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Destination management companies have tremendous potential to deliver personalized experiences, but logistical challenges can slow operations and limit growth.
Without the right tools at your disposal, coordinating suppliers, schedules, and services can be overwhelming for teams, slowing down operations and creating bottlenecks that are hard to recover from. This can stand in the way of streamlining bookings, increasing revenue, and keeping your customers satisfied.
According to an article by Skift, The Tech Revolution Poised to Power Tour Operators, “The global tour operator software market is projected to be valued at $1.2 billion by 2026. Some tour operators are spending more than $1 million on technology. But, most aren’t sure what they should be looking for in a DMC software and what exactly that ROI would be, or they may not be ready to make the switch.”
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Why DMCs may be reluctant to make the switch
What is destination management company software?
DMC software is an all-in-one platform designed to help destination management companies streamline their operations. From managing bookings and suppliers to organizing itineraries and handling customer communications, this software makes it easier for DMCs to run their business smoothly without the need to juggle multiple tools.
But, what got us here, exactly? It’s worth noting that several trends in the travel industry are driving the need for DMCs to adopt modern software solutions:
Rising demand for personal experiences: Today’s travelers are looking for unique, customized experiences. DMCs need to offer tailored itineraries and seamless service to stand out from the competition, something that’s hard to do when relying on manual processes.
Increased competition: With more travel companies entering the market, DMCs are under pressure to provide faster, more efficient services. Automated tools enable quicker response times, better organization, and a more professional presentation, giving DMCs an edge over competitors who are still operating manually.
The shift to digital: Travelers expect digital solutions at every touchpoint, from booking to receiving itineraries and communicating changes. DMCs who can’t keep up with this digital demand risk falling behind, as both B2B clients and direct customers gravitate towards companies with more advanced, user-friendly platforms.
Globalization and remote work: As remote work and digital nomadism increase, the global travel industry is experiencing growth in cross-border travel. DMCs need tools that help them manage international clients and suppliers efficiently, handling different time zones, currencies, and languages.
Challenges DMCs face with legacy tools and processes
Historically, manual processes were the only option available to DMCs. The tourism industry operated at a slower pace, and many DMCs served smaller, localized markets where these manual systems were sufficient. Communication between DMCs, suppliers, and clients was typically handled over the phone, by fax, or through physical paperwork. Spreadsheets became a significant advancement at one point, offering more flexibility and control compared to older manual methods.
Sound familiar?
Now that the global tourism industry has evolved, the need for real-time coordination, scalability, and digital solutions has skyrocketed. Travelers now expect instant confirmation of bookings, tailored itineraries, and up-to-the-minute updates—demands that are impossible to meet using the old manual methods.
Why legacy tools are costing your DMC time and money
If you’re not currently using DMC software—or are using outdated tools—you may be facing some of these common challenges, which can impact all aspects of your business:
Inefficiency in managing multiple suppliers: Without a centralized system, juggling contracts, vendors, and services leads to errors and missed opportunities.
Emails and phone calls for supplier coordination: Coordinating with suppliers via endless email chains and phone calls can result in missed communications, delays, and confusion.
Time-consuming manual processes: Outdated or manual booking and itinerary systems are slow and prone to mistakes, which becomes unscalable as businesses grow.
Spreadsheets for managing bookings: Relying on Excel or Google Sheets to track bookings and client information becomes unwieldy as operations scale, leading to errors in data entry and version control issues.
Lack of Automation: Manually handling invoicing, rate updates, and client communications leaves room for human error. Automation can streamline these processes and free up time for more important tasks, saving time and preventing costly mistakes.
Manual financial management: Managing invoices, payments, and financial reports across multiple tools increases the risk of errors and limits visibility into overall financial health.
Difficulties in scaling your business: As your DMC business grows, managing more clients and suppliers without the right tools becomes a logistical nightmare.
Paper-based contracts and agreements: Storing contracts and agreements in hard-copy format makes it difficult to track updates and pricing changes, slowing down negotiations and making scalability difficult.
The business impact of using outdated systems
Scott Rutz, the vice president of sales and marketing for the Lincoln, told Skift, “They [tour operators] had great tools for bookings but not equally as great as tools for working with clients. They weren’t keeping track of e-signatures and proper approval forms for clients. And that left them in a tough spot in terms of liability when they did not have good documentation showing that a client approved the terms and conditions and the cancellation policies.”
As your DMC business grows, these challenges become harder to manage, creating slow-downs and making it difficult to scale. Additionally, relying on outdated methods can harm the customer experience, with miscommunications leading to poor service delivery and less personalized itineraries.
Why DMCs may be reluctant to make the switch
As appealing as it may be to switch over to a destination management company software, it’s not as straightforward as it seems. There are a lot of factors that go into this specific aspect of digital transformation for tour operators, and it may lead them to take a step back instead of taking the leap forward. In fact, most tour operators make bookings through third-party sources.
According to The 2023 Digital Transformation Report by Skift, “...a lot of that money is going into maintaining the status quo. Almost 40 percent of executives reported that their No. 1 priority for technology system and infrastructure investments in 2023 and 2024 is to maintain and upkeep existing legacy systems.” Meanwhile, only 28 percent said they’re priorities for infrastructure investment in 2023-2024 were to modernize their software or hardware.
Some of the reasons for this could be due to concerns about costs, how to choose between DMC software companies, and how to know the DMC software they choose has the features they need.
How to choose the right DMC software for your company
Whether you’re considering moving over from your legacy systems to a DMC software for the first time, or you’re looking to switch over, here are some tips on how to choose the right DMC software for your company:
1. What features should I look for in DMC software?
Centralized supplier management
Look for a solution that allows you to manage all your suppliers—hotels, tour operators, transport services—within one system. This should include tools for storing contracts, tracking rates, and handling seasonal rates.
Automation of repetitive tasks
Automating processes like invoicing, rate updates, and itinerary creation can save hours of manual work. The software should support automatic notifications, booking confirmations, and client communications to reduce the risk of human error.
Customizable itinerary creation
Your DMC software should enable you to easily create and customize itineraries that meet your clients' needs. Look for drag-and-drop functionality and the ability to add personalized touches like branding, real-time updates, and interactive features.
Financial management integration
Destination management company software should be able to easily handle invoices, payments, and financial reports, offering real-time insights into your business’s financial health, while also making it easy to pay suppliers.
Scalability
As your business grows, the software should be able to grow with you. Ensure it can handle an expanding number of clients, suppliers, and bookings without significant slowdowns. Look for flexible pricing plans that allow you to scale up or down as needed.
Real-time reporting and analytics
Being able to pull reports on bookings, supplier performance, and financials in real-time is key to making data-driven decisions. Your software should offer customizable reports and dashboards to provide a clear overview of your operations.
Multi-currency support
If you work with international clients or suppliers, the software should support multiple currencies and be able to automate exchange rates. This ensures seamless payment processing regardless of where your clients or partners are located.
Cloud-based access
A cloud-based system ensures you and your team can access the software from anywhere, providing real-time collaboration and updates even when working remotely or on the go.
Long-term support
Ensure the software provider offers smooth onboarding, comprehensive training, and ongoing support. Look for 24/7 customer service and a knowledge base for quick issue resolution.
Developer integration with existing software
Check if the software integrates easily with your current systems. Seamless implementation by your dev team ensures data flows smoothly between platforms, optimizing your workflow.
2. How much should DMC software cost?
The cost of DMC software depends on your business size, required features, and customization needs.
Most operate on a subscription model, with fees ranging from $100 to over $1,000 per month. Basic plans for small businesses cost between $100 and $300, offering essential features like booking management. Mid-tier plans, from $300 to $700, include advanced tools like supplier management. Enterprise plans, starting at $700, provide custom features and priority support.
Customization fees can then run you anywhere between $500 to several thousand dollars, with setup fees typically between $200 and $1,000. Some providers also charge per booking or transaction, which can benefit businesses with seasonal fluctuations. However, it’s important to ensure this model aligns with your revenue.
3. Questions to ask when comparing DMC software solutions
If you’re comparing two software providers or even two solutions from one provider, here are some questions you’ll want to ask before making your choice:
“What features are included in the base package?”
Make sure to understand which features come standard and which require additional costs. Ask about supplier management, itinerary creation, automation, and financial integration to ensure the software can handle your core processes.
“How scalable is the software?
As your business grows, you’ll need software that can keep up. Ask about scalability—can the software support a larger volume of clients, bookings, and suppliers as your business expands?
“What integrations does the software offer?”
Check if the software integrates with your existing tools, such as CRM systems, financial software, and booking engines. Seamless integrations are key to reducing manual work and ensuring efficient workflows.
“What kind of customer support is provided?”
Determine the level of customer support you’ll receive. Is there 24/7 support available? Do they offer phone, email, or chat support? A reliable support team can make a huge difference in resolving issues quickly.
"What training resources are available for learning the software?"
Ask about the training options provided, such as onboarding sessions, video tutorials, documentation, or access to a dedicated support team. Make sure the provider offers resources to help your team quickly learn and efficiently use the software.
“How secure is the platform?”
Data security is critical, especially when dealing with sensitive client information and payment details. Ask about the provider’s security measures, such as encryption, data backups, and compliance with industry standards like GDPR.
“What is the onboarding and training process like?”
A smooth implementation is essential for your team’s success. Ask how long onboarding typically takes and what training resources are available to help your staff get up to speed quickly.
“Are there customization options?”
Determine whether the software can be tailored to your specific needs. Can you customize workflows, reports, or client-facing documents, such as itineraries and invoices, to match your branding and processes?
“What is the pricing model?”
Clarify the pricing structure, including any hidden costs, such as setup fees, customization charges, or transaction-based pricing. Be sure you understand both the upfront and ongoing costs associated with the software.
“Can I try a demo or trial version?”
A hands-on trial or demo can give you valuable insights into how the software works and whether it meets your needs. Ask if a demo or trial period is available before making a commitment.
How Tour Amigo stands out: A smarter choice for DMCs
Tour Amigo offers a powerful yet easy-to-use DMC software designed to streamline your operations. In addition to all the essential tools you expect—like contract management, itinerary creation, and real-time updates—we provide features that truly set us apart:
Supplier management: Efficiently manage your supplier relationships and product offerings.
Contract and rate management: Simplify complex contracts and rate structures for better control and accuracy.
Multi-day itinerary builder: Create detailed, multi-day itineraries with ease, streamlining your planning process.
Comprehensive reporting: Gain actionable insights with real-time analytics to make informed business decisions.
Travel agent portal: Offer agents a dedicated portal to manage bookings and itineraries with ease.
Automated guest communication: Keep your guests informed with automated, personalized communication throughout their journey.
We offer flexible pricing to meet the needs and budget of your business. Plus, our dedicated customer support team and extensive knowledge base ensure you get the most out of our platform.
Visit our pricing plans, here.
Are you ready to simplify your operations and grow your business? Book a call today and explore how Tour Amigo can make a difference.
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