Marketing, marketing, and marketing. Everywhere today we find in the business world, people are running after digital marketing, internet marketing, electronic media marketing because the market is the entire world. It’s like a mess on social media platforms. Out of every 3 social media promotions, we find 1 is on either digital marketing or affiliate marketing.
Let’s talk about the tourism industry. We find global players of travel and tourism are only online platforms. The unfortunate part of the tourism industry is that these online bodies are just platforms and not agencies. In India maximum times in the board rooms of any online travel agency, the core management only hammer their brain focusing on marketing and promotion. They are always in a hurry to increase the revenue of their company. Either these people will focus on marketing strategies or they will discuss implementing their technology so that they can pull as many numbers of leads as they can. The management is always in a hurry as if they cannot afford to waste a single minute and delegate the same message to their subordinates. Always they like to talk about numbers, deals, offers & freebies. And the bitter truth is that even after 3 years or 5 years we find them that they are still in a hurry as if nothing has been done in the past so many years. Exactly you people have done nothing in the past so many years that you could have done it. People who feel that they are running short of time always have short of time. And when time is short the quickest way to bring up a business, one finds marketing and promotion is the only way out. Am I wrong my dear Founders, Presidents and Vice Presidents, etc. of top Indian online travel platforms? I would like to request you all to ask from yourself.
I am asking once again that “Is marketing & promotion being the only biggest tool to make a brand or business popular and become a global player”? Let’s do some research and try to dig few reasons that why the worldwide online tourism industry is so much dependent on marketing and promotion. Why the marketing burn is so high in this industry?
- Online travel agency giants spent $10.6B on marketing in 2018
- In the year 2019 Expedia marketing expenses was US Dollar 5.04 billion
- In the year 2019 Booking.com marketing expenses was US Dollar 4.97 billion
- Ctrip in the year 2019 spent on marketing US Dollar 1.3 billion
- Make My Trip in the year 2019 spent on marketing US Dollar 0.18 billion
- Also, we find that in the year 2016 Make My Trip spent a total of $109 million (Rs 730 crore) on sales and marketing
- Yatra meanwhile lifted its sales and marketing spend by 46.8% to INR 612 million ($9 million) in the year 2016
- Expedia – $ 10.6 billion in 2018
- ECONOMICS TIMES: Global airline industry will burn through USD 77 billion cash in the second half of 2020: IATA
If we start digging the marketing and sales numbers that are huge and overall it is affecting the entire tourism industry. Don’t you think we need to do the postmortem that why these leading travel agencies are burning so much on marketing, promotion, and sales? Remember guys, finding out the reasons for a problem gives birth to opportunities.
But let me tell you that all these figures of marketing expenses are a combination of all the travel & tourism sectors like airlines, hotel industries, holidays, etc. In fact, for the package tour, we don’t find any separate statistics. But we cannot deny the fact that most of the online companies burning rate on marketing are very high.
According to Forbes an article published on Oct 2 2019 & it said, “Online Travel Agencies need to reinvent themselves to fend off rising costs and Google.”
The Forbes report has highlighted the following 3 factors:
New Rivalries
It has been observed that the tech powerhouse that helped OTAs to become successful in the first place will eventually rise as the biggest threat in travel planning.
The other threat is coming from Google. Google has worked in the past for many years very silently building a brand in travel and today it has become a leading option for travel search, second to Expedia.
Costs and Commissions
Besides companies like Google and the tech powerhouse, the other factors are the rising competition in the tourism world. The high operating costs, business model, and the increase in “Search Engine Marketing (SEM) are also the negative factors that need to be considered seriously if one would like to exist in the travel industry.
Disruptor Headaches
The OTAs and other in the travel industry are facing rising SEM cost, overcrowded marketplaces, and disruption by a new wave of innovators and big corporate names. Actually, you see OTAs are not travel agents, they are supposed to be called OTPs (Online Travel Platforms). Due to indirect booking and commission in between, there is a price war in the market.
So we can say that there many market gaps in tourism that still need to be addressed. And the good part is that we have a huge scope & opportunity in the tourism world. I cannot be able to reveal my company’s trade secret that will play a vital role in combating those market gaps and availing those opportunities. But still I will try to explain some interesting facts and figures that might be useful for our tourism corporate world to rethink on their business plan and work on it. After all, it is our responsibility to make better and better the tourism world for our survival.
Niche Tourism Academy’s first step is to prepare core tourism professionals so that they can be easily differentiated from the rest in the market. They should be qualified & efficient enough to address those market threats. They should be taught not to become a copycat as most of the start-up guys do. Google has its own business plan so does Expedia and others. So our core professionals must have the ability to create something innovative for their own and solve the market issues. Their innovative ideas can cater to the customer’s demand. There are numerous scopes still awaiting in the tourism world that need to be addressed and to be solved. But in order to justify those areas of gaps one must have complete knowledge on the fundamentals. And this is one of the biggest market gaps in the tourism world.
My question still remains to be answered. “Is marketing & promotion being the only biggest tool to make a brand popular and become a global player?”
Okay, I am giving below 10 multi-million-dollar brands that don’t depend on Traditional Marketing Budget.
- Zara – The first retail fashion store opened in 1975 and, as of 2016, it boasted 2000 stores in 77 countries.
- Krispy Kreme – Company in beverages and limited-time donut varieties.
- Sriracha – Food & beverages industry.
- Trader Joe’s – Food & beverages industry.
- Costco – The second largest retail brand in the world.
- Kiehl’s – Multi-million-dollar Cosmetics company.
- Spanx – The billion-dollar undergarment brand.
- Lululemon – An athletic apparel retailer.
- GoPro – A Hi-Def camera manufacturing company.
- Click Magic – The next-generation ad tracking and link management system that makes every click more profitable.
Now can anyone name a single online tourism agency or a holiday company that made a brand popular without depending on traditional marketing?
There are many brands in the world so popular, but they don’t need to advertise. You have seen that mostly all the online travel houses love figuring out how to woo their audiences through massive marketing & promotion. And so they allocate a huge amount of marketing dollars. But we don’t find in the tourism sector any such online agency that is worldwide popular, and they don’t need to advertise. What I am saying here please be noted i.e. “online agency” and not offline. Because there are offline holiday companies in the world that are popular, and they don’t allocate any huge amount on marketing or promotion. But… but those offline companies are not global players. So we can say that in an online package tour there is a huge “Market Gap”. And market gap simply means opportunities. The question is WHY? Why this market gap has not been able to fill till now? Are you all excited to know the answer to this ‘Why”?
If you want to know the answer from my perspective I would like to invite you to come to my FREE 90 minutes Master Class. Just for 90 minutes keep your ego aside and take out your time to connect with me even if you are a Director, President, and Chief Executive Officer of any international group or a global chief executive experienced in the B2B and B2C technology, media, and travel sectors or has held numerous senior management and director roles as part of your several-year stint in the tourism industry. I can guarantee even to those stalwarts that they will start thinking from a different angle for the betterment of the tourism industry. After all Niche Tourism Academy is for everyone those who are in tourism. My intention is not to criticize anyone because everyone has contributed a lot to the tourism industry even those guys who are not from the root level of tourism. I am only against the injustice being done with the real heroes of this industry. I have started this revolution and I am sure many will join my hand to take it forward in the future.
Need more clarification to my question that “Is marketing & promotion being the only biggest tool to make a brand popular and become a global player?”
Currently, most of the online tourism company is driven by the following sequence.
Technology (40%) – Marketing & Promotion (50%) – Borrowed Product Data (10%)
I will very boldly say that 95% of the online tourism industry is running on the copy & paste method and their products are borrowed. They don’t have their own. That’s why above I have mentioned ‘borrowed product data”. And it’s a shame on those online tourism industries because they are global players.
The current demand of the online tourism market is something different now post pandemic.
Own Product (60%) – Technology (30%) – Marketing & Promotion (10%)
And in fact, there is an “urgent need of a worldwide network of tourism knowledge under one platform”.
It is always said that a great product needs great marketing. Great marketing doesn’t mean huge marketing expenses. Great marketing in terms of great ideas that can trigger the pulse of your target customer. And Apple Inc. is an example of the same. Do we have any such tourism brand in the world that can be called an Apple Inc. of tourism?
The current demand is to focus on building a business that is hard to compete and creating its own “Hub” so that our whole marketing and selling strategies should not be dependent on the other platforms. All the promotional platforms are changing quickly so we need to focus on building such a company that should be independent and rich in product.
I have simply here pinpointed few vital issues and given some data so that one can have some idea and move forward in a better direction in their tourism business or profession. Some might agree and some might not agree. Those who don’t want to agree I don’t care because Niche Tourism Academy is going to prove it right in near future.
Before concluding this article I will say that though marketing one of the most important tools in any business to grow and succeed one must know how discreetly it can be used. In the tourism industry marketing and promotion can never be taken as the primary tool of business. It will be your product that should always be the primary tool to grow your business. So start revising your business plan and I am sure you will find a huge positive change in your business. Best of luck to you all guys.
My next article will be “Learn How to Successfully Sell Kamchatka Tours” so STAY TUNED….
- If you would like to be in the community of Future World’s Largest “Core Tourism Professionals”
- If you would like to become the Master of “Fundamentals of Package Tours” and
- If you would like to “Differentiate” yourself from the rest in the Worldwide Tourism Market
COME & JOIN NICHE TOURISM ACADEMY…. LAUNCHING ANYTIME IN JUNE 2021… STAY TUNED & FOLLOW US
Compiled By
Asad Siddiqui
(Founder @ Niche Tourism Academy)
connect@nichetourismacademy.com, nichetourismacademy@gmail.com
www.asadsid.com & www.nichetourismacademy.com