Tour operators play an important role in helping you reach new guests, new regions, and new types of travel demand. While their model works a little differently from online booking channels, they are a powerful source of reliable business - especially in shoulder or quieter seasons.
This article explains why we recommend offering STO rates to tour operators, how this partnership benefits your property, and why the industry-standard reduced rate is typically around 25% off your RACK rate.
1. Why we recommend providing STO rates to tour operators
STO rates are the specially reduced rates you provide to tour operators for packaging your accommodation with their tours, itineraries, or group products.
We recommend offering these rates because:
They drive predictable business
Tour operators generally book well in advance, and often in larger volumes. This helps you secure a base level of occupancy that you can rely on throughout the year.
They open access to markets your property may not reach alone
International guests, inbound tour groups, long-haul itineraries, and niche travel experiences are often distributed through operators. It’s very difficult to reach those markets directly. These operators bridge that gap for you.
Operators handle the marketing and distribution on your behalf
Instead of spending your own time and budget marketing abroad or in specialist niches, operators take on that responsibility. They bundle, promote, and sell your property within their packages.
Less admin and negotiation
Tour operators typically work with contracted rates and set periods. Once agreed, the process is streamlined, consistent, and far less reactive than day-to-day OTA management.
2. Benefits of Listing With Tour Operators
Access to international exposure
Global operators often distribute through overseas agents, specialist travel companies, and broader tourism networks. A listing with one operator can put you in front of hundreds of potential sellers worldwide.
Higher length of stay and packaged travellers
Guests booked through tour operators tend to stay longer and travel with structured itineraries. This often reduces gaps and improves overall occupancy patterns.
Stronger seasonality support
Operators plan group tours and itineraries months ahead and often run products even in shoulder seasons. This helps fill low-demand periods and smooth out revenue across the year.
Less price comparison
Because packages combine transport, experiences, and accommodation, travellers compare the full offering and not just your nightly rate. This reduces the price-shopping behaviour commonly seen on OTAs.
Professional partnerships
Tour operators value long-term relationships. Once they trust your service, reliability, and consistency, you often become part of their standard product portfolio.
3. Why We Recommend a 25% off your RACK Rate
We typically advise that you offer around 25% off the standard (RACK) rate when contracting with tour operators. This percentage may seem high at first glance, but it’s important to understand the flow of commission within the travel trade.
A Wholesale rate is an STO Rate.
Multiple stakeholders require a margin
Unlike direct bookings or OTAs - where the commission is usually paid to a single platform - the traditional travel trade chain involves several players:
- The tour operator
- The retail agent or travel consultant
- In some markets, an inbound handling agent
- Sometimes a specialist tour designer or DMC (Destination Management Company)
Each entity needs a portion of the margin to make the package viable.
Operators bundle your rooms into full travel products
Tour operators are not just resellers of rooms. They package your accommodation with transport, guiding services, meals, and experiences.
Their margin helps cover:
- Marketing and distribution costs
- Sales staff
- Risk on unsold inventory
- Customer support
- Foreign exchange fluctuations
- Payment delays or credit terms
Your STO rate supports the viability of that entire structure.
25% off your RACK Rate keeps your listing competitive
Because operators compare rates across destinations and suppliers, a standard STO percentage ensures you remain attractive within their offering. A rate that is too high compared to industry norms may push them to book alternative properties.
You still maintain control of your public pricing
Your RACK or BAR rate remains the price you publish for direct customers and OTAs.
STO rates are not displayed publicly, and operators package them rather than selling them as a standalone nightly rate.
This protects your pricing integrity while allowing operators to create marketable, profitable packages.