It’s been a tumultuous few years for the travel industry, with staff shortages, strikes, and supply chain woes creating mass disruption following on from Covid.
Despite a resurgence in consumer travel during the summer – with nearly twice as many people travelling abroad in the six months from March to August 2022 than the previous six months – the cost-of-living crisis is once again putting pressure on travel and hospitality brands.
So, how are companies adapting their strategies to align with the changing needs of consumers amid ongoing challenges?
Value-based messaging and finance-focused products
The cost-of-living crisis is expected to result in many consumers pulling back on non-essential spend, which could mean sacrificing trips abroad. But even for those who are planning to travel next year, research suggests that there could still be a shift towards more budget-friendly holidays. Abta’s 2022 Holiday Trends report – which was conducted in August – found that 61% of all people surveyed said they will go abroad in the next 12 months, but 35% will reduce costs and opt for cheaper trips.
Travel and hospitality companies are adapting their messaging accordingly. Premier Inn recently shifted the tone of its ‘Rest Easy’ campaign to reflect the brand’s consistency and reliability, as well as encouraging customers to book ahead for cheaper leisure stays. “We took that balance of getting out and reliving all those experiences, to how we’re thoughtful about how people are spending, and the sentiment around value,” Tamara Strauss, Premier Inn’s global customer director, recently told Marketing Week.
Elsewhere, Tui’s ‘Next Summer Sorted’ campaign is also centred around helping consumers sort out their summer holidays now, with the introduction of fixed pricing that can be paid in instalments over time. The tone is far removed from Tui’s ‘Live Happy’ campaign from last summer, which then focused on inspirational content related to making getaways extra special.
Fixed pricing is also one of the factors behind the success of Hopper – which has the fastest growing travel app in the US, with nearly 80 million downloads. Hopper is well known for its predictive algorithm, which informs customers of the cheapest time to purchase a flight. More recently, Hopper has added additional fintech products, including a ‘Price Freeze’ feature, which enables customers to freeze the price of an airline ticket, hotel room, or car rental for a fee that’s 5% to 15% of the underlying product cost. If the price then rises, Hopper covers the difference up to a predetermined cap.
This strategy has helped Hopper grow during a time when many in the travel industry suffered. Capital One recently invested $96 million in the company, following on from the success of its initial partnership, Capital One Travel, which saw Hopper power Capital One’s travel booking platform.
Promoting travel agents as consumers look for assistance
Disruption and uncertainty around travel has resulted in consumers increasingly seeking out advice and help from travel agents and advisors. Abta’s report also found that, as of August 2022, 36% of people had booked via a travel professional or agent compared with 34% in 2019, with a notable rise in young families and 25- to 34-year-olds booking in this way as they seek peace of mind. Elsewhere, luxury travel agent network Virtuoso reported that requests from people seeking an advisor grew 50% in 2021 compared to 2020.
Once a role that focused solely on booking; travel agents now take on a variety of customer-experience focused tasks amid growing complexities in travel. This can range from determining vaccination entry requirements to re-arranging flights in the face of disruptions and finding insurance – even offering recommendations and arranging trip itineraries.
Travel brands are also recognising this demand. Earlier this year, Jet2Holidays rolled out a billboard campaign designed to drive customers to their local travel agent, which can be located via the travel agent finder section on the Jet2Holidays website. Following this, the company then launched the ‘Holiday Saving Experts’ campaign in September 2022, promoting and positioning independent travel agents as experts that can help consumers find and book the best-value holiday possible.
Elsewhere, the demand for travel agents is also being reflected in new tech start-ups like Fora Travel, whose co-founder is the former CEO of One Fine Stay. Fora Travel aims to reinvent the modern travel agency, enabling anyone to become a travel agent via its platform, with commissions earned by booking hotels and other travel experiences. The company says that, for customers, the benefit is a personalised trip created by an expert with a deep understanding and love of travel.
Moving away from search engines to social media and travel apps
As product searches shift towards retail sites – with 61% of US consumers now starting their journey on Amazon – search for travel is also shifting, with consumers increasingly using apps and social media rather than search engines like Google.
Expedia says that its app usage is at an all-time high, with quarterly active app users increasing nearly 40% in Q3 2022 versus the same period in 2019. As Expedia explains, its app is now part of a longer-term marketing investment, which helps the company to “capture traveller intent outside of classic performance channels” as well as extend lifetime value.
In order to do this, Expedia is adding new features to its app to engage and inform consumers, including Price Tracking, Trip Boards (to allow users to share and collaborate on trip details), and Smart Shopping (to enable users to compare and choose between available rooms).
Booking Holdings (owner of Booking.com, Kayak, and Agoda) has also focused heavily on its mobile apps this year, viewing the channel as a way to increase direct engagement with customers in order to drive loyalty. Glenn Fogel, the company’s CEO, said in a recent earnings call that around 45% of room nights were booked through the company’s apps in Q3, which is just over 10% higher than in 2019. “The great thing about the mobile app is it’s in people’s hands or in their pocketbook or in their pocket where they’re carrying it with them. And that gives us the connection to be able to provide them with better service, better things to do, better value. And that’s why it’s such an important part of this Connected Trip vision,” he said.
Lastly, the growth of Hopper also demonstrates the consumer shift to mobile travel apps, which is again determining the strategy of many travel brands. CEO Frederic Lalonde is hoping to build on this to become the number one ‘super app’ in the US, with new plans to integrate social commerce features such as referrals, share-to-earn, team buying, and daily gifts.
In a recent interview with Travel Weekly, Lalonde suggests that the days of extensive research into travel will disappear alongside a fractured booking process, replaced by an all-new customer experience. “Will it be an ecommerce app that sells travel? Will it be a travel app that does ridesharing? Will it be a ridesharing app that does travel?” he asks. “But somebody’s going to win…”.
Loyalty, flexibility and ‘bleisure’: How travel brands are adapting post-pandemic