By , Anand Srinivasan
Published April 26, 2016
Travel start-ups are among the most difficult niches to find success with. There are two reasons for this. Firstly, the segment is extremely competitive. There are literally hundreds of travel agent businesses selling tickets and packages to any given destination. As a result, the high marketing costs can often eat into the healthy commissions that these agents make. Secondly, destination-targeted holiday bookings are often a one-time transaction. Few people travel to the same holiday destination each year.
Given the challenges, there are two sustainable marketing strategies to choose from. OTAs that provide holiday booking from across the world often focus on branding. Building a brand ensures that your service is the “go to” platform for holiday planning. On the other hand, start-ups that focus on specific destinations use SEO, SEM and content marketing to grow their business. The strategy here is to be capture leads from Google search queries pertaining to these destinations and channel these visitors to your travel services.
Barring SEM, none of the other strategies provide quick and viable returns on your investment. Both SEO and brand building can often take years to materialize while SEM can be quite expensive for a high competition segment like travel. So what are some alternate low cost strategies that newly launched travel start-ups can use to grow their business? For this article, I talked to travel business owners for those lesser known tricks that helped them succeed in business. Here are a few tips.
Hotels and experience related business are often listed on online aggregators like TripAdvisor and VirtualTourist. These are websites that are heavily used by travelers to research their destinations and to plan their itinerary. In effect, where you rank in these listings can often make or break your business. According to Andrea Gaviria who heads Marketing Operations at Ibiza Summer Villas, a comprehensive reviews-focused strategy has helped her team reach out to that targeted list of travelers who seek reviews from past visitors before making their booking. By focusing on reviews, you can establish credibility that is often a vital element that travelers look for while booking a holiday.
If you do not have a lot of marketing budget, direct outreach can often be one of the most cost-effective ways to find new business. According to Jeremy Clement, the Co-Founder of Project Expedition, a tours and activities marketplaces for adventure travelers, Twitter and Instagram hashtags are great ways to identify prospective travelers to any particular destination. He says that the way to do this is to search for people using these hashtags or keywords and engaging with them through these social networks. You can also take it a step further by offering discounts or may direct these leads to your website to make a booking. Direct outreach through social networks can get you customers who you may have missed through other marketing channels and the strategy itself can work for both OTAs as well as destination-specific travel start-ups.
This is a strategy that works well for OTAs and other destination-agnostic travel start-ups. According to LP Maurice, the CEO and Founder of BusBud, an online bus booking service, his startup regularly organizes hackathons for developers to build innovative new travel solutions using their API. These hackathons have helped his business build attractive products for customers like finding $1 bus tickets or tools to compare the prices of bus tickets against flights for any route. Such projects can not only be useful features for your main product, but can also create virality and in turn new bookings in the short term. Maurice says that these projects are a “unique and innovative” way to reach out to new customers.
Aspiring entrepreneurs often assume travel to be a segment that needs deep pockets to survive. But as these strategies show, it is always possible to penetrate the market with low cost innovative strategies in the short term till your business can grow sufficiently large enough to focus on the other high cost marketing strategies.