Industry stakeholders believe that by 2025, the online travel space in Southeast Asia will account for 38 percent of the region’s total digital economy, which will make it worth around US$77 billion.
For tour and activities operators in Asia who are new to the digital sphere in general, 'channel management' is a term used to describe the process of allocating and controlling inventory, pricing and availability of your brand’s offerings via various online sales channels.
These days, it is considered a fool’s errand to try juggling all of these variables without a cloud-based channel manager, a software that empowers you as the operator to track all your sales from each of the different channels in real-time and from a single interface.
It’s important to note that online sales channels should not be seen as a replacement to the tried-and-true practices. Operators in Asia will tell you that traditional channels (such as independent sales agents) cannot be ignored. In this part of the world, offline travel agents also play an important role in the game and, therefore, must be taken into consideration.
That said, the online opportunity is still largely untapped, especially in Southeast Asia. Savvy stakeholders will advise acting with urgency when it comes to new internet-based channels, as they still represent underpriced attention for your business.
But doing this is still no easy task. Such a statement is especially true for experiential travel operators in Asia, many of whom are coming online for the first time. Brands have a tough time choosing their preferred channels due to a vast ocean of choices. One common question asked by tour and activities businesses is: “How can I be sure which channels are most appropriate for my particular offering?”
This is a fair question. Luckily, we come bearing tips. In no particular order, here are five ways that Asia’s experiential tourism operators can rock their online channel management.
Understand who you are trying to convert
The first thing you need to do is figure out exactly who you want to be purchasing your tour or activity. This means looking at data points related to geography, demography and socioeconomic standing. Who are they? Where do they come from? What can they afford? How do they behave online as a result?
If you already know that middle-class affluent Chinese tourists between the ages of 18 and 35 account for 38 percent of your annual realised revenue, then that piece of information should help determine how you do your homework.
Once you are set on who exactly you’re targeting, try to figure out how best to make them convert online. For example, operators should consider Online Travel Agencies (OTAs) like Ctrip, Alitrip and Meituan-Dianping as channels when trying to convert a China-based audience.
Set your timeframe for homework
Okay, so you understand who you’re trying to reach. Now it’s time to do a deep dive on which channels make the most sense for you. But before you start the process and begin weighing pros and cons of each potential channel, you should first give yourself a finite amount of time to do it.
One of the biggest problems at this stage is likely an overabundance of options. Give yourself no more than one or two weeks to make your choices (perhaps three to five channels for starters) and rationalise them to your team. This should help put up some proverbial guard rails that will protect you from ‘analysis paralysis’ (inaction due to over analyzing the playing field).
Make sure to get a variety of channels
Naturally, there is more than one way to pull in customers. Savvy operators will recommend that you employ a fair mix of owned and paid channels in your lineup. In the context of actual conversion mechanisms (and not marketing pillars such as your brand’s blog, social media, YouTube channel, etc.), this will mostly refer to direct booking tools on your website.
To bolster an owned channel, experiential travel brands will need to invest in marketing techniques like PR distributed to digital media outlets, as well as other offsite link building strategies. This can help funnel the target audience back your conversion page.
It would be unwise to ignore OTAs as sales channels for experiential travel. A recent Phocuswright study showed that 53 percent of bookers would not commit to booking until they read reviews. Eighty percent opted to read between six and 12 reviews before booking.
As such, if you can get the channel basics covered with a couple key OTAs and direct bookings via your website, then you’re likely off to a good start. Operators might also want to explore how daily deals sites like Groupon can help drive conversions.
A/B test channels and plan for changes
Inevitably, some channels will work out, while others do not. Luckily, your channel manager should be able to readily display this data. Knowing the performance data for each channel can empower your brand to make tweaks that might help the underperforming channels improve.
Practical questions to ask yourself may include: “Are my digital marketing strategies actually driving conversions on my site?”, “Does my site show up easily on a Google search?”, “Is the OTA I’m plugged into often accessed by my target customers?”
What’s important at this stage is that you don’t automatically assume that you’ve chosen an invalid channel. Before abandoning a certain channel that’s not working well—and doubling down on another one—first try different ways of pulling users to the one that’s underperforming.
For example, try using different permutations of featured images and headlines in your social media ads to drive clicks to your OTA listing. Try experimenting with different types of PR content to deliver more inbound traffic to your site’s conversion page.
The key is to simply run tests with all of your chosen channels. From there, you should be able to optimise on strategy. Abandon a channel only after you’re really sure it won’t perform the way you need it to.
Crunch the numbers quarterly
When it comes to actionable intel on your channels, it probably won’t do you much good to obsess over performance on an hour-to-hour basis. But it’s good to set multiple evaluation dates throughout the year. This way you can be sure to change things up when needed. This is also important when it comes to setting your annual budget.
Based on revenue, try to understand which channels you are overspending on and which ones you need to invest more into. This will prove useful for experiential travel brands of all scopes and sizes in Asia. If you’ve got your channel manager software setup correctly, doing the quarterly math and projections with the team should be a piece of cake.
For traditional operators just coming online for the first time, this may all sound quite scary. But actually it’s not. Luckily, there are tech solution providers in the region that can help get your brand’s channel management up and running. The most important aspect is that you commit to generating more business via online channels, sooner rather than later.