How Do Price Changes Affect Consumer Perceptions?
By Kara FinnertyJun 1
Published January 25th 2018
#Travel is one of the most popular hashtags on Instagram. If you didn’t post about your vacation did you even go?
Meanwhile brands in the travel industry engage in tough competition to win consumers’ attention and favor both on customer service and share of voice. While the act of travelling might take place in far away cities, much of our exposure to the concept will take place in online spaces.
Massive online interest in the industry is backed up by solid financial results. According to last year’s report by the World Economic Forum, travel, tourism and their enabling ecosystem are contributing over 10% to global GDP and the industry is slowly recovering from the 2007-08 crisis with projected further growth in 2018.
So, in a digital age where we have more customer data than ever before, what can we learn about the consumer journey when it comes to the travel industry? Facilitating better experiences both online and offline may be just the thing to make way for a travel boom.
The path to purchase for a majority of consumers is expected to start with a Google Search.
However, despite the positive financial outlook for the industry on a global scale, Google Trends data from 2004 to 2018 based on the broad semantic topic of ‘travel’ shows a trend for decreasing interest in the past decade.
This cannot be explained by the crisis in 2007-2008, because the downward trend is clearly starting before that. So what is going on?
If we look at the same Google Trends topic filtered not by web search but by YouTube search, things begin to take a different shape. Search interest is on an upward trend in line with the rising consumer interest in visual (mostly consumer generated) content.
UGC (user-generated content) is becoming incredibly influential when it comes to what Millennials buy – 84% of them and Generation Z say their friends’ posts on Facebook influenced them to change their travel plans.
Consumers surveys consistently show that reviews by other users are ranked as more trustworthy than branded content: 95% of travellers said they were more likely to trust reviews on third party websites than on a tour operator’s site.
Let’s compare two distinct models of producing travel content: Expedia and Trip Advisor.
Expedia has been one of the top global travel brands in the world for the past five years, and it focuses on producing content with high production value from professionally shot video guides to sponsored blog posts and social media content.
Trip Advisor, on the other hand, focuses on consumer-generated content: reviews, travel advice and (online) word of mouth: an essential source of travel advice and inspiration for the modern consumer.
When we look at global Google Trends data for the two websites we see an unusual opposition. The rise of interest in Trip Advisor coincides with a downward trend for Expedia.
Of course, we must be cautious not to confound correlation with causation, but the data is indicative of the change in consumer mindset which was spearheaded by the boom in smartphone use in 2011-2012.
So we know the importance that customers place on their peers’ thoughts, whether that’s through buyer reviews, influencers’ YouTube videos or their friends’ Facebook posts. Where does that leave brands in terms of netting those original customers and creating positive experiences for them throughout the buyer journey?
Vice President and Chief Innovation Officer of W20 Group Bob Pearson describes this process as “Pre-commerce”. He points out that direct client-brand transactions take up 1% of the time dedicated to interacting with products and deciding whether to buy them.
Brands now need to engage consumer attention in the early stages of the journey to purchase to create trust and personal connection which is then shared and reiterated over social media in order to attract the positive attention of other customers.
This is especially the case because of the rise of algorithms which nudge you towards content you are already likely to interact with based on your previous engagement and the use of big data to inform marketing decisions.
Travel brands can enlist two key streams of data to provide this custom-tailored experience:
For example, Airbnb started out only with properties for rent but noticed how users started to form a community of travellers who are interested not just in affordable accommodation but also in experiencing local food and culture.
Booking.com also predicts a rising interest in local experiences and is continually expanding features which emphasize personalization. The company added “Passion search” and included statistics about the types of users who prefer different properties or the top activities for a given location.
“Booking.com is about the experience” is clearly a motto which resonates with what consumer behavior shows: younger generations of travellers are interested in crafting a unique, Instagram-friendly travel experience and even baby boomers steer clear of old-school package tours and favour personalized guided tours.
So generational differences are, indeed, blurring, and there is a lot of potential in targeting other age cohorts, especially Gen Xers.
This trend is partly fuelled by increased trust in UGC content, and partly by the appeal of industry influencers and their lucrative income which inspires readers to turn into content creators themselves.
If we look at Google Trends data for the past decade: interest in the term “travel blogger” seems to go hand in hand with queries for the ubiquitous “digital nomad” lifestyle: a defining feature of today’s booming freelance economy.
Travel blogging supply is on the rise because it seems to satisfy two sets of demands: the demand for user-generated content by the audience and the desire for work flexibility and freedom among modern employees.
The result is not simply a change in the media landscape but a disruption in the way the travel industry reaches target customers. Social media and word-of-mouth recommendations have helped spur interest in a variety of personalized travel experiences: solo female travel, sustainable travel, privately guided tours, travel guides for particular hobbyists like foodies and other niche interests.
Tapping into the global online conversation about travel in English can give you the broad strokes: audiences are interested in sharing practical travel tips; local food and places to eat are a huge topic of interest; audiences and bloggers are both mixing and segregating different travel styles like backpacking and luxury travel, etc.
However, these findings are quite broad and what will be more useful for brands is to look at both global trends and well-segmented data. Analyzing conversations in local languages regarding specific types of travel can help with tailoring more efficient country or even city-specific strategies for the different buyer personas.
As Signe Jungersted from Wonderful Copenhagen puts it ”Travel has changed. Everyone wants to be a temporary local”.