Impact of Social Media on Travel Industry

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How Social Media is changing the Travel Industry?

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By Cybage Travel and Hospitality Practice Group

March 2010

Impact of Social Mediaon Travel Industry

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Forrester Research projects

companies will spend $3.1 billion

annually on social media by 2014”.

As per the report by SharVanBoskirk,

“US Interactive Marketing Forecast,

2009 to 2014,”Forrester Research,

July 6, 2009.”

Social Media, today, is redefining the way travel companies market to consumers and business

prospects. A large number of Travel Companies are increasingly using blogs, Facebook, Twitter, and

other social means to reach customers in a better, more cost-effective manner than traditional

advertising allows.

One thing that is common in the travel industry is how travel is such a personal experience, and how

the best travel experiences don’t come from guidebooks. Instead, the best travel experiences are

gained from people you meet along the way that suggest places you would have never discovered

otherwise.

This makes recommendation services a perceptible way

for people to get travel advice from an extensive network

of people who have real insight into what to see, do and

hear, and a willingness to share it.

Social media has become a serious marketing channel

rather than just a cool, unprofitable experiment. But the

question that arises is that how can online travel

companies and services effectively integrate social media

into their offerings to sell and earn more business.

Social media, in a broader sense, is described as the

convergence of technologies making it possible for individuals to easily communicate, share

information, and form new communities online. But what do social media mean for business today?

Social Media - New Arena for the Travel Industry

There are at present hundreds of millions of consumers worldwide using social networks, blogs,

micro-blogs, online forums, and video-sharing websites to communicate and share information. Travel

companies have followed this big, global online network of consumers with the help of social media.

Social media marketing has moved from being experimental to a must-have, increasing the importance

of adopting an integrated social strategy.

Although social media is not just about Facebook and Twitter, these two social networking websites

comprise 20 million users out of the global online audience of more than 300 million users. The volume

of interactions and the enormous amount of real-time information created by the social media is

contributed to break into the mainstream of the channels. This trend is here to stay, Forrester Research,

Inc. forecasts interactive marketing to garner 21 percent of all ad spend by 2014, up from 12 percent

in 2007.

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Social media, which includes social networking, user reviews, syndicated videos, and blogs, is expected

to grow the fastest and become the third-largest interactive marketing spend category in five years. The

following figure depicts Forrester’s interactive marketing spend forecast.

Travel companies today actively use Twitter, the micro-blogging website, to communicate directly with

their target audience, bypassing traditional public relations vehicles. The immediacy and informality

of Twitter allow marketers to come across as real people, as opposed to faceless companies. More

importantly, however, Twitter allows marketers to listen better to their customers.

Similarly, Facebook has become the one-stop shop for large audience segments that wish to socialize

online. This offer companies to access to highly segmented customers and a natural stage to launch viral

campaigns and new forms of interactive advertising.

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“By the end of 2010, more than 80% of market growth in social applications will center on a business case for

improving external customer relationships, rather than improving internal collaboration.” Data from two Gartner reports, Predicts 2010: CRM Marketing Is Building Demand on a

Limited Budget and Predicts 2010: Customer Service Meets Social CRM.

Opportunities in social media for Travel Industry Social media brings with it a great number of opportunities; however, let’s concentrate briefly on a few

key considerations for travel businesses.

Marketing

Connect with passionate users:

As advertisers, travel companies no longer

need to disturb everyone with a message.

Instead, they can engage interested customer

through social media and give them good

reason to be our advocates. Apple is perhaps

the best example of a company whose users

take a personal interest in promoting the

brand they love.

Create higher levels of engagement:

Companies can/should invite discussions,

allow users to share experiences, and engage

them in improvements. The point here is not

how this is done, but the multitude of ways

through which we can extend and enhance

the brand experience that consumers

voluntarily choose to commit to.

Engage, not advertise:

The impression ads and click-through ads of

the portal/search paradigms don’t work well with this channel. It is better to share things that would

interest them and personalize, whenever possible.

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Increase brand and product awareness:

The first step in engaging social customers is to listen to them. While social networking websites provide

a rich source of customer opinions and attitudes, the challenge is to capture and use their views in a way

that benefits the business.

Many of today’s leading websites encourage their visitors to rate and review products or content, ask

and answer questions, and share personal experiences. These capabilities help marketers in developing

online communities, establishing brand loyalty, and increasing visitor confidence.

Understand your true differentiators:

Sometimes, what you identify as differentiators differs from what your customers think. Therefore, it is

important to monitor what your customers say about you and reconcile their opinions with your story to

set forth a clear, credible, and consistent brand message.

Better leverage online channels:

Social networks can also provide an excellent opportunity for grass-roots online marketing initiatives.

Because social networks tend to be egalitarian and informal, they have the potential to appeal to

customers at a personal level, unlike through traditional channels.

Make fans not friends:

Fans on Facebook and Followers on Twitter give users the power to opt-in to being associated with you,

which is exactly what you want. This is low risk for your fans, and you can stay focused on sharing the

great things about your brand.

Sales Social networking also promises significant benefits for sales by providing the companies with new ways

to find, connect with, and understand their customers. Increasingly, companies are realizing the benefits

of incorporating social networking into their traditional sales processes.

Finding new prospects:

If done respectfully and in accordance with the terms of service for each social networking website used,

prospects will often be more receptive on a relevant subject when approached informally or through a

common contact than when approached through a cold call.

Engage in more meaningful conversations:

While they cannot replace the traditional relationship-building activities, social networks do provide

companies with a new tool to build and enhance relationships with potential prospects or customers.

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Social Media Influences Travelers

Channel

58% of travelers are influenced by user reviews

when deciding which channel to use

Product

47% of travelers are influenced by user reviews

when deciding what travel to purchase*

Price

99% additional amount people are willing to

pay after reading positive user reviews online **

Crossover

44% of business trips are extended to a leisure

stays, for an average of 5 almost days*

Consistency

57% of these crossover travelers stay in the

same hotel and city during their extended trip*

Conclusion

100% of the corporate firewall is an artificial

construct when it comes to making travel

decisions.

* The PhoCusWright Consumer Travel Trends

Survey,Ninth Edition, May 2007

** Comscore and Kelsey Group Consumer Review

Survey, October 2007

“In 2010, businesses will be looking at new ways to leverage Twitter and

alternatives to twitter will emerge”. PhoCusWright’s Analysis report dated March 2010 “Travel Innovation and

Technology Trends: 2010 and Beyond by Bob Offutt. “72% of CMOs, who did not

attach revenue assumptions to social media in 2009 say they will do so in 2010,

in addition, 64% of CMOs say they plan to invest more in social media in the

next year." According to an article in MarketingProf's

Customer Service Increasingly, customers are using social networks as an

important channel to find, receive, and communicate

information about the products and services they use and

express their views and displeasure, if any.

Social networks provide a rich source of unfiltered feedback and

a platform to identify service issues and spot opportunities for

product improvement. Thus, used correctly, social networking

websites can help customer service organizations be more

effective and create value for business.

Better understand your customers:

Social networking websites can also provide a wealth of

information about customers and their interests, lifestyles, and

preferences that might otherwise be difficult (or impossible) to

acquire. Paired with the right analysis capabilities, publicly

available customer data from social networking websites can

provide an additional layer of insight into customer preferences,

behaviors, and sentiments, which can lead to more successful

sales interactions. That not only helps remove perceived barriers

between customers and companies, but may also reduce the

cost of service.

In addition to this, social networks provide an interactive

channel that not only helps remove perceived barriers between

customers and companies, but also reduces the cost of service.

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Create an early warning system for product issues by:

• Proactively monitoring social networks for keywords, complaints, and issues related to a product.

• Monitoring chronic complainers to identify top potential service issues.

• Seeing social networking conversation history right within the customer system of record.

Large companies such as Dell and General Motors as well as thousands of mid-size and small companies

use Twitter as a secondary customer care channel.

Through this social network, they respond to negative posts immediately, with empathy. Brands

complaints by customers, although unpleasant, become opportunities for them to improve and excel.

Responding to customers' opinions or feedback makes them appreciate you, whereas doing nothing at

all makes them wonder what happened and leaves a bad impression.

Provide efficient multi-channel service:

As customers are turning to social networking websites for help, organizations have the opportunity to

help them en masse, for example, by posting unbiased information or providing self-help capabilities

through the Web.

Measurement and Monitoring

The more comfortable you get about the idea of measuring social media, the more you want to dig into

the practical application of it. Therefore, it isn’t surprising to see social media surpassing all other

channels and being ranked on the top among marketers.

Travel Companies should combine measurement tools and techniques to better understand their

investments in social media campaigns by.

• Identifying and tagging public online conversations about their product, brand, and industry.

• Analyzing message effectiveness by measuring impressions, replies, and other key metrics

According to The Nielsen Company, global* consumers spent more than five and half hours on social

networking websites such as Facebook and Twitter in December 2009, an 82% increase from the same

time last year when users were spending just over three hours on social networking websites.

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*Global data takes into account the following countries: U.S., U.K., Australia, Brazil, Japan, Switzerland, Germany,

France, Spain and Italy

`

Expectations in 2010 and beyond Along with the rise in social media budgets by the industry, a rise in expectations from the Travel

companies to produce measurable ROI has also made its way. According to an article in MarketingProf's,

“72% who did not attach revenue assumptions to social media in 2009 say they will in 2010, in addition,

64% of CMOs say they plan to invest more in social media in the next year."

To be successful, travel companies must ensure that they are presented in the best possible light and in

appropriate channels. This involves active online monitoring to gain insights into new products and

service offerings, improve customer advocacy, and reduce customer service costs.

Question: Indicate how influential each feature is to you when planning leisure travel?

PhoCusWright’s Analysis report dated March 2010 “Travel Innovation and Technology Trends: 2010 and Beyond by Bob Offutt

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In terms of how companies are using social media monitoring, brand-reputation management and

prospecting come out on top. The next most common use is identifying brand advocates.

The primary Business Purpose for Social Media Monitoring?

The data from an informal poll clearly shows that although companies understand the importance of

social media and PR measurement, they are not there in terms of execution yet.

“By the end of 2010, more than 80% of market growth in social applications will center on a business

case for improving external customer relationships, rather than improving internal collaboration.” Data from two Gartner reports, Predicts 2010: CRM Marketing Is Building Demand on a Limited Budget and Predicts 2010: Customer Service Meets Social CRM.

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Social Media Strategy for TMCs and Travel Companies Travel businesses should create a Business Page on

Facebook, Twitter, or LinkedIn, etc. that can perform multiple

tasks for you. This will create an opportunity to "soft sell"

your travel business in myriad ways.

Through this business page, you can provide information on

current offers, places to visit, and things to do. You can also

make announcements, if any, such as online seminars or

travel shows and post upcoming topics. You can also create

some audios and direct your potential customers to a place

where they can learn how to get the most out of travel at the

least cost or hassle. Use your 'Wall' in your Business Page to

post great photos, newsfeeds, and links to articles from a

variety of travel experts.

Out of all the social networking websites, Twitter offers still

more chances to target your audience and create a unique

brand in double-quick time.

Because the travel business is filled with exciting one-time

events, you have a golden opportunity to pass them on to

your followers in real-time. That gets the buzz going in your

direction. No need to pump it with a hard sell. This is one

place where "build it and they'll come" really works.

The travel business is, probably not quite unique, but

certainly distinctive in depending so strongly on trust. The

casual, friendly nature of the travel business syncs perfectly

with Twitter for building that trust.

Tips:

• Build a community surrounding your business and

gain extra exposure.

• Inform visitors of what's going on in the travel

industry. Where are the HOT vacation spots? Where

are the best destinations for the deepest deals?

Use Twitter for branding your product and see how

your product is received by the target customer.

It is a one-stop shop for imparting blogging, media,

calendaring, communicating, and sharing ideas or

information and others.

Image/video sharing and companies can create and

upload their brand images/videos and keep for free.

Companies can see what their competition is up to ‒

Keep track of what others in your industry are up to.

Network updates gives you a feed of recent activity.

It is used for photo sharing, photography related

networking, worldwide. Flickr gets top rating on

Search engines, use it to list your travel keywords and

get links to your site.

Setup your own webpage and use the YouTube

imbedded code to display the video on your page.

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• Ask fans for input and comments about their vacationing experiences. What have been the most

exotic, the most kid-friendly, the most historic, the scariest, the most eco friendly?

• Create contests and special offers. Announce your newest or best services

• Even if you don't know much of the information yourself, link to the websites you could link to in

Twitter and on your Facebook Page.

• Upload your videos and pictures of hot vacation spots, near and far. Encourage your Facebook

fans to upload their funniest vacation picture and have people vote on it.

Conclusion The surging popularity of social networking websites is indisputable. Yet many travel companies still

struggle to translate it into real business benefits. By acquiring tools that let them manage their social

networking initiatives alongside traditional marketing, sales, and service activities, travel companies can

take advantage of social networking without losing focus on their core business.

Ultimate success will follow for businesses that can integrate social networking’s wealth of customer

data, unfiltered feedback, and informal conversations into their existing customer management

initiatives and processes.

Travel Businesses must have a strategy for social media to be in the market and ahead in the competitive

environment. The main concerns of CMOs were;

• Consumer’s social media habits

• Branding the product

• Listening to influential people in the groups

• Rapid response mechanism in place

• Measure the results

• Look for opportunities

Travel companies should have innovative tools to leverage on this immense scope for branding products

and better services.

They need tools that will weed out “noise” and provide the capability to listen to both customer attitudes

about the brands and competitors charts trends, as well as converse and interact with customers.

A social networking system typically integrates with social networking APIs to achieve a variety of

functionalities by extending and mapping newer features.

Cybage has been keenly involved in understanding this revolutionary medium and creating a cutting-

edge technology. Having worked on implementation of APIs of leading social networking websites,

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Cybage has gathered extensive experience in integrating rich and interactive social networking features

into any Web application by using available off-the-shelf social networking products.

About Cybage

Cybage is a leading name in the global IT industry with a proven track record of over 14 years. We are a SEI CMMI Level 5 and ISO

27001 certified company with a global team of over 3000 employees. Ranked as one of the top 100 Innovative Service Providers in

the 2009 Global Services 100 list and featured in ‘Fortune’ at no. 4 in the 2008 Global Outsourcing 100, rising star category by IAOP,

we have been consistently adding value to the business bottom line of a crème-de-la-crème global clientele.

Leveraging our unique ExcelShore™ model of operational excellence, we not only help our clients to substantially bring down their

costs, but also improve their business processes to get the most out of the flat world dynamics. Our service offerings include

Software Development, Sustained Engineering, Re-engineering, QA &Testing, Technical Writing, Technical Support, User Interface

Design & establishing dedicated Offshore Development Centers (ODCs)

Cybage has a dedicated practice for Travel and Hospitality domain. We understand the dynamism in today’s fast paced travel &

hospitality industry, its rapid growth, fierce competition and increasing customer expectations. We have extensive experience in

this industry through active offshore engagements and have served 40+ major customers in USA, UK & Europe.

To know more about Cybage’s Travel & Hospitality expertise write to us at: [email protected]

Cybage Software Pvt. Ltd.

HQ: West Avenue, Kalyani Nagar, Pune 411 006, India. Tel: 91 20 6604 4700 Fax: 91 20 6604 1701 | www.cybage.com

Pune, Hyderabad, Gandhinagar, Seattle, New York, San Francisco

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Impact of Social Media on Travel Industry

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