Do people prefer to book their travel direct from the supplier? 20 years ago the word disintermediation started to be heard and it took about 10 years for the major impact to be felt. Travel agents and wholesalers have gone through massive changes in adjusting to the reality of the internet.
Today, massive online travel agencies (OTA’s) have created enormous market penetration in the hyper competitive world of search engine marketing. The accommodation sector in particular is a bloodbath with rooms being offered across multiple OTA’s and metasearch services as well as directly and chain websites.
So what does the consumer prefer?
Several reports say that customers prefer to book direct. Tnooz.com recently reported “Though metasearch has made it possible for consumers to scour hundreds of booking sites for the best price, many travelers prefer booking direct with the hotel for the flexibility in cancellation policies and the promise of better service and perks, but only if the price is comparable and the booking process easy and effortless. – See more at: http://www.tnooz.com/article/hotels-metasearch-compete-OTAs/#sthash.xVnDJEWR.dpuf
This is also reported on webintravel.com. An article here uses results from and Accor Hotels study states, “The majority of business travellers prefer to book their business travel accommodation directly online with the hotel brand (57%), followed by the secretary in the company (40%), while usage of offline travel agents is in the minority (16%).”
It’s another story for global tour operators. There is a prediction for more volatility, takeovers and mergers in the online travel world for 2015. In the final part of the story it is reported that Kuoni, one the largest tour operators in the world, is scaling back because “traditional brands can’t even figure out what to do with the businesses they have built – Kuoni’s tour operating business remains on the block after the company announced it would sell off its tour operating interests in Switzerland, Benelux, Hong Kong/China, India and Scandinavia. The move affects about 3,800 staff in total and business that generated turnover of CHF 2.2 billion last year.”
How do local suppliers compete?
Local suppliers and DMC’s have some self competing interests. On the one hand, they want to protect their relationships with the big tour operators but they also want to take direct bookings. How do they do this without creating problems for themselves?
1. Don’t get into a war with yourself. If your business model is based on traditional marketing channels, find new ways to cooperate with your channel partners, such as offering them online user log-ins with access your inventory. Make their work easier and faster and they will be able to serve the end clients more effectively. Adventure Engine will easily allow you to vertically integrate with your channel partners, up and down, on Summit enterprise level solution.
2. If you want to sell direct, but still move product through the traditional channels, don’t cannibalize your own market: create incremental sales. A great solution is to have Adventure Engine create a branded website for you with your product on it. We can help you use the website to target new markets that you currently do not occupy. You can set any price points you want, and still pull from your own inventory.
3. Whether you sell direct, online, on the phone, or with intermediaries, two things never change: you must have good customer service and you must have accurate information at your finger tips or presented online. Fall down on either one and you’ll damage the other. Good, accurate service can only happen if you are managing your seats, equipment, rooms, guides, etc in a system that allows full inventory transparency and real time booking.
4. Consider forming a cooperative marketing group using Simbiosis to cross sell with your local group, or like minded partners. You can read more about Simbiosis from Adventure Engine here.