5 Forces That are Remaking Travel Marketing

By John Koetsier January 1, 2017

A long time ago, the travel industry was a fairly sleepy business. Then came the digital and the massive social and cultural changes of the last three decades, which disrupted the business in astounding ways, and gave travelers more choices and control over their tourism experiences. Here are five of the big forces that are reshaping travel marketing in 2016, and how they continue to transform that massive and expansive travel industry.

The Collaborative Economy

Suffice it to say, AirBnB and companies like it are radically changing the hospitality industry landscape for travelers. One of the big ways that peer to peer stays are filling a unique need is that, according to Airbnb, 72 percent of their available venues are outside of central urban zip codes, versus 26 percent for hotel chains. They also tend to offer lower price points, enabling people to stay, on average, for longer periods of time and in locations that are more suited to their individual needs.

But there’s a lot more to the collaborative economy than home stays, and it’s definitely changing both the core offerings and available amenities at travel providers. Uber, Lyft, Olacab, and Grab are reshaping the transportation industry. Ditto hourly car and bike rental services like Zipcar, GetAround, and Enterprise Car Share. Vayable and Viator enable people to offer individualized activities to travelers, reshaping the tour business. Upaji, FeastWith, and Vizeat empower travelers to share meals with locals instead of only going to restaurants.

And travel companies are also offering on-premise services related to the collaborative economy. Virgin Hotels and Gap, for example, have a deal that enables hotel guests to order and receive “emergency” clothes in their rooms, without visiting a retail store. Similarly, tour operators are also getting in on the game.

Lifestyle Heterogeneity

When I was a kid, Holiday Inns carpeted the highways and byways of the U.S., from coast to coast. They offered a pleasant, “Middle American” experience geared to the needs of that Mom, Dad, and 2.1 children under 12 that supposedly typified who we were as a society.

Of course, that view of American travelers was oversimplified even then. In fact, finding a good fit between travelers and destinations/experience was part of the core value proposition of the travel agent. But now our increasingly fragmented society has yielded an incredible range of travel preferences — and the major companies have responded with offerings geared to a host of different “types.” This goes way beyond segmenting business and pleasure travel!

Hospitality industry leader Marriott Corporation, for example, has 19 different brands of hotels, each geared to different travelers and occasions. There are now four flavors of Holiday Inn among the 13 brands of IHG, each offering unique experiences as well.

Another major player in the hospitality industry, Starwood, focuses on price, amenities, and attitudes/lifestyle as differentiators for its 11 lines. Here’s how they describe one of them, Aloft:

“Designed for global travelers who love open spaces, open thinking and open expression, Aloft is where travel creates possibilities. An affordable alternative for the tech-savvy and confidently social, Aloft caters to the global traveler. With a vibrant social scene at W XYZ bar, modern authentic design throughout and technology that keeps up with the next gen traveler, Aloft is: Different. By Design.”

The ubiquity of data-driven digital targeting and multi-channel marketing makes it possible to pinpoint such psychographic clusters at scale and cost-effectively. This is surely an example of a trend fostered and enabled by the ability to deliver precisely targeted messages and offers to individuals, via digital.

Increasing “Fit” Expectations

We all like choice, and one of the big ways that digital changed tourism marketing l was in enabling us to conduct our own searches and then compare results. Years ago, most of us were delighted with the ability to see dozens of options via online travel sites. Now we expect more from the tourism industry.

But these days, people expect to find the right “fit” from travel and tourism experiences. In this context, fit relates to personal travel style, the purpose of the travel occasions, the sorts of activities you like to take part in once you get there, etc. For example, as you do that search for Las Vegas on your favorite online travel agency site, are you planning a luxurious honeymoon weekend, or more of a bachelor/bachelorette party where you want to save on the room to spend more on activities? Do you like neon flash or understated elegance?

Travel brands have long found ways to collect, remember, and predict customer preferences. Such customer-centric databases were and are key parts of their marketing strategy. But more recently, some have also begun leveraging massive unstructured data sets across their marketing plans to better predict traveler needs and interests via a combination of natural language processing and analysis of massive amounts of unstructured data. So many of the potentially valuable signals people send come from sources beyond search queries and past purchases. Companies like WayBlazer use unstructured data along with signals from more conventional sources to create personalized recommendations that are all about a better “fit.”

Omni-Channel Travel Shopping

Travel is a high-consideration purchase type, and consumers tend to gather information and options from a variety of brands and media properties. Research shows that the average traveler visits 20+ venues for information in the process of researching and transacting a trip.

And they are doing all this considering and comparison shopping on multiple devices — from smartphones, to work computers, to home PCs and tablets. For marketers, this creates a significant data challenge. When consumers send only a portion of their intent signals via one device or platform, it’s tougher to understand the totality of their needs and what would make them happy.

Travel companies do have an advantage at uniting at least some of those signals across devices. Because many travel sites and apps are transactional, travel companies use consumer logins across multiple devices to bring together some of the signals. But very few people shop with only one company or using only one venue. That means that travel companies will need to turn to device graph companies like Tapad and Crosswise to help them bring anonymized multi channel browsing and booking data together and associate it with 360-degree consumer profiles.

The Advent of Companion Apps

We often think about the app category as dominated by games and m-stores. But one of its fast-growing segments is “companion apps” — applications whose primary purpose is not to entertain or drive a transaction, but rather to enhance brand experience. A hotel companion app, for example, might offer self-serve check-in on a smartphone, smartphone-as-room key, digital concierge services, digital room service ordering, and other experiences designed to simplify the traveler’s stay.

Growing evidence shows that an increasingly large segment of the population would like to be able to do everything without ever speaking to a person. In fact, a 2014 Software Advice survey of business and leisure travelers found that 60 percent would be more likely to book with a hotel that allowed smartphone check-in or smartphone-as-room key over a hotel that didn’t.

Digitally-driven self-serve experiences have done wonders to increase transparency and reduce operating costs for travel companies. But the flip side of “no human interactions” is that a key way of differentiating a travel brand — great people — has been eliminated from millions of guest trips and stays. Brands will need to identify other ways to differentiate. With increasingly amazing companion apps, or in mining past guest stays for clues as to likely future wants. Remembering a pillow preference, or ensuring that a single woman is booked into a room near the elevator. Anticipating breakfast orders. Or anything else that gives guests a reason to notice — and build a preference for one vendor over another.

Because there has to be life — err, marketing value — beyond the points program if travel marketing is to build long-term customer loyalty.

Thanks to iMediaConnection for publishing this content first.

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