“Suppliers have a great opportunity to generate incremental revenue from package sales”

Interview with Gregory Saks, director – travel, Compete, Inc.

Suppliers have a great opportunity to generate incremental revenue from package sales, but need to work on the integration issues, says Gregory Saks, director – travel, Compete, Inc.

“Sales (packaged-related) on supplier sites remain low. A big hurdle to overcome is that most product packaging engines on supplier sites are disconnected from the core booking engine on the website, putting the onus on the consumer to work hard to find a relevant package offering,” says Saks.

In an interview with EyeforTravel.com’s Ritesh Gupta, Saks spoke about the trends in online distribution, relationship between travel suppliers and agencies and other issues. Excerpts from the interview:

Talking from travel suppliers’ perspective, you told me last year – What’s missing was an understanding of a consumer’s entire travel consideration process as well as demographic and psychographic profiles so that visitors are no longer anonymous.  How do you think this has changed?

There have not been any significant technical developments. Unless the website visitor is an existing customer that is cookied or logged in, the website operator has little information about this consumer’s profile, needs, and motivations.  Additionally, companies do not have visibility into where and what travel products consumers are researching and booking at competitor sites. This is where Compete fits in, as we have the ability to study these types of behaviors and provide assessments to our clients and partners.

What striking features have you witnessed in the way travel planning and buying process is evolving? 

The most notable trends are a continued but slowing shift in bookings from online travel agency websites towards supplier websites.  In reaction, online travel agencies have been expanding their focus on selling vacation packages rather than standalone flights or hotels. Also of note is the progress made in the meta search category. Usage of this category is still far lower than traditional OTA’s, however it is growing quickly. Sidestep and Kayak now each have over two million US users per month. 

Considering your organisation offers core online travel intelligence solution, how do you think online advertising and search engine marketing have progressed in the last year or so?

The search engines have introduced new tools and features designed to allow marketers to target and manage their search campaigns more efficiently, but the concept of selecting keywords and corresponding bid amounts is unchanged.  The search engines are working hard to sell every last drop of relevant inventory that they have, and doing a good job.

How do you think suppliers are going with attracting traffic to their own sites through desktop marketing application and dynamic packaging initiatives?

In desktop marketing, Southwest remains the most prominent and successful example of a supplier using this kind of application. There is an opportunity for improvements in desktop applications, such as more precisely targeted offers and messages that both Southwest and other marketers could focus on.   

As for packages, sales on supplier sites remain low.  A big hurdle to overcome is that most product packaging engines on supplier sites are disconnected from the core booking engine on the website, putting the onus on the consumer to work hard to find a relevant package offering. Suppliers have a great opportunity to generate incremental revenue from package sales, but need to work on these integration issues.

You had referred to change in relationship between travel suppliers and agencies, expected to forge stronger and deeper relationships with consumers that extend beyond their own websites. How has this shape up in your viewpoint?

It is still an open playing field.  Southwest has done a fantastic job with its DING application, but there are room for other marketers as well.  The sites best positioned to establish a strong desktop marketing presence may be the agencies, which have more products to offer.   An always-on application from an airline will only provide offers to a consumer who is in-market for flights, however an application from an agency can provide offers regardless of what type of travel the user is in-market for. 

How do you think consumer-generated content (CGC) as a tool has progressed when it comes to strengthening bond with the target audience on the whole? 

Starwood's new Sheraton website is a strong endorsement of consumer generated content, and a good indication of its progression.  Understanding how the new Sheraton site is performing will be important for other travel marketers to decide if they will follow suit.

What is perception about CGC? Do consumers trust bloggers views more than traditional marketing? 

Consumers value information generated by their peers, and compared to traditional interrupt-style advertising messages, often find it more trustworthy.  The issue becomes aggregating and categorizing all of the content.  There may be dozens of comments about a particular resort hotel scattered thinly across several websites, and the average consumer won't get access to all of it.  Being able to find consumer generated content from people who share the same travel interests, likes and dislikes as oneself can be difficult. Knowing that two out of two reviewers gave a cruise ship a five-star rating is helpful, but more important is knowing if the ratings were given by a couple in their 60’s looking to relax, or instead by college spring-breakers!