The travel industry is booming. According to a 2019 Deloitte report, US hotel gross bookings grew from $116 billion to $185 billion from 2009 to 2017. In the same period, airline revenue also grew, from $155 billion to $222 billion:
For airlines, hotels, restaurants and other businesses across the world, there are now better ways to serve customers as well as target them with relevant marketing messages online. With all these new opportunities, though, comes some uncertainty and obstacles. Here, we outline seven marketing challenges in the travel industry today and how they will impact the future of businesses in the space.
Personalization has become very important in many different aspects of the travel industry. It’s necessary not only for capturing audience attention with your marketing message, but also providing a good customer experience.
Regardless of whether someone is traveling for business or pleasure, they appreciate and expect personalization, and businesses are doing everything they can to incorporate it into their service. Delta Airlines, for example, uses personalization technology to help flight attendants provide assistance to their corporate clients and includes offerings such as onboard amenities, special offers, information about connecting flights, etc.
Hotels can also capture extensive microdata about their guests and use it to provide a more intimate experience. Guests interact with the hotel in many different ways during their trip: at the check-in counter, in hotel restaurants, with room service, in spas, and more. These are all opportunities to collect data and learn about guest preferences.
Capturing and leveraging this information, though, are two different things entirely.
Hotels need to have systems in place to collect this data and connect it to their customer relationship management (CRM) platform to automate personalizations that encourage upgrades and repeat bookings. Say a previous guest spent every day of their week-long stay on the golf course. They could be retargeted with a relevant marketing message promoting discounted tee times.
Advertising is no exception to the personalization needs of travelers today. According to a recent report on travel advertising, personalization is the number one challenge for travel marketers today, with nearly half (46%) reporting that delivering personalized ads and offers in real-time is a top challenge for 2020.
Probably the biggest personalization opportunity for advertisers in the travel space is catering to the interests and desires of individual audiences. For example, young people today are less interested in luxury and relaxation and more interested in experiences when they travel:
Aruba.com does a great job of this with the targeted ad shown above. They also follow through on-site with MyAruba, an interactive feature allowing you to build your own itinerary of favorite places and experiences:
Personalization isn’t just about ad targeting. It’s also about providing people with the autonomy and customization features they need to build the travel experience they want.
2. Keeping Up with New Technologies
Technology is constantly reinventing industries decade by decade, but the real impact new technology has had on the travel industry throughout the past 10 years is impressive. Back in 2010, hotel and airline apps were just getting started, yet now they are just as important to the travel industry as other major businesses.
One prominent example of new technology that businesses in travel need to get a jump on is dynamic pricing. Airlines and hotels can use factors such as time of year, day of the week, and corporate versus leisure travelers to estimate the right price point to drive conversions. Using technology backed by artificial intelligence, it’s possible to make these adjustments based on the daily changes in market demand. Some pricing engines have the power to update fares as often as every 15 seconds, and businesses are starting to see the huge difference this makes in bookings.
The problem facing travel marketers, though, is that taking advantage of dynamic pricing requires much more than just investing in new technologies. The challenge businesses have is reworking their entire data management process, including integrating CRM and revenue analytics.
New technologies bring fresh opportunities for marketing and sales, but they also bring new competition. Airbnb is a prime example of this. The home and room rental platform helps travelers book accommodation at a fraction of the price of regular hotels. It also does an excellent job catering to personalized needs by offering rentals with work and pet-friendly spaces, a kitchen, and all the other “home” amenities people want that most hotels don’t offer. 49% of Airbnb users use it as an alternative to hotels.
Today, most businesses in the travel industry are only competing with Airbnb by playing catch up. Booking.com has started home-stay style listings in addition to hotels. Expedia purchased Home Away, another non-traditional rental marketplace, to enter the field. Travel businesses need to be prepared to either embrace this style of accommodation or else make changes to compete against it.
3. Embracing New Opportunities
Marketing channels are constantly introducing new features and content formats that businesses can use to promote their offerings. This is especially true with social media. Airlines and other businesses in the travel industry have a social presence, but they often struggle to keep up with the latest opportunities to market on these platforms.
Look at Facebook’s travel ads, for example. These are dynamically generated ads that populate with information based on an individual’s travel interests. Say someone browsed hotels or looked at flights. Airlines, hotels, and other travel businesses can target Facebook ads based on specific dates, destinations, and other trip details:
Other new ad types such as Instagram Story Ads also offer businesses a unique opportunity to reach audiences directly. But, since these are largely video-format, travel businesses need to be prepared to invest in marketing creative that captures attention and encourages action. Once they do, businesses can also take advantage of Facebook video ads as well as YouTube advertising to reach their audiences with a more engaging marketing message.
Competition on search networks is so stiff that most travel businesses invest the bulk of their marketing budget in paid search, largely bypassing social. However, they really can’t afford to ignore the new features and targeting capabilities on social anymore.
Google is a problem for travel marketers that most don’t realize they even have. Google offers all sorts of features for marketing: paid search ads, Google Hotel Search, Trips, Maps, and more. But these opportunities also essentially serve to help Google monopolize marketing in the travel space.
Google’s ecosystem of products tends to favor itself. Google Flights is a feature that allows travelers to book right from the search results. The fact that it appears above organic results really encourages people to use it over other options like Expedia or Kayak.
What Google deems to be features that improve user experience actually just encourage people to use its other properties. Another example of this is Google Trips, which makes travel recommendations for people based on information gleaned from their Gmail account.
This rising monopoly of the travel industry leaves businesses with a conundrum. Many feel they have no choice but to invest the entirety of their marketing budget into Google properties. And even then there’s no guaranteeing Google will recommend their business in search results.
There’s not a whole lot that businesses can do about this particular marketing challenge just yet, other than to keep a diverse strategy and be patient. Google has been fined for favoring its own products before, and the issue of its monopoly with the travel industry is currently under discussion with legal bodies.
5. Voice Search
Voice search is a growing concern for search engine marketers in every industry. Alexa, Siri, Google Home, Cortana, and other technologies encourage and empower people to use voice search to get the information they need. This is particularly true for travel-related queries. According to Travelport research, nearly half of travelers have used voice search to help manage travel.
It takes a lot of work to optimize your content for search engines in general and considering voice search as well is even more of a challenge. People use voice search differently than they do normal search queries. Here are a few of the main things you can do to optimize for voice search today:
Target conversational keywords
People using voice search are much more likely to use long-tail keyword phrases in their queries. For example, instead of saying “hotels in Boston,” they might say “show me hotels in Boston near the Museum of Fine Arts.” Travel businesses should create pages optimized for these long-tail queries to capture more traffic. Creating a detailed FAQ page is a great way to do this.
You can discover voice search keywords using Google Search Console. There’s also many third-party tools designed to help you brainstorm long-tail keywords. Answer the Public, for instance, shows you common questions people ask related to specific keywords:
Use schema markup
In order for smart devices to offer your site information as a query result, it needs to be sure your information is really the kind of content the person is looking for. Rather than let the machines guess, it’s better to encode your content to help it identify what the information really is. This is universally done using schema markup. It’s a standardized vocabulary that you embed into your website’s HTML code. It effectively labels your content. Say, for example, you have a hotel suite listed with two bedrooms. Using schema markup to indicate the number of rooms helps ensure your listing shows up when people voice search for “hotels in Boston with two adjoining rooms.”
Optimize Google My Business
Optimizing your Google My Business information is a good idea for SEO in general. When people search for your business specifically, your Google My Business information will show up right in the search results:
In today’s digital climate, with nearly all voice searches being for local businesses, it’s even more important to keep this information up to date. Including relevant information such as your address, availability, and amenities makes it easier for voice search to pull up your listing in reference to specific voice search queries.
6. Reputation Management
Particularly in the age of social media, reputation management is incredibly important for businesses in the travel industry. Airlines, most noticeably, are renowned for receiving negative publicity when customer service issues arise. Every effective marketing program should include strategies to minimize bad PR and address customer service issues quickly.
80% of consumers today use social media to engage with brands. Often, unhappy customers will post right on your Twitter or Facebook page with their complaints. They can also leave negative Facebook or Google reviews. Travel industry businesses need to have a person (or team) in place ready to address issues and minimize negative reviews.
This is especially important for SEO. When a hotel or other business appears in local search results, reviews are also a part of the listing. Having a number of negative Google reviews can decrease clickthrough rates, not to mention limit sales.
What many marketers in the travel space don’t realize is that reputation management isn’t all about damage control. You should make real efforts to encourage positive reviews and publicity as well. Businesses can encourage positive reviews through email campaigns to happy customers. Creating your own hashtags and asking customers to share their experiences with your business is a great place to start.
7. Achieving ROI from Advertising Investment
Travel businesses can invest a lot in different marketing initiatives, but getting a good return on investment from your efforts is a challenge. 45% of businesses in the travel industry say achieving ROI with advertising is a top pain point today.
It’s important for travel businesses to invest heavily in advertising to maintain visibility in a crowded market and stay ahead of the competition. But the key to success is making micro-optimizations to your strategy that add up to improved ROI. There are technologies and strategies out there that can reduce wasted ad spend while simultaneously increasing bookings or sales. All travel businesses need to do is find the right options for their marketing goals and the needs of their target audience.
A great example of this in action is isango!’s collaboration with QuanticMind. Isango! is an online travel agency once faced with razor-thin margins on their travel products. By partnering with QuanticMind’s customer success team and utilizing their data science-driven bidding technology, they were able to grow their marketing contribution by more than 200% while cutting costs by more than 20%. (You can check out the full case study here).
Marketing Challenges in the Travel Industry – Wrapping Up
Revenue in the travel industry continues to grow, yet there are still many opportunities for businesses to improve their marketing strategy. New technologies and competition are constantly changing the way travel marketing works. Businesses that want longevity need to consistently look for new ways to optimize their efforts, whether it be for search engine marketing, reputation management, advertising, etc.
Whatever initiatives you do invest in, just make sure you utilize the right technologies and teams to ensure your entire budget is well spent to reach your goals and drive higher ROI.