Receptive tour operators are based in the United States and sell their services to tour operators throughout the world. These services include hotel accommodations, ground transportation, attractions, restaurants, etc.
- How Inbound Tour Operators Work
- Participation Requirements
- General Contract Inclusions
- Congratulations, you have a contract! What now?
- Group Business
How Inbound Tour Operators Work
- Inbound tour operators primarily offer FIT or independent travel products, so the majority of this information refers to independent travel. See the Group section below for more information about international inbound groups.
- The inbound tour operator publishes a confidential tariff (a catalog/brochure/electronic promotion featuring their services, including accommodations, ground transportation, attractions, restaurants, etc.), using the net, non-commissionable rates hotels provide them. The inbound operator distributes the tariff to their clients, the international wholesalers and tour operators. The inbound operator’s tariff is never distributed to consumers.
- The overseas operators use the rates in the confidential tariff and mark them up to include their profit and, as necessary, a travel agent’s commission. The overseas operator then prints their own brochure and distributes it to retail travel agents, operators, and/or consumers.
- For FIT travel, the consumers travel to their destination with vouchers issued by their tour operator and redeem them for services purchased.
For a hotel to be considered for an inbound operator’s program, you must consider the following:
- In order for inbound tour operators to offer a competitive program and book individual and group business into a hotel, they require rates that are customarily at least 30% below your published rack rates. Obviously, potential volume will dictate the discount you are able to give, but this is considered by many as the minimum percentage discount required to be considered. Your rates should be ready to offer in April for the following contracting year.
- You may offer direct bill credit to the inbound tour operator and accept their voucher as initial payment for the guest room.
General Contract Inclusions
The following is a checklist of things to remember when offering a bid to an inbound tour operator. One of the biggest challenges the inbound operator faces during contracting season is an incomplete contract. Take time to be sure you provided all of the following information. Doing so will save everyone time:
- Rates for all dates during the requested contract term. Most inbound operators work with a contract season starting April 1 and running through March 31 of the following year. The rates offered should be net, non-commissionable, plus tax. Be sure to include the tax rate. The rate should be the same for 1-4 occupants. If you cannot offer a 1-4 rate, you must list the extra person charge, rollaway rate, and the maximum number of persons allowed in each type of room. A maximum of 3 rate seasons or less is preferred.
- Room allotment (if applicable). You must check with the inbound operator to see if they require an allotment in your area.
- Cut-off period. By offering an allotment of rooms, you agree to “give” the inbound operator that allocated inventory until the cut-off date, at which time it reverts back to you for general sale. A cut-off period of 7 days prior to arrival is preferred and most inbound operators cannot work with a cut-off date of more than 14 days prior to arrival. It is a good idea to list a specific time such as “4:00 p.m. Eastern Standard Time” to avoid misunderstandings.
- Direct bill credit. An inbound operator must have direct bill credit approved with your hotel to do business with you. Please ensure your accounting department has all of the necessary information and let the operator know when they are approved.
- Blackout dates. Although it is a good idea to keep these to a minimum, the inbound operator will generally understand your need to close certain dates, provided you do so up front. Please be sure to list all dates on the contract when you will not be able to honor their allotment. In many cases, the inbound operator will take a higher rate for busy times if you will continue to honor their allotment during that period.
- Cancellation policy. Generally 24-48 hours prior to arrival. Most inbound tour operators will provide notice on cancellation in writing, either by fax or e-mail. You should always get it in writing.
- No show policy. State clearly what your policy is in the event the guest never arrives. Generally, the hotel may bill the operator for the first night’s room and tax.
- Act of God policy. Be sure to clearly state your hotel’s policy on cancellations in case of Acts of God and other situations beyond the reasonable control of either party. Such instances could include fires, earthquakes, floods, weather, riots, labor strikes and police/military action.
- Child policy. At what age do children stay free in the same room as their parents with existing bed types?
- Porterage (baggage handling rate). Although the customer is responsible for tipping the bell staff, most inbound operators like to include this figure in the information they provide their clients. Occasionally, the inbound tour operator will include one piece of luggage in their contract; when this is the case, your bell staff must be advised.
- Parking fee information. Especially important in major destination cities.
- Meal information. Enclose menu if applicable.
- Sales kit with brochures & map.
- Names, phone/fax number and e-mail addresses for general manager, sales, accounting and reservations contacts.
- Signature of authorized hotel representative, printed name, title and date on the contract.
Congratulations, you have a contract with an inbound tour company! What now?
The process of working with an inbound tour operator is not finished when the contract is signed. There are a number of steps a hotel must take to ensure its new guest’s satisfaction and a smooth working relationship with your new inbound tour client.
- Be sure the room allotment inventory is loaded correctly in your reservation system and your Reservation Manager has a clear understanding about how the process works.
- Provide your reservations manager with the name and phone number of the reservations/inventory control contact at the inbound tour company.
- Give your reservations manager a copy of the final contract with all rates, seasons, blackout dates and cut-off dates.
- Meet with your accounting department to be sure they understand the billing process and have approved the customer for direct bill.
- The inbound tour operator will provide you with a list of credit references for approval of direct bill credit with your hotel. The guest will present a voucher for payment of their room and tax portion of their entire stay when they arrive. The hotel must be willing to bill the inbound tour operator for the stay or the program will not work.
- The inbound tour operator will provide you and your accounting department with a list of billing procedures to follow when seeking payment for vouchers received. Follow these instructions exactly to receive prompt and full payment. Inbound tour operators will generally pay for redeemed vouchers once each month, but be sure everyone is clear on the policy before the guests start arriving. Note: Many inbound tour operators require the reservation or tour number be listed on the hotel invoice before they will pay.
- The inbound tour operator will provide you with a void “sample” copy of the voucher. Be sure that both your accounting department and front desk have a copy of this.
- All vouchers, with a copy of each folio attached, will be submitted to the inbound tour operator with an invoice for the total amount being billed.
- Make copies of everything.
- Meet with your front desk staff to ensure they know how to work with vouchers and understand the importance of rate discretion. The room rate is between you and the inbound tour operator and is no business of the guests, as they have already paid for their room when purchasing the voucher. Room and tax rate information between the hotel and inbound operator must never be provided to the guest.
- A separate folio must be set up for incidentals. When the guest arrives, collect the voucher and attach it to the room and tax folio. A second folio must be opened for the guest’s incidental charges. The voucher usually does not cover any charges other than room and tax. Occasionally, Full American Breakfast will be covered by the voucher and meal coupons or other arrangements need to be made for the guest to redeem their breakfast. The guest will settle incidental charges separately when they check out and a credit card imprint or cash deposit should be taken at check-in to cover these charges.
- Many of the guests cannot speak English. If you plan to do a lot of FIT business, you may want to consider having instructions and hotel information printed in different languages to help the check-in and check-out processes go more smoothly.
- When in doubt, call and ask! The inbound tour operator is more than willing to answer any question you may have and is happy to provide information that will help you and your staff provide the guest with a perfect stay at your hotel.
- Be particularly sure the reservation information in your computer matches the information on the voucher. If not, call and verify the correct information with the operator ASAP.
- If there are any discrepancies, remember that the guest standing at your front desk is the innocent party. In their mind, they have prepaid for their stay and just want to get to their room as quickly as possible. If possible, allow the guest to check in and work out the details with the inbound tour operator later. The guest will have no knowledge of your business dealings with the tour operator and we don’t want the operator or the hotel to look bad in the eyes of our guest, if at all possible.
Many inbound tour operators also bring groups from overseas. Groups will not arrive with vouchers; they will either pre-pay or request direct billing. You will need to clarify the payment procedures with the inbound tour operator when booking the group.
There are a few items to remember to include when contracting a group:
- Room rate. The rates should be clearly listed as single, double, triple, quad, plus tax, net, non-commissionable. Include the tax rate.
- Room type. Unless otherwise indicated, most leisure groups require two beds in all rooms. Sofabeds, rollaways and murphy beds are NOT acceptable accommodations. Do not offer group space unless you can meet the room requirement with all DD rooms. Many inbound operataors will also bring corporate groups to North America to attend conferences and trade shows. Most of these groups will require only one bed in each room. Ask the tour operator about the number of beds required in each room at the time of the inquiry to avoid offering something you don’t really have.
- Deposit policy (if applicable). In most cases, the inbound operator will prefer that you direct bill the charges of the group, as you would for an FIT client. If this is not possible, clearly state your required deposit amount and due date(s) on the contract. Customarily, a deposit equivalent to the first night’s room plus tax is acceptable. If the group is only staying one night, some hotels ask for 50% of the total stay.
- Cancellation policy. Clearly state this on all contracts. There are many considerations when determining what your cancellation deadline should be, but 30 days prior to arrival is a good guideline.
- Rooming list. List the due date for the group’s rooming list. Most groups do not have this information available until two weeks prior to the arrival date. Two weeks prior to arrival is generally the standard.
- Porterage. (baggage handling charge) Unlike FIT, tour operators will almost always pay for porterage service for their groups. List the total cost for round trip (arrival and departure) baggage handling service and be sure to indicate whether it is per person or per bag.
- Meal prices. Provide menus and prices for Continental Breakfast, Full American Breakfast, lunch and group dinners. Be sure you have the seating available in your restaurant or banquet center to accommodate all of the people in the group at the same time. Some groups may eat “at leisure” and not all at the same time. Know the group’s morning itinerary in advance to help you plan. You must confirm a time for the meal to be served and staff accordingly. Not all groups will require meal service, but know what your capabilities are in advance.
- Communicate. If the group is part of a tour series that the inbound operator has booked with you, be sure to check in with them monthly to see how that tour is selling. The operator may be willing to release some rooms back to you if the tour is not selling well. This will help you stay on top of your room inventory and better prepare for the group.
Rates, terms and conditions must be individually negotiated between inbound tour operator and supplier. The purpose of this brochure is to provide information on customary practices and serve as a guideline only.