What is your economic travel engine?

Travel and tourism industry businesses were without a doubt some of the most progressive early pioneers of the digital age. They were among the first to create online bookings, comprehensive websites and mobile apps. They were also among the first to make costly wrong turns, often falling prey to adding new B2C and B2B features to satisfy a first-to-market thirst and losing major leverage to new online resellers. Today the challenge of sifting through tactics to reach customers and organize a strategy can be formidable. Is there a simpler solution? Has your strategy been truly focused on the economic engine of your travel business? Does everyone in your organization understand what makes your engine run?

Regular, Plus or Premium?

There is a lot to be learned from the mistakes of those who went first. Many of the early mistakes in the travel sector happened because leaders didn’t think through the details of the alliances they made. It was easy to fall into the trap of turning more and more over to third parties and resellers. The outcome was unfettered access by third parties to customers who bought direct. How did that shift happen – was it because strategies were misaligned? The answer is yes and no. A common culprit is “silos”. Silos occur when groups within organizations don’t share information with each another, and it happens in large and small companies. When silos exist, it can create a lack of common understanding about what truly fuels the company’s economic engine and how to develop strategic targets to support it. The end result is the business doesn’t understand where the greatest profit lies.
Can your travel business break away from the mistakes of the past and build upon the wins? Going forward, any change to your business plan will likely be more easily accepted by decision makers when your strategy focuses on the economic engine of your business. The economic engine can be defined as the one or two main revenue sources that makes your business truly prosper. When all levels of your organization share this common understanding, you can keep the essential principles in organizing a new strategy more basic, but much more strategic. Still unsure what fuels your engine?

Economic travel engine examples:

  • Lodging brands – selling franchises, delivering reservations to hotels – bookings
  • Individual hotels and resorts – heads in beds – room bookings
  • Tourism, destination groups and attractions – revenues from visitors who make bookings
  • Car, airline, cruise, rail, tours, etc. – seats in seats – bookings
  • OTAs, travel agents, tour operators – commissions, revenue from bookings
  • Meeting, event, group planners – service fees, revenue from bookings
  • Technology, software, agencies – fees, revenue from delivering bookings

Once you have clarity around what fuels your engine, you can begin devising your plan around how to extract the greatest performance and profit from it. Your strategy doesn’t need to be a direct or indirect only distribution scenario. In the travel sector, Southwest Airlines built one of the purest direct to customer bookings strategies. You rarely, if ever, find Southwest for sale on a reseller channel. But, the clear majority of travel and tourism companies, both traditional and non-traditional, have strong, vibrant relationships with third party resellers. However, one of the traps they often fall into is in not being bold enough in negotiating with resellers and being willing to walk away if the terms aren’t right. Another trap is not having strong goals in place, shared and adopted by the organization, around building customer databases and relationships.
Ask yourself, have there been any significant changes to your strategy in the last few years that made a positive difference to your KPIs and performance? Is your team focused on getting the most profit from bookings and growing them to fuel your economic engine? Are there silos within your organization keeping your team and strategy from thriving?

Removing silos to fuel success

You don’t have to be a giant brand or even have a giant budget to put your business on a new track for success. Sometimes it is as easy as having the humility to pause and truly study the past wins and losses along with your team dynamics to properly fuel a more profitable and enjoyable approach.
If you are a travel business who needs help putting any level of your distribution or digital strategy on a path to greater success, contact the MBK Group, a team of proven experts within the global travel sector.


Mary Beth Kelm is a creative eCommerce visionary with over 25 years’ experience building winning teams and strategies and helping travel businesses prosper at a local, national and global-level. Before turning her focus to the MBK Group, Mary Beth served as Senior Vice President eCommerce, Global Distribution, Marketing & Sales for Choice Hotels International. Mary Beth and the senior leaders at the MBK Group are a team of individuals with deep proven success that have fought, won and solved some of the biggest challenges in the global travel sector.

2018-06-21T10:54:14-07:00 December 11, 2017|Organizational Courage, Strategic Travel Partnerships|