Conundrum of Tour Commissions

Tour Commissions paid by retailers and craftspeople to tour guides and operators is a fact of international tourism. Learn to avoid its adverse impact on you.

Many craftspeople and retailers throughout the world pay tour guides, tour operators, and even taxi drivers commissions on the sale of product of between 10 – 35 percent; sometimes even more. Some even pay a flat fee just for bringing a group of tourists into their store or workshop, on top of commissions. Payment of commission in international tourism is a fact of life, although it doesn’t always happen, and it is not something which tourists should necessarily try to avoid when deciding upon a particular tour service provider, or proposed stops on a day tour.

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In a typical scenario, a tourist decides on a range of sights of interest; some craft demonstration and sales oriented, others activity based (visiting historical sites and ruins, churches, galleries and museums), and still others centering upon nature, the outdoors and photography. It’s within the context of visits to the first, when commissions are sometimes paid.

Commissions Are Not Always Paid to Tour Guides & Operators on Sales to Tourists

There are three main reasons why some craftspeople do not pay commissions to tour guides and drivers:

  • The workshop may have a set policy from which it rarely if ever deviates, knowing that it will make sufficient sales without the help of guides and drivers, or believing that tour guides will nevertheless patronize the craftsperson’s retail outlet for one or more of a variety of reasons.
  • A craftsperson may wish to keep prices as low as possible, believing that tourists and guides will gravitate to the particular shop, the former based on knowing the reputation for rock bottom prices, and the latter with a view to providing value added service. It could be anything from travel souvenirs to travel gears or even artefacts.
  • A weaver, potter, wood carver or sculptor may have a reputation for producing the highest quality in the class, or manufacturing a product which no others make (i.e. miniatures, or sculptures made of recycled metal or wood), and therefore believe that uniqueness and quality will drive business without the need for paying commission.

Payment of Tour Commissions is Not Always a Bad Thing

A tour guide on a small personalized tour may in fact end up acting as an interior designer or consultant when visiting craft workshops, and provide valuable advice. The guide might be working on a fixed daily rate, and spend an inordinate number of hours with clients above and beyond the call of duty. Since some tourists don’t tip once they have established a rate, a modest commission is arguably in order if the client gets what he wants in spades.

Reasonable tour commissions paid to a driver or guide is often indicative of a healthy symbiotic relationship between guide and service provider, which in the end benefits the client, any way you look at it. Furthermore, payment of a modest commission should not take the ultimate sale price of the product out of the range of reasonable.

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It’s the cheap tour, where a relationship between bus or van driver and client never develops, and between driver and craftsperson is strictly business, which should be approached with caution.

How to Determine if the Tour Guide is Motivated Primarily by  Tour Commissions

There are indeed ways to determine if on balance your tour service provider is working for you or more so to line his or her pockets above and beyond wanting to receive a reasonable salary:

  • Find out in advance how much time will be spent at each stop on the itinerary, and if the agenda seems out of line (or not what you anticipated); ask the rationale. Two hours at an Indian rug weaver’s shop versus 20 minutes at the Taj Mahal should raise a red flag.
  • Ask for details of the itinerary in terms of particular workshops and the like, and inquire why craftsman “X” versus “Y”. This means doing one’s due diligence in advance by reading. But remember that journalists, writers and travelogue publishers also fall prey to the commission conundrum without realizing it, so don’t rely entirely on the literature.
  • If using a private guide, and if you have done some reading, ask about going to workshops or stores which you have read about, and if there is resistance, probe further. But remember that your guide is, in theory, a professional who knows his business and the vendors much better than you.
  • Suggest non-sales based stops, perhaps of more historic interest such as colonial churches or ruins, or hiking trails and panorama if that interests you. If on an organized tour this will not be possible, but if you’re hiring a private guide or driver, you should be able to control the day.

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  • Ask your hotel desk clerk or manager for more than one recommendation, and the pros and cons of each.
  • If using a tour guide or driver, before committing ask for testimonials. If booking using the internet, written recommendations should be forthcoming.
  • Consider making arrangements for touring before embarking on your vacation, so that you can do your homework from a position of strength, without being under the gun to make reservations in the midst of a one-week vacation. Having the day marked out in writing should provide a level of comfort.
  • Ask your hotel manager why a particular guide is being suggested? Ask to speak to other hotel patrons who have used that service within the past few days with a view to confirming the advice of hotel staff.

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  • When speaking with fellow tourists who have used the service, be up front with concerns. For example, it’s appropriate to ask if an inordinate amount of time was spent at the workshop of a craftsperson, and if there seemed to be any pressure to buy – relative to the amount of time spent at an activity based sight or other stop where money would simply never change hands.

The Key to a Fulfilling and Enjoyable Day of Touring While on Vacation

The number of vacation weeks you take in a year might be extremely limited. It’s therefore important to get the most out of each vacation day, tours included.

Assess the pros and cons of each touring option, and remember that tour commissions are often a part of the touring experience, not always to be shunned.

3 Comments

  1. Well written and very informative article. Could you write about the general Dos and Don’ts while travelling abroad and about money exchange-what, where and how to do it, the right time etc.?

    1. Sure Deepika. I’ll take that as a feedback and write a post on that.. Atleast some of the principles I follow during an international travel

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