Deals websites are increasingly looking to travel as a source of revenue, but they claim to be “growing the pie” rather than stealing market share from travel agents.
Recent years have seen sites such as Scoopon.com.au and Luxury Escapes turn their focus to mopping up excess capacity in the tourism sector by creating limited availability deals which are sent out to their considerable customer databases.
Speaking at the Traveltech conference in Sydney earlier this week, Scoopon general manager Jon Beros confirmed over the last two to three years, travel had been the company’s fastest growing category in the group and is now its biggest.
“We only just started to understand the power of what travel can do in 2014/15,” he told delegates. He reported 60-70% growth per year, with an increase of 100% expected this year.
The site currently sells cruise and accommodation, but Beros was quick to stress that it is not a wholesaler or a travel agent. However, with its database of five million members growing at a rapid rate, partly thanks to its new emphasis on travel, it is certainly a force to be reckoned with.
Meanwhile, the Lux Group’s Luxury Escapes is also making significant strides in the sector, with sales growing to $200 million in just three years, according to managing director Adam Schwab.
He believes that deals websites like Luxury Escapes are “definitely a positive influence on the industry.”
“We are inspiring people to travel to new destinations,” he said.
“Almost every customer we bring to a hotel is incremental.”
Randall Deer, managing director of Ignite Travel Group – the company which was recently acquired by Flight Centre Travel Group – also highlighted the benefits the channel offers the travel industry. The company shifted its focus from a travel-based rewards program to consumer deals in 2009 with the launch of Myholidaycentre.com.au.
“If you present good opportunities for people to travel, they will react,” he said.
“A lot of people are waiting for that inspiration. We are out there just reminding people all the time how much they want to take that holiday.”
The sites’ ability to curate product rather than place a vast array of options before their customers also works to their benefit, according to Deer.
“Choice isn’t always good,” he told delegates. “Choice can equal confusion.”
Ensuring a “frictionless” sales process is also an important part of the process by making it easy for customers to book, something which all three parties agreed upon.
“Fixed packages remove a lot of the choice which removes confusion,” Deer said.
Myholidaycentre.com.au aims to entice the consumer segment, not by discounting, but through “value-adds” – a measure which also protects the interests of agents, he added.
“By not discounting packages, it means we can grow harmoniously with the rest off the industry.”
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