The COVID-19 pandemic has been a horror story for many small businesses, particularly within the travel industry. And within the travel industry, Tours and Activities businesses have been hit particularly hard as travel ground to a halt.
So it’s understandable that, right now, it’s hard for tours and activities operators to look ahead with any optimism as we wait anxiously for borders to open, planes to get back in the air, and tourists to get back on the move. But when Benjamin Franklin wrote that out of adversity comes opportunity, he was on to something.
Now is the time for tours and activities operators to recalibrate how they do business, examining their channel mix and revenue model to ensure a brighter, more profitable future.
Why now? Because it’s becoming increasingly clear that for at least the next year we are going to need to make more money from fewer people.
That can only be done by creating bigger margins. And there are only two ways to do that while maintaining the quality of your product: hang on to more of the money that comes your way, or put up your prices. In either of these cases, the Online Travel Agencies (OTAs) are not your friend.
Now that may be a controversial statement, but hear me out.
If you put up your prices while continuing to rely on OTAs for a significant portion of your sales, your products are very likely to garner less attention on the OTA sites. As a result, you could very well reach a lower percentage of travelers through OTAs – and thus sell far fewer seats/tickets – than you do today.
If you keep prices as-is but continue to pay the ever-increasing margins that OTAs charge, you may see bookings increase a bit from their abysmal lows of this spring. But don’t expect the OTAs – who specialize in global travel – to fully bounce back and deliver the same level of sales that you’re accustomed to.
Fortunately, there is a third way:
While this may sound intimidating, there are tools ready and waiting to help you. One of which you likely know well: Google.
We know that, due to the lengthy time between initial consideration and booking, the entire tours, activities and attractions business revolves around search. The OTAs have made their fortunes by exploiting this fact, using global reach and massive budgets to win bookings that might otherwise have come directly to tours and activities operators.
The good news for operators in this time of COVID: at a time when travel is limited to local areas, searches for ‘near me’ have increased dramatically. So the global reach of the OTAs is no longer an advantage, and operators have a unique opportunity to shift the balance of bookings back in their favor by taking advantage of the local business capabilities Google offers.
The key is to maximize your use of these tools to capture the majorities of these ‘near me’ searches for yourself, so you get the booking without paying a 30% commission. That means more money for you, not the OTA. What’s not to like?
If you do it well, more of the money that the customer pays will go to your business, and your business alone.
This means choosing a booking system that allows you to take bookings on your own site without a crazy commission. There are lots of them out there and most are really good. Find them on the Reserve with Google list (just Google ‘Reserve with Google software partner’). You’ll pay a small monthly fee, but you’ll be giving your customers a good quality user experience without service costs being added to your prices. The cheapest booking should be the direct one.
What this boils down to, is whether someone actually makes a booking on your site using a mobile phone. We do reviews regularly and often you can’t. Operators need to understand most of their customers are using a mobile phone and have no time for complexity or difficulty. Again, this will be mostly resolved by the booking platforms, so just pick the one that suits you best.
Around 50% of all searches are local and 80% are category-based. Google my Business gives you the tools to be visible for these searches. It also allows you to connect your booking through the Reserve with Google features. Google does not take a commission on these highly visible placements. It’s as close as you are going to get to making free money. Seriously, it’s that easy.
Once that’s sorted, you’ll want to manage your channels and pricing, which means managing your relationship with the OTAs to maximize conversion and bookings for the travelers you aren’t able to capture on your own. Remember, you’re in charge. You don’t want an OTA offering discounts on your prices and therefore your margin.
Put simply, the game is to get every booking you can and to ensure as many as possible of those are direct. And with these four steps, and perhaps an experienced partner like TourismSolved in your corner to help navigate the online world, you’ll be well on your way to leveling the playing field by driving more direct bookings as travel returns.
If you are interested to learn more we are going to be running free Webinars with Rezdy. Go to our website and tell Bruce our bot you’d like to come and we’ll make sure you get an invite.
Register link: https://tourismsolved.com/webinars