Travel and hospitality factsheet


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Travel and hospitality Internet Marketing fact sheet by WSI.

Industry Overview
Business Challenges
Industry Opportunities
Digital Marketing Trends
Digital Marketing Opportunities
Popular PPC Keywords

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Travel and hospitality factsheet

  1. 1. Travel and Hospitality INDUSTRY FACTSHEETIndustry OverviewThe travel and hospitality industry is formed by three types of companies with considerable overlap: retail travelagencies, business travel management companies and tour operators. Demand of the industry is driven by business andleisure travel, which is subsequently dependent on the shape of the economy. Major services include reservations,tickets for airline flights and lodging, as well as leisure cruises and packaged tours. Other more minor services includeentertainment and event tickets, time-share services, convention and sightseeing services and car rental reservations. Inrecent years, there have been two major factors affecting the industry: sophisticated pricing schemes created by theairlines to maximize profitability, and the progression of the Internet as a widely available information and booking tool.Business Challenges  Intense Competition from Internet Agencies: Travelers can easily bypass traditional travel agents and third party travel websites by simply booking directly with airlines and hotels. To maintain a competitive edge, many large online travel agents (like Expedia or Travelocity) have eliminated booking fees. Additionally, some companies even waive cancellation and change fees. This shift away from fee revenue, forces travel agencies to backend commissions and advertising revenue to shore up the difference.  Economy and Terrorism Fears: Travel is strongly connected to the strength of the economy, partially because of business travel and partially because personal travel is dependent on income. Further, terrorism or natural disaster fears easily prompts tourist cancellations.  Competition from Communication Technology: Advancements in communication technology significantly decreases the need for business travel. Video conferencing is a method that is becoming a strong alternative to travel. Adoption of video conferencing technology has significantly cut travel expenses for companies. Online management and collaboration tools decrease the need for business travel.Industry Opportunities  Internet Distribution: The Internet has the ability to help traditional travel agencies expand their reach to new customers. While most travel agencies already operate Internet websites, many of these are purely promotional. Agencies that invest in computer technology are more able to increase sales by enabling customers to vie and purchase travel packages directly from the website.  Specialization: As airlines tickets become commodities, travel agencies are adapting and changing their focus to providing packaged tours. By focusing on a niche and developing expertise in specific areas of this large industry (like African safaris or European art tours for example), travel agencies can provide a higher value-added service to travelers.  Technology Initiatives: Travel agencies are investing in new technology initiatives in order to help them attract more customers, improve efficiencies, cut costs and win market share from competitors. For instance, travel Copyright © 2011 by Research and Management. All rights reserved.
  2. 2. Travel and Hospitality INDUSTRY FACTSHEET companies are leveraging customer databases by combining information from other subsidiaries. This tactic enables agencies to create more-targeted marketing campaigns as well as offer incentives to encourage future travel.Digital Marketing TrendsTop Online Merchandising ToolsThe majority of website visitors land on hospitality and tourismsites using search engines, according to a recent statistic releasedby eMarketer. In Q4 of 2010, 29% of total website traffic forhospitality and tourism sites came from search engines. Twenty-six percent of total website traffic to hospitality/tourism sites wasfrom visitors typing URLs directly into a browser during thisperiod. Meanwhile, 16% of traffic came from those whobookmarked a site. Five percent of total web traffic came fromthose who clicked on an email link to land on a hospitality/tourismsite, while 3% of traffic came from those who clicked on an ad. Why Travelers Visit Hospitality/Tourism Sites Most leisure travelers visit hospitalism/tourism sites to view or cancel reservations, according to 80% of visitors in Q4 2010. During the same period, 70% of visits said they visited a site to find hotel information. About 69% of visitors landed on a hospitality/tourism site to make reservations, while the same percentage said they visit travel sites to compare rates.Mobile Boarding PassesAccording to Juniper Research (in a statistic released by eMarketer), bythe end of 2011, there will be 280 million mobile boarding passesdelivered worldwide. This includes airlines, rail, metro and bus passes.Experts predict that more people will purchase mobile boarding passes inthe coming years as mobile usage grows in popularity. It is projected thatby 2013, there will be 480 million mobile boarding passes delivered totravelers worldwide. Copyright © 2011 by Research and Management. All rights reserved.
  3. 3. Travel and Hospitality INDUSTRY FACTSHEET Select Online Tools for Hotel, Airline and Cruise Sites Most hotel, airline and cruise brand sites offer travelers the ability to book online (according to 93% of respondents). Only a small segment of 7% said they do not offer this capability online yet. About 62% of hotel, airline and cruise brands worldwide said they offer online videos to their consumers, while 45% said they have online loyalty programs, a strategy that has proven to be quite popular in the travel and hospitality industry. Twenty- eight percent of hotel, airline and cruise companies said they currently use social sharing tools on their websites. Meanwhile, 20% of respondents said they utilize the Facebook “like” feature in their business. Interestingly, live chat is an online tool used by 17% of those in the hotel, airline and cruise industry, while 9% leverage user reviews.Mobile Sites and AppsAccording to a recent statistic released by eMarketer, 76% of worldwide airlinescurrently offer a mobile version of their website, while 61% of hotels do thesame. Only a small percentage (6%) of cruise lines has a mobile website as ofApril 2011. On the other hand, 66% of worldwide airlines offer their travels aSmartphone app, while half of worldwide hotels have a Smartphone app fortheir customers. Approximately 13% of cruise lines currently have aSmartphone app. When it comes to iPad apps, only 24% of airlines and 11% ofhotels offer an iPad app to their travelers. Desired Hotel Industry Related Apps When it comes to hotel industry-related apps desired by corporate travel buyers and agents worldwide, we see that 82% of respondents said they would like an app to view recommended restaurants/bars around the hotel location. Meanwhile, 68% of respondents said they would like an app that provides suggested activities around the hotel they’re staying at. Half of all respondents said they would like a hotel image application, while 49% would like the ability to purchase hotel services prior to arrival using an app. Similarly, 39% of respondents would like an app to order room service prior to arriving in their room. Other reasons travelers would like a hotel-related app include: comparing hotel features, adjusting heating/air conditioning prior to arriving and remote recording of TV channels and programs. Copyright © 2011 by Research and Management. All rights reserved.
  4. 4. Travel and Hospitality INDUSTRY FACTSHEETDigital Marketing OpportunitiesImmediate Areas of Focus for Social and MobileWhen we look at the latest digital marketing opportunities of social media and mobile for the travel and hospitalityindustry, their main considerations and focus should be on how they can use these technologies to make it easier forconsumers to research and book their travel destinations. On the social front, consumers are engaging with travelbrands and other travelers primarily on blogs, Facebook, Twitter, YouTube and review sites to get access to real-timecustomer service. Additionally, they use these channels to find special offers and deals, plan their destination, gatheradvice and read reviews from other travelers on where to stay and what to do, and share their post-vacation photos andstories.On the mobile front, companies in the travel and hospitality industry (airlines, hotels, car rental companies etc.) aremore active in the mobile space than businesses in other industry sectors. Again, they are primarily using mobile tomake it easier for their consumers to research and book travel arrangements. Activities like trip management, flight andhotel check-ins, checking of itineraries, reading reviews and using location-based social networks like Foursquare toconnect with friends and get local deals are the primary ways consumers are using their mobile devices for travel. Whenit comes to social technologies and mobile marketing, below is where we see the majority of travel and hospitalitycompanies making considerations from a strategy standpoint. Social Technologies Blog Facebook Twitter LinkedIn YouTube News Feeds/ Social Forums Review Social Alerts Bookmarking Sites       Mobile Marketing Mobile Mobile Local Mobile Mobile Site Search Ads/ Text Apps    Copyright © 2011 by Research and Management. All rights reserved.
  5. 5. Travel and Hospitality INDUSTRY FACTSHEETPopular Pay-Per-Click Keywords Keyword Advertiser Global Monthly Estimated Cost Competition Searches per Click travel 0.53 550000 $1.51 hospitality 0.1 74000 $1.70 cheap flights 0.98 3350000 $1.33 cheap tickets 0.92 1220000 $0.94 airline tickets 0.98 673000 $1.49 cheap airline tickets 0.98 301000 $1.28 travel lodge 0.14 246000 $0.22 travel channel 0.05 165000 $0.32 travel agency 0.34 135000 $1.49 cheapest flights 0.97 110000 $1.28 bing travel 0.17 110000 $0.27 cheap car rentals 0.99 90500 $2.72 air tickets 0.95 90500 $0.73 cheap airfare 0.98 90500 $1.39 cheap flight 0.91 90500 $1.09 travel agents 0.9 74000 $1.21 travel news 0.03 60500 $0.63 travelling 0.09 60500 $1.47 travel advisor 0.19 60500 $0.12 budget travel 0.4 60500 $0.51 Copyright © 2011 by Research and Management. All rights reserved.