travel tech insights

There are very few people who haven’t heard the refrain, “I know half my marketing expenditure is a waste of money, I just don’t know which half.” One reason for this saying’s longevity is that it contains a kernel of truth; every travel company would love to know exactly what turns a visitor into a customer – so it could only spend money on what makes that happen. 

The travel agency has seen its share of changes over recent years. Marketing channels used to be called the front door of the agency or the telephone. Then online booking arrived in the travel industry, bringing with it: pricing transparency; e-commerce; new distribution relationships and altered commission structures.

For most travel businesses the first reactions to these changes were reactive changes to their business models – and it made sense. When price transparency drops margins and commissions are shrinking, finding ways to cut costs and increase efficiencies provides more immediate relief than creating new revenue streams with higher profitability. However, in 2016 proactive changes in travel agency business models will likely accelerate, particularly in the area of digital transformation.

To the public eye travel is a straightforward concept focused on destinations, activities, tickets and itineraries. For those who work in the travel industry it’s always been a complicated set of interrelationships between retailers, wholesalers and service providers – made, if anything, even more challenging by the global reach of the Internet. Two of the more visible ways the Internet has changed the travel are: 1) raised customer expectations for a unique and amazing travel experience; 2) price transparency – customers can book much of their travel directly online, or have travel plans in mind and quotes in hand before the first conversation with atravel agent. 

The travel industry has always been a complex distribution system comprised of retail travel agents; wholesalers supplying travel services options including transport, accommodation, tours and attractions; and local tourism resources who contract their services with wholesalers. Over the past ten years this distribution system has been impacted by the Internet as consumers can bypass travel agents and go directly to the local tourism resources. However, for the most part, these basic high level relationships are still intact.

Who are the millennials and why are they important to your travel business? It’s certainly no problem finding articles identifying millennials by the numbers: did you know they check their smartphone 45 times a day, and are 50+% more likely to ditch search engines and email in favor of social networks to find brand content? Or that 44% of them praise or flame product and services experiences with text messages and 38% of them use social media to do the same?

In fact, millennials are a widely diverse group, and any implication it can be accurately characterized by various data points is misleading.Demographically speaking, the group is defined as those born between 1980 and 2000 – or 15 to 35 years old. Does any doubt fifteen year old girls check smart phones 45 times a day? Does anyone believe 35 year old men do the same? The age band is simply too broad to support general  assumptions about specific behaviors, not to mention it also covers the span in which people mature to adulthood: young adolescents go into the group and mature adults come out.