By Tim Gunstone, Managing Director, EyeforTravel.Somehow, despite nervous CFOs and minimal investment, brave marketing and distribution professionals have continued to innovate in the online and mobile channels with phenomenal success.

Published: 10 Mar 2010

By Tim Gunstone, Managing Director, EyeforTravel.

Somehow, despite nervous CFOs and minimal investment, brave marketing and distribution professionals have continued to innovate in the online and mobile channels with phenomenal success.

In November 2009 we reported how Hilton, one of the world’s biggest travel companies, reported a ROI of 44 to 1 from its mobile web investments. This is in the face of the global travel industry shrinking by over 2%. This struck me as being incredibly important. It demonstrated that while our industry may not have grown over the last 2 years, it has evolved enormously.

You are probably aware of some of these changes and are already exploiting them. However, if you (like most companies) have had to cut back on research, let’s face it you are working blind.

We have been researching and running conferences on travel distribution since 1997. That means we consistently analyse the industry and identify the game changing trends, and subsequently invest hundreds of thousands of pounds into running conferences and commissioning research on these core areas. On the back of our research to date this year, I wanted to share the areas I feel you need to focus on and invest in for 2010. I’d love to hear your feedback!

1. Online sales and channel management: With the European online travel industry growing at over 10% per year and the offline channel shrinking at 6% you need to be exploiting this key distribution channel. By 2012 we predict UK online sales will be bigger than offline. You need to understand how to sell online and across multiple channels, including your own website, third party distributors, high traffic non-travel websites, mobile networks and social media. How travel companies get the right balance between maximising their reach online, and minimising the cost of sale will be a key differentiator of success in 2010 and beyond

2. Social media: Basically, in the last two years the debate has fundamentally shifted from “should we take social media seriously?” to “How the hell do we manage this revolution in communication?” How we all communicate with, market to and engage with our customers has changed forever. Travel companies, large and small, need to embrace social media – or risk losing credibility and market share. But you need to get it right. A clumsy, badly planned social media strategy will do more harm than good, eroding trust and damaging your brand. You need to set the right vision, KPIs and strategy for your business and ensure that you are tracking and measuring your social media initiatives effectively.

3. Mobile: Mobile web browsing is soaring. It shot up by over 67% in the USA last year and is predicted to grow by an average of 30% per year until 2013. By 2014, experts forecast that mobile browsing will the dominant method of accessing the web. That’s just four short years from now! Major Travel Multinationals are reporting ROI on mobile initiatives at over 400%. The biggest companies in the space, Apple, Google, Nokia, Blackberry, Facebook and Amazon are fighting to control this lucrative fast growing market. If you sell online you need to know how to sell over mobile. It’s a very different medium and offers a host of new opportunities and challenges.

4. Search and online marketing: how consumers search for travel related products online is constantly changing. In order to maintain visibility on the web, travel companies need to adapt their search strategies to take into account more complex search terms, localised search, multi-lingual search and real time search results (e.g. Twitter feeds on Google). As the same time you need to ensure that your search strategies dovetail into your wider online marketing efforts so that your display advertising, PPC campaigns and web content inititaives drive qualified, measureable traffic to your site.

5. Ancillary and merchandised revenue: The airline industry will make over US$58 Billion from the sale of non core products this year (CAPA). The growth of online and the potential of mobile will enable the whole travel industry to sell far more than its core product in the next few years. If you have a large customer base, then the opportunity to up-sell and cross-sell ancillary products is enormous – and extremely lucrative. What’s more, a well executed ancillary strategy can help increase customer satisfaction and retention.

However, this is a sensitive area, and you need to be aware of the pitfalls. Get it wrong and you could easily damage your brand and alienate your customers. The potential is huge but will take investment in technology and in creating the right partnerships.

6. Online payments and fraud prevention: The growth of the online travel industry across different markets follows 2 simple stats. Internet penetration and online payment. Right now over 67% of Europeans can’t pay for travel products online via credit card. Payment capabilities need to match product and target market, an area often overlooked by travel companies used to operating in more credit card friendly markets. Fraud is also an ever present threat, dramatically highlighted by the collapse of the Globespan and e-Clear businesses earlier this year, but an expensive problem for many travel companies.

I founded the Travel Distribution Summit in 1997 and it’s been leading innovation in the online travel industry ever since. All these issues and more will be covered and debated in depth at this year’s Summit, which is taking place on 17-18 June at the Business Design Centre in London.

For full agenda information, go to http://events.eyefortravel.com/tds/index.php/conference/agenda-overview

To see a list of the 100 speakers at the event, go to http://events.eyefortravel.com/tds/index.php/speakers

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