The travel industry has long been at the forefront of technology adoption. Some of the most successful businesses to survive the dotcom bubble of the early 2000s were travel companies – notably Expedia, lastminute.com and priceline.com – all of which still exist today.
What seems surprising now is that some of the leaders of the traditional tour operators and airlines were skeptical of whether this “Internet thing” would catch on.
Stelios Haji-Ioannou, the Easyjet entrepreneur, famously stated the Internet was “just for geeks” before proclaiming that it was doubtful if Easyjet customers would use the web to book flights. However, initial traffic volumes for easyjet.com proved encouraging enough for him to change his mind and in April 1998, Easyjet began selling flights online. The business he founded now turns over more than £600m a year and employs over 10,000 people – with over 99% of flights now booked online.
Low-cost carriers and online travel agencies have clearly benefited from the online travel revolution over the past 15 years but hotel groups have also done similarly well.
Marriott, the world’s largest hospitality group, reported revenues of over $3bn in 2015 – a 24% increase on the previous year. Similarly, the InterContinental Hotels Group announced revenues of $1.8bn in 2015 which it attributed to the investment in mobile. The IHG mobile app delivered over 40% of all digital visits and contributed more than $1bn in revenues, up from less than $50 million in 2010.
Developing slick sites and mobile apps that will delight users and generate sales isn’t easy or cheap. The Four Seasons famously spent $18 million on their mobile-optimised website in 2012. In 2016, the industry continued to invest heavily in technology, content and digital marketing and there is a lot that other sectors could learn by looking at the technology and digital approaches being adopted by some of the largest players. Here are some of the things we think they are particularly good at.
The travel industry is inherently global and has always catered to international customers. As a result, the sites of hotel groups and airlines have a high level of localization and deliver content in a huge range of languages.
Easyjet’s website is available in over 20 languages including Chinese and local varieties of French for Belgium and German for Switzerland.
Easyjet offered content in French and Spanish as early as the year 2000. Even in the US, the top airlines are well localized for global audiences with both Delta and United Airlines providing site content in Spanish, French, German and Chinese among other languages.
A good SEO strategy is important for any business but for the travel industry it’s critical. Travelers are notoriously disloyal. And they seem immune to loyalty programs. In fact, as far back as 2012, there was evidence that travel companies that spend more on loyalty programs perform slightly worse than those that don’t.
As far as many people are concerned flights and hotels are largely the same and cost is the primary determining factor in most consumers’ decision-making process.
This explains the huge volumes of searches for generic terms like “cheap flights” or “Paris hotel” over brand terms.
Low brand loyalty breeds intense competition but it also fosters innovation. To avoid a race to the bottom, savvy travel marketers have ensured that their sites adopt all of the best practices regarding on-site SEO, page speed and mobile performance in particular, app development and improving the user experience both on and offline.
Travel sites – particularly hotels and airlines – are typically properly configured in terms of their hreflang tags for referencing multiple languages, canonical tags for consolidating link equity for near duplicate content and the use of content delivery networks like Akamai or Amazon Cloudfront to serve static content like images and video quickly to users around the world and to improve page load times.
The travel industry was one of the first to create editorial content to answer specific questions that would-be buyers might ask before they decide on an operator and embark on their trips.
Innovative travel marketers were some of the first to recognise the value of storytelling and using creative copywriting techniques along with stunning imagery to entice users and ultimately sell travel products.
Booking.com uses inspirational content to engage with users –aligning user segments with interests and activities with content such as “the world’s top volcanoes” for the adventurous or “a taste of Tuscan cuisine” for food lovers. This is a good way to reach consumers during these early stages of their holiday research and allows them to capitalize on the long tail which is becoming even more important as consumers independently research their trips online and visit a huge range of sites before arriving at a decision.
The large players in the travel industry are highly incredibly adept at getting you to part with your cash and employ a range of psychological techniques to ensure that happens. One of these is loss aversion.
Loss aversion refers to the tendency for people to strongly prefer avoiding losses than acquiring gains.
Some studies suggest that losses are as much as twice as psychologically powerful as gains so loss aversion is a powerful tool for getting customers to commit to a product.
We all experience a bit of FoMO (Fear of Missing Out) online and many hotel booking sites capitalize on this. For instance, Expedia often displays a message on its site stating a small number of rooms available in the particular hotel you’re looking at or additional messaging boldly asking customers to not “Miss Out” on the deal accompanied with ticking clock icon and red text.
Booking.com goes further with a digital clock ticking away while you’re reviewing your choice and shows you that a large number of other site visitors are also considering the same hotel room that you are.
Purchasing indecision can also derail buyers – even towards the end of the decision-making process. Booking.com and Expedia both attempt to eliminate all distractions by removing the navigation elements from the page and limiting all call-to-actions to only those that will allow you to complete your booking.
The largest high-street travel agencies in the UK are on a mission to deliver immersive, in-store experiences to customers before they embark on their trips in an attempt to foster brand loyalty.
TUI is betting on its Thomson brand and has scrapped expensive brochures in favour of enhancing in-store experiences with virtual and augmented reality.
Thomson has recently integrated touch-screen devices, iPads and interactive maps into their stores with more than 120 stores planned for the upgrade in Europe – and even distributing “smell generators” that replicate the smell of sand to entice customers to the beaches.
Travel industry disruption
While this all sounds very futuristic – the travel industry can’t be complacent as there are significant risks to the growth of the businesses previously discussed posed by digital disruptors and the sharing economy. According to a recently released a report by Morgan Stanley and AlphaWise – Airbnb poses a significant risk to the status quo.
Airbnb could slow down the growth in hotel revenues by almost double what analysts previously predicted.
According to the report, growth in the number of people who use Airbnb instead of hotels has been higher than expected. Pi Data Metrics also produced a report that showed hotel and accommodation-based searches declining significantly in 2016, a trend which they attributed to the “Airbnb factor”.
Airbnb is now working with Alain de Botton to create a travel company that actually delivers on its deep psychological promise to each and every traveler.
What’s not quite clear is how this sentient business might be able to “disrupt” the screaming babies, annoying friends, overzealous airport security or unpredictable weather.