Sign Tennessee Travel Agency Agreement Computer

Document type sign travel agency agreement tennessee computer

hi everyone we keep discussing how online travel agencies work in our previous videos I've covered an OTA structure in the booking engine and now let's talk about the way OTS make money commissions my name is andre ciabatta roth and i'm travel technology competence lead the resulting soft and today I'll explain what a commission engine is and how it can work in an OTA so how do travel agencies make money well they distribute travel products and charge commissions simple as that these products are supplied by airlines hotels tour operators and also OTS can resell products getting them from larger OTAs like Expedia for wholesalers like hotel beds in any of those cases suppliers sell products for their base fares and then OGS ed Commission's on top of them write commissions come in many flavors a customer may see a service fee included in their total price or you can hide a commission as a markup and a traveler won't see them or sometimes you would see discounts that are applied to Commission's or in base fares but ultimately it's still the same thing if you're an OTA you basically have two ways to handle commissions have a flat rate or have adjustable Commission's let's figure out how these are different the simplest way to handle commissions is to have a flat rate flat rate is a standard commission size that applies to all products for instance you've got 10% for hotel sales or you charge 20 bucks for each flight flat rates are sometimes required by supplier agreement and you can do anything about it but there are way too many problems with using flat rates they all come down to the fact that you can't be flexible with your prices and if you aren't flexible you can't win the competition a quick example you sell a direct flight from London to Berlin and all your competitor OTAs have the very same flight for $300 if your flat rate makes it 3:15 you aren't gonna win this deal and you want your commissions to be lower but if you sell complexity naira from 1 & 2 let's say st. Helena and nobody has it you want your Commission's to be higher and as you've guessed OTS use specific software to adjust commissions a commission engine revenue managers to adjust price and rules considering various factors and once this rules are configured the engine will be calculating the final price the trailer see and boy they could be manuals and factors that impact them let's just give a few supplier you managed to negotiate a great deal with this hotel in Amsterdam you have better based price than your competitors great you can adjust Commission and make it higher for the supplier and still be competitive traffic source you promote your products on Meta Search Engine like kayak where people look for cheapest deal let's make commission a little bit lower for this marketplace in up sale and Solaris like insurance or extra luggage and on the contrary let's make it slightly higher for loyal people who come directly to your website dates you expect higher demand for Lisbon flies this summer bump a commission up size of a deal a user looks for a complex bundle tour for family with kids let's make a discount I can go on and on you can consider flight class destination one-way or roundtrip flights a whole lot of things so revenue managers consider multiple factors and edge rules using a commission engine but here's a problem what if you have color it's of rules and they start conflicting with each other imagine that one of your rules says that flies from London to Milan must go with five dollar discount on Skyscanner another rule says that flights to Milan by a layer must go with a dollar Commission and to make matters worse let's say you sell connected flights with six dollar Commission and now imagine that a traveler wants to flight from London to Tel Aviv by Ryanair with a connection in Milan and they find your deal on Skyscanner what should the engine do how should it calculate the price the traveler sees a good commission engine should detect them automatically and allow revenue managers to define how to combine these rules for instance they must be able to make one rules outweigh the others or average commissions or maybe sum them up or any other type of flexible combination of rules you got the idea these are the basics of a commission engine in a nutshell but some of you may have noticed the elephant in the room right how to define exact commission size in the first place in most cases revenue managers do their research and try calculated the best Commission's the rates should be competitive enough and still make money then these rates should be baked in rules via Commission engine interface by the way heavily user-friendly interface is also very important revenue managers must be able to constantly update these rules remove them or even add new ones market conditions are changing and the OTA must adapt but it's still a lot of manual work in the reactive rather than proactive way to managing the revenue you have to check prices of your competitors every day or even by some historical data from metasearch engines or data providers or scrappers and then calculate and recalculate your Commission's can we automate that yes let's step into the territory of advanced Commission engines these ones use business intelligence to analyze how successful your current rates are for instance you see that the number of customers that are coming from betas vs. fallen may be a reducer commissioned by a buck or two or you see that your deals from London to Milan are booming let's increase the price you can automate some changes to the rules as well like your engine can react to demand by increasing or decreasing some commissions but this is still not enough can you make the engine even better now about technological singularity your ot can generate a lot of data you good prices and there changes from suppliers you have search history by destinations you have a track record of all close deals user behavior data in a drop of that you can consider external factors like whether hola and destinations anything once you start generating a lot of data you can put it in use and start predicting some things and here's where machine learning can help for instance you can forecast when the demand will rise or fall down then you can adjust it to your rules to take advantage of these changes or you can try predicting the commission sizes themselves that are competitive but generate enough revenue eventually with machine learning you will be able to automate some Commission operations or at least create a powerful analytics platform that will help revenue managers make the right decisions obviously there won't be a fully autonomous Commission engine is still need talented revenue managers but in the future machine learning can become a real support to humans great let's sum things up a commission engine can be as complex as you make it you can stick to flex rates and forget about dedicated engineer old or you can create a powerful platform that will consider multiple factors and their combinations and finally you can augment your engine with business intelligence and machine learning I hope you like this video and if you did give it a thumbs up and check my previous og explainers if you haven't yet thanks for watching and see you the next one [Music] you