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This is the official blog of The Travel Marketing Store. We provide a range of business services related to travel marketing including strategic consulting, a business directory, newsletters, travel marketing events and conferences.

Global Online Travel Market: Trends and Opportunities (2016-2020)

A new report is now available on Research & Markets entitled “Global Online Travel Market: Trends and Opportunities (2016-2020)”.

The report analyses the potential opportunities and significant trends in the global online travel market.  The reports forecasts the value of the global online travel market.  It provides detailed analysis of leading players in the sector including Expedia Inc., The Priceline Group and Hostelworld on the basis of attributes such as business overview, recent developments, financials and strategies adopted by the market leaders in order to ensure growth, sustainability, etc.

The online travel industry originated in the 1970s in the United States market.

Today, from a regional perspective, Asia Pacific, Western Europe and the US market are seen to be similar in size and collectively accounting for 80% share of global online travel market in the year 2015.  In the upcoming years, emerging markets are expected to outperform growth in advanced regions due to improving of socio-economic factors. In addition to this, emerging markets also have a high proportion of Millennial population.

The growth of the global online travel market is driven by growth in global tourism industry, rise in internet penetration and increasing mobile presence. Increasing internet penetration and rise in use of smartphones especially in emerging economies are providing impetus to online travel industry globally. However, presence of certain factors are also posing barriers to growth of the industry and the ability for new entrants to get a foothold. Some of these factors are the threat from alternative accommodation providers, regulation and compliance in the industry and the required high marketing expenditure for companies operating in the segment. Key trends prevailing in the industry includes organic expansion of core brands and increasing capital investment and supply in the hostel space.

Source: Global Online Travel Market: Trends and Opportunities (2016-2020)

Digital spurs an overhaul of approaches to travel, and marketing reflects this – Which-50

The travel industry has unmistakably evolved over the last decade due to the development of the web and impact of digital marketing, with many people acting as their own travel agent. The web makes it convenient to research, compare deals, and book your own travel, especially while on the go with a smartphone or tablet.

Digital has spurred a complete overhaul in our approach to travel. Globally, internet travel booking revenue has grown by more than 73 per cent over the past five years to reach a staggering 57 per cent of all travel bookings. A holiday overseas is no longer a once-in-a-lifetime opportunity, with multiple trips and “gap years” now the norm. The average traveller is now more discerning and travel hungry than ever. Furthermore, research published by leading travel site Expedia, found that Millennials were more likely to blend work trips with leisure, adding on a few days for tourism on to business trips.

This trend creates a whole new type of semi-business tourism, spurred on by connected consumers quickly finding hotels, flights, and tourist information sometimes on the same day. As marketers, it is becoming increasingly difficult to keep up with the spontaneity and movement of the average traveller. These are issues covered in a paper from Kenshoo called “Digital Travel Transformation Improving Your Marketing in Southeast Asia’s Travel and Leisure Landscape”.

Southeast Asia in particular has become a tourism superpower over the last ten years, transforming from what many believed was an alternate destination for budget back-packers, to a major destination for serious international travellers. The region recently dominated MasterCard’s 2015 top 10 Global Destination Cities Index, which tracks airline ticket purchases and other travel spending data, with four Southeast Asian countries making the top ten.

Southeast Asia is extremely well connected, with TechinAsia reporting 42 per cent of the world’s internet users reside in Asia. This high concentration of web users has been instrumental in opening up the region to tourism. Take Singapore for example, where almost 50 per cent of web users regularly access travel services on the web, more than the worldwide average of 35 per cent.

eMarketer research also reveals that digital travel sales in Asia-Pacific rose by almost 20 per cent to $US139 billion in 2015, with the region set to outpace Western Europe and North America by 2018. Indonesia is leading the pack with an estimated 33 per cent growth for 2016.

With the region showing no signs of slowing down, marketers need to embrace the power of digital marketing in order to keep up with today’s gallivanting consumers — remaining nimble and adapting to change to build a loyal brand and profitable business.

Kenshoo global data with Asia Pacific and Southeast Asia breakouts reveal some key insights into the digital marketing trends for search, social, and mobile advertising. The research highlights the key engagement metrics that are driving the growth in the travel industry.

Across the travel industry globally, search is still very strong, with year-on-year (YOY) growth for spend, clicks, and clickthrough rate (CTR), while cost per click (CPC) was down 18 per cent. The decrease in the quarterly metrics reflect the seasonal drop in Q1 after a busy Q4 period.

Global mobile spend has more than doubled YOY from ten per cent to over 20 per cent, but still has room for growth. Clicks from mobile devices reached over 30 per cent share in Q3 and Q4 in 2015, indicating the rate of consumer adoption versus advertising spend growth and the lower cost of mobile clicks.

Social has also seen some solid gains YOY with the global data revealing an increase of 83 per cent in spend and a 56 per cent increase in clicks. The increase in CPC is reflective of the increasing competition on social platforms.

Cost per click in Asia Pacific and Japan reflects closely to what is happening globally, with CPC decreasing ten per cent last quarter in the region, compared to nine per cent globally. YOY CPC data also mirrored what is happening globally with a 26 per cent decrease in APJ, compared to an 18 per cent decrease globally. This indicates that, as a whole, campaigns are becoming more optimised over time.

Global mobile spend has more than doubled YOY from ten per cent to over 20 per cent, but still has room for growth. Clicks from mobile devices reached over 30 per cent share in Q3 and Q4 in 2015, indicating the rate of consumer adoption versus advertising spend growth and the lower cost of mobile clicks.

Social has also seen some solid gains YOY with the global data revealing an increase of 83 per cent in spend and a 56 per cent increase in clicks. The increase in CPC is reflective of the increasing competition on social platforms.

In APJ, travel marketers are increasing mobile investments more with these devices accounting for 29 per cent share of paid search spend in Q4 2015, compared to 23 per cent globally. Clicks from a mobile device steadily increased throughout the year from 32 per cent in Q4 2014 to an impressive 46 per cent in Q3 and Q4 2015.

The standout metric in APJ was click-through rate, with a substantial 85 per cent YOY increase compared to -6 per cent globally, potentially driven by both impression-to-click ratios and an increased focus on engagement by travel marketers in the region.

While the overall spend levels are not stable enough for proper analysis, we can see that mobile search is booming in SEA, with the first two quarters in 2015 revealing over 50 per cent of clicks from a mobile device. This reflects the mobile-first landscape in the region and exceeds the share of clicks from a mobile device in both Asia Pacific and globally.

Cost per click in SEA averaged $US0.25 in 2015, with a seasonal peak in Q2 of $US0.35, reflecting the competitive time for travel bookings. The SEA region has lower average CPCs than Asia Pacific (averaging $US0.41) and globally (averaging $US0.55). Click-through rates are also remarkably high in SEA averaging 8.1 per cent over the five quarters, compared to 3.5 per cent in APJ and 3.2 per cent globally. This is reflective of highly engaged audiences and efficient paid search advertising campaigns in the region.

Source: Digital spurs an overhaul of approaches to travel, and marketing reflects this – Which-50

Flights versus hotels: where is the market for meta in APAC? – EyeforTravel

mainAlthough many established metasearch markets exist in the region, there is real opportunity for differentiation and innovation in Southeast Asia In Asian markets like China, India and Japan online travel – and that includes flight and hotel metasearch – is established, flourishing and mirrors global trends.

China’s Qunar, for example, launched in 2004 as a flight and hotel metasearch but quickly emerged into a more hybrid travel play with a strong focus on the higher margin hotel-booking segment. According to analysts at the Yale School of Management, in the fourth quarter of 2014 there were “66% more direct sales than platform sales in terms of volume”. And in the longer term, analysts expect this to reach 80%, which explains the expansion of Qunar’s workforce from 2,500 to 7,500 employees in 2014.

In India, the country’s biggest online travel firm MakemyTrip has been around since 2000, first serving the travel needs of US-based Indians returning home to visit family. By 2005 the firm had established a local base and after bedding down set to expanding its armoury of travel related products and services in the region. Holding up a mirror to global diversification trends, in 2011 it acquired Gurgaon-based metasearch play iXigo.

Meanwhile in Japan, one of the world’s most innovative and established travel markets,15-year-old Venture Republic operates the largest domestic metasearch engine with domains Travel.ip and Hotel.ip. In 2012, it experienced 50% user growth versus just 15% from players in the OTA space.

Unsurprisingly all these markets have proved attractive for global metasearch firms. UK-based Skyscanner is just one and by 2012 it had established a presence in China through a partnership with search engine Baidu. Later, in 2014, it acquired another – Youbibi, proving that local partnerships are an essential ingredient. Last year, just to tick off another country, Skycanner linked up with Yahoo Japan in a 51%-49% JV.

Southeast Asia: the addressable market?

In Southeast Asia, where many travel bookings here are still made through traditional travel agents there is plenty of opportunity and room for growth. Here there were over 100-million tourist arrivals in 2015, according to ASEAN, the association of Southeast Asian nations, and nearly 50 million of these came from within the region – most notably from China.

Max Kraynov, CEO and founder of metasearch firm JetRadar, which has headquarters in Thailand, has an interesting view. While he sees huge and growing potential for hotel metasearch in Southeast Asia, he is not convinced of the potential for flights, because “there are no real OTAs to metasearch on”.

“For a meta with flights, the addressable market is small as there’s enormous brand recognition of low-cost carriers and a meta needs to do lots of educational work to capture this brand-loyal audience,” he says.

So, although flight metasearch is JetRadar’s game elsewhere in the world, from its regional headquarters in Thailand, today it operates as an OTA.

For a meta with flights, the addressable market is small as there’s enormous brand recognition of low-cost carriers and a meta needs to do lots of educational work to capture this brand-loyal audience

Max Kraynov, CEO, JetRadar

However, not everybody holds this view. Anna Trushkina, commercial manager of hotel metasearch play Wego, for one, disagrees that there are a dearth of OTAs in Southeast Asia to compare rates from.

“If you take Indonesia, by far the biggest point of sale for Wego in the region, as an example, the OTA market is led by local players such as Traveloka, Tiket.com, NusaTrip, and PegiPegi, which have both hotels and flights – and flight volumes are even bigger. What is more, global OTAs and hotel brands are actively acquiring customers online in the region and local media conglomerates have either launched or are launching an OTA of their own.”

To Trushkina’s latter point, last year media investment conglomerate MNC Media spawned Mister Aladin, a hotel metasearch. At the time, CEO Teddy Pun was quoted by Tech in Asia saying that far more differentiation and innovation is needed in the region’s online travel sector – a gap he hopes to fill.

Pun believes that being part of a media conglomerate also gives Mister Aladin the marketing edge – where many local firms’ resources are often stretched. As Kraynov points out, the high cost of paid search makes it particularly tough for aggregators in the region which rely mostly on SEO and rentention mechanisma like email subscription, mobile app installs, Facebook likes and so on.

Local and mobile edge

For Trushkina, Wego’s edge in Southeast Asia, and elsewhere, has come from localised investment in mobile apps that have proved “very sticky for metasearch” where users are being sent down the funnel.

On the localisation front, Wego has also placed particular emphasis on providing users with rates from local and global players, and direct hotel rates on all key points-of-sale.

Trushkina cannot stress enough that Wego’s growth in the region is coming from mobile where usage continues to grow by 15% year-on-year according to digital agency We Are Social. Indeed, mobile connections in the region today now number over 700 million, the agency reports. At the same time, the number of people using Facebook and Twitter in the region is expected to surpass the US in 2016.

With a fast growing digital landscape, coupled with rising incomes and discretionary travel spend growing as a result, online travel in Southeast Asia looks set for takeoff.

Where the real money is to be made may remain a moot point but it’s clear that while metasearch may start with flight search, brands will continue to add higher margin hotels, transfers and other ancillaries going forward.

That has been the story elsewhere in the world, and it’s unlikely to be any different here, says Kraynov.

Source: Flights versus hotels: where is the market for meta in APAC? | Travel Industry News & Conferences – EyeforTravel

The Travel Marketing Awards:  Travel marketing tips from the industry’s mould-breakers – TTG Media

The recent Travel Marketing Awards in the UK highlighted some excellent new case studies.  We particularly liked this one from Hostelworld featuring Chris Eubank.


Award: Best PR Tactical, and the only platinum winner, for its Hostelling with Chris Eubank video – a collaboration with Lucky Generals creative agency.

Brief: To engage with the target audience of millennials, reminding them that hostels are not just affordable social hubs but that they boast increasingly stylish spaces.

Strategy: “The millennial audience is on mobile and social media,” says Ottokar Rosenberger, chief marketing officer at Hostelworld, explaining why digital is such a focus for the brand. The company’s Hostelling with Chris Eubank video, which was uploaded to YouTube, was born out of an 18-year-old sketch that featured on TV’s I’m Alan Partridge show, where Partridge suggested the idea to a BBC executive.

The idea was brought to life last year after Eubank expressed his confusion on Twitter over why people always asked him about youth hostels. The online hostel aggregator seized the opportunity to introduce the eloquent former boxer to the world of hostels. “Everybody knows Eubank and lots of young people are in on the Partridge joke – it was culturally very relevant,” Rosenberger explains. “So when Eubank came around and said, ‘Hey, what is up with hostels and me?’, that got us going.”Rosenberger adds that it is testament to the team’s ability to innovate quickly that made the idea a reality. “From going, ‘Should we do this?’ to getting Eubank involved and into the Brighton hostel, to putting it online, it was four days. If we’d done it a week later, I don’t think it would’ve worked… [Working on the momentum built online] was absolutely the key to success.”

Masterminding such a successful campaign all comes down to having great brand awareness, Rosenberger adds. “It was tongue-in-cheek, but also very authentic for our brand. [It’s important to] always be authentic about what you do and what you stand for as a brand.”

ROI: The video reached an audience of two billion and was picked up by national media. “We were featured in places we wouldn’t normally get to, such as the BBC” says Rosenberger. “We wanted to pierce through the consciousness of millennials. And we totally achieved that.”

Watch the ad here:


Judge’s feedback
Aneil Bedi, partner at M&C Saatchi, says: “The key to good marketing is that it has to present ‘old’ information in a new, surprising but relevant way. What makes Hostelworld’s Hostelling with Chris Eubank so brilliant is that it combined all this with the impact of everyone being in on the Alan Partridge joke. It didn’t cost a fortune and the results were outstanding – a masterstroke of marketing. It was a unanimous decision to give it The Travel Marketing Awards’ highest rating – platinum. I can’t wait to see what they do next.”

Source: TTG Media | Travel industry, travel agent and tourism news, events and jobs – Features – TTMAs: Travel marketing tips from the industry’s mould-breakers

Facebooks 360-Degree Travel Videos Offer Destinations a New Path to Marketing – Skift

Facebook logoFor the first time, hundreds of millions of consumers around the world can watch 360-degree, virtual reality videos on Facebook via their own devices. It has helped that some travel brands have already spent millions to showcase their cities and landscapes on this new media platform.

The first 360-degree/virtual reality travel videos on Facebook span five continents and since January, National Geographic, GoPro, Seaview 360, Discovery, Weather Channel, and Tourism Australia have rolled-out about 24 of these videos for their Facebook pages.

Each of them has more than three million views with Tourism Australia, one of the first destination marketing organizations to put its 360/virtual reality videos on Facebook, getting 4.6 million views to date on seven of its 17 such videos that are on Facebook and another 1.6 million views across YouTube and its consumer website Australia.com. Australia.com’s Facebook page has about 6.8 million likes.

Tourism Australia’s videos are tied to its $40 million global marketing campaign that launched in January and made Chris Hemsworth its frontman. The destination’s 360/virtual reality videos aim to effectively channel what makes Australia special. Travelers can navigate through the videos themselves and get to the heart of unique experiences they could have throughout the heart of unique experiences they could have throughout the country, such as kayaking through Katherine Gorge in the country’s Northern Territory or playing with baby kangaroos on South Australia’s Kangaroo Island.

“[These videos] aren’t just Tourism Australia’s assets,” said John O’Sullivan, Tourism Australia’s managing director. “They’re an industry development tool and a sale tool for consumers and trade partners. We’re encouraging travel agents and our other partners to use them as well. We especially saw the potential of having such content available too for frontline travel agents to also share these experiences with people considering Australia.”

Bringing Virtual Reality to Consumers

Facebook initially launched these videos in September 2015 as 360-degree videos on desktop, where consumers could click and drag the screen 360 degrees to view all perspectives of the video.

In November, Facebook brought these videos to mobile iOS and Android devices and made available on its Oculus Rift as well as Samsung Gear virtual headsets. Before these releases, travel brands were demoing these videos at trade conferences or at in-destination meetup events for consumers and were only viewed by people attending these events. Putting virtual reality in the hands of consumers clearly changes the game for brands and makes their costly and time-consuming production efforts more worthwhile.

“The videos help the consumer to consider places they otherwise would not have considered because they were able to immerse themselves in a place and get a feel for it,” said O’Sullivan. “They also help us convey that Australia isn’t a place you do in just one trip. You come back another time and do something different and these videos can help you decide what you want to do.”

Facebook Foray Into Virtual Reality

Facebook showed it was serious with virtual reality when it acquired Oculus in 2014 for $2 billion and these latest video and headset releases only tease at the direction the company will take the technology.

Source: Facebooks 360-Degree Travel Videos Offer Destinations a New Path to Marketing – Skift

A new dynamic packaging experience ready to take off

TravelC LogoThe Travel Marketing Store has recently signed an agreement to jointly take to market the excellent dynamic packaging solution developed by Mallorca based Travel Compositor.   Their online product, TravelC, provides an excellent platform for travel agents, tour operators, destination management companies, destination marketing organisations, start-up and existing online travel agents to provide a new level of dynamic packaging for their customers.

The solution connects to all three major GDS, Travelport, Sabre and Amadeus plus has integrated two low-cost airline aggregators, Mystifly and Travelfusion therefore provided excellent coverage of flights.  As the flight search takes place the lowest direct and connected fares are offered with simultaneous hotel suggestions being presented.

The solution also can connect to a variety of hotel aggregators or “bed banks”.  The system dynamically packages hotel content with selected flights with the ability to add transfers and activities all from a single screen interface.  Complex itineraries can be built at speed and saved as a brochure to share with customers or friends.

Duncan Alexander, Managing Director at The Travel Marketing Store stated “we are delighted to team up with Travel Compositors particularly with our approach to key destinations, airlines and airports to provide a better solution to market stop-overs and through connections.   We have been looking for some considerable time to find the right technology partner for our “flyvia out of the box campaign proposition” and we have found it in TravelC”.

Once flights and6ab9e0a7-1a98-4d34-8482-31aede6e5deb hotels are selected transfers and activities can be booked including tours and restaurants.  Soon a rental car aggregator will also be added to the packaging capabilities offering a full service suite for all leisure and business travel needs.

This unique solution can be deployed with any travel online retailer and tailored to meet their requirements.  The Travel Marketing store is currently in discussion with a number if destinations, airlines and tour operators regarding adopting this unique dynamic packaging solution.

In particular the solution can be used for promoting single and multi-stop over packages.

If you want to know more please contact us or view their Travel Marketing Directory listing.


Aer Lingus, AirAsia, Ryanair, and Spirit use email to sell after booking

The need for ancillary revenue requires airlines to venture beyond the booking confirmation email.  The latest report from IdeaWorksCompany follows that path to learn how airlines gain more sales after a booking is made.  IdeaWorksCompany assessed the full set of emails sent by six top ancillary revenue airlines to learn how they encourage customers to buy more.

During December 2015, IdeaWorksCompany made flight bookings on the following airlines:  Aer Lingus, AirAsia, easyJet, Ryanair, Spirit, and Vueling.  This list of airlines might look familiar to those acquainted with the annual CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany.  These airlines are top ancillary revenue producers and a review of their methods should provide lessons for how to boost a la carte sales:

  • Aer Lingus and easyJet were aggressive marketers with emails sent, on average, every three days.
  • AirAsia was very succinct in its email communications; the airline sent just three post-booking emails and limited the entire content to just over 800 words.
  • Ryanair was a moderate marketer among the six airlines in terms of email frequency and had the lowest average word count at 222 words per email.
  • Spirit, with 2014 baggage revenue of $22.25 per passenger, focused its emails on the task of encouraging travellers to pre-pay bag fees.

In addition to the above, hotel and car hire bookings, checked bags, and assigned seating were the most frequently promoted items in post-booking emails sent by the airlines.

“Never Say Goodbye; Savvy Airlines Use Email to Sell After Booking” was released today as a free 15-page report available at the IdeaWorksCompany website.  The 2016 Ancillary Revenue Report series is sponsored by CarTrawler.  Click here to access the full report:  www.ideaworkscompany.com/category/current-reports

Interest in European vacations sag in the aftermath of terror attacks – Channel NewsAsia

Interest in European vacations sag in the aftermath of terror attacks.  No cancellations or significant changes to travel plans already made, but travel companies report a decline in visitors searching for trips to Europe. By Linette Lim, a view of Europe from Singapore post the Brussels bombings.

Appetite for travel to Europe has taken a hit in the wake of multiple terror attacks in and around the continent, based on data from travel booking sites Wego and TripZilla.sg.

Since last Tuesday’s attacks in Brussels, Belgium, Wego told Channel NewsAsia it saw a 50 per cent week-on-week decline in the number of Singapore-based travellers searching for trips to Europe, while TripZilla.sg reported a 40 per cent drop.

The triple bombings in Brussels on Mar 22 – which claimed 32 lives – took place just months after 130 died in a series of coordinated gun and bomb attacks in Paris in November. Both attacks have since been claimed by the Islamic State group.

“Following the Paris attacks, the demand for travel to France was significantly impacted during the first two months after the attacks but it was recovering fairly quickly thereafter,” said Winnie Tan, founder and CEO of TripZilla.sg. “We believe that the same will happen for Belgium.”

Wego’s CEO & co-founder, Ross Veitch noted that in the aftermath of the Brussels attacks, destinations like China, Thailand, Australia, and Japan have seen “significant increases in interest from Singaporeans”. But he said that interest in travel to Europe is expected to return to normal in the lead up to the June school holidays.


Travel agency Chan Brothers said that so far, it has not had any cancellations from customers heading to Europe. “We have over 10 groups in Europe currently and are closely monitoring the situation daily to assess its continual development by keeping in touch with our local operators,” said Ms Jane Chang, its head of marketing communications.

Other travel-related companies also said there was no significant change in travel demand from Singapore to Europe. Singapore Airlines, for example, said it has not seen a noticeable change in demand for flights to Europe.

“While travelers remain cautious about travelling to Europe, we haven’t seen significant changes to demands for Belgium, but we have seen a slight decline in enquiries and bookings for Turkey,” said STA Travel’s marketing manager Erika Cortez. She cited the Ministry of Foreign Affairs’ advice to Singaporeans travelling to Turkey to exercise precaution in the wake of recent bomb blasts in Ankara and Istanbul.

TripZilla.sg’s Ms Tan noted that there has been fewer travel offerings to Turkey in the last months, and “search for ‘Turkey’ as a travel destination has dropped by 57 per cent” compared to a year ago.


Travel services providers Channel NewsAsia spoke to point out that what was experienced in the wake of the Paris attacks could give insights into how travel demand to Europe will trend.

STA Travel, for example, said its experience following the Nov 13, 2015 wave of attacks was that growth in bookings rebounded in a matter of a few months.

A TripAdvisor spokesperson explained: “The popular tourist destinations that suffer an attack always work quickly to do what they can to ensure security measures are strengthened and travellers will, and do, come back.”

This rebound could be helped by a reduction in room rates and flight prices, as travel services providers respond to an initial fall in travel demand, suggested TripZilla.sg.

A quick check on the websites of Europe-based carriers like AirFrance and KLM showed that they are been offering lower-than-usual prices, at around or below S$1,000 for a return trip from Singapore to some European destinations, including Athens, Barcelona, and Stockholm.

“We have been seeing large discounts for rooms and flights to Europe, and Paris in particular, since the November attacks. Prices have just started to hold relatively steady and many in the industry were thinking the downturn was about to level off completely,” said Ms Tan.

“This new attack has definitely dashed hopes of European tourism’s return to normalisation.”

Source: Interest in European vacations sag in the aftermath of terror attacks – Channel NewsAsia

Hotel Chains and Travel Websites in a Tug of War for Customers – The New York Times

LondonHotel Chains and Travel Websites in a Tug of War for Customers

A recent Hilton commercial that shows people tapping away on their phones and computers as the Rolling Stones song “(I Can’t Get No) Satisfaction” plays seems relatively benign, as does the tagline, “Stop Clicking Around.”

But it is one more — very expensive — salvo in the long-simmering tension between hotel chains and online travel agencies like Expedia, as each try to grab their share of customers.

The marketing campaign, developed by Fold7, which is based in London, is the largest such initiative in Hilton’s 97-year history. It premiered during the Grammy Awards broadcast last month and is appearing online, during major television broadcasts, on billboards and in many magazines and newspapers.

The symbiotic relationship between hotel chains and online travel agencies has been under increasing strain for some time. While online travel agencies offer consumers a wide array of options and bring customers to hotels, they do not develop the holy grail of customer relations: brand loyalty.

According to Phocuswright, a travel market research company, 31 percent of people in the United States used online agencies for their travel needs last year, and 28 percent booked directly, slightly up from 2013.

Hilton is also offering similar deals to members who book directly.

“I think what Hilton is doing is quite creative and has the potential to be very, very successful,” said Henry Harteveldt, founder of Atmosphere Research Group, a travel industry research company. “It’s all about building trust in the Hilton website, and the most effective way is to go after the online travel agencies.”

Some online, and even off-line, travel agencies are not very happy with Hilton’s public move.

Cyril Ranque, president of Lodging Partner Services for the Expedia Group, called the hotels’ campaigns, “an ill-conceived strategy in the long term.” Expedia Inc. owns, among others, Hotels.com, Hotwire.com, Trivago.com and Travelocity.com.

Mr. Ranque said that most consumers who were shopping on Expedia and similar sites were “brand agnostic,” meaning they do not really care where they book as long as the hotel meets their needs.

“We have an algorithm that puts forward the most attractive and appealing choice for consumers,” he said. “If hotels are consistently not offering the most attractive prices to consumers, our algorithm would push other hotels ahead.”

Mr. Ranque also said that the hotels would lose customers who would have been directed to the hotels’ websites by a third party.

“We’re trying to make them understand it’s a bad approach,” he said of Hilton.

Geraldine Calpin, Hilton’s global head of marketing, says the campaign’s goal is to make consumers aware of the goodies available to loyalty customers who book directly — including lower rates and room selection — and to clear up misunderstandings that crop up with third-party bookers.

“If you book direct, it gets rid of the confusion,” Ms. Calpin said. “This is where you can get the best price and the best value.”

One factor is simple economics. Hotels pay commissions if a third party books the reservation. This commission is 15 to 20 percent for each booking, said Cindy Estis Green, chief executive of Kalibri Labs, which provides research to the hotel industry about revenue performance.

Another factor is the increasing concern about consumer confusion — that is, customers thinking they are booking directly with a hotel and finding out later that they used a third-party site. Sometimes consumers think they are booking reservations that can be cancelled without charge, only to find out later that is not the case — or they arrive at a hotel to discover that they do not actually have reservations.

The Federal Trade Commission “has gotten very interested in this,” Ms. Estis Green said. Some consumers are not just perplexed about whether they are booking directly or through a third party, she says, but also who really offered the lowest prices.

The fact is, most hotels and online travel agencies have “rate parity” agreements that neither can undercut the other’s price and that hotels must give the best prices to all the online agencies and not favour one over another.

Rate parity has come under deepening scrutiny; in 2014, about 30 lawsuits were filed in various states against major hotel chains and online-booking groups saying rate parity violated antitrust laws.

The lawsuits were consolidated and eventually dismissed because the plaintiffs were unable to prove that there was an actual conspiracy between hotels and online travel agencies to set prices, said Ilse Scott, a lawyer who specializes in hospitality law with the firm Michelman & Robinson.

There are exceptions to rate parity. One is offering “private” rates to select groups of consumers, such as those who are part of a loyalty program.

The “book direct” movement is not limited to the United States. The European umbrella organization for hotels, restaurants and cafes called Hotrec began a similar campaign last year.

“More brands will follow the direction of Hilton and Marriott,” Mr. Harteveldt said, “but the challenge is if everyone does it, will it really help the brands?”

Source: Hotel Chains and Travel Websites in a Tug of War for Customers – The New York Times

Customize Your In House Mail to Create Branded Campaigns

One of our new and featured suppliers in The Travel Marketing Directory is Rocketseed.
The value proposition is staggeringly simple.  Turn all your outbound e-mail into a controlled and measureable branded campaign.  Their solution enables the branding team of a company to centralise the management and control of header banners on all outbound e-mail and standardise the signature.
All banner clicks are recorded enabling analysis and follow up engagement.
Download Rocketseed’s brochure to view the solution below and watch their promotional video below.
Rocketseed e-mail media
Rocketseed e-mail media