If you are a traditional travel agency and want to start selling online, or you are just starting up, one of the most important factors in your decision is the money involved. Assuming you don’t have an unlimited budget, this article will shed some light on how to optimize your budget in the online travel business.
Regardless of which platform you use, if you just invest in a platform and expect to make sales overnight, it rarely happens. It might happen for well established agencies that already have good traffic on their website and are simply changing the platform. If that is the case, then you should skip the parts about marketing budgets because you already know this, and go straight to the budget for the platform.
If you don’t already have a strong traffic source for your website, then it's important to understand that the online platform is a must, but it's not everything. You will need to invest in online-specific marketing efforts. It is the role of your marketing budget to put your website in front of as many pairs of eyes as possible.
In other articles we have discussed strategies for doing that.
The second most important budget is your software budget. A good platform can cost a fortune if you build it from scratch, or around 20,000 to 100,000 EUR in setup fees, depending on what modules and features you select. Of course, there are monthly running costs for support for the platform. They usually work out at around 5% of the initial setup fee. However, the best option is to invest in a SaaS (Software as a Service) platform for travel, which takes the financial pressure off your shoulders. SaaS platforms come with almost zero setup fees and only monthly fees. In this way, the money that you would pay out in setup fees for a traditional platform can go into marketing efforts.
Be aware that money invested in marketing is returned to you in 45 days on average.
All that said, we think it's much more important to invest in a SaaS platform and allocate a constant budget to marketing. A marketing budget will reap you a profit, and profit will start paying for the platform. Depending on your strategy, you will reach a break-even point, where what you are spending on the platform will be covered by the profits the platform and marketing are generating. From that point on, you have a profitable business.
As always, if you want to see how Travitude can help you turn a profit, please arrange a meeting with our sales team.