What is a DMC?
A “DMC” stands for destination management company and is definitely worth looking into when building your business as a tour operator. It’s a third-party entity that acts as a liaison between local businesses and their potential customers, often international. Services that might be referred through a destination management company include: transport services, hotel bookings, tours, restaurant bookings, activities, events and even language or translation services. DMCs often specialise within specific locations, and sell themselves on this basis. They’re most likely nicely clued up on all activities in their particular area and can offer the best options possible for people seeking tours. Alternatively, larger DMCs can offer customers more competitive pricing on products and services, or a holistic and hands-on organisational service. In this context, they act as a purchasing consortium, able to use their buying power to provide better rates. What sets DMCs apart from travel agents is their hands-on and specialised approach, usually going above and beyond what is typically expected from an agent. This might include being present on the tour to make sure everything runs as smoothly as possible during the entire process.
Why use one?
There are a variety of reasons why using a DMC can be beneficial.
For tour operators, the biggest value to be gained from using a DMC is having a second stream of reach and advertising. This means that your tour will have access to a client base that you may not have the resources to get hold of. For example, if you’re looking to aim at a new clientele potentially foreign, then a DMC could be a good option for you. But it’s not only the client base that a DMC will provide for you, as their structure has the potential to give you access to a network of tour operators close to you. Establishing partnerships and alliances within your area can allow you to support and be supported by local business. And travellers and DMCs alike aspire to support locality. Having the expertise and guidance of a DMC can also function as a second creative resource(opens in a new tab) for your business. Additionally, they often have a broader understanding of the client and what they are looking for when booking tours. One final point of advantage of using a DMC is for your SEO. External links to your website will inevitably increase traffic to your website but it’s also good to know that these links also increase your reputation on Google. The more your travel business is referenced, the more reputable it appears to Google’s metrics and also to potential customers.
For travellers, a DMC can offer local expertise and knowledge of an area that might traditionally be difficult to know. Language barriers are a significant hindering factor for customers trying to access information and tours in other countries. Not only can a DMC help customers overcome the language barrier, they help their clients save time and act as quality control so that the customer can be assured that they will get the most out of their overseas experience.
Why not to use one?
With all the benefits of using a DMC, are there any drawbacks? Many in the industry often comment on the expense of having a relationship with a DMC. While they can ask for anywhere between 10-30%, this can be a significant sum for independent tour operators. In addition to this, some DMCs require the use of ‘white-labelling’. This is essentially them placing their brand on the tour’s product or service, such as requiring a tour guide to where the DMC’s branded shirt. In saying that, if you are simply looking to improve revenue or reach at a smaller cost, a DMC might not be the best option. While many of their services are valuable, it would be more prudent to address your issue directly. Advertising, social media campaigns, or even a revamped website(opens in a new tab), might offer simpler and more affordable solutions.
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