Top 8 Challenges Affecting the Digital Travel Industry, Right Now
There is a huge variety of challenges that the digital travel industry is having to find solutions to. These challenges call for different responses from the various companies involved, all of which must ultimately serve to improve customer experiences.
Here are the top eight challenges affecting the travel industry right now, and some of the solutions that are being proposed to overcome them.
1. Brand Differentiation
Whether it's a seat on a plane, a room in a hotel, or a car rental, there are many companies out there all selling the exact same product. Companies are now having to find different ways of marketing their particular brand, products, and services to make themselves stand out from their competitors.
Many up-and-coming travel companies and OTAs are building their brands within a particular niche - honeymoon and destination weddings, for example, or adventure holidays, or as region/destination-specific specialists. In doing so, they avoid becoming "all-in-one" travel shops - Jacks of all trades but masters of none. By focusing on one niche or just a few related niches, these brands create differentiation in their marketing efforts, which become more effective as there is less competition.
As David Angotti, Co-Founder of SmokyMountains.com puts it: "While national websites like HomeAway and Airbnb deliver exceptional booking experiences and raise overall industry awareness, the hyper-relevant nature of geo-targeted niche sites is better equipped to deliver additional demand for specific localized markets. For example, high-quality video content that highlights a destination, combined with paid amplification through Facebook, can raise awareness for a specific market. This delivers additional demand and visitors that likely would not have visited the region in absence of this marketing approach. Smaller, niche websites excel at geo-local strategies like this. In addition to increased demand, the niche website increases the overall distribution health of a brand through channel and lead diversification."
2. Budgeting
In the constantly evolving world of technology, along with customer expectations changing faster than it's possible for companies to keep up with, budgeting becomes a very important factor in keeping up with trends.
Companies are being forced to use their budgets in smarter ways and advertise their business through different means.
One way they're doing this is with social media platforms, through which brands are able to promote themselves and connect with their audiences for little or no financial outlay. By taking advantage of the marketing opportunities social media provides, brands can effectively market their products and services in a more cost-efficient manner.
As a popular industry among young people, social media provides a great opportunity for travel brands to connect with target customers where they are, promote their products and services, and gain organic traffic to their websites - all without having to lay out a lot of money.
3. Multichannel Attribution
Multichannel attribution refers to the process of determining which marketing channels lead to conversions and sales, and giving each channel an appropriate amount of budget and attention accordingly.
Having a clear idea of which marketing channels are driving sales means companies can better allocate their marketing efforts. This then helps the business increase its efficiency of spending by only investing time and money into the channels which are driving growth.
Additionally, when a business knows its market and customer demographics, it can engage accordingly and optimize content to fit each platform for specific groups. This again increases the efficiency of a company's budget as it's able to witness higher engagement on these platforms and focus on enhancing the customer experience.
One company doing this particularly well is Marriott International, which created a culinary challenge and associated hashtag which trended on Twitter and Instagram. By using multichannel attribution to identify the best platforms on which to run the contest, the hotel brand was able to reach a diverse range of people, ultimately gaining a much wider audience.
4. Customer security
With the EU's General Data Protection Regulation (GDPR) now in force, customer security and privacy are becoming ever more important. While targeted ads and personalized marketing are massively popular and effective ways of advertising, travel companies need to be careful about what type of information they're using to personalize the ads directed at potential customers.
With ever-changing technologies, including voice, AR, and VR, keeping up with customer security is becoming a much more difficult job. New threats are forcing businesses to have to use new technologies and software in order to protect their customers' data.
If a business is taking the appropriate steps to ensure customers are secure on its site, it encourages repeat business and helps to drive revenue. When a site is secure, not only is a company improving customer experience, but it's also building trust in the eyes of its audience. This provides customers with the peace of mind that their information is being treated with the respect it deserves, and that the company itself is responsible and stable in its position within the digital travel market.
5. Loyalty
Many customers have stated they would have no problem booking with another brand or company if certain conditions, including price, schedule, or locations, were preferable.
This indicates that customer loyalty is a rarity, with customers having no ties to the company that they are choosing to travel with. Price comparison sites compound this problem by making it simpler than ever for customers to shop around for the best deal. It's also more unusual now for travelers to book their entire vacation in a single package, with innovative platforms such as Airbnb and Kayak providing a much easier booking experience to book flights, hotels, etc. separately.
Loyalty programs are something that many travel companies are setting up to ensure customers keep coming back. Hilton, for example, offers fitness classes in return for loyalty points for its guests. This encourages its customers to return to its hotels to build their loyalty points up.
6. Inspiration
Inspiration for trips and holidays can come from anywhere. Travel companies need to be ready to seize onto this inspiration when it occurs - or even create it themselves - and convert it into sales.
This is why you'll often find travel companies posting beautiful images of travel locations on their social media accounts. These images are designed to spark inspiration in those who view them, and then (hopefully) encourage and inspire holiday bookings.
Platforms such as TripTuner can help generate this inspiration in an audience. TripTuner describes itself as a "travel inspiration engine" and uses powerful artificial intelligence software to help travelers discover new vacation opportunities based on their travel history, searches, and interests. TripTuner also uses data to offer customized and personalized advertisements in order to further inspire customers.
7. Marketing Automation/Segmenting/Messaging Strategies
Many marketing departments must perform repetitive tasks like sending emails, posting to social media, and other mundane actions. However, marketing automation technology can take care of these tasks, leaving marketers free to focus on developing new strategies and interacting directly with their audiences.
Segmenting seeks to divide a broad consumer or business market into sub-groups of customers - known as segments - which are based on some type of shared characteristic/s. These groups are also usually subdivided into further groups of existing customers and potential customers. Segmentation helps marketers deliver the right information to the right people at the right time - by not sending top-of-the-funnel content to those in the middle, for example.
Brand messaging is the language and phrasing that appears on a company's website and other advertising materials. It covers everything from the fonts and images used on marketing materials to the type of music played on advertisements. Brand messaging ultimately informs audiences whether a product or service is aimed at them and can make the difference between success and failure.
The most important thing about brand messaging is that it's consistent across all channels. Your brand should have one identity and one voice, so you need to make sure all those responsible for putting out brand messages are savvy to this fact and have the necessary guidelines and training to make it happen.
8. Social Media
Travel brands are looking at how social media can be used for (almost) free advertising and to create organic buzz around their offerings.
Social media is massively influential to younger generations in particular, with many only using products and services they see advertised on their favorite platforms. Not only this, but they are living lifestyles in accordance with the trends they see on social media, with travel being a massive influencer in this regard. Instagram is a particularly useful social media platform for the travel industry as it allows brands to use hashtags to encourage people to share their travel experiences and create organic content as a result.
Social media is also being used to form relationships and enable communication between businesses and their customers, provide excellent customer service, and encourage loyalty. Being able to communicate with a company using a platform such as Facebook Messenger is, for most people, preferable to sitting on hold on the phone.
Final Thoughts
The challenges facing travel companies are forcing them to come up with new, creative solutions to combat them.
However, those companies which are willing to meet these challenges head-on will see customer experience improve across the board. In turn, this will encourage not only repeat business from those customers who have booked with them previously but inspire new customers to come on board as well.
The various challenges facing digital travel marketers will be hot topics at Digital Travel Connect US 2019, taking place this October at the Rancho Bernardo Inn, San Diego, CA.
Download the agenda today for more information and insights.