Ask-An-Advisor: Why Would I Use a DMC Instead of a Tour Operator?

This is 2024’s second edition of TMR’s Ask an Advisor series, a regular column where a team of travel advisors tackles questions from others in the industry. All questions from this series have been submitted by readers and vetted by the TMR editorial team. The second 2024 question comes from a relatively new advisor with questions about using a destination management company (DMC) with their client.

Dear Ask-An-Advisor,
I am a relatively new travel advisor and have a question I’ve been too embarrassed to ask anyone I know. I have some clients interested in doing a FIT tour, something I’ve been getting more comfortable with, and I was going to use a preferred packaged tour operator to put it together, which I’ve done a few times now. However, some of my colleagues have been telling me that I could, and maybe should, use a DMC to plan the trip instead.   I don’t understand the benefits, or the negatives, of using a DMC instead of a tour operator. I’m afraid that using a DMC might be more work for me, too, and I’m unsure if doing so would even benefit my clients that much. But other advisors seem pretty convinced that it is the way to go. Help!

Melinda Fortunato, Owner, Best Travel

DMCs offer in-depth knowledge, local relationships, and intimate familiarity to craft custom itineraries tailored to your client’s unique interests. Their capability goes way beyond tour operator cookie-cutter itineraries. Plus, their local support means that in-travel problems can be addressed immediately. This all leads to a seamless experience for your clients. Working with a DMC can be very similar to a tour operator.

Interview DMCs so you know that their processes align with your business. Ask about the experiences they create and the questions below for more insight:

-How do you present itineraries (Travefy/AXUS/PDF)?
-Can you white-label the itinerary so my logo and business name are on it?
-What is your turnaround time for an itinerary?
-Do you work with a net/gross rate?
-How do you process payments? (Payment link with your clients’ card or wire transfers)
-Do you plan only private tours or, also, small group tours?
-Do you have relationships with 4 and 5-star hotels?
-Can I book hotels separately from the itinerary?

Every itinerary may not be ideal to use a DMC. A DMC’s value shines with private tours, transfers, and authentic and exclusive experiences. A low budget trip with standard group tours works best with a tour operator.

Our travel partner relationships are as important as our client relationships, therefore, you want to respect their time and expertise. Here are a few guidelines.

-Don’t price shop by asking multiple DMC’s for one trip. Work with one and communicate your needs.
-Do charge a fee & qualify your client well. Share as much detail as possible about your client.
-Do hop on a call to discuss the itinerary adjustments. It’s so much faster than emails back and forth.
-Do hop on a call with the DMC & your client. It’s impressive to have international partners. This can help close a sale and it’s a fantastic opportunity to discuss the final details before travel.

Remember, stepping outside your comfort zone is how you grow professionally. Working with a DMC will make you a rock star to your clients!

Melinda Fortunato is a passionate travel advisor in the Washington DC area with over 10 years of experience and a lifetime of travel experience as a military wife and child. She is the owner of Best Travel, a luxury travel agency that provides high-touch service and custom travel planning. Melinda actively advocates for the travel advisor industry as a Champion for Women of Travel Leaders, ASTA Mentorship Committee member, Nexion Advisory Board, and Past President of the ASTA Central Atlantic Chapter. 

Angela Hughes, CEO, Trips & Ships Luxury Travel

Choosing between a DMC and a tour operator depends on your client’s travel style, budget and what they want from their trip. Make sure to understand their needs first.

Working with a DMC is great because they know the local scene inside out. They can show you hidden gems, get special deals, and create personalized itineraries. They’re flexible with last-minute changes and pay attention to detail, which helps everything run smoothly. Plus, you’ll be supporting the local economy. But, they can be pricey, and managing multiple destinations can be tricky.

Tour operators, on the other hand, offer convenience with all-in-one packages that cover flights, hotels, and activities. This makes booking simple and often saves money due to bulk discounts. They’re good at handling complex itineraries and provide 24/7 support, making group travel easy and stress-free. However, their trips can feel less personalized and may miss unique local experiences. The quality can vary, and not all the money spent stays local.

Pick a DMC for a tailored experience and a tour operator for convenience and value.

Angela Hughes, CEO of Trips & Ships Luxury Travel and Luxury Travel University, is a trailblazer in the luxury travel industry. She leads a talented team of advisors, curating bespoke, high-end travel experiences that exceed client expectations. Angela’s passion for travel and education is evident in her work with Luxury Travel University, where she empowers professionals with the skills and knowledge needed to thrive in the luxury travel market.  

Jennifer Doncsecz, CTIE, President, VIP Vacations Inc

There are many benefits to using a DMC including their knowledge, expertise, and relationships directly in a specific destination.  DMC’s are responsible for taking care of your clients once they arrive at their destination and can help provide a hassle-free experience.  If you find yourself developing a niche in a specific destination, you could benefit from utilizing a DMC to be your “go to” in that destination. I have leaned on several DMC’s for specific countries in Europe and trust them to take good care of our VIP clients.  Keep in mind that it is very important to seek advice on using reputable DMCs and I would suggest you reach out to your consortia for recommendations.  When comparing what is best for you, you should also find out how the DMC pays commissions and how they accept payments. 

Finally, in an era when we are juggling a lot, efficiency is key, so using your preferred tour operator to handle transfers and excursions might be more beneficial as not only does it save you time, but your commission on the FIT is listed under 1 reservation and rolled into the total booking. 

Jennifer is a nationally recognized travel expert. As president of VIP Vacations Inc., Jennifer has distinguished herself as one of the top travel agents in America. Having received numerous industry awards, Jennifer uses her position to educate consumers as well as travel professionals on how to create amazing memories through travel.