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Operators “unaware” of true distribution cost
Operators need to get a grip on their distribution costs, according to a white paper from TOWARD Europe. According to the organisation’s white paper on tour operator distribution, called Navigating a Route to Profitability, most operators surveyed in its research “were unaware of their true cost of distribution, both offline and online.” The white paper points out that one of the primary distribution costs for UK operators trying to distribute via agents is network access where billing is based on network time, rather than by transaction. It points out that this limits tour operators ability to predict cost of sale, “making it difficult to plan for, and difficult to establish, the true cost of distribution.” RWA’s Mark Bradbury, who is chairman of the TOWARD Europe Tour Operator to Distribution Channel working group, told TravelMole: “If you are distributing via viewdata you are ultimately billed on the connect time between the agent and your system which varies on the time of day and month by month so you don’t know how much you are going to be charged.” However he added that he expected transaction-based pricing to start to be introduced later this year. One of the more remarkable features of the white paper’s executive summary on distribution is that viewdata is not mentioned once. Mr Bradbury commented: “This report is about the future and the future for the industry is not viewdata. It has served the industry phenomenally well but it doesn’t satisfy the needs of agency customers. If your mum goes into a travel agency she isn’t going to want to sit in front of a viewdata screen.” See related stories: Operators “do not know where their sales come from” Clock ticking for operators over technology
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