How Can Travel Agencies Expand Their Markets and Grow their Businesses?
As in any business owners journey, at some point, travel company entrepreneur sees a need, urgency or opportunity to grow.
That urgency might be stronger today, given that a whole host of newly capitalized startups are entering the picture. They’re digitally enabled which means they are a bigger threat to any business that is standing still.
Many travel agency and tour company owners worry that they’re doing something wrong with their business, when in fact, competitors are silently swiping their customers away via better products and stronger digital marketing.
To be effective, digital marketing should reside on top of product/service or business innovation. “Here’s our stuff” marketing doesn’t work anymore.
Why Grow Now?
It might be for greater revenues, greater business efficiency, or might even be to survive against encroaching competition. And travel firms might be insecure about their current source of leads, e.g., from a supplier/marketplace that might raise prices, reduce supply/access or even cut them out at any time.
“Growth solves (nearly) all problems” — Sam Altman, CEO of OpenAI.
Intrepid Travel Tours — Growing for Spectacular Revenue and Marketshare Gains
As an example of growth, let’s look at IntrepidTravel.com, a service many travel agencies use to provide tours for their customers.
IntrepidTravel, the tour marketplace is making growth moves. Their latest financials show a net profit of $21.8 million in 2023 – a $47.7 million turnaround from 2022, the best growth in the company’s history. Bookings grew 68%, revenue rose 113%, and 41% YoY growth in revenue and a $180 million boost in web bookings, while creating 10,000 more direct customers.
What’s driving their growth is complex, obviously a deliberate overall strategy of growth and acquisitions (check out their 2025 outlook pdf), but I’ve noticed more online travel agencies using them as a provider. Seems a simple way for travel companies to expand/enhance their own product offerings, even if the cost/commissions are high. Right now, travelers might not care.
And they appear to be providing more tours, customized tours, and elite-priced guided tours as well. That would indicate a product, innovation, retention, and partnership strategy base is behind it, and that’s opening up new possibilities and connections. Of course, those business development activities are contributing to a strong presence online. As this chart shows, their Google referrals have grown.
Who Really Knows What’s Coming?
The economy is a political product. It’s squeezed, stimulated and stretched to fit political objectives.
This should encourage you to become more independent and successful to fend off where the politicians want to take everyone. Wars, high interest rates, unemployment, regulations, travel restrictions, taxes, and more can contort the travel market. And only those nimble enough to adjust would survive.
The travel sector has been thriving the last few years, and may do very ahead, but not without trends and events shaping its course.
Even though you love your travel business and the lifestyle, at some point too, you may also look to sell your business. You might let a new big capital investor take it to new heights (with residual rev share for you of course!). There are plenty of ways to make that transition and keep yourself involved.
I’m reminded of Pat Sajak of the Wheel of Fortune TV game show. He is retiring in June, yet is staying on in a consulting capacity for several years. The show can’t really depart from its current style and format as fans would stop watching. However, they might innovate to make even more popular. They’ll want growth.
And sometimes selling a business is just a transition to a new one. Frequently, change is good for the soul.
But back to growth, moderate growth is one way of keeping your business stable, profitable, and pick up marketshare. So the issue then becomes how to grow, which we explore today.
Threats to Your Business May Contain the Key to Growth
Threats are simply the voice of change. The travel market is and will continue to evolve so being proactive can help you keep ahead of the curve and carve out a powerful niche. Ecotourism, adventure travel, and senior’s travel are booming. With all the change in experiences, destinations, customers, and business processes, market niches are always open for domination. A defensive positioning strategy won’t work long.
Many new online travel businesses are forming due only to technology. New SaaS travel management software is providing tools for bookings, customer service, bookings, itinerary management, consulting, and marketing and leads.
And AI is entering the picture which your staff can leverage to add services and products and be more effective. AI-powered travel software is obviously a big opportunity. Exploring the latest travel management software is a wise investment of time.
Proactive Preparation for Healthy Growth
Rather than waiting for the clouds on your travel business horizon to darken your landscape, why not create a comprehensive travel business strategy to stay highly profitable, and even grow profits?
If you’ve thought about it but backed away because it seemed risky or the opportunity didn’t look so grand, take the time to visualize what these new opportunities might be. Because in some cases, the effort might be inexpensive which allows you to explore new markets, products, sales, channels, marketing strategies, and partnerships.
One thing about hiring me whether for content development, PPC, SEO, or social media promotion, is that it’s an inexpensive opportunity to explore a multitude of products/strategies/tactics. The point is to think about the end benefit, not the immediate fix to something you’re doing. When I grew Delta Hotel’s traffic from 1.2 million per year to 2.5 million, it made their PPC spend more effective, captured emails, and gave them feedback on many things they were doing in marketing.
Who Uses Exploration/Testing? Winners
Each travel agency, destination, hotel, resort, and tour company is unique. So the path to growing marketshare is a unique one much like the custom guided tours you sell.
It’s not easy to know which growth channel/tactics is best for you right now, so some research is in order. You may even decide to create a wholly new business with a new brand. Some travel companies have been doing just that.
Ways to Grow Your Travel Company
- new types of services
- new geographic markets
- new branded travel experiences
- increased engagement with current customers
- improve marketing — tv, youtube, downloadable brochures, influencer connections
- improve your content marketing
- advertise more
- build partnerships
- drop unprofitable products/services
- try a new travel marketings software platform
- specialize in profitable niches (adventure, eco, and wine tours)
- focus more on your unique niche
- expand your agency/tour company to new locations/cities
Top Travel Business Growth Strategies
Let’s look at the growth strategies created by Entrepreneur Magazine as an initial guide.
Here’s a few:
Market Penetration Strategy: growing sales of your current products/services within your current customer base.
Product Development: creating or offering new innovative travel products/subscriptions to build a more impressive brand and give current customers something new to try.
Market Expansion: You could explore new markets or target new customer segments and niches thus growing and diversifying your customer base and reduce the risk of dependency on one market.
Strategic Partnerships: Explore and Capture Whatever Works: If you’re practical, you might like the idea of us exploring several unique/diverse opportunities, a customized approach to let us find something in the marketplace that builds leads for your travel agency, destination, software company, or tour company. Real success is never simple as in these single strategies. Instead, a unique combination that works for you is likely better.
Customer Retention: Personalized communications and service packages, focus on customer service, and a brand image of continuous value grows customers confidence and optimism about their connection with you.
Pricing Strategy: Developing a pricing strategy that lets customers access better value will help. With their increased expenditure, they receive a menu of added value features and benefits. This could be done to help differentiate your service packages and your brand and help ward off competitor’s offerings and encroachment.
Digital Marketing: The ultimate medium to grow exposure, market awareness, engagement, customer loyalty, impact, and sales touchpoints. All the other growth strategies need digital marketing tactics to be successful. It’s the swiss army knife of growth tools. A multi-digital-channel approach can help achieve the reach, frequency, and impact you need.
Employee Development: After you’ve identified the right growth strategy, you can work to train and boost the skills and capabilities of your staff. Certaintly, with new travel management software tools arriving, talented staff become more capable of helping prospects, closing leads, and providing better service to customers.
Customer Feedback: Tapping your current base for insights on satisfaction and areas of improvement can help guide growth plans and product development.
Continuous Innovation: Adapting and optimizing your travel business processes, product marketing, and business model helps you to keep ahead of the wolf pack and perhaps set you apart as the market leader.
Many Pieces of a Giant Travel & Tourism Market Available to You
As you saw, Intrepid Travel Tours innovated and grew in 2023. They jumped on the trend of tour travel and solidified their current customer base while growing out many new ways.
The truth for your small travel business is that a much larger market is available whenever you feel like accessing it. Whether you’re a SaaS travel management software developer, tour operator, travel agency, hotel or resort, or travel destination, a growth strategy seems natural and wise.
The solution involves building small, unthreatening successes that build confidence and mastery. By using digital marketing strategies to their fullest, you will capture wins, grow sales, run experiments and gain valuable insight.
Hopefully, the strategies discussed peak your curiosity about improving. At the very least, you’ll earn much more revenue while keeping your marketshare and customer base.
If you’re needing help with cost effective digital marketing, please speak with Gord at 416 998 6246.
See more on the 2024 Travel & Tourism Market outlook, increasing bookings, building trust with travelers, creating great travel experiences, and optimizing customers’ path to purchase.