Online Travel Marketplaces – Fad or Future?
The freedom of choice is sweet.
It’s sweeter when all the possible choices are laid out in front of the eyes, eliminating the need to look elsewhere.
That’s what an online travel marketplace does. It doesn’t spoon-feed travelers (because no one wants that) but gives them an immense range of options, especially local experiences to choose from. Travelers today like planning their own trips but they need to be nudged in that direction with sightseeing options, places to visit locally, local transport, flights, hotels, and other such details.
This is why, this space is expected to grow and garner $1091 billion by 2022.
What exactly is an Online Travel Marketplace?
An online travel marketplace can be described as a medium or a connecting link between providers and consumers. It connects businesses (local and international) to travelers by allowing the former to sign up and display their offerings. Consumers/travelers then check the products out and choose them. These products can be separate offerings or packages.
A huge advantage here is that these marketplaces help convince even those who haven’t yet made plans to buy a package. They may visit the website looking for information or details, and find multiple options to select from. This convenience makes it easy for them to compare and decide quickly.
Digital travel sales across the globe have seen a tremendous rise in the past few years because online purchases are quick and easy. This is why industry providers are tying up with online travel marketplaces to showcase their products. If they are not featured on these marketplaces, they stand to lose a lot.
Companies that stand to benefit the most out of these marketplaces are inbound tour operators, local sightseeing and activities providers, B&B owners, independent hotels, local transportation providers etc. An online marketplace can provide such businesses the exposure and distribution opportunities that are otherwise difficult or costly for them to get. They can’t spend hundreds and thousands of dollars on advertising like OTAs can so marketplaces can be a cost-effective marketing channel for them.
A marketplace is a great platform for travellers too, as they can buy directly from the sellers and compare services and deals offered by various suppliers under one roof rather than contacting them individually.
Types of Online Travel Marketplaces
Did you think they were all the same? Not really! Here are a few popular ones:
- Those that reach out to everyone. These include Thrillophilia, Lonely Planet, Travel Triangle and TripAdvisor
- Those based on memberships
- Those with a great rewards program
- Those with niche products only
How to build an Online Travel Marketplace
The market has a few marketplaces already. If you are looking to build one as well, it must be on par or better than these. Fortunately, the formula is quite simple. There are a few steps to keep in mind here, and they are listed out as follows:
- Find a niche and/or direction: Being specific makes targeting easier. But, like Expedia and other giants, you can choose multiple niches as well. Local tours, hotel & flight packages, geographies, and types of tours are few examples that you can look into. Focusing on a niche also makes it easier to identify and reach out to potential partners that are going to be selling through your marketplace, as you’re not casting a wide net. It also narrows down your buyer personas/segments to create tailored marketing campaigns. Eg. if your marketplace is focused on adventure tours/activities, you can run targeted campaigns to attract people interested in adventure travel and outdoor activities.
- Set the foundation: Business planning and gathering a stellar team are the two pillars your business will stand on. Make sure you leave no room for error here. Carefully craft your business plan, including every possible detail about customers, your roadmap, revenue projections, etc. and then build a team that will help you achieve your goals. There are two major revenue models for a travel marketplace: 1) Charge a monthly subscription from sellers 2) Charge sellers a transaction fee/commission on the bookings they get through the platform.
- Build the website, focusing on user experience: Make sure your website has all the elements that can win over consumers. These include speed and a seamless experience along with important features, reviews, ratings, subscription/membership, etc. Detailed product descriptions with attractive images and video content also enhance user experience. Booking and payment gateway need special attention because these are the most crucial features. Once everything is in place, roll out a beta to test everything. Only after you are satisfied, take it live. While it’s relatively easier to build front ends for your marketplace website, building the back-end is much more complicated. You can approach a travel technology expert like TravelCarma to help you provide you the back-end infrastructure – things like CRS/Extranets for your partners to load their inventory with rates, aggregating content from third-party API suppliers, markups and business rules management, mid-office for managing bookings and generating co-branded vouchers and invoices, payment gateway integration, reporting module for BI reports and analysis etc. The unique advantage TravelCarma offers is that you get all ready-to-use building blocks for the back-end travel components(that usually take months to build otherwise) but with the flexibility of building your own front ends for web and mobile using TravelCarma’s Development APIs. So you can save months on development and have your UI/UX the way you want. Plus, TravelCarma is hosted on Amazon Web Services(AWS) which provides scalability, flexibility and world-class security.
- Craft clever marketing campaigns: You need to attract quality traffic to your website get your business going. In fact we suggest running teaser campaigns weeks before you even go live to create a buzz and get early sign-ups. All you need is a compelling landing page and you’re good to go! Once live, a cost effective way to build website traffic is through digital marketing, particularly inbound marketing. This includes doing on-page and off-page SEO, publishing 2-3 quality blogs posts a week with relevant keywords, running 1-2 webinars a month and being active on social media platforms like Facebook, Instagram and Linkedin. You can even run email campaigns using Mailchimp to reach out to potential buyers and sellers. If you have the budget, you should also run paid campaigns on Facebook and Google to maximise exposure.
Are online Travel Marketplaces worth the hype?
Before we answer this directly, let’s take a look at some statistics in the travel world.
- The global online travel market is expected to grow by 13.16% annually until 2023.
- It is expected to garner $1,134.55 billion by 2023. That’s a steep increase from $570.25 billion in 2017.
- Expedia, a global leader, generated around $12.07 billion in 2019. Around a billion more than it did in 2018.
These numbers directly imply that the online travel marketplace is heading for great things and is totally worth the hype. It is not a fad that will fade in a few months or a year. It is here not just to stay but also to grow because the demand is increasing. More and more people want to travel and explore the world. They all need a medium that’s convenient and helpful such as an online travel marketplace.
Online marketplaces benefit providers and customers, which is why they are getting popular. The demand is expected to go up with each passing year.
The right time to build an online travel marketplace was yesterday. The second best time is now so that you can capitalise on the opportunities that will arise once the COVID-19 situation subsides and the world of travel slowly gets back on its feet.