Coupons in Travel Accommodations Industry
We were unable to find information on the insights on how coupons are utilized in the travel accommodation market, coupons/promotional spend per year, the total conversion that takes advantage of coupons, the total increase in conversion because of such offers. However, we attempted compiling useful insights, information on conversion rates from all the information we were able to find based on the frequency of the information on a good number of reliable sources.
1. COUPONS FOR USING AN AGENCY'S APP FOR THE FIRST TIME
- Expedia is one of the leading OTA (Online Travel Agencies) in the world.
- An important part of the company's strategy is attracting customers that use mobile devices which include driving conversion through coupons.
- Expedia offers a $25 discount coupon for using their app to book hotel accommodations for the first time which encourages users to try their app.
2. BEST PRICE COUPONS
- Expedia has a best-price guarantee for their bookings.
- If potential customers find lower prices than Expedia's, the company gives a $50 coupon and pays the customer the price difference.
3. TRAVEL COUPONS ARE INCREASINGLY POPULAR AMONG CUSTOMERS
- A report from ClearTrip and Flying shows that coupons are becoming more popular amongst customers.
- Consumers rated promotional offers and coupons as a source of 28% of the motivation for choosing travel brands.
- In a study, A.C. Nielson proved that 95% of customers like getting coupons and 60% of these people look for coupons.
4. USING PHYSICAL SPACE TO DISPLAY COUPONS
- There are demographics of consumers who prefer to make physical bookings.
- Experts like Scott Selenow encourage travel destinations to have physical spaces at their locations to display coupons which are considered as an added value to customers.
- To take advantage of this, physical travel destinations are to provide spaces for displaying the coupons and other promotional materials available from the agencies they partner with in exchange for their online agencies to include a link promoting their accommodations and advertising the offers.
5. ADVERTISING COUPONS VIA ENTERTAINING VIDEOS
- Travel accommodation agencies use videos to reveal coupon codes and other promotional offers.
- Airbnb advertises their limited $100 discount coupon offer for staying at tree houses and private islands in an engaging video.
- The Airbnb video in question was made with clips from the live-action Jungle Book movie, which in turn engages viewers.
KEY FINDINGS ON PROMOTIONAL SPEND AND CONVERSION RATES
- MakeMyTrip spent $74,402,000 on accommodation promotions and made $58,204,000 from the same industry in 2018.
- Many new customers are converted because of coupons.
- The conversion rates for hotel websites is 2.2% and top hotels have as much as 5.6% conversion rate.
- According to a Littledata survey, the average conversion rate for the travel industry was 0.6%. For the top 20% of players in the travel industry, the conversion rate is 2.2%, with a rate of 4.4% for the top 10%.
- Increase in conversion rates can raise occupancy rates from 5% to 20% (i.e., 15%).
- Discounts and offers from accommodations result in the customer preferring that travel agency.
- Several chain hotels have lost out due to this.
We began our research by looking for precompiled information on each of the requested information; insights on how coupons are utilized in the travel accommodation market, coupons/promotional spend per year, the total conversion that takes advantage of coupons, the total increase in conversion because of such offers. For this, we leveraged reputable databases industry, market and related platforms like Reuters, Emarketer, TripAdvisor, Sojern Data, PRNewswire, Accenture, Travel Daily News, and so on. For the promotional or coupon spend, increase in conversion and amount of conversions utilizing coupons, we looked for industry reports, market analysis, news articles, press releases, publications, and other similar materials. However, we did not find any information coupon spend or promotions in the industry, insights or any of the other criteria. Instead, we found information about good coupon deals, why customers should use travel coupons, options, and availability of coupons, global travel insights which did not relate to coupons, coupons insights and market analysis which neither included spend nor related to the travel accommodations industry. This might have been because the industry is really specific and such information is not publicly available.
Secondly, we shifted to identifying the various types of travel accommodations to repeat the strategy for each of the types. An article found listed the types of travel accommodations to be hotels and resorts, short-term rentals on sites like Airbnb, extended stay or services apartments, hostels. We repeated the previous strategy for each of the relevant types of these accommodations with the intention of adding together the coupon/promotional spend available, the uptick in conversions, and the number of conversions via coupons for each of the accommodation types for an estimate and compiling the insights from each. Available information focused on tips for using coupons, trends in driving conversion which did not include much information on coupons, examples of travel accommodation agencies with high conversion rates, and other similar kinds of information.
Thirdly, we looked for travel industry insights, global market analysis on the general industry with hopes of finding information relevant to the accommodation market. We utilized reputable databases, industry, and market research platforms, blogs and so on like Deloitte, Green book, Mitel, PRNewswire, TripAdvisor, and the likes. Again limited information available on annual spend or conversion which had to do with coupons and more related to landing page designs and advertising. We were, however, able to obtain some useful information from this strategy. The lack of this information was probably due to the relative smallness of the coupon market in the travel industry.
We decided to analyze the top travel accommodations in the world to obtain information on their coupon/promotional spend, uptick due to the conversion from coupons, and to draw insights from their use of coupons. We discovered that the key players in the travel accommodation booking industry are online travel agencies (OTA) booking sites like Bookings.com, Airbnb, Hotels.com, Agoda.com, and Expedia. From this, we focused our attention on obtaining the requested information from the key players to analyze the market. We found how Expedia drives conversion using coupons.
In addition, we focused on analyzing forums of the key players in the market to manually count the number of new customers that joined because of coupons. For this, we leveraged the Airbnb forums like Community with Airbnb, Bookings.com forums, TripAdvisor forums, and Hotel.com forums. We discovered that there were several new customers because of coupons and discounts but we could not find the percentage of the new customers that were coupon converted because the information was not sufficient to make a comparison. This was because the posts by the new customers were complaints about not getting their first-time coupons and those introducing themselves did not mention whether they joined because of coupons.
We tried to triangulate the requested information by digging deeper for case studies, surveys, studies, researches, polls that would probably provide information on the most successful coupon offerings by travel accommodation agencies. We analyzed their overall conversion, the uptick on conversion, and success rates in general. This provided us with information on the changes such offers had on first-time consumer opinions and preferences about the brand. For this, we utilized reputable databases and industry-related sites like Academia, Research gate, Nielsen, Harvard Business Review, Forbes Academia and Travelocity among others. Nevertheless, what we found was more related to how to take advantage of coupon deals and how they save money for customers. Not much information was available on improvement in brand image, statistics on preference or first-time customers conversion. We discovered that discounts and offers from accommodations result in preference by customers. We assume that this is because the coupon conversion rate for the travel industry was relatively low as we discovered from our previous strategies and therefore there were no changes significant enough from the industry for such studies. More significant conversion rates are obtained from peer to peer channels.
Next, we tried analyzing information on general coupon insights, conversion, spend to extract information related to travel accommodations. We searched for coupon insights, global and regional market analysis on the general industry from reliable sources like Finder.com, TripAdvisor, Insight Vacations, Coupons.com, Deloitte, and so on. This strategy was futile as the information obtained had almost nothing to do with the travel accommodation market. What we found were those related to coupons in general from various other industries.
Then we have compiled relevant insights from all the information we were able to find based on the frequency of the information on several reliable sources. We found out that several travel accommodation agencies utilize coupons (of as much as $100) which helps drive conversion. Additionally, the total conversion rates in the travel and hospitality industry is relatively small.