Blog homeOne problem facing many tour operators is large dot coms moving into their area - and either taking substantial market share - or creating downward pressure on pricing. They may be “in your area” now - or will certainly be in the next few years.
Firstly I ought to define a dot com - by which I mean a travel company (either agent or principal) trading mainly online. There are some travel websites that act as the online public face of a “traditionally structured” travel company - and these are “dot com like” but not dot com themselves….. confused…. yeah sorry - I can’t explain very well today.
Anyway, this got me thinking in a “David vs Goliath” way. What weaknesses do large travel dot coms have that can be used against them by smaller travel companies when faced with their own Goliaths?
First lets look at the makeup of a dot com (I will base this on one I have done some work for in the past - however they are not longer trading exactly as they were)
- Hotels only
- 60,000 hotels distributed globally
- Mixture of connections to acquire hotel price & availability - including individual hotel extranets and 3rd party bed bank connectivity
- Sold via central website as well as many partner websites (affiliates and other large travel portals)
So - all looks good. Lets say you sell hotels - but as a tour operator - and only in a very specific destination. What do you do about this dot com that now has many of your hotels on their website - probably selling at a lower price - and now taking a proportion of the direct market away from you?
I won’t go through my solutions to this problem because these are dependent upon what your company is about…..however here are some of most dot com’s weaknesses that you could choose to expose:
- Product knowledge - You will know more about your hotels than the dot com. The dot com just has hotels in a database and little practical knowledge about what makes one hotel better than another.
- Destination knowledge - If you are a local tour operator - you will absolutely have much better destination knowledge than you dot com competitors. The challenge is to use this without turning your website into a guidebook.
- Scale - If you are a smaller company, you can take actions that can only be done on a smaller scale. For example, functionality that requires human intervention would never be implemented in a dot com. Additionally, dot coms only tend to sell product that they have a lot of. If you can create product that has very low maximum capacity - you won’t have any dot com competitors.
- Call centre / contact centre - dot com call centre staff tend to be amazing at knowing all the ins and outs of the booking process - and booking conditions etc - but are not product or destination experts. Your staff (or you) hopefully are.
- Product treatment - larger companies tend to have to implement the same functionality or web design for all their products. If you have 60,000 hotels each will be presented in exactly the same way. As a smaller company you can afford to spend more effort on your products you know sell well - regardless of the fact that you end up with an unbalanced website or marketing campaign. Does one of your hotels have something unique to it - then create more information about it on your site?
- Individuality - you can treat your customers as individuals. Dot coms struggle with this.
- Agility - larger dot coms tend to work on “allocation” meaning they have pre-booked much capacity often a season or two ahead. If you sell mainly “on request” (meaning that you buy hotel stock when a customer buys from you) then you can be more agile and react to changing market conditions
Of course, good dot coms tend to be looking to solve these problems as well…… but most large dot coms get stuck on dealing with issues of large scale - and therefore leave much fruit on the tree - if you know how to harvest it!
Any more weaknesses that can be used?
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