Kickbacks & Commissions on International Tours a Vacation Reality

    Storefront Tour Operator Promoting Bus Tours - Alvin Starkman

Storefront Tour Operator Promoting Bus Tours – Alvin Starkman

Kickbacks to hotels from guides, &  commissions to craftspeople & other vendors from tour operators are facts of life in tourism. Learn the signs & options.

International tourism, especially but not exclusively in third world and developing nations, is often rife with kickbacks from tour operators to hotels, and commissions from retailers and craftspeople to those same tour operators. A poorly paid front desk clerk or a hotel manager / owner of questionable ethics has a choice of to whom he or she recommends patrons for a tour of a city or surrounding towns and villages, and may use discretion unscrupulously. A guide, driver or tour operator has options regarding where to take the naive tourist, and for how long to visit each stop.

Tour Options for Travelers on a Vacation to a Third World or Developing Nation

Tourists have several options in terms of how to go about arranging to see sights and embark on craft buying outings in the hinterland surrounding a vacation destination city. They include:

  • online resources before the vacation begins or upon arrival
  • referrals from friends and relatives who have visited the same destination
  • waiting until approached on the street by a supplier of touring services such as a tour operator, private guide or driver, or cabbie
  • using public transportation such as second class bus service, with guide book in hand
  • walking into a storefront tour retailer
  • asking for a recommendation from a hotel employee, either before arriving at the city, or after arrival at the vacation destination
  • using touring services posted in hotel lobbies or through a tour operator with a kiosk right in the hotel

The Hotel Recommendation for a Particular Tour Guide, Driver, or Tour Company

Lodgings often get kickbacks for every tourist or group of tourists recommended to a particular service provider. It’s a fact of life. The difficulty is knowing if the recommendation is based upon the hotel employee receiving a significant kickback, or sincerely believing in the quality of service which will be provided by the guide, driver or tour company. There’s nothing inherently wrong with a hotel receiving a sum of money. Sometimes tour companies insist upon providing a token of appreciation. The problem arises when hotel staff provides recommendations based predominantly upon what’s in it for them.

Starting Proposition When Selecting a Tour Company, Guide or Cabbie; and the Exceptions and Qualifications

One can begin with the proposition that the more it costs to go on a tour, the less likely that the tour operator or guide / driver is being motivated to take you to particular attractions, and stay there for a designated period of time, based on making commissions. But any rule of thumb must be approached with caution. There are ways to determine, on balance, if the proposition applies in a particular set of circumstances:

  • If the cost of the bus or van tour is extremely modest, and there are few other tourists signed up for the day, do the math. How can the tour operator afford to pay a driver and for vehicle upkeep and gas, unless the driver or tour company relies on hefty commissions? Of course there are exceptions, such as the tour company having an off day in terms of numbers, or wanting to keep staff employed during slow season. The other side of the coin is that there are in fact private guides who charge a lot, and still want their commissions.
  • If the route concentrates on visits to sights close to the city, it could be a signal that the company does not want to spend very much on gas, and again is motivated by attending several nearby stops where high commissions can be secured. Is the most distant point of the day’s route less than a half hour from the city of origin? On the other hand, time constraints could be a rational explanation.
  • If the time allocated at craft villages or stores seems out of line compared to the time proposed for visits of a more ecotourism or panoramic nature, or activity-oriented, it could signal that the idea is to spend a lot of time where vendors can ply their wares using pressure tactics, and only a token amount of time at the other sights where commissions are not an issue.
  • Can it be ascertained if there is a specific reason for stopping at the workshop of a particular craftsperson or retail outlet? Commission could be the motivator. For example, the percentage paid could be high, or the prices charged by the craftsperson or retailer could be elevated relative to the quality of product, similarly resulting in significant earnings for the service provider even if the percentage paid is modest.

How to Resolve the Kickback and Commissions Issues When on Vacation and Wanting to Tour

As suggested above, there is nothing inherently wrong with a hotel receiving money in exchange for recommending a particular tour guide, driver or tour company, as long as the payment is not the determining factor. As a general rule you get what you pay for. A cheap tour frequently ends up costing more in the end, if the service provider is not primarily motivated by the best interests of the touring client. A private guide or driver who charges well, perhaps by the hour, on balance will provide the best, and of course personalized service. Be vigilant, and learn how to determine if the commissions issue should be a factor in deciding upon a particular provider of touring services. But remember that this is only one dimension of international tourism and the motivation of a guide or tour operator may be to earn a living in a completely aboveboard fashion in an effort to consistently provide value-added service.

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