June 6, 2021
When it comes to travel, customers pay extra attention to every expense - including fees at checkout. However, the reaction to an added cost varies significantly by region of the world and by culture, with markets such as parts of Europe seeing fees very differently than markets such as North America. The decision to add a booking fee will come down to having a clear understanding of your customers as a tour operator, from your location, the location of your customers, the source of your bookings, and the overall booking experience you’d like for your customers to experience.
1. Where are you located?
When choosing a booking system as a tour operator, it is essential to understand that some booking system’s monthly rates and booking fees vary from country to country. Additionally, some give you the option to include the fee or not at checkout, whereas others do not offer that flexibility. Spending some time researching costs and flexibility can save you the headache of signing up for a booking system that ultimately doesn’t reflect the user experience you are looking for for your particular customers.
2. Understanding your customers: where are they coming from?
Are the majority of your customers from Europe? As a general rule and even law in some areas, prices in Europe are what they say they are on the price tag - taxes and fees included. There are a few exceptions like concert and theatre tickets, when not bought at the venue - for example, the print-at-home fee, from when ticket agencies started to sell online. In short, Europeans expect their prices to be what it states in your advertising and website, no matter if you sell a snorkeling trip in the Caribbean or a bike tour in Copenhagen.
Outside of Europe, it is common to see credit card or booking fees show up in the final steps at checkout. Often these customers aren’t thinking twice and have come to accept the reality of booking fees - look at sites like Airbnb, where customers are charged not only a booking fee but cleaning fees and potentially other additional fees depending on the region.
3. Where are your bookings coming from?
Where do you want your business to come from? Directly through your website, via OTAs, from local agents, or others? Mapping out where you’re currently receiving your bookings and where you’d like your bookings to come from can help clarify the decision to charge the booking fee to the guest. Junglebee CEO Michael Rouveure states that in his experience, the more established tour operators depend on 40 to 50% direct bookings, 40% local concierge desks, and about 10% online from OTAs. If you optimize your tour business to receive around 50% direct bookings, the booking fee will impact up to half of your customers.
It is crucial to keep in mind that if you choose to charge the booking fee to the customer, they could quickly go ahead and book through an OTA that doesn’t charge the additional booking fee. In the end, this may cost you even more since OTA’s are charging an average of 20%+ in commissions to tour operators.
Another option possible with booking systems such as Junglebee is to charge only a deposit for your tour or activity incurring the fee, with the opportunity to pay the balance either in cash or via alternate methods that would not incur the additional cost fee.
4. User experience
Who are your customers? Are you offering premium packages to customers who don’t hesitate when it comes to price, low-cost tours for budget-conscious travelers, or middle-tiered trips where for example, a 5% fee can make or break their decision? Putting yourself in the shoes of the customer buying your tour can gain a lot of clarity surrounding the decision to include or exclude a booking fee.
Take some time to try the entire booking experience from the website, booking form/system, and follow-up emails. Please do this in incognito mode with an alternate email to feel what your customers are experiencing when they book. In particular, when you see the additional booking fee, what is your instinctive reaction? Getting a few different friends and family to do the same and offer feedback can be very valuable.
Researching, planning, and booking any tour or activity should be as seamless, fun, and easy as possible - these folks are looking to escape their current reality; they want a five-star experience that is effortless every step of the way. Adding an extra fee at the end of the checkout process can create a tiny but noticeable distortion in their idealistic picture. And drives home the point that as tour operators, we are doing this for profit after all - at least partly because we have to pay for staff, maintenance, etc.
In the end, choosing whether or not to include a booking fee is a decision unique to each tour operator. It comes down to having a good understanding of your business, from the market you serve to the locations you’re targeting, and finally, the booking experience you’d like to create for your customers.
Tour booking systems like Junglebee give you a choice to include or exclude the fee. As previously mentioned, it also allows the flexibility to have the guests pay the fee on the deposit alone or the entire trip cost. You can input on-site bookings with no booking fee using Junglebee, except for bookings paid for using the in-house payment processing system JB Pay.