Who “owns” the travel customer?
Online travel agents (OTA’s), the mega retail networks like Flight Center and disruptors such as AirBNB are increasingly becoming dominant players in the travel industry – leaving traditional travel wholesalers and tour operators struggling as higher commissions and the demand for greater promotional support erodes profit.
Consumers have direct access to a global smorgasbord of travel product. Operators who rely heavily or solely on the retail networks are vulnerable consumers can purchase ‘anywhere, anytime’ so it is up to each operator to ‘own’ their customer base and leverage the direct relationship with those customers.
It is vital for tour operators, wholesalers, and other principals to develop and protect their own customer base. The industry leaders such as APT and Scenic have been nurturing and growing their customer base successfully for years, thus helping to insulate themselves by securing a percentage of their business direct.
“The popular call to action on advertisements ‘See your travel agent or call us’ has become ubiquitous.”
Notwithstanding this, many of these industry leaders have achieved a reasonably symbiotic relationship with travel agents – they’re too big to fill all their capacity direct so they welcome and support the contribution from retailers.
The small and midsize operator however is in a more precarious position. This is especially the case for those who used to rely on the traditional distribution model for their product through the travel agent network. The very large networks such as Flight Center can certainly produce volume, if they accept a product as ‘preferred’ in the first place, but they’re expensive.
Commissions payable to the smaller retail networks and the few independent retailers that are left, are more reasonable but the travel agencies need to be serviced, nurtured and supported.
That often means fielding sales reps who are expensive. The production and distribution of printed brochures, still seen as essential, is also expensive.
By developing a solid customer base and owning the customer you are able to:
· Own the end to end experience your customer has – from booking to after experience followup
· Get a higher return as you no longer have commission
· Be in greater control of your destiny by becoming less reliant on the retail network.
One tour company we know only sells tours direct to the customer, you can’t buy their product through a travel agency. They provide a superior quality product and impeccable customer service. As a result their operation has been growing substantially year on year.
Travel wholesalers and tour operators who look to building and nurturing their own customer base will ride out the current travel industry disruptions and be in a position to leverage the value of those relationships into the future.
Em creative/digital has extensive experience working with travel operators, creating strategic customer acquisition and loyalty campaigns join us for a coffee and we show you how build the right relationship with your travel customers.