Priceline buying Kayak, AirAsia merging with Expedia, Delta investing
in Virgin Atlantic, TripAdvisor buying Jetsetter….to name but a few.
This sudden flurry of company acquisitions and buy-outs in the travel
space, coupled with the always-connected online and mobile consumer
demonstrates how travel is moving at a faster pace than ever before.
Take these two examples. Can we identify key clues which indicate the
direction the travel industry is pointing for 2013 and beyond?
Priceline buying Kayak:
Take Priceline’s unexpected move of purchasing Kayak end of last year–
this immediately raised the importance of hotels and other travel related
companies to have multi-channel digital marketing strategies and to not rely
too heavily on Priceline or Google’s strategies. Multi-channel and digital strategies
emphasise the importance of presence on social channels (Facebook, Twitter – or
RenRen, Weibo for the increasingly lucrative Chinese consumer) and that brand
building through these is essential.
This acquisition also suggested that Priceline may be using Kayak as a
way to bypass Google and consequently save up to $1 billion annually that it
spends on Google – after all, Priceline is one of Google’s biggest customers,
having spent $375.2 million in online advertising just in the third quarter of
2012.
What does
this mean for Travel 2013 and beyond: The travel and hotel industry is incredibly fragmented
and everyone is vying for space. This is reflected by the big
OTAs merging in the battle for supremacy.
Could this mean that smaller travel companies need to be even more
innovative to compete, or should they be placing more effort in to looking at
how to partner with such giants?
Air Asia and Expedia:
What I found interesting about this was that ‘AirAsia
Expedia’ appointed Kathleen Tan, who previously served as AirAsia's Group Head
of Commercial and Senior Vice President in China since 2004. Is it just a coincidence that they chose
someone with a strong background in the Chinese market, or could this be a sign
of things to come, suggesting and reinforcing AirAsia Expedia’s intention of
placing an even bigger focus on penetrating the Chinese market. This would make sense as the Guardian (among
many) have recently reported, the “Chinese become world's biggest-spending
tourists - Chinese tourists spent $102bn on foreign trips last year,
outstripping travellers from Germany and the US” (www.theguardian.co.uk)
What does
this mean for you in 2013 and beyond: There has been a lot of press on the growth
of China as a soon to explode huge player in the travel industry – everyone
wants to know how to penetrate this market.
Should this be an area to focus your distribution efforts?
Conclusion:
The travel industry is booming. 2013 is set to have more apps, more online
personalisation, more mobile friendly websites and more choice. Smaller companies are going to have to place
significant effort in building their brand through multi-channel
marketing. Ultimately, mergers and
acquisitions mean more data and more reach, so as the travel giants battle it
out, as a consumer, you can expect great things from travel.
The flurry in mergers could
also be a reaction to the pressure and expectation the industry has around
Google's travel plans. The launches of
Google Flight Search and Google Hotel Finder caused a stir, years before they
even got released. Maybe the key players
‘merging and acquiring’ is in the wake of the prospect of a big entrant like
Google making waves in the online TA space.
As a competitor, expect to be integrating slick, targeted
and personalised marketing into your distribution strategies. To make sure your
strategy is on track for success in 2013 and beyond; make sure you attend the 9th
Annual Travel Distribution Summit,Asia 2013
