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30 to 50 that's how much the largest ota spend on marketing in relation to their revenue let it sink in 50 percent of revenue spend on marketing hi everyone i'm andrei chibotterov travel technology competence leader at elticsoft and today we'll talk about marketing when you are an online travel agency can you survive the competition with expedia and booking holdings let's find out expedia and booking holdings are a duopoly the two largest players have about 92 percent of the ota market in the us obviously expedia isn't only expedia.com it also owns travelocity car rentals vrbo hotels.com and many more booking holdings owns booking.com priceline egoda kayak rental cars lots of brands and this duopoly has all travel products imaginable from hotels to restaurant table reservations it's a fierce competition and it looks like there's nothing to be done here especially when large otas throw so much cash at marketing but it's still possible many small and mid-sized travel agencies exist and thrive so let's talk about key strategies here the first thing that works is going niche you see expedia and booking as any large consumer business try to conquer the world they must be everywhere with any service while this is their strength it's also their weakness because they don't focus on individual destinations individual hotels specific groups of travelers they must serve everyone so instead of chasing every single traveler think about some unreserved niche and explore opportunities there you may focus on specific geographic locations or specific segments of travelers like group travel ultra budget hobo travel family travel or specific types of trips like around the world travel experiential travel or even space travel ikea do not think of this niche in five years and also you may find your niche in a specific group of suppliers one of my friends is running a local ota and their niche is distributing cottage lodging in the carpathian mountains what's interesting though they mostly work with those homeowners who have never heard of booking.com and who aren't digital natives before working with this ota they mostly operated by phone with local destination managers and street ads there had been no online booking available before and this ota works directly with owners helps them set up prices and even manage bookings and now they consider building their channel manager for suppliers going niche with suppliers has other perks especially with hotels large otas charge punishing commissions from hospitality players up to 30 or in 45 percent if a hotelier wants their list and be displayed among preferred properties yes major otas bias their search results in favor of those who pay more having a niche market with smaller number of suppliers allows you to work closer with them and negotiate commissions that will be lower for hotels than say booking.com but still be enough for your business so another critical thing is to always look for better deals with suppliers and negotiate with them directly yes you still can get generic prices from gds's bad banks or large otas but these prices won't allow you to be competitive and get enough commissions since you can't negotiate with everyone go niche and look for a perfect market another strategy close to going niche is smart pricing or smart commission's management i'm not going to dive into it because i already have another video about it and the link should be somewhere here generally smart pricing means that you don't set a single flat markup to all of your travel products customers or channels instead you adjust commissions and change it considering multiple factors let's now talk about placement and promotion first the niche logic works here as well you may look at some underserved regions with potential travelers and consider expanding in this location let's say mexico localize your website for spanish speakers hire mexican call center try to negotiate deals with carers who fly from mexico and write content in spanish that your mexican travelers will be interested in you get the idea if you're into digital world there's nothing special in terms of marketing channel except for one thing yes i'm talking about meta search engines the idea of comparing the prices of the same product across multiple sellers is not unique it works in ecommerce too but in travel especially in leisure meta search engines are very popular most leisure travelers are very price sensitive they actively research deals to find cheaper ones so the main strategy for meta search engines is to have the price lower than your competitors what about adwords pay-per-click ads are the major channel for larger otas they throw tons of cash into google ads and social media does it mean that you should avoid adverse at all no not really if you have a pronounced niche or very specific product inside of this niche you still can win the bidding war aiming at low to mid volume keywords a great example comes not from otas but from hotel chain red roof inn at some point realized that about 90 000 travelers get stranded at us airports every day because of cancellations red roof ran a very targeted ad campaign they display ads online mobile and only for travelers who are looking to find stay near the airport yes those trend at 90k it brought them 60 more bookings than other campaigns and this campaign would work even better for an ota since they are not limited to a single chain to top it off if you have a data science team you may personalize your ads or even assess how likely this person is going to buy from you before targeting them yeah it takes some ingenuity to win clicks here but don't neglect paid adverts another powerful strategy is content marketing people research destinations a lot and content marketing can meet this demand make it useful for travelers look for things that travelers research about your target destinations or services and give them as much helpful information as possible places to go prices cheap but great restaurants how to get from the airport or how to get round is it safe to travel there you name it european ota holiday pirates for instance is a fully content-driven ota that finds best deals and sells them through quality content and strong editorial leadership and they don't spend money on ads if you have a blog invest in search engine optimization this must go together if you have a youtube channel invest more in imagery and production quality finally you must have a loyalty program that provides perks and discounts for your acquired customers and as always i'm going to wind up my video with some interesting trends that i think are going to shape the future but please be aware these are very subjective so feel free to express your subjective views in the comments okay two main things i've talked about personalization and this thing is going to be big in coming years because more and more travelers are looking for unique experiences rather than standard hotel museum or hotel beach pendulum and this means that travelers requests are going to become more diverse and to capture those needs you have to personalize their offers and make them individual the second assumption is that there will be a couple of nimble and imaginative disruptors that will start reclaiming the market like airbnb the most otas look the same they have the same interfaces same looking flows same endless list of options and the same problems for instance kiwi is unique because it connects non-interlined flights and financially guarantees these connections so if you're confused about how to survive ota competition always look for untapped opportunities okay then thanks for watching give this video a thumbs up if you liked it and considered useful subscribe to our channel it has lots of interesting content and see you in the next one