How the Travel Industry Can Take Advantage of the booming New Membership Economy?
Travel companies are being continuously marred with escalating distribution & advertising costs, high competition in the market while their margin is on decline.
As distribution costs continue to rise because of OTAs, travel providers (Hotels, Airlines, Car Rentals and Cruise Lines) are challenged to win back business from third-party intermediaries and produce more bottom line profit for owners. Global travel brands are paying big shares of their already slim margins while giving up control of retail rates to merchant OTAs. Also, according to a report published by Adgooroo in 2014, there has been a 40% increase since 2012 in Pay Per Click cost in advertising in Travel Industry which clearly shows that the heightened competition has driven up the prices for keywords. Leading travel brands are forced to pump huge amount of money in advertising, with decreasing value.
To combat the loss in revenue, travel companies have invested in Loyalty Programs but these customer rewards have been severely criticized as short-lived, cheap promotional activities, giving something for nothing. On an average, a customer participates in 10 different loyalty programs with decreasing value for each program as a result. Major airline companies have come up with Frequent Flyer Programs to attract and retain customers, however this is nothing new anymore, nothing that differentiates them.
So, the question that arises is: How do travel companies earn the loyalty of customers and deliver outstanding benefits without losing margins? One possible answer is: Building loyalty with your customers through a bespoke travel club. According to latest industry reports, Membership Economy is the new currency for business growth in 2016. One of the many examples is- The Hilton Select Program by Hilton Hotels. Hilton Select is members only savings program offered by the most recognized hotel brand in the world and its huge success is a testament to that.
According to Robbie Kellman Baxter, author of The Membership Economy, companies who are able to obtain and retain members will be the ones that thrive. Members are a powerful source of regular reliable income and travel companies that service and retain members have a financial and marketing advantage over others.
Personalisation of service is a huge trend among Millennials. A travel club brings that personal touch in travel services directly to your customers. Developing a travel club could be one of the smartest and most profitable business decisions your company can make!
At Custom Travel Clubs, we provide membership driven organizations the right platform with travel benefits and optional booking technology to build and run their own travel clubs. These travel clubs often operate with 35%-40% margins and create true residual and reliable income.
Here are a few benefits of starting your own Travel Club:
- Create a new recurring revenue stream through monthly memberships and sales
- Create and maintain customer loyalty as customers keep buying travel from you
- Generate leads from existing travel club members and by advertising the travel club on your web site
- Attract new customers and retain existing customers by selling travel club as part of a rewards program
- Cross-sell other services or products
Custom Travel Clubs are experts in creating travel membership programs with more than 60 years of experience in travel domain. We offer bespoke solutions that includes a beautifully designed portal for your members, a host of member benefits and 24×7 customer service to answer your member’s queries. These portals are responsive, attractive and easy to implement in your existing platform or can be stand-alone member sites.
Author & Co-Author: Mike Putman & Swati Jha
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