James Mann, Senior Client Development Manager – Travel at Rakuten Advertising, looks at why travel marketers are going to lean more heavily on online deals, vouchers, and promotions.
When nominating a word of last year for the UK travel industry, it’s hard to find a better one than “disruption”. Long queues in the airports, rescheduled flights and trains, and last-minute booking cancellations have almost become the norm. Adding to this, concerns about the cost-of-living and a looming recession have meant that Brits aren’t as trigger happy when it comes to booking their holidays.
That said, people have showed in the past year that they still want to go away despite this turbulence (whether that’s overseas or a lower key domestic holiday). In fact, Statista’s research shows that revenue in the UK travel and tourism industry increased to nearly £25 billion this year, rising by about £10 billion from the previous year. The Statista Mobility Market Outlook estimated that revenue across all segments of the sector will continue to increase and surpass pre-pandemic levels by 2023.
Therefore, while there are many new and emerging factors at play affecting UK travellers’ behaviour and approach, the fact is that we’re still a nation of holidaymakers – and that’s set to continue next year.
The ‘Vigilant Vacationer’
Holidays cost more today (in relative terms) and often require extra planning. This is giving rise to the ‘vigilant vacationer’ – a shrewd holidaymaker who’s willing to do the leg work to make sure the trip is worth their while. Recent research from Rakuten Advertising reinforces this trend, finding that 70% of holidaymakers have booked travel after finding a deal or a promotion online.
Because people currently have less disposable income, travellers have never been so discount conscious. Offering incentives through the affiliate channel such as cashback can help to boost conversions. Travel brands must tap into this if they’re to succeed, with the uncertainty set to stay into 2023.
But while it’s not surprising that a great discount will increase conversions, travel brands also need to be sensitive to this new, wary consumer and advertise strategically to appeal to varying concerns and changing wallets. This will involve taking a step back to revisit the lessons of the last two years to assess what marketing activity resonated, what fell flat, and what the unexpected surprises were.
Personalise your promotions
An initial learning since travel recommenced, is that brands must look to enhance their personal understanding of customers on a region-by-region basis. Since the pandemic, local market nuances have become more distinct, as seen with the varying economic responses to the cost-of-living crisis.
As a result, brands marketing to UK consumers should leverage affiliate network’s expertise in the travel sector to bring the right promotions to the right people. Combining the brand’s knowledge of its own audience with an affiliate publisher’s understanding of the local market and British consumers will allow for a more effective execution of affiliate strategies to elevate their marketing efforts.
Being agile to market nuances is especially important for travel, considering the cross-border nature of this industry. In addition, working with publishers in each local market means that best practices can be applied across different countries.
Focus on loyalty and retention
Price sensitivity is clearly a major factor for UK travel brands – and discounts must be part of this strategy. To complement this, however, marketing teams must consider that the economic downturn evokes an emotional as well as a rational reaction. Travel companies need to appeal to consumers on a personal level, not just a financial one.
At a time where people are re-evaluating their budgets, travel brands need to boost their presence and showcase how they’re supporting customers. The point-of-reward needs to change in loyalty programmes, for instance; rather than rewarding a small customer segment that racks up a lot of travel miles, brands should offer exclusive rewards to less frequent or newer customers.
For example, an upgrade to a first-class lounge in the airport could be a dealmaker for someone who’s considering not flying due to worries about a long wait in the airport. On the other hand, a traveller concerned about late cancellation fees and rigidity could be won over with a free cancellation policy. Being flexible is important here, with consumers becoming increasingly cautious about how they choose to travel.
Stay relevant and present
Taking steps to improve their loyalty programmes will enable travel brands to build trust among consumers during this period of uncertainty. It will help them to stay relevant and present too; if someone can’t afford to travel today, once they are in a place to plan a holiday, they will choose the brand they trust. In this way, loyalty feeds into a longer-term revenue strategy focused on retention.
By complementing this approach to loyalty programmes with personalised messaging and promotions through the affiliate channel, travel brands can both encourage customer retention in the long-term and encourage conversions in the short-term. This will leave them better placed to achieve their KPIs during turbulent economic conditions, while also building a reputation with the most affected customers for when they’re in a position to start travelling again.
Senior Client Development Manager - Travel