The document discusses the travel and hospitality industry. It covers the industry overview including major services provided. It outlines business challenges such as competition from internet agencies and the economy. It also discusses opportunities in the industry including using the internet for distribution and specializing in niche areas. It provides statistics on digital marketing trends such as most visitors using search engines and desired hotel apps. It concludes with areas of focus for social media and mobile marketing.

1. Travel and Hospitality
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Industry Overview
The travel and hospitality industry is formed by three types of companies with considerable overlap: retail travel
agencies, business travel management companies and tour operators. Demand of the industry is driven by business and
leisure travel, which is subsequently dependent on the shape of the economy. Major services include reservations,
tickets for airline flights and lodging, as well as leisure cruises and packaged tours. Other more minor services include
entertainment and event tickets, time-share services, convention and sightseeing services and car rental reservations. In
recent years, there have been two major factors affecting the industry: sophisticated pricing schemes created by the
airlines to maximize profitability, and the progression of the Internet as a widely available information and booking tool.
Business Challenges
 Intense Competition from Internet Agencies: Travelers can easily bypass traditional travel agents and third
party travel websites by simply booking directly with airlines and hotels. To maintain a competitive edge, many
large online travel agents (like Expedia or Travelocity) have eliminated booking fees. Additionally, some
companies even waive cancellation and change fees. This shift away from fee revenue, forces travel agencies to
backend commissions and advertising revenue to shore up the difference.
 Economy and Terrorism Fears: Travel is strongly connected to the strength of the economy, partially because of
business travel and partially because personal travel is dependent on income. Further, terrorism or natural
disaster fears easily prompts tourist cancellations.
 Competition from Communication Technology: Advancements in communication technology significantly
decreases the need for business travel. Video conferencing is a method that is becoming a strong alternative to
travel. Adoption of video conferencing technology has significantly cut travel expenses for companies. Online
management and collaboration tools decrease the need for business travel.
Industry Opportunities
 Internet Distribution: The Internet has the ability to help traditional travel agencies expand their reach to new
customers. While most travel agencies already operate Internet websites, many of these are purely
promotional. Agencies that invest in computer technology are more able to increase sales by enabling
customers to vie and purchase travel packages directly from the website.
 Specialization: As airlines tickets become commodities, travel agencies are adapting and changing their focus to
providing packaged tours. By focusing on a niche and developing expertise in specific areas of this large industry
(like African safaris or European art tours for example), travel agencies can provide a higher value-added service
to travelers.
 Technology Initiatives: Travel agencies are investing in new technology initiatives in order to help them attract
more customers, improve efficiencies, cut costs and win market share from competitors. For instance, travel
Copyright © 2011 by Research and Management. All rights reserved.

2. Travel and Hospitality
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companies are leveraging customer databases by combining information from other subsidiaries. This tactic
enables agencies to create more-targeted marketing campaigns as well as offer incentives to encourage future
travel.
Digital Marketing Trends
Top Online Merchandising Tools
The majority of website visitors land on hospitality and tourism
sites using search engines, according to a recent statistic released
by eMarketer. In Q4 of 2010, 29% of total website traffic for
hospitality and tourism sites came from search engines. Twenty-
six percent of total website traffic to hospitality/tourism sites was
from visitors typing URLs directly into a browser during this
period. Meanwhile, 16% of traffic came from those who
bookmarked a site. Five percent of total web traffic came from
those who clicked on an email link to land on a hospitality/tourism
site, while 3% of traffic came from those who clicked on an ad.
Why Travelers Visit Hospitality/Tourism Sites
Most leisure travelers visit hospitalism/tourism sites to view or
cancel reservations, according to 80% of visitors in Q4 2010.
During the same period, 70% of visits said they visited a site to find
hotel information. About 69% of visitors landed on a
hospitality/tourism site to make reservations, while the same
percentage said they visit travel sites to compare rates.
Mobile Boarding Passes
According to Juniper Research (in a statistic released by eMarketer), by
the end of 2011, there will be 280 million mobile boarding passes
delivered worldwide. This includes airlines, rail, metro and bus passes.
Experts predict that more people will purchase mobile boarding passes in
the coming years as mobile usage grows in popularity. It is projected that
by 2013, there will be 480 million mobile boarding passes delivered to
travelers worldwide.
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Select Online Tools for Hotel, Airline and Cruise Sites
Most hotel, airline and cruise brand sites offer travelers the ability to book
online (according to 93% of respondents). Only a small segment of 7% said
they do not offer this capability online yet. About 62% of hotel, airline and
cruise brands worldwide said they offer online videos to their consumers,
while 45% said they have online loyalty programs, a strategy that has
proven to be quite popular in the travel and hospitality industry. Twenty-
eight percent of hotel, airline and cruise companies said they currently use
social sharing tools on their websites. Meanwhile, 20% of respondents said
they utilize the Facebook “like” feature in their business. Interestingly, live
chat is an online tool used by 17% of those in the hotel, airline and cruise
industry, while 9% leverage user reviews.
Mobile Sites and Apps
According to a recent statistic released by eMarketer, 76% of worldwide airlines
currently offer a mobile version of their website, while 61% of hotels do the
same. Only a small percentage (6%) of cruise lines has a mobile website as of
April 2011. On the other hand, 66% of worldwide airlines offer their travels a
Smartphone app, while half of worldwide hotels have a Smartphone app for
their customers. Approximately 13% of cruise lines currently have a
Smartphone app. When it comes to iPad apps, only 24% of airlines and 11% of
hotels offer an iPad app to their travelers.
Desired Hotel Industry Related Apps
When it comes to hotel industry-related apps desired by corporate travel
buyers and agents worldwide, we see that 82% of respondents said they
would like an app to view recommended restaurants/bars around the
hotel location. Meanwhile, 68% of respondents said they would like an
app that provides suggested activities around the hotel they’re staying at.
Half of all respondents said they would like a hotel image application,
while 49% would like the ability to purchase hotel services prior to arrival
using an app. Similarly, 39% of respondents would like an app to order
room service prior to arriving in their room. Other reasons travelers would
like a hotel-related app include: comparing hotel features, adjusting
heating/air conditioning prior to arriving and remote recording of TV
channels and programs.
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Digital Marketing Opportunities
Immediate Areas of Focus for Social and Mobile
When we look at the latest digital marketing opportunities of social media and mobile for the travel and hospitality
industry, their main considerations and focus should be on how they can use these technologies to make it easier for
consumers to research and book their travel destinations. On the social front, consumers are engaging with travel
brands and other travelers primarily on blogs, Facebook, Twitter, YouTube and review sites to get access to real-time
customer service. Additionally, they use these channels to find special offers and deals, plan their destination, gather
advice and read reviews from other travelers on where to stay and what to do, and share their post-vacation photos and
stories.
On the mobile front, companies in the travel and hospitality industry (airlines, hotels, car rental companies etc.) are
more active in the mobile space than businesses in other industry sectors. Again, they are primarily using mobile to
make it easier for their consumers to research and book travel arrangements. Activities like trip management, flight and
hotel check-ins, checking of itineraries, reading reviews and using location-based social networks like Foursquare to
connect with friends and get local deals are the primary ways consumers are using their mobile devices for travel. When
it comes to social technologies and mobile marketing, below is where we see the majority of travel and hospitality
companies making considerations from a strategy standpoint.
Social Technologies
Blog Facebook Twitter LinkedIn YouTube News Feeds/ Social Forums Review
Social Alerts Bookmarking Sites
     
Mobile Marketing
Mobile Mobile Local Mobile Mobile
Site Search Ads/ Text Apps
  
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Popular Pay-Per-Click Keywords
Keyword Advertiser Global Monthly Estimated Cost
Competition Searches per Click
travel 0.53 550000 $1.51
hospitality 0.1 74000 $1.70
cheap flights 0.98 3350000 $1.33
cheap tickets 0.92 1220000 $0.94
airline tickets 0.98 673000 $1.49
cheap airline tickets 0.98 301000 $1.28
travel lodge 0.14 246000 $0.22
travel channel 0.05 165000 $0.32
travel agency 0.34 135000 $1.49
cheapest flights 0.97 110000 $1.28
bing travel 0.17 110000 $0.27
cheap car rentals 0.99 90500 $2.72
air tickets 0.95 90500 $0.73
cheap airfare 0.98 90500 $1.39
cheap flight 0.91 90500 $1.09
travel agents 0.9 74000 $1.21
travel news 0.03 60500 $0.63
travelling 0.09 60500 $1.47
travel advisor 0.19 60500 $0.12
budget travel 0.4 60500 $0.51
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