January 2, 2022
Fees are a big part of doing business as a tour operator, but we believe they don't have to be. Did you know that big booking systems charge 6% or more, whereas, at Junglebee, we charge just a fraction of that? How would a 2% booking fee positively impact your tour & activity?
Over the last few years, as the founder of a tour booking software startup, Junglebee, I've had the opportunity to chat with many tours and activities owners that have expressed their points of view. There's been a lot of talk about which booking system to use and more importantly, how much it will cost.
Find out how much you're currently paying for your booking system and how much you could save by switching to Junglebee
In the tour industry, costs are a significant factor for tour operators, with revenue often only 10% of the ticket price. There's a reason for that; as a tour owner, you have to pay employees, there are annual maintenance costs for equipment, seasonal & weather changes eat into the overall yearly income, and then, unlike many other businesses, tour owners pay commission anywhere from 20% up to 50% for bookings. Agents, also known as Online Travel Agencies (OTAs), compete directly with tour operators. As a tour operator, you're spending money on marketing to compete with OTAs, or you're paying them at least 20% of your ticket price. Operating a tour business is tough; it's volatile, there's a lot of overhead that depends on ever-changing seasonal markets.
And so it's no wonder that there is a lot of talk about booking system costs, and more importantly, about the different pricing models that booking software companies offer that don't always suit tour companies.
The preference often depends on where you are in the world. For example, in North America, the predominant pricing structure for booking systems is no fixed monthly fee but rather a booking system fee added to the booking. On average, the booking system fee is 6% which the guest pays on checkout, and the tour owner still pays another 3% credit card processing fee. The 6% booking system fee that guests pay at checkout is a big subject of discussion amongst tour operators. Some tour owners prefer to add the cost to the tour price on checkout and have the guests pay it, while others feel it puts them at a disadvantage and scares guests away.
Using a North American booking system for tours can be a double-edged sword where you either eat a 9% cost per ticket or hand it over to the guests, making your tour up to 6% more expensive than competitors.
In Europe, it is standard practice to include the fees in the overall cost; and in some countries, the law requires that you include the booking fee in your pricing.
And so there is another pricing structure that I've seen booking systems offer, mainly in Europe, a fixed monthly cost to use the booking software that ranges anywhere from $50 to $250 per month and the additional 3% in credit card processing fees.
Avoiding tour booking software with monthly fixed costs doesn't entirely surprise me, as we've seen recently throughout the Caribbean with hurricanes and then global pandemics like Covid-19. It is almost unimaginable to be paying a fixed fee for a booking system when you don't have bookings.
To recap, our main two pricing structures that booking systems offer:
These very different pricing options cause a rift for tour operators to navigate when choosing the right booking system for their needs. They must ultimately make a final decision that will significantly impact their company's success, which is, understandably, why there is so much discussion about booking system pricing models within the tours industry.
Over the last few months, as Covid-19 has been breaking the tour industry, I've been mulling over the idea of
What if there was a better pricing model for booking systems that could better help tour operators?
A pricing model that would increase revenue for tour companies and yet not affect guests or put a tour operator in an uncomfortable position where they are paying fixed fees during slow months?
What if we followed the same pricing model that low-cost airlines have been using for decades, significantly decreased fees for tour operators provided that the booking system deals with volume?
Slowly but surely, over the last six months, I've been working with our team to make Junglebee a low-cost booking system with no monthly fee, and our booking fee is only 2%*. Tour owners can still charge the 2% booking fee on checkout to guests or include it in their price. Either way, we're making it 66% cheaper than most booking systems and a lot more palatable without the monthly cost when the season gets slow.
I'm sure that many tour operators are wondering how we've been able to drop the price so much, while our competitors are not? The truth is relatively simple; we've made Junglebee as streamlined as possible. While there might not be as many bells and whistles that you may find in the massive multi-million dollar booking systems, our platform is easy for tour operators to manage alone and straightforward for guests to navigate in the booking process. We don't need such a vast team to handle accounts for tour businesses; they can do it themselves.
What's more, many booking systems have been around for years, some longer than others, and their pricing is based on older technologies or locked in with older technology partners that drive costs up or haven't updated their pricing. They base their pricing on the past when technology cost way more. It's 2022, and at Junglebee, we've established pricing on newer technology that automates many of our systems.
We're handing over the benefits to tour operators in hopes that a low-cost pricing structure based on volume backed by tour owners is the future for the tour industry.
If this is a model you can stand behind as a tour company, we hope to hear from you in 2022!
*Junglebee's 2% booking fee applies to any country that can use Stripe as a credit card payment processor (This fee does not apply to any Caribbean country).