Terminology used by the Travel Trade

FIT

This can mean ‘Fully Independent Tour’ or ‘Flexible Independent Traveller’ and consists of any type of traveller such as individuals, couples, families etc. who have booked via an agent but are not travelling as part of a group. They require the assistance of the Travel Trade to plan and book their holiday / accommodation / things to do based on their knowledge and expertise. This is a growing trend in travel for all markets, especially with online bookings increasing.

Operators will need:

FIT or commissionable rates because they can generate a huge amount of business throughout the year, however the bookings need to be flexible as to when customers choose to book rather than restricted to a particular day, week or month.

Suitable Wales Product:

Any product wishing to increase their bookings and willing to offer rates can work with FIT travellers.

Groups

Groups means that the consumers will be travelling in a group, they may know each other beforehand (e.g. a special interest club) or may be individuals / couples or families who book on to a pre-arranged Travel Trade package / tour with a full itinerary already planned out. The group will travel together and stay in the same hotels, often visit the same attractions or do the same activities. The average group size starts at either 10 or 15 people.

Operators will need:

Group rates depending on the size of the group and you as a business are able to negotiate this.

Suitable Wales Product:

Depending on the size of the group some products and services will not be able to cater for the groups market. When marketing to the Travel Trade it is always useful to state the group sizes you are able to cater for.

Pricing

At this point you may now be thinking that it is going to cost you to work with the Travel Trade as you need to offer commissions and net / special rates. In order for the Travel Trade to be successful the companies selling your product or service on your behalf also need to be able to make a profit. In most cases you only pay commission or offer a discounted price when the sale is made. It provides an opportunity for greater promotional reach of your product at little extra cost.

Travel Trade Commission / Net Rates

The commission is the fee paid to the intermediary who has worked to market, distribute and sell your product or service. This is a fee that covers their function and service. It is often determined as a percentage of the gross rate.

Group Rates

These are the rates that you offer to an operator who brings a group to your product or service and it will generally be the net rate (rate before they are marked up with an additional margin for profit for sale to the public).

FIT Rates

When arranging an FIT tour, operators will also ask for a net rate, remember that the booking may only be for an individual, couple or family but over the year the operator may place many bookings at your venue.

Time length of pricing

Operators will be discussing pricing for their tours / holidays normally about two years in advance and they will be calculating their tour prices accordingly. This should be considered in your pricing strategy because increases in hotel rates / entrance fees will impact on their profit margins.

More common jargon - Jargon Buster