Tour Operator Software: Essential Milestones to Get a High-Performing Solution

In the current travel industry there is an abundance of tour operators – travel companies specialising in creation of tours by planning their structure, booking essential components and arranging distribution to either individual travellers or travel agents for reselling.

Depending on the type of activity, there can be:

• Inbound tour operators handling travel arrangements in the host country for tourists coming from abroad;
• Outbound tour operators creating tours to international destinations;
• Domestic tour operators arranging trips within their country of origin;
• Destination management companies, or DMCs which manage a specific range of travel products and services for only one selected destination;
• FIT (abbr. for ‘Free Independent Traveler’) tour operators servicing only individual tourists that book trips and travel on their own not being a part of any group;
• Tailor-made tour operators which focus on providing unique itineraries and experiences fully adjusted to the needs of specific travelers.

There can also be more subdivisions depending on what criteria are used.

Overall, there are over 130,000 tour operator businesses handling tourism activities worldwide, with the total increase of the tour operator / travel agency market size to 474.4 Billion USD in 2023. The range of service offering is extremely diverse – ranging from standard events like guided tours in large cities to feeding rare animals in the most exotic parts of the globe. The interest for their services is abundant, versatile and is currently on the rise with the immense delayed demand kicking in after COVID-19.

Nevertheless, despite all the interest and stable market growth, tour operator businesses can hardly become successful without high-performing software infrastructure – the key component of today’s digitised commerce. This makes it extremely important to know how to navigate the technology landscape properly and make informed software choices. There always needs to be a pattern to follow that can help ‘connect the dots’ the right way in choosing technology for your business.

Here is our vision of the key milestones to work through en route to obtaining a high-performing tour operator software solution.

#1. Getting a fully-functional back-office – the backbone of your tour operator software

Back-office is the cornerstone that binds tour operator software infrastructure together. It controls your entire business process automation. A modern tour operator back-office is a complex solution incorporating a wide range of apps and options responsible for:

• Centralized booking storage and reservation management;
• Managing user roles, responsibilities and access rights;
• Handling the business rules governing sales, settlements with suppliers, rates, commission, etc.;
• Customer service workflows – and much more.

#2 Reliable booking engine and online payment processing – the two keys to a stable booking flow and more sales

Another fundamental component of tour operator software solution is the booking engine, which is responsible for receiving and processing online booking requests from both individual travellers and agents. Such an engine must be linked to your inventory database or your suppliers’ travel products. Besides, it must connect to B2B and / or B2C interfaces to allow making reservations by system users. To additionally assist users in locating what they require, a booking engine should be equipped with well-developed search forms and workflows.

When selecting a booking engine, there are several noteworthy items to consider. Firstly, you need to make choices that fit your business format – B2B, B2C, or a combination of both.

• If  you distribute your products via travel retailers, it makes sense to integrate your content with OTAs or other agents via an API. This allows you to send tour details, pricing, availability and get back requests that will update your travel product status automatically.
• If you want to sell directly to individual travellers, you’ll need to connect your customer-facing website with your booking engine in order to create a booking flow that appeals to your clients. You’ll also need a combined booking engine that can handle requests coming from both agents and online retail sales websites to increase profits.

Dynamic packaging functionality is also crucial if you want to let your clients adjust tour components instead of purchasing predefined tours. Your booking engine also needs to handle customizations and flexible dates for booked trips.

Another important aspect to work on is payments processing. It is a must for your booking engine to incorporate built-in payment gateways – the likes of Stripe, PayPal; there can also be multiple preferable options depending on the regions you operate in. Your software should also support diverse payment options: bank debit, mobile payments, credit cards, digital wallets, cryptocurrencies, etc. Other options like vouchers, gift certificates, payment instalments or deposits are also good to have.

#3. Make sure to have efficient inventory and supplier management functionality

Streamlined management of travel product suppliers is a highly important aspect to pay attention to as well. Unless you have your own fleet of aircrafts or a set of accommodations to provide to travellers, you are most likely purchasing inventory from external vendors. These are usually some or all of the following:

• Leading GDSs (Sabre, Amadeus or Travelport);
• Hotels, lodges, vacations rentals or alternative accommodation;
• Airlines;
• Bedbanks (the likes of Hotelbeds, Webbeds, HotelsPro or others);
• Providers of transfers / car rental services;
• Activities providers (for ex., Viator);
• Destination management companies or other specialised niche suppliers.

To automate reservation processes the most usual practice is to have your solution connected to various travel provider APIs. This way tour operators can send booking requests and get confirmation sent back to them along with other important status updates received within their own back-office. An important point to remember here is that the integration process can be quite time-consuming and requires qualified engineers to do the job. A rational way out here could be to look for a travel supplier aggregation solution that has numerous integrations available off-the-shelf. This way you can make just a single integration and gain access to multiple suppliers through it.

GP Travel Hub is a unified API aggregator of diverse travel product suppliers

Another way to go is to establish an extranet and give direct access to your system and let suppliers manage their allotted inventories on their own. This scenario is more and more rare nowadays. Nevertheless it can work quite well, especially in case it is necessary to work with smaller local or niche vendors.

#4 Incorporating instruments to build travel itinerary

In contrast to companies from spheres like retail sales or manufacturing, the inventory of a travel business consists of individual travel services (hotels, flights, transfers, car rentals, etc.), tours and travel packages. The key objective of tour operators is to arrange these separate services into a marketable bundle, which is the complete tour distributed to clients and partners. This is their key difference compared to other market players. For this reason every tour operator must have the right software in its arsenal that can help perform this task according to the business model.

There are many specialised solutions on the market that serve the purpose of developing, scheduling and customising tour plans, or ‘itineraries’. Some of them are standalone, the others are built as a part of a larger ERP-level travel system. These solutions provide real-time availability of individual elements such as hotel beds and transportation seats. Intuitive user-friendly interfaces enable operators to arrange tour components and link them to a tour calendar. These solutions may also include destination content such as city guides and optional activities. For lengthy tours with multiple stops, automatic map-routing generation would be nice to have.

The final choice of the solution depends on what kind of tour operator you are and what kind of tour you sell – more standardised or tailor-made. In any way, there are systems available for all needs and budgets.

#5 Ensuring streamlined customer management and interaction

In order to optimise customer relationships, a strong CRM solution is practically a must nowadays. The ideal solution should automatically create profiles and store customer information and interaction history, while also offering additional features to facilitate communication and personalization. This may include the ability to easily create custom commercial documents – proposals, quotes, properly formatted invoices and more.

Travel CRM Functionality

Many tour operator platforms incorporate a CRM module. Nevertheless, a standalone CRM platform could be required to provide more advanced functionality. If you already have a CRM, integration with your booking software is necessary to establish a seamless information flow. Luckily, many of the modern tour operator platforms have well-structured and documented APIs allowing to perform integrations productively and in various formats.

#6 Online website(s) and content

To keep up with the digital age, having a user-friendly website with an intuitive search and booking flow is essential.

Having your website integrated with your booking engine or tour operator software platform and embedding booking forms for the products you sell is highly recommended. It makes sense to find a solution that provides diverse functionality: website building tools with ready-made templates, APIs to integrate custom developed website designs, inbuilt content management and SEO capabilities to create a website, fill it up, and connect to your booking solution to facilitate online sales.

As for content management, it is possible to partner with a content provider (GIATA, ArrivalGuides, etc.) or create content on your own. Besides, implementing a CMS (WordPress, Joomla, Squarespace, etc.) will support creating, managing, and sharing digital content on your website and distribution channels

#7 Accounting and Analytics

Accounting is a crucial component of business operations, involving tasks such as billing, invoicing, maintaining a general ledger, and bookkeeping. For tour operators, there are two basic options:

1. Using an out-of-the-box accounting module within a comprehensive system;
2. Opting for a standalone solution that is feature-rich and compatible with booking and payment processing software.

Reporting and analytics are also essential for informed decision-making in sales and marketing. A powerful analytics module should enable customised reports and digestible dashboards to provide insights into the company’s performance, expenses, revenue, employee activities, and customer preferences.

#8 Extra 3rd-party integrations and other items to enhance functionality

Integrations with other platforms such as review sites, point of sale systems, and customer support software are definitely worth proper attention. Other factors to consider when choosing tour operator software include localization capabilities, customer support services, security compliance, and the availability of a free trial to test the software’s compatibility with your workflow and staff interface.

Off-the-shelf software solutions for tour operators vs custom development: the pivotal dilemma

Companies often face the decision of whether to purchase an off-the-shelf solution or create a custom system. The choice depends on the balance of price, time and customization that is required to put the software up to the challenges facing the business.

Generally, if you run a large enterprise or have unique workflows, developing proprietary software appeals to be a better option. This way ensures a system tailored to your specific business needs. However, if you have legacy software, modernising or replacing it will turn out to be a significant and resource-consuming project. In such cases, gradual changes are preferable instead of taking on too much initially.

Ready-made solutions are more suitable for small to medium-sized travel companies with functional needs that can be met by existing instruments. You can start with acquiring a few modules and fine-tune their functionality on the fly. There are plenty of such systems on the market right now that can be easily found on the web.

Combining ready-made solutions with custom development is also an option. For example, you can build a custom booking engine while implementing off-the-shelf accounting and CRM products to save time and money while covering your principal business needs. There can also be other scenarios. Here’s an example from our practice of how a deeply customised ready-made platform can solve complex challenges for established travel companies.

In any way, one needs to first perform a careful evaluation of all relevant technology and business needs prior to making the purchase decision. A commonly practiced approach for this is to first run a business analysis and discovery phase. This is a reliable way to avoid many implementation risks and calculate your development budget with precision that eliminates excessive spending.