What is wholesaling?

Wholesalers are companies that promote and on-sell your product directly to consumers and via the domestic and international retail distribution network. 

Wholesalers source flights, accommodation, transport, car hire, event tickets, tours and attractions, negotiate rates and promote their destination product range online or offline (brochure flyer, advertising campaign).

Wholesalers also select individual product elements and then link them with other complementary products to form packages. The wholesalers then communicate these packages via their website, in their brochure and frequently through their marketing communications channels. For this service suppliers pay a commission.

Some of Australia’s major domestic wholesalers include Qantas Holidays, Virgin Blue Holidays, Great Aussie Holidays, Travelpoint Holidays and Creative Holidays.

The standard domestic wholesale commission is 20 to 25 per cent, 10 per cent of which is passed on to the travel agent if that is where the booking originated. The remaining 10–15 per cent is retained by the wholesaler to help cover the costs of:

  • Central reservations system, including product loading and maintenance.
  • Telephone /email communication 
  • Collateral (brochures and flyers)
  • Marketing, including advertising and distribution
  • Online booking system.

If you wish to work with wholesalers it is important to consider your ability to offer an allotment (more relevant to accommodation and tours), and/or free sale reservations, with a negotiated release back for unsold product.

Increasingly, wholesalers also require a participation fee for product to be loaded into their central reservations system (CRS) and to be featured in their brochure/website.

Overseas wholesalers often use inbound tour operators (ITO), who are Australian-based and act as the conduit for overseas wholesalers as they are based in Australia. There is an extra level of commission when doing business with an ITO.

Overseas wholesalers sometimes deal directly with operators in Australia and in this case the extra commission does not apply.

Travel agents

The retail distribution network has evolved rapidly over the last 10 years. There are approximately 4,500 travel agencies in Australia. Travel agents are an important part of the distribution chain as they gain customers via their shop fronts as well as via their highly visited online websites such as flightcentre.com, harveyworldtravel.com etc.

The large retail networks in Australia include, Harvey World Travel, Travelscene American Express, Jetset Travelworld, Flight Centre and Travellers Choice. Travel agency groups work cooperatively with wholesale and airline partners to develop aggressive tactical marketing campaigns. Domestic bookings are an important part of a travel agents business in Australia.

Retail travel agents are paid a commission, approximately 10 per cent, for bookings.

Last Updated 21st November 2012