Future Trends & KPI Online Travel Industry

August 10, 2008 by Anil
Filed under: Web Analytics India, internet-in-india 

Continuing from the earlier posts on Online Travel Industry in India

Post one: Online Travel Industry India and Web Analytics Status

Post Two: Marketing Trends in Online Travel Industry India

This post covers how Web Analytics Tools can be used for Online Strategy and Optimization.

To Step back a little, Travel Industry has evolved! Big time in India. It all started with the airline industry boom, followed by Train and now Bus services. It’s young and happening and evolving

THE PAST

Gone are the days when
1.    You had to wait in a long Que for your air/train tickets!
2.    You had to be on phone with travel agents
3.    Spend time traveling to book and confirm tickets
4.    Last minute cancellation/rescheduling was a tedious process!
5.    you had to go to different agent for your hotel/holiday booking
6.    Spend time negotiating on travel/holiday deals
7.    when you had no idea of how your hotel/holiday destination looks before landing there!

THE CURRENT

Enter Online travel industry ! and just a few clicks and your all set! And what does consumer get?, a one stop shop for
1.    No more going to Travel agents (options of e ticket or paper)
2.    Click away from booking tickets and cancellation too
3.    Meta Search with options like Price range, non stop, airlines options and instant booking
4.    Online itinerary
5.    Mobile alerts
6.    Mobile booking
7.    Great deals on hotels and holiday package
8.    Customized travel deals
9.    Preview of holiday destination (video, reviews and hotel looks)

THE FUTURE

So Here are some trends which one would see (some already existing) in travel industry and “undoubtedly” web analytics plays a key role here!
1.    Increased Meta Search Penetration
2.    Cross selling of related products
3.    Increased Mobile Penetration
4.    Improved Self Services
5.    Increase in RIA ( Rich internet applications)
6.    Travelers Review
7.    Social Media Marketing

With market evolving and internet penetration increasing, every Online travel marketing firm will need to emphasize ( iam sure they do) on ROI on each Marketing efforts, new technology (RIA’s) used, Self Services and also keep a track of future trends ( Mobile, Social media etc)

Measuring What matters!

The two previous posts on online travel industry in India was on web analytics status and marketing trends in India. however there’s still lot’s of room for improvement.

Online Firms in India having been spending huge amount on “Awareness/Reach” that is Marketing efforts* (SEM, Banner, Affilates, Email, TV, Print) and are yet to

  • Understand the Return of Investment (ROI) on Awareness
  • Yet to measure Engagement and conversion
  • Segmentation and Loyalty Analysis
  • Leverage the “Power of Optimization”

* wish i could support this with hard facts, but this is based on my previous web analytics status check of online travel industry sites.

I could not agree more with Ravi ( who commented on the earlier post)

I think there is a bigger problem ,Indian Online travel industry is plagued with is all focus is on acquisition of customer and almost negligible focus on customer conversion. Obviously, all of them focus on how can they cheaply get a consumer to get to their site and thats it. few really understands that increasing user engagement will hugely drive conversion. Also it is less cost effective to increase sales via increase in conversion than to increase in acquisition of customer. However, this scenario will change very soon.

Yes Ravi the Scenario will change!, and will change for good for all the companies which embrace and understand the power of Web Analytics.

Key performance indicators (KPI’s) for online Travel Industry

Travel sites are challenging with so many moving parts and rich media applications which drives success. Remember KPI’s are bridge between your business objectives and web analytics data, Each site may it’s own specific set of measures

however, Here are 7 Key Performance indicators which will help one get started assuming you have your web analytics data implemented to capture this data.

  1. Revenue per Booking
  2. Sales Cycle
  3. Look to Book Ratio/Conversion
  4. ROAS (Return on Ad Spend)
  5. Campaign Conversion rate
  6. Top Origin and Destination Cities
  7. Top Geography and Demography

Here’s a brief description of each Key Performance Indicators for Online Travel Industry

1.) Revenue Per Booking:

Revenue per booking will vary by season, product type, booking pace, and because of this variation it’s important to have a trended view of the KPI to give you an overview of your revenue performance.

2.) Sales Cycle:

Sales cycle will help you understand,

  • Days Before first purchase: The number of days that elapsed between the customer’s first visit and
    his or her first purchase.
  • Days Since Last Purchase: The number of days that elapsed between the most recent purchase
    and the preceding purchase.

3.) Look to Book Ratio/Conversion:

The Look-to-Book Ratio is the percentage of visitors (looking) who actually make a purchase (booking).
Look-to-book Ratio helps

  • Understand if there customers are satisfied with their visit/shopping experience.
  • Understand how qualified the traffic to their Web site really is. Look-to-Book.

4.) ROAS (Return on Ad Spend):

Helps understand the return on various marketing spend, helping you do a quick SWOT analysis

5.) Campaign Conversion rate:

A quick overview of all your campaign performance.

6.) Top Origin and Destination Cities:

This probably is one of the oldest metrics used by airline industry, This metric can help

understand popular city pairs and also correlate with other metrics (example: Understand which airlines compliment with popular city pairs, measure look to book conversion for top origination and destination cities, Revenue per booking for popular pairs)

7.) Top Geography and Demography:

This metric gives great insight, the reason i emphasize this is coz of how internet booking is gained/gaining importance India, this metric will help you understand top cities and evolving areas where internet booking is growing.

So above was the list of top KPI’s for Travel Industry which will help travel firms provide actionable, real-time insight that can help them with both online and offline strategies.

Missing something, time to add your perspective via comments.

The Next Post would deal with Automobile Industry and it’s online presence in India. Until next post happy reading!

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Comments

3 Comments on Future Trends & KPI Online Travel Industry

  1. Raja Ramachandran on Wed, 27th Aug 2008 3:31 pm

    2. Great blog !

    Could i know the market share of web analytics tool in india…..?

    Many Thanks
    Raja Ramachandran

  2. Newbie on Thu, 4th Sep 2008 12:00 pm

    3. Nice blog and interesting read.

    I am very much interested to make a career in web analytics but don’t know where and how to start, what resources are available both online and offline also what qualifications are required or preferred. I would also like to know the present job market for this field in India as it is a very new field. I would be very grateful if you could guide me.

    Thanks and Regards

  3. roopam on Fri, 5th Sep 2008 1:57 pm

    4. Hi Anil,

    i am new to the field of web analytics and hence, required your help. your website is a great source. in case there are any upcoming events in delhi (as i am based out of delhi), please do let me know. while i would be a regular visitor to the blog and also i have subscribed to it, in case there is something else, please do let me know.

    also, since you are in touch with people from this field, it would be great if you could direct me to someone based out of delhi who i can approach for some guidance.

    i have been trying to procure the bok by avinash kaushik (web analytics an hour a day). however, i need it ugently and getting it form US would take 15-20 days. would it be possible for you to help me in that regard?

    thanks a ton!!
    Roopam

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