Pushed though five new TV commercials, the spots will feature the now famous roaming gnome in a variety of situations, ranging from the running of the bulls to a ski gondola to a sandy beach, all with messages encouraging travelers to get up, go and experience.
We spoke with the company’s Chief Marketing Officer, Brad Wilson, to get the inside scoop on the new campaign and what makes Travelocity different from the other leading OTAs in the marketplace.
Competition from sites like Hotwire, Priceline, Kayak and Orbitz is tough, Wilson admits, but he believes that this new campaign sets Travelocity apart in its multi-platform approach. In addition to multiple ads pushed through partnerships with nearly all major television channels and many online outlets, the campaign is being offered via mobile and social channels as well.Housed on YouTube, the campaign will be seen in its entirety across all of the brand’s social channels, but also on mobile devices – a key differentiator, Wilson said.
The famed Roaming Gnome is still a major part of the campaign as well, serving as both mascot and inspiration for travelers.
But that isn’t all that’s new at Travelocity. The brand is aiming to capture travelers through a number of interactive and engaging methods, including a new video series with Courtney Scott, a “Let’s Roam” app launching in April that will let travelers use social sharing technology to solicit information about upcoming trips, and a billboard-like advertising program in major airports that will direct travelers to special offers through unique mobile codes.
We’ll keep a close eye on how this new campaign develops and what – if any – changes this makes to the OTA landscape.
Online travel agencies have had a solid run over the past two years. They picked up some market share as would-be travelers were willing to poke around a little more to score cheap tickets. High rates of unemployment and under-employment and general economic uncertainty, of course, were enough to make consumers value every dollar a little more. This opened an opportunity for online travel agencies to advance in the marketplace, and chip away at the dominance of their suppliers (i.e., the airlines) on the web.
Yet, the market is turning. Next year is expected to be a strong one for the air travel industry relative to 2010, and 2010 was a vast improvement over 2009. For online travel agencies, this provides some benefit as a rising tide, but it’s likely to favor their suppliers, as customers are more likely to go with what they know over putting in some effort to find the largest discounts.
Online travel agencies will have to overcome this tendency by investing smartly and substantially in their own brands. This is what we’re seeing in the latest move by CheapOair, the one of the 10 largest online travel agencies in the sector, in its recent announcement of a marketing mix change, which teases a broader strategic shift given changing market conditions.
A Changing Travel Market
From 2008 to 2010, online travel agencies were able to chip away at the online market share of their suppliers, reducing the suppliers from owning 62 percent of the online business in 2008 to 59 percent in 2010, according to travel industry research firm PhoCusWright. Bargain hunters drove the market, which eroded the importance of brand loyalty.
From 2009 to 2010, PhoCusWright notes a “strong countercyclical performance for the OTA category.” In 2009, sales fell only 1 percent for the sector, compared to 5 percent for the total online leisure/unmanaged business travel market. And, online travel agencies have posted double-digit gains in 2010.
Stronger industry conditions, however, are better for the suppliers, and PhoCusWright observes, “With the rebound continuing, supplier websites will likely regain momentum as the OTA fight to hold on to their share gains.”
In regards to the actual travel experience, ostensibly, the airline’s brand matters most. When a passenger books through an online travel agency, the brand associated with the transaction lasts for a few minutes – or a few hours, depending on the diligence of the buyer’s search. Meanwhile, interaction with the airline’s brand starts during the search for a ticket, persists through the flight and ends sometime after the passenger hops into a town car to get to his ultimate destination. To register in the customer consciousness, online travel agencies need to develop the sort of presences that will keep them top of mind.
This runs counter to the traditional online customer acquisition models associated with the online travel agency business, which involve a combination of search engine optimization, online ads, affiliate programs and social media. These are transaction-oriented tactics, which speak directly to the brand-barrenness of big discounting.
More Than the Transaction
The largest online travel agencies have already moved past transaction myopia: everybody knows the Travelocity gnome, Priceline‘s William Shatner and the likes of “Cooper” from Expedia. For all but the top players, however, investments in mass media brand development (such as television) have generally been eschewed in favor of what’s been known to work. Speaking at Business Insider’s IGNITION conference last week, Buddy Media CEO Michael Lazerow noted that Travelocity grew to $4 billion in revenue through online means before it moved to television to get to the next level.
Yet, for the online travel agency sector to hold its ground – and even grow – in 2011, brand has to matter more, and this means casting a wider media net. This, plus the size of CheapOair relative to its competitors, is what caught my attention about its recent media diversification. The company is launching its first television ad campaign, “Get More for Less,” in an aggressive move to get out in front of the imminent online travel market shift.
The move to television is an aggressive one, and it comes a bit ahead of “schedule” for CheapOair, if you use the Travelocity number as a reference point. Expedia pulled in close to $3 billion in revenue last year, for example, and Priceline at $2.3 billion. Travelong/CheapOair generated $825 million in revenue in 2009 and has grown at a year-over-year rate of 45 percent this year, resulting in forecasted 2010 revenues of $1.2 billion.
The company’s CEO, Sam Jain, says, “TV is a new strategy for CheapOair and as we head into our 6th year we believe this is the right time to expand our marketing efforts. TV is a natural evolution from our current digital marketing and will help build awareness among a larger audience and introduce more people to the brand.” The countercyclical tendencies of the online travel agency market relative to travel as a whole reinforce this point.
Pointing to the potential for a virtuous cycle, CheapOair’s Sr. Vice President of Strategic Partnerships, Bill Miller, adds, “This new TV campaign should draw in more customers for us which in turn will bring more value to our supplier partners. Our suppliers — airlines, hotels, car rentals —- want valuable and efficient distribution partners. I believe we are all that and more and this TV campaign is just another example of how we can extend our marketing reach on the behalf of our supplier partners.”
Fashion versus Reality
It’s been fashionable among the digerati to claim the death of other forms of media, and I’m as guilty as the rest. But, the reality is that SEO and online ads (a la Google’s pay-per-click model) are becoming increasingly crowded and competitive. Since they are focused on the transaction rather than the brand, they don’t provide for a relationship with the customer that results in a gradual reduction in cost per revenue over time. It’s strictly “pay by the drink,” and that can get pricey.
With the travel market starting to tip in favor of the travel suppliers over the online travel agencies, the costs associated with traditional online marketing will become even higher, as brand brings customers back to the suppliers and online travel agencies chase a shrinking share of bargain hunters. For online travel agencies to compete effectively, they have to make their own investments in branding – a commitment that lacks the predictability of other forms of marketing.
Strangely, television may become the key to winning on the web in the travel industry in 2011. A better market translates to the amplification of the importance of brand, and commercials are still a critical aspect of this in the consumer world.
A battle of the brands is about to break out. The good news is that it’s for your benefit … and you’ll get to watch it on TV!
If your next hotel stay is more expensive than you expected, blame the government. State and local governments, still reeling from the recession, are looking for any source of revenue they can grab. And, they’re next target seems to be online travel agencies.
Online booking sites, such as Expedia and Orbitz, negotiate a rate with hotels for available inventory, market it up a bit and pass it along to the travel-buying public. The business model is pretty straightforward. The problem comes down to which room rate should be used to calculate state and local occupancy taxes. At least 40 lawsuits have been filed over the issue, as local governments have rewritten ordinances to try to add a bit more to the coffers.
There’s a lot at stake, according to a USA Today report. Approximately $1 billion a year is perceived to be lost by state and local governments.
“Occupancy taxes are based on the rate the hotel sets and receives,” he says, “not the profits, fees or commissions of its partners. … The facilitation fees are no more part of the hotel rate than the taxi that takes the guest from the airport or the tip they give the bellhop.”
How do you feel about this issue? Leave a comment to let us know if it’s what the hotel gets or what the occupant pays that should matter for tax purposes.
As the meta search market becomes more saturated, online travel agents and booking sites need to up their game plan in an effort to attract more discerning consumers looking for the nitty-gritty before booking.
Online travel agency Orbitz Worldwide Inc. announced plans to roll out a new “hotel search experience” on its site, complete with destination information, maps, tools and resources for travelers looking to book a hotel room with the OTA.
The side-by-side comparison feature allows users to compare the pros and cons of various hotels in a single view. But there are some other cool new features on this search engine including interactive maps that show both the hotel location and real-time room rate pricing, and a Google Street View image of the hotel and its surrounding neighborhood.You can also filter and sort results based on price, star-rating, consumer reviews and amenities. In most cases, hotel photos, videos and virtual tours from will be posted, but according to Orbitz, these photos and videos will only be from verified customers.
I tested out the site with a quick search for a New York City hotel. My parameters:
3- and 4-star properties in SoHo, Tribeca, or Greenwich Village that offer free WiFi. Orbitz returned four results: Soho Grand Hotel, Tribeca Grand Hotel, Hilton Garden Inn Tribeca and the Washington Square Hotel. Not bad options, and when I clicked on the Google map to the left of the page, I was treated to a map of NYC with the four hotels’ placements, as well as the price info.
My only disappointment: I couldn’t find the ‘real’ street view that allows you to see what’s happening near and around the hotel. I think this feature, in particular, will be extremely helpful for travelers who are booking hotels in a new destination, so Orbitz might want to give it more prominent placement.
Have you used the new hotel booking site on Orbitz? Let us know what you think!
Taking good photos of fireworks is no easy feat. The darkness, rapid movement and distance all conspire to confuse your average digital camera. As a result, many fireworks photos come out blurry and disappointing. All the more reason then, for selecting today’s fabulous fireworks shot from Flickr user Aseem01, who caught this colorful burst in Ota-ku, Japan. Fun fact: in Japan, they call fireworks hanabi.
Want your photo considered for Gadling’s Photo of the Day? Upload your best shots here.