strategy+business is published by PwC Strategy& LLC.
or, sign in with:
strategy and business
 / Fourth Quarter 2001 / Issue 25(originally published by Booz & Company)


Catching Travelers on the Fly

Our investigation highlights the risk — and reality — of commoditization in the travel industry. Consider online travel agencies, for example: Forty percent of the digital travelers who visited Expedia also visited Travelocity, and vice versa. The price-based lack of loyalty was similarly apparent among customers at airline sites: Thirty percent of the people visiting American Airlines’ and United Airlines’ sites cross between the two, with 55 to 60 percent of their online prospects also visiting other major airlines’ sites.

These travel sites play into the commoditization trap by focusing their offerings almost entirely on price and availability. They are designed largely to deliver a seat at a price consumers believe to be as good as (if not better than) one they could find anywhere else. None of the current travel portals or discount sites offer something so compelling or proprietary that the other sites couldn’t match it. They’re not prepared to answer the questions a digital traveler might ask beyond price: Which cruise, from which port, offers the best value in June or July? How should an opera lover traveling to Salzburg plan side trips that match his interests in antiquarian books and locally brewed beers?

Once upon a time, travel marketers engaged in more dramatic forms of marketing. Consider the gorgeous British railway posters of the 1930s, which attempted to generate demand by illustrating the joys of bathing in Brighton. Or fast-forward another 30 years, to the airline advertising of the 1960s and ’70s, with its images of seductive stewardesses and slogans like “Fly Me.” Whether focused on the destination or brand identity, the marketing highlighted aesthetics, customer engagement, and, most importantly, brand differentiation.

In recent years, travel marketers have moved away from such image-based advertising. In large part, that’s because today’s travel market is much more complex, and its buyers vastly more sophisticated. The same traveler has many different needs, depending on the occasion. For a quick business trip or family visit, price and availability are key. For a weekend break, more choice is required, including such considerations as comfort of lodgings, access to rental cars, and local entertainment possibilities. For a major holiday, the search for vacation-related information actually becomes part of the experience, and anticipation a source of pleasure.

How can a single marketer appeal to an individual consumer across so many potential occasions?

The answer is to start with the understanding that marketing communication today is not a one-way street, but a dialogue. Interactive technologies are allowing marketers to learn about a consumer’s immediate needs and interests, and to match their products instantaneously and seamlessly to those needs and interests. In the process, marketers can learn how different people in different situations view their product, what other products they compare it to, and how these customers ultimately make buying decisions — information with equal relevance to both offline marketing and online marketing.

In the world of online travel, however, this dialogue is still at a rudimentary stage, limited largely to loyalty programs. What’s more, the challenge suppliers face in becoming all things to the same person (and to do so profitably) is significant. An airline cannot provide the same experience to you when you are traveling coach with your family to Walt Disney World as it does when you are flying first class on business to Frankfurt.

But marketers can tailor their messages and services to meet a customer’s needs in each distinct usage occasion, matching the value proposition to the digital traveler’s momentary needs. Although not as powerful as, say, offering every consumer — from the lowest-paying to the highest-paying — an ocean-view room, occasionalization can give the savvy supplier an edge by enabling it to deliver to consumers the information and enticements they want, when they want them.

Follow Us 
Facebook Twitter LinkedIn Google Plus YouTube RSS strategy+business Digital and Mobile products App Store


Sign up to receive s+b newsletters and get a FREE Strategy eBook

You will initially receive up to two newsletters/week. You can unsubscribe from any newsletter by using the link found in each newsletter.