14 JANUARY/FEBRUARY 2019 • FOGHORN FOGHORNFOCUS: SALES & MARKETING The Promise The basic promise between you and the OTAs can be distilled down to this: you will make some (not necessar- ily all) of your offerings available for sale through the OTAs and if they sell a ticket, you’ll be paid for that ticket, minus a commission held back by the OTA. Securing a listing on the OTA sites is not as straightforward as filling out a form. There is a contract to review with terms to negotiate; insurance to be updated; activity details to be submitted, reviewed, and hopefully approved; and an onboarding and setup process. Once you sign the contract, you are essentially agreeing to a set of very specific terms (commission rates, re- schedule and refund policies, etc.) in exchange for the OTA listing your offerings (not your company) in their directory. They may also advertise your activities (again, not likely your company), promote them directly to their customers, etc., based solely on the OTA’s needs, criteria and discre- tion, if it’s not otherwise detailed in the contract. When the OTA’s marketing and promotion efforts result in a booking for one of your activities, then the OTA – who collects the payment from the customer - will eventually send you the net proceeds minus any commissions that were agreed upon. This usually happens a month after the event occurs and you may need to validate the customer attended in order to get paid. The Reality The OTAs do not control the market for tours and activities. From various industry reports, OTAs represent 2% - 4% of all ticket sales for TAA. Keep in mind, those same reports suggest that 60% of bookings for TAA still happen offline and the overall market will be $183B by 2020 (Phocuswright: July 2017). You can understand why OTAs are striving to ensure they have a role in capturing that offline spend. In talking with various operators about many of the popular OTAs, the actual contribution made to ticket sales and revenue reportedly range from nearly non-existent, to less than 3%, to upwards of 10% or more. Actual results vary greatly from OTA to OTA. This is affected by the location of your offerings, competition for the offering type, the market segment that the OTA targets, and whether you are adhering to all the OTA’s policies (which affects how willing they are to promote you). One operator with whom I spoke recently told me his total sales are rela- tively flat, year over year, but his OTA sales from one particularly visible OTA have gone from 3% to 12%. Other operators have seen net increases in their overall business and attribute that additional success to their relationships with the OTAs. If the OTA choses to use its marketing and promotion expertise on your behalf, it can be quite impactful. A very important factor to consider is whether the OTA is expanding your share of the market or are they actually diverting some of your