travel tech insights

Few people in the travel industry would contest that competition is intensifying; sources for information and insights are multiplying and travelers’ – especially millennials – expectations for trip experiences are higher than ever. Turning these people into customers is an increasingly difficult challenge. Even getting them to your shopping cart isn’t enough – as high abandonment rates attest. Is it any wonder so many travel agencies are focused on sharpening their marketing campaigns to the public with Big Data and Analytics? Actually, perhaps the priority of marketing to that group is a big of a wonder – when you consider it often overlooks the importance of existing travel customers to current and future success.

There’s no question every travel company – from travel agency to travel management company (TMC); tour operator to destinationmanagement company (DMC) –has financial statements produced by its travel management software system.  Whether for viewing monthly/annual financial results, meeting shareholder requirements or complying with bank requirements, financial statements are a fixture in the business world.  However, many travel company owners and managers don’t know how to read this financial information; some rely on accountants or advisors to explain the numbers; others just don’t really use the information at all.

The travel industry is witnessing a cross-current of demographics: on one hand, the Baby Boomer generation is retiring and leaving the work force; on the other hand, the millennial generation is entering the workforce and beginning to climb the income ladder. To a large extent, the way a travel company handles this transformation over the next ten years will determine its success. It will have to adroitly adjust to the changing travel habits – and budgets – of the graying boomers and become aware of – and knowledgeable about - millennial lifestyles and travel preferences. In some ways the challenge of millennial travelers is unique; certainly the influence of technology is unprecedented. But in more ways, it’s no different from what the travel industry faced when the boomers arrived decades ago; a new, significant, market requiring insight and innovation.

The Web can be a magical place: your company launches its website and over the course of weeks and months transactions begin to take place with people you’ve never heard of, from places you’ve never been. Soon you find yourself spending long hours exploring ways to build site traffic: SEO concepts and terms from Google analytics become a familiar part of your vocabulary. After months of steady effort momentum builds and a steady upward trend emerges. But not so for sales; revenue consistently lags behind projections. An inbound marketing firm is brought in and reports the conversion rate for website traffic is 1.5% - and calls it good news because it’s so close to the travel industry average of 1.6%. It sure doesn’t seem like good news, does it?

GetYourGuide, a young travel company founded in 2009, made a splash in travel industry news last week with the announcement of a $50 million investment by KKR, a prominent NYC-based investment company.  For new travel company entrepreneurs – or those in any industry, for that matter – GetYourGuide has all the hallmarks of a Cinderella story: humble students working through the night, unaware they’re on the brink of creating a multi-million dollar company.  Not long ago this blog had a post that relates to the GetYourGuide story, “Top Start-up Tips for the Travel Industry”.  Accordingly, this announcement provides a great opportunity to see how well this Cinderella story validates our travel start-up guidance in the areas of: value; planning and attitude.