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The Seven Disciplines the Travel Industry Needs to
Master in Order to Grow in 2011


By Tim Gunstone, Managing Director, EyeforTravel
January 2011

Alongside the continuing fluctuating economic situation, soaring food and commodity prices and potential climatic disruption, the travel industry has to master 7 distinct developing disciplines and trends if we want to evolve.

1 Search - Despite Microsoft’s best efforts, Google’s monopoly of this space seems certain. However, our research show that more and more travel companies are finding their SEO efforts no longer reap reward, and its only PPC that gets them up the rankings. Finding a way to make Google communicate why this is could be key. In addition we can’t ignore the ITA / Google deal (which may allow product prices to appear in search) and wonder how the deal will impact on established comparison sites such as Kayak and Skyscanner. Of course innovations from these sites will happen, but let’s find out how and when! In the meantime search is evolving at an incredible rate. How you master maps, and location based services are critical elements for new-age selling. Similarly, it’s important to understand that if you are targeting the growth BRIC markets you can’t rely just on Google and English.

This year we have the following search sites speaking at our European Travel Distribution Summit (May 10-11 in London) – Google, Bing, Skyscanner, Kayak, Swoodoo, Travelsupermarket.com

2 Social Media  - Whilst search is key, it is a select number of social media sites that are gaining huge internet market share and SEO ranking. Facebook regularly attracts more traffic than Google and is now providing a genuine threat to Google’s revenue stream.  What’s really interesting is that early stages of research indicate that the travel industry finds that Facebook is easier to work with as an advertiser than Google. Undoubtedly in a year of seemingly constant travel crisis, social media has proved itself as the way to communicate with customers. However, does this mean that social media sites will cash-in on even more of our industry’s marketing spend? Our research indicates that these sites could be the place where more and more travel companies advertise their products, right at the key moment when so many travel plans are initiated by our potential consumers. One of the main reasons behind this school of thought is that sites like Facebook and Twitter are the starting place for many-a-conversation about holidays and travel. The growth and development of location enabled social networks such as Foursquare, Gowalla and Facebook Places also offer a unique potential to up-sell and target more customers whilst they are on their trip.

This year we have the following social media sites speaking at our European Travel Distribution Summit (May 10-11 in London) Facebook, Foursquare, Yelp, Gowalla, MagicSeaweed, Trip Advisor, SCVNGR

3 Mobile - The one stat that really stood out for me from our 2010 events and research was the 300% growth in mobile traffic in 2010 for the lastminute.com site. When you couple this with Hilton in 2009 reporting a 40 to 1 ROI ration from mobile initiatives you know the travel industry is on the brink of a massive change. The critical travel industry challenge is to build a business model that enables travel providers to make money from their key role in the travel buying cycle.  In order to successfully move (for example) the complex Ryanair ancillary revenue focused website onto an easy mobile platform is no easy feat, but it’s a change which must be made to succeed in modern travel. The potential for tour operators and hotels in this space is incredible! At the moment however, the industry is still battling with whether to prioritize apps or mobile sites as their first move, not to mention juggling how to successfully take mobile payment, plus how to maximise the potential of HTML5. Watch this space!

We have Lastminute, Trainline,Virgin, Ebookers, Expedia’s Mobilizy, Accor Hotels, TUI UK, Cornthia Hotels and  British Airways all commenting on this fascinating trend in London this May.

4 Ancillary Revenues & Merchandising.  – Over the last decade the drive to build ancillary revenues revolutionised the online travel industry. It will continue to do so but there is a huge flaw that no one seems to be willing to address. Mobile browsing will only keep growing yet it still remains impossible to buy an air ticket from an ancillary-heavy website on an iphone. The consumer trend is still to browse a little on your mobile, check out the options, but wait until you are back at your desk where you can adequately search for cheaper products and ultimately purchase travel. It’s only at this point where the customer often changes supplier. I see more and more travel companies selling non-core products through more channels but also the innovators facing a huge challenge if they remain tied to the point of sale revenue generating machines.

This year we have the following companies speaking about ancillary in London this May: Spanair, Hostelworld, Farelogix, Cartrawler and ATPCO

5 Payments and Fraud. The growth of the online travel industry across different markets follows 2 simple stats. Internet penetration and online payment. In 2010 67% of Europeans couldn’t pay for your product online via cc. We examine how your payment capabilities need to match your product and target market. We also look at the ever present threat of fraud and how you can minimise this risk.

6 Revenue Management – it’s the dark art that’s been around for years, get it right and you can explode your profit margin. Get it wrong, and you lose customers for good and create internal chaos. The ever growing number of channels and balancing distribution innovation with what works is also key. How do we move forward with RM, and what are the key industry issues? Certainly how to sell in-hotel and on-flight, plus how to implement RM on a budget or for an independent hotel.

We have the following companies speaking about revenue management at our London show this 10-11 May: NH Hoteles, IHG,  Hertz, Colorline Cruises, Ramada Jarvis Hotels

7 Distribution sales & marketing strategies: partnerships – In our business partnerships and relationships between the intermediaries and the suppliers are an ever topsy turvy seesaw. Right now with various GDS battles raging, plus new channels such as group buying on the up- distribution has never been so hard. Innovation and development with partner companies is the only way to guarantee your hold on the market.  

This year we have the following companies speaking about Distribution marketing strategies and partnerships at TDS Europe: Accor, Ryanair, BMI, BMI Baby, Avis, Citizen M Hotels, TUI, Gap Adventures, Visit Britain, Choice Hotels, Royal Caribbean, Black Tomato, Eurosstar, Eurorail, @leisure group, Expedia

So, to conclude, these issues are based on the countless research calls and emails we make each year to key decision makers in the travel industry to  formulate the agendas for our Travel Distribution Summits. I founded the Travel Distribution Summit in 1997 and it has been leading innovation in the online travel industry ever since. Every year we spend months not only researching what the industry wants to know about, but also identifying what the industry needs to know to move forwards. The results come together this May when over 90 speakers and 1000 attendees (all senior decision makers from all parts of the industry) meet to network and form strategies that will see travel companies reallocate millions of marketing and distribution budgets in order to simply sell more travel and reduce distribution cost.

Hope you can join us. www.eyefortravel.com/tds


About EyeforTravel
EyeforTravel is a leading media company specializing in business intelligence for the travel and tourism industry. EyeforTravel provides a series of senior executive travel conference on a diverse range of topics including travel distribution, online marketing, social media, mobile and revenue management.  EyeforTravel also provides some of the most in depth research into global online travel markets and trends. For more information visit www.eyefortravel.com
 
Contact:

Rosie Akenhead
Event Director

rosie@eyefortravel.com
0044 (0) 207 375 7229


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