Online Travel's Future is Now

This is a great time to talk about ecommerce since the holidays are upon us and marketers can expect another record-setting online holiday spend. But, holidays aside, where do Americans spend more ecommerce dollars than any other category? If you guessed books, you would be right on a volume level, but in total dollars, Americans spend more on travel than anything else online. Nearly two in three Americans research and plan travel online, and another 66 percent of those book their travel online. In fact, online travel advertising is one of the internet's more mature ecommerce sectors.

Since it is so mature, you would think this is a settled industry with entrenched players and established ways of doing business. Not so. Online travel planning is in the process of being turned on its head by Web 2.0.  So much so, that the title for giant Phocus Wright Conference in Hollywood this week is Travel 2.0.

If we use user-generated media as shorthand for Web 2.0, the biggest development in the travel category will mean new opportunities for travel marketers to reach early stage "in-market" buyers as UGM-centric websites such as Tripmates.com, Igougo.com, Lonely Planet, and Real Travel pull buyers away from fossilizing Online Travel Agents (or OTAs such as Expedia, Travelocity, Orbitz, Hotwire, and Priceline.)

Increasingly, travel planners want more than the price quotes OTAs offer; they want advice. They want to hear from real people like themselves who have been to the places they are exploring and can give "from the trenches" commentary. Who among us hasn't been burned by the often hyperbolic language and photos that most travel properties use to describe themselves, only to discover on arrival that there was no mention of the 220-unit condos under construction next door, or that the 10-year-old photo of the beach doesn't show the erosion down to bed rock from last year's tropical storm. User-generated content has become king in travel. Five days in the Caribbean for a family of five can easily exceed $10,000, so more and more travelers are relying on each other to make certain each dollar is well spent.

OTAs were (and are) the cash registers of online travel. But, by in large, they do not feature access to traveler commentary on specific transportation carriers or properties. While no one is foolish enough to predict the downfall of the OTAs, it IS easy to see how travel sites that link travelers with one another will attract more and more buyers. This is good news for marketers since, with a few exceptions, OTA audiences have been "off limits" to most advertisers. Even when a travel marketer gets an indirect click from an OTA, it is generally a late-stage travel planner who already knows where they were going and what timeframe they want to go in.

The new Travel 2.0 landscape looks a little better for media planners. A new generation of travel websites is creating the opportunity to reach travelers earlier in the process and bring them directly to your website. Here are some of the hot areas:

  1. Travel Deals publishers (CheapFlights, Travelzoo, SmarterTravel, Fare Compare)
  2. Travel Review websites (TripAdvisor, which recently launched graphic ads)
  3. Online travel communities (Igougo, TripMates, TravelPod, RealTravel, Gusto, TravBuddy, TripConnect, etc)
  4. MetaSearch Websites (Kayak, Mobissimo, Yahoo Farechase, SideStep, Travelgrove)

There are still challenges to reaching this audience, of course. Most of the supplier websites (Hilton, Hertz, etc) that are also stealing market share from OTAS, don't accept advertising that links off their sites.

When a fairly mature industry changes, it's easy to run for the hills, but as a wise person once said, "Change is Opportunity." Travel 2.0 means a few things for media planners and is, on balance, positive for marketers trying to reach an audience of "in market" travelers online. In a nutshell it means:

  1. A chance to reach travelers earlier in the travel planning process
  2. More fragmentation as travelers seek new CMG-centric sites. You won't be able to reach 50 percent of travelers through just three sites anymore
  3. Direct access to travelers. The new sites that are taking place of the OTAs offer links directly to an advertiser's website

In short, Web 2.0 means a better online experience for travel planners and a broader range of opportunities for marketers. Every industry needs a shake-up every 10 years or so even a mature sector of ecommerce like travel.

Cree Lawson is Travel Ad Network's CEO.

 

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