Blog homeConversion on travel websites – big topic. Lets look at the numbers:
General conversion rates from Google for
Online Travel Agencies (OTA) is 1-5%;
airlines 5-10%;
cars 10-15%.‘Immediate conversion’ – when a click is followed through to a booking without the user pausing for thought – is between 0.5% and 2.5% for OTAs.
[Source: See my previous blog post analysing these figures]
Now lets look at at some conventional ecommerce retail conversion figures:
ProFlowers: 31.1 percent
LL Bean: 25.7 percent
Amazon: 23.7 percent
VitaCost: 23.0 percent
Coldwater Creek: 22.4 percent
QVC: 21.1 percent
Roamans: 20.4 percent
Office Depot: 20.2 percent
LandsEnd: 19.3 percent
Victoria’s Secret 19.2 percent
[Source: Kikabink News via Danbec @ Isango - Original source Nielsen Online Dec 2008]
Massive difference – why is that?
I have covered plenty of analysis on this blog about conversion. I am not going to recap all the old arguments – but here is a new principle – DESIRE.
Travel websites tend to have a two step marketing process
- Generate consumer desire for the destination (and associated product)
- Once desire is generated, make your version of the product the one that must be booked. No point generating desire for a destination only to lose the customer to a competitor with a similar product!
This differs from, say, Amazon where the desire for an individual book (or branded product) may have been generated prior to the initial site access. All the website is doing is servicing existing consumer desire. Of course, subsequent sales etc could be based on desire generated by the site – but the very first sale – the one with the hardest conversion to achieve – will probably have desire generated by a 3rd party.
Where do travel agents fit in?
For the sake of this discussion I will equate travel agents with website affiliates. Both are remunerated on success. I will leave the discussion about who owns the consumer relationship (agents tend to, affiliates rarely do) and topics such as agents paying for the right to sell an airline’s flights as topics for another day…
The goal of a modern travel agent should therefore be about generating desire for a travel product. Travel suppliers would really value travel agents within the travel industry if they were desire builders. However many agents are not – hence their position in the industry is reportedly in peril.
Successful website affiliates understand the desire building game. There is a second set of website affiliates – those who cream off a % of traffic already looking for a known brand – and direct it to the branded website… Not the kind of affiliates that websites want to work with.
Its not agents vs suppliers!
Moral of the story is – if you are building desire for a product – regardless whether you are an agent, a tour operator or whatever you like to call yourself – you are probably going to be OK in the travel industry. The web may be great – but the end game for the web is efficient desire building – not automated desire building. Humans buy from humans and will do so for a while. The clever aspect of the web is enabling one human to converse with hundreds of potential customers at once – rather than just on a 1 to 1 basis.
If you are just servicing existing desire then unless you are online or have similar economies of scale you could be in trouble over the longer term. Suppliers can service existing desire perfectly well themselves – no need for agents to assist with that.
The conversation that we should be having therefore within the industry isn’t to polarise agents vs operators vs suppliers etc….. but to think about where is consumer desire generated and how should we reward agents for building desire if they are not handling the booking function?
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Absolutely agree with you about the importance of building desire to improve conversion rates. But the challenge is tracking the origin of that desire (and reward people accordingly) in the travel industry where the time between desire and purchase is so long. Notice the companies you list with 20% conversion rates are smaller basket value items that often fall in the impulse category of purchases. I’d be curious to see how travel stacks up against similarly priced products like high-end televisions or even the auto industry. If I’m spending 20 Euro on a book I might not shop around to save an extra 5 Euro. If I’m spending 5,000 Euro I will shop around to save 500 Euro. Still your point is valid that travel must do a better job of building desire and converting that into a purchase. We just signed a deal today with WizzAir to provide travel inspiration about festivals in destination cities because they realized price alone does not create sufficient travel desire. Which is something RyanAir would argue since they seem to believe price is the reason and the means all wrapped in one. Don’t have an answer, but thanks for getting the conversation started.
Hi Alex.
What are the dynamics of a web site which are helping to build consumer desire.
What are your ideas about the following elements of a web site.
* Usability & user friendliness
* Design. The way the site show its products.
* Prices & payment opportunities.
* Brand value of the web site, travel agent or tour operator.
How important are they against each other. What is your importance order.
Greetings from Turkey
Fatih
Great thread. The bane of the ‘desire builders’ (and I believe we are a prime example of one) is that fulfillment gets done elsewhere. At Travel Intelligence, where conversion was painfully low, the problem was building desire only for the visitor to book direct with the hotel or via a budget supplier – especially since alot of the hotels were only ‘on request’. Same problem exists at other boutique hotel sites like mr and mrs smith. However efficient you are at building desire, if you are in the ecommerce game, (if you don’t have massive scale and hence purchasing power) then you have to work extra hard to get the business, whether via incentives, loyalty (viz MMS’s vault) or whatever.
The alternative is to bypass all that and become a media company, relying on ad revenues. In which case you need substantially more traffic.
How very interesting – and refreshingly “new”. For a change.
There could be two sorts of agent, though, desire builders (essentially vacation orientated) and the me sort (who are essentially business travel orientated). Personally, I am not building any desire for anything as my function is to resolve travel problems, rather then create a desire to go to a destination in the first place. As you say, we will leave the bit about paying for the privilege until later. The me sort are getting a bit few and far between. Our function is to resolve the rather more complex travel requirements. I do get bored doing endless return flights to Paris and do indeed wonder why anyone wants to pay me a fee for doing it for them – though larger companies do not want people going off willy-nilly booking all sorts of stuff, so I act as a sort of travel policy policeman. Self booking tools can be got around! I come into my own, like today, trying to create a working itinerary for a trip to Port Moresby, Dili, Suva and Honaraia.
I like this concept of “desire builder” although you do rather skirt round the subject of renumeration. I am wondering if this neatly summarises a holy grail which has been sought by many, for a long time. I believe that there must be, firstly, a desire to renumerate (I am not too sure that one exists at present) as many of the larger elements in the food chain are too heavily focused on their end-of-year numbers and “long term thinking” just does not exist. Further, you are asking all elements to step back from grabing what they can from where they can; if you can do that, it will be classified as a miracle.
This is good stuff. At least one is not talking about – yawn – “finding a niche” and all this other well worn garbage as we witnessed recently…..
Hi Alex,
Here’s what sticks out for me in your post.
1. Travel marketing is a two-step process
* Generate consumer desire for the city/destination
* Once desire is generated, make your version of the product the one that must be booked- right now, or tomorrow morning when the customer is ready to book on impulse
2. It’s not just about desire building, but ** efficient ** desire building. And not automation.
I am intrigued by this concept of ‘efficient desire building’. I would argue the most efficient desire building comes from images and words that absolutely blow people out of the water. If a visitor comes to a site and is shown a wide variety of very compelling travel experiences in a few of their preferred destinations, I would argue the copy generates the desire, and a human closes the sale through email or telephone conversations. You are absolutely right that humans still buy from humans.
Perhaps you could write a post elaborating a bit more on how you suggest readers could efficiently build desire?