Global Travel Industry
Globally the travel industry is worth over £100bn and this is growing as the developing world starts to travel more.
The UK however has seen a slow down in the travel sector due to the effects of the recession people are choosing to cut back on their holidays. In the boom times people were taking holidays 1-2 times per year, this has gone down to 1 or maybe none (a stay at home holiday or holiday in the UK). People do not have as much disposable income to spend as they once did, and as living costs are going up this is a trend that the travel industry is trying to adapt to.
Another factor that complicates things is that the cost of travel is going up, as fuel costs rise, food costs in hotels and wages in foreign countries rise the overall cost of cheap package holiday’s on average is higher now than 5 years ago.
The result is that consumers are more price orientated rather than destination orientated, opting for a cheap holiday in the sun anywhere rather than locations that make profit for the tour guide.
National Travel Industry
The UK is one of the most expensive places to holiday, with fuel costs, VAT, food costs, drinks and day excursions, many people still opt for overseas package holidays.
However, the UK is investing into themed holidays, similar to Butlins from the 1970’s spa breaks and resort holiday’s closer to home are becoming more popular with busy families that cannot take more than a week off together at a time. Resort holiday’s offer full activity facilities (such as golf, horse riding, childcare, tennis, swimming etc.) to families making the UK a alternative option to going abroad.
Competition In The Travel Industry
The holiday industry is notorious for competition, ranging from freelance travel agents, holiday websites and the traditional travel agent.
As more companies start up, the industry is only becoming more and more competitive causing companies to reduce their profit margins to meet sales figures.
Marketing For Holiday Companies
The internet is the primary tool that is used now as most people prefer looking at holiday destinations from the comfort of their home rather than going into town on a Saturday to go round the various holiday shops collecting brochures on the way.
With this in mind, most holiday companies use their websites (that now have good quality pictures of holiday destinations or multi media files) to attract customers using internet marketing, paid advertising (PPC) and social media channels.
TV advertising is still used in marketing for travel agents mainly to reinforce their brand name; however the web based companies (and freelancers) do opt for the internet.
Most holiday companies find that the traditional forms of marketing (such as TV advertising, magazine advertising) is quite expensive and only helps ‘sow the seed’ of a holiday – there is the danger that people will go to a competitor after seeing the advert. This is why the internet is more more efficient, as the advert/website will draw holiday makers onto the website and hopefully they will select and pay for their trip there and then within minutes.
One popular kind of marketing for travel businesses is ‘re-marketing’. This is where a travel business will continue to market their holiday’s to existing customers, in the hope that they will come back and re-book their next holiday (rather than shopping around or going elsewhere). Bringing on old holiday clients is much cheaper than bringing on new ones.
The key tool for any travel company is the website, in today’s world, a website is essential and 90% of holiday makers will view and book their holiday’s via a website. Coupled into internet advertising, SEO and paid advertising (PPC) the internet is the essential marketing tool for any travel company in 2012.