Whether you are an established travel agency that wants to start selling online or you are just starting out, you might be wondering: "Is it possible to beat big online players in the market?" In this short article we are going to shed a little light on this subject and show you what possibilities we see.
Let's start our analysis by taking a look at the strengths and weaknesses of the big online players. Then we will consider how we can use this knowledge to our advantage.
First of all, big online players have large advertising budgets. When you have a big budget you can use it in many ways. However, because of the complexity involved, a bigger budget is actually less profitable in percentage terms than a smaller one. So if you only have a small number of areas on which to focus your marketing efforts, you can beat the big players in that way. Because of their large volumes, they can afford to have just a small percentage of successful transactions from the total clicks.
The small or medium player has the advantage of specialising in a few destinations. Instead of trying to sell everything to everyone, you can focus on a few destinations and do them very well.
When an online travel agency (OTA) is very big, it channels a lot of marketing efforts into selling to its existing customer base. These customers are easier to sell to because you have almost zero acquisition costs. This is a strength that you can use in your favor. You can start thinking like a big player and create your own customer base. In the long run, the idea is to gradually switch your marketing efforts from new customers to existing customers. At some point you will start to understand more easily how much is needed and where.
The big players can afford to compete for the most sought after destination keywords in Google, but this increases acquisition costs. If you move to long-tail keywords you will have less competition and lower costs. Long tail means a very detailed search query. Instead of typing "accommodation in Paris" maybe someone looks for "accommodation in Paris for 2 adults at hotel X". Focusing on long-tail queries is another winning strategy for a smaller player.
When it comes to price, big OTAs have additional incentives from their suppliers, but they keep high sale prices on their websites. Most wholesalers will give you a better price than the large OTAs. Why do large OTAs charge higher prices? Because they have a large captive audience for their services. Some people don’t search anywhere else for a comparison. But these are not the people we are looking for. This is what you should aim for in the long run: to become the only choice in your customer's mind. But it's a long battle.
We think that every player has a place in today’s online travel landscape, and even if it looks like a "winner takes it all" game, the small pieces left actually bring big money. If you have a solid online platform on your website you can grow step by step.
If you want to see how our platform could help you beat the big OTAs, you can schedule a demo with our team here.