Learn how to negotiate better rates with hotels and vendors for your tour operator. Discover tips and strategies on market research, relationship building, flexibility, discounts, and comparison.

Be more focused on building collaborative relationship with people than positions in any given company. People in Travel industry are somehow well connected. Foster your professional relationships as much as you can

How can you negotiate better rates with hotels and vendors for your tour operator?

Negotiating better rates with hotels and vendors is a key skill for any tour operator who wants to offer competitive prices and high-quality services to their clients. However, it can be challenging to find the best deals and establish long-term partnerships in a dynamic and diverse market. In this article, we will share some tips and strategies on how to negotiate better rates with hotels and vendors for your tour operator.

Key takeaways from this article

Build solid relationships:

Cultivating trust with suppliers is key. Start by paying on time and giving honest feedback. This goodwill enhances your ability to negotiate and secure better rates down the line.
Prioritize personal connections:

In the travel industry, people move around a lot. By focusing on strong interpersonal relationships, you're likely to benefit from insider deals and long-term partnerships even as contacts change jobs.

This summary is powered by AI and these experts

1 Know your market

Before you start negotiating, you need to do some research on your target destinations, the seasonality, the demand, and the competition. You need to know the average rates, the occupancy levels, the quality standards, and the special offers of the hotels and vendors you are interested in. You also need to know what your competitors are charging and what value they are adding to their packages. This will help you to identify the gaps and opportunities in the market and to position yourself accordingly.

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Fabrizio Cerutti

Ultra Luxury Hospitality, Cruise and Superyacht Industries, Advisor to BoD's and Family Offices, Co-Founder, Lecturer and Mentor
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Research standard prices for hotels, & other services in the locations you operate. Explore online platforms & booking systems that offer negotiated rates. Highlight the potential volume of business you can bring to the hotel or vendor. Negotiate better rates by bundling multiple services together. Emphasise the USPs that may be appealing to the hotel or vendor. Don’t be afraid to walk away if the rates are not favourable. If it's challenging to negotiate lower rates, try to negotiate added value instead. Successful negotiation involves finding a balance where both parties feel they are getting value. It's not just about getting the lowest price but establishing a partnership that benefits both yourself & the hotels/vendors you work with.

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Roland O.

At your Service Hospitality & Tourism Cluster General Manager | SVP Sales & Marketing | Advisor | Asset Manager leading your business to the next level
(edited)
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In addition to the above Tour Operators able to influence ETA and ETD (weekdays) have a strong bargaining position as lodging businesses aim to reduce URI (unsold room inventory).

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Dr. Omer Ayoub - PfMP® PMP® CAPM® CSPO®

Your Saudi Expert .. Let's talk!
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Identify your source markets, look at your numbers what business has been generated by the source markets for this given property over the period of time. Marginal analysis and profitability that has been generated for the given property through your Travel Management Company (TMC) will come in handy for the next stages of negotiation

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2 Build relationships

One of the most important factors in negotiating better rates with hotels and vendors is to build trust and rapport with them. You need to show them that you are a reliable and professional partner who can bring them consistent and profitable business. You can do this by communicating regularly, paying on time, providing feedback, and resolving any issues promptly. You can also show your appreciation by sending thank-you notes, referrals, or gifts. By building relationships, you can increase your bargaining power and leverage your loyalty.

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Rabih El Zyr

Hospitality Business and Management Leadership @ The Radisson Hotel Group
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The relationship in some parts of the world play a key role in getting the best possible commercial deals from suppliers, especially in the Middles East market, but also that needs to be backed up with a straight forward win-win approach that is essential to build trust and sustain preferential terms for the future

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Dr. Omer Ayoub - PfMP® PMP® CAPM® CSPO®

Your Saudi Expert .. Let's talk!
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Be more focused on building collaborative relationship with people than positions in any given company. People in Travel industry are somehow well connected. Foster your professional relationships as much as you can

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3 Be flexible

Another way to negotiate better rates with hotels and vendors is to be flexible and creative. You need to be willing to adapt to their needs and preferences, as well as to the market conditions. For example, you can offer to book in advance, to fill in their low seasons, to take up their unsold inventory, or to accept their non-refundable or non-cancellable terms. You can also propose to bundle or cross-sell their services with other products, such as transfers, activities, or meals. By being flexible, you can create win-win situations and mutual benefits.

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Roland O.

At your Service Hospitality & Tourism Cluster General Manager | SVP Sales & Marketing | Advisor | Asset Manager leading your business to the next level
(edited)
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Cash is King, don’t just book in advance but consider paying in advance, just like your tour customer may do. Complementing the hotel’s cash flow management efforts is likely to find open ears for better deals, it also demonstrates confidence in the business you can move.

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4 Ask for discounts

One of the simplest and most effective ways to negotiate better rates with hotels and vendors is to ask for discounts. You need to be confident and assertive, but also polite and respectful. You need to present your case clearly and convincingly, highlighting your value proposition, your track record, and your potential. You also need to be prepared to back up your request with data, testimonials, or references. You can ask for discounts based on volume, duration, frequency, or exclusivity. You can also ask for value-added services, such as upgrades, amenities, or commissions.

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Dr. Omer Ayoub - PfMP® PMP® CAPM® CSPO®

Your Saudi Expert .. Let's talk!
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Certain commitments knowing your source markets may give you a competitive edge over other competitors when negotiating rates with the property. Based on your business generation, you can always vouch for better offerings that shall lead to win-win situation for both business partners

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5 Compare options

Finally, one of the best ways to negotiate better rates with hotels and vendors is to compare options and shop around. You need to have a clear idea of your budget, your expectations, and your alternatives. You need to solicit multiple quotes from different sources, such as online platforms, local agents, or direct contacts. You need to analyze and compare the offers based on the price, the quality, the availability, and the terms and conditions. You need to be ready to walk away if the deal is not satisfactory or to close it if it is favorable.

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Dr. Omer Ayoub - PfMP® PMP® CAPM® CSPO®

Your Saudi Expert .. Let's talk!
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Comparing a direct deal versus through a DMC partner who is offering same property at different rates.. at times onboarding both will also be a good move to increase your supply base for different channels.. i.e. online and offline sales

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Roland O.

At your Service Hospitality & Tourism Cluster General Manager | SVP Sales & Marketing | Advisor | Asset Manager leading your business to the next level
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Knowing your customer always aim to negotiate added value(s) matching your audiences interests and complementing their experience.

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How can you negotiate better rates with hotels and vendors for your tour operator?

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1 Know your market

2 Build relationships

3 Be flexible

4 Ask for discounts

5 Compare options

6 Here’s what else to consider

Travel & Tourism

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