look good by donating to projects here and there.
• Is looking for a long term, win-win situation and doesn’t hold the threat of switching DMCs over your head to continually pressure you on price. Says well done and thank you when it is deserved.

6. Can tour operators be, with regard to their DMC requirements in a particular country, be a serial monogamist or can an operator be polygamous?

I personally think this depends on the kind of Tour Operator you are:

• For group, overland, set departure tour operators like Explore I think they typically want to find, develop and then stick with just one local DMC operator. They have a less diverse and flexible product and client base.
• For a higher end, tailor-made, FIT Tour Operator like Audley Travel, Steppes and A&K I think there is often good reason for a TO to use different DMCs in the same destination . This normally applies for very large countries such as Australia, USA, Russia or Mexico say where you may want a DMC located in different, dverse regions. It also happens when you have a variety of clients looking for differnet types of quite niche experiences like multi-sport, wildlife, Uber Luxury and so on. Then you can often find that you need different DMCs that specialise in differnet themes or experiences.

In return though I do feel that Tour Operators need to start being more understanding of DMCs that want to go direct to consumers (B2C) as well as working with the travel trade (B2B). This is normally a different type of clientel and rarely puts you in direct competition due to lack of consumer protection and other considerations. 

7.    Looking at it from the other direction: should a DMC engage with a second operator in the same country? Or is this cheating; committing adultery?

Again I think this depends on the kind of Tour Operator you are:

• For group, overland, set departure tour operators like Explore I imagine they are not very happy if a local DMC that is running their whole operation is looking to do business with a competitor. It’s a closer and more transparently competitive market. Certainly when we operated for Intrepid in Central America we never looked to work with other overland operators – only in niche areas like trekking and biking etc where there wasn’t really overlap.
• For a higher end, tailor-made, FIT Tour Operator like Audley Travel, Steppes Travel and A&K then a DMC really has to work with more than one Tour Operator in each country or they will never survive. This is a less directly competitive market with different niches, levels of service and price points. Each client also typically brings an operator less volume of business. The fact that you have several clients in one country is easily managed by a DMC through transparency and ethical ways of working and “ring-fencing” the product development, marketing and was of working with each client.

When I worked with www.viaventure.com the UK market was the perfect example of how this can work well. We work with the majority of UK operators – many who are in direct competition with each other. This has worked for both sides for years without incident in my opinion because:

• Each TO is responsible for really understanding their client and what they want – then passing that to us as a DMC to design their travel experience
• Each TO has to add their own style and value to what they do with our products and services in order to win business
• We worked with each TO independently to develop product and improve conversions based on what they were prepared to commit to
• If we got the same general public customer coming for a quote from different and competing TOs we let all of them know that the client is shopping around – we only have 1 sales person working on all of the quotes – we then let the TO prove their value and are led by them in terms of what they want us to quote. We keep what each is doing completely confidential for the other. Let the best man win.

8.    Presumably you need a DMC who understands all about Tour Leader requirements and standards/risk assessment/Contracting ahead/Quality control etc?

Sorry to be dull but again, I think this depends on the kind of Tour Operator you are. For group, overland, set departure tour operators like Explore they are much better at supporting DMCs / local operators being able to deliver on these areas because it is such an integral part of how they operate and they want much more standardisation of service across the board and across the globe.

For a higher end, tailor-made, FIT Tour Operator like Audley Travel, Steppes Travel and A&K I personally have found that they are much less inclined to help in these areas and really are looking for DMCs that already know how to do all these areas. I feel this is more the case as you go more into the luxury area of the market. The more a DMC can do to learn about best practice in these areas the better.

9.    A good DMC/Tour operator relationship is, I guess, a bit like a marriage. During the course of the relationship there will be fights, squabbles, and disagreements. So how do you keep the relationship fresh, and repair the occasional spat and hurt? 

In most relationships I would hazard a guess that one side loves the other just a little bit more.

As a DMC you always feel a little bit like the less loved one and always feel like you could be got rid of at any point for a younger, newer model … or a sugar daddy :)

As a DMC for me it’s all about nurturing a win-win relationship with your tour operator clients from the beginning. Lots of face time, telephone calls, office visits, online training and so on…. building strong business relationships at all levels in the organisation from the owners to the product, marketing and sales staff. The better relationship you have the more you understand each other and are tolerant and understanding you are of issues and problems that may arise on both sides. The easier it is so just say, “sorry and how can we fix this in the best way possible?”

I believe that a DMC has to value themselves, always do your best, operate without “ego” and be prepared to stick up for yourself. Be ready to loose a client rather than bend your values, principles and price point. Value yourselves and find the clients that value you. Try to work for a diverse portfolio of clients and don’t have only a few “big fish”… hard to do.

I feel like real “spats” only happen when you are mis-matched or one side is demanding something impossible – which is I guess the same thing. A DMC needs a client Tour operator to be understanding of how operating in some countries has real difficulties and sometimes we just need a bit of understanding. 

DMCs must do their best to:

• offer competitive rates and be able to argue their value proposition.
• say sorry for their or their suppliers mistakes and make amends to travellers and clients ASAP – learn from it
• be open to learning from their clients and continually develop the things they need
• invest in sharing costs of FAMs and training client staff and producing marketing content

I hope this rough summary of our presentation stimulates though and discussion and I would love to hear you thoughts, comments and questions below. As always - do check out my consultancy services on www.travelkinship.com and email me directly on [email protected] if you think I can help you further.