Social media, new methods of distribution, search and the use of new devices are probably the main issues keeping travel companies awake at night.
But while it is relatively easy for the final three to demonstrate return-on-investment by way of results and revenue (or not), social media still struggles to present a solid business case to many executives.
Hundreds of DMOs, airlines, hotels, online and offline travel agencies, and tour operators are trying different things when it comes to using social media, some with the blanket method of trying everything, others with a more softy-softly approach by simply creating Facebook pages and Twitter profiles or engaging with consumers in forums and blogs.
So important has social media become to the wider marketing strategy of the travel industry these days that it is quite surprising when a senior executive dismisses the very idea of social media as “gimmicky”.
It leads to the obvious question: can social media can be ignored entirely by a modern travel company, brushed aside as an irritating fad that can have no sway over the strategy of a company?
It appears that this is certainly the case of Trailfinders, the long-haul, tailor-made travel specialist with 26 travel agencies around the UK and Ireland, whose managing director Tony Russell dismissed social media outright at a conference in London last week.
He told delegates at the annual Barclays Bank get-together of travel execs that the idea of using services such as Facebook and Twitter is “not for us”.
“It’s gimmicky and our product is better put into traditional tried and tested marketing methods.”
Inevitably, Russell’s comments were met with a mixture of bemusement and outrage on Twitter, the network’s fans invariably reacting strongly to anyone daring to dismiss it and social media so vociferously.
Perhaps see it from Russell’s perspective for a moment – the company sells the vast majority of its product offline, in retail shops, or over the phone via call centres.
It is still a reasonably heavy user of newspaper classified ads to peddle latest offers, maybe uses a bit of keyword advertising (haven’t found any though).
So in Russell’s world, with the business seemingly ticking along nicely (it’s been operating since 1970), perhaps there is absolutely no need at all to juggle marketing budgets, re-train staff, build and maintain a social media presence.
But it is such statistics as those in the recent L2 Digital IQ Index for travel report, for example, which must be ringing bells somewhere in the heads of the naysayers.
The study found that social media is a “significant” source of referral traffic to 78% of travel websites. For 90% of those in the study, social media platforms were the top downstream sites for users after they had finished visiting a travel site.
The report is just one of hundreds of surveys and reports kicking about outlining the importance of social media in the research, search and shopping aspects of all travel products.
And as mobile and tablet devices bring the web to travellers in-resort, social media again will become (indeed, probably is already) even more influential.
Armed with such research and the opening up of the web even further into the lives of ALL travellers, regardless of whether they complete the booking element of their trip on or offline, can social media really be ignored and dismissed as gimmicky?
Bet Russell has been naysaying ever since the early days of websites. “We don’t do CHANGE at trailfinders”.
@old schooler – bit unfair.
thankfully those that do say such things in the industry are few and far between these days.
However, do remember some agency conferences going back a few years where such a phrase was still relatively commonplace.
Well, maybe Trailfinders is taking a King Canute approach to social media and digital in general – it doesn’t even have a booking engine, although its site has 5,000 pages – but it made something like £13 million last year and turns over north of £600 million, so it’s ticking along pretty well. There are plenty of travel firms investing millions in their online strategy, booking technology and social media that are doing a lot worse. There’s a longer interview with Tony in Travel Weekly next week (you can catch it online in our digital edition) in which he says the firm knew some years back it had a choice to go down the digital route or stick to its guns and its belief in bricks and mortar and great customer service (by the way, I’m not suggesting good customer service can’t be delivered online). Had TF and, in particular, its founder Mike Gooley believed the former was the way forward for it, it would have gone 100% down that road. It didn’t, so it puts the vast majority of its energies into the ‘old fashioned’ techniques of travel retailing. Is there any universal wrong or right in this? Maybe if you believe a course of action is right and you are passionate, single-minded, determined and skilful enough you’ll make it right, even when everyone is telling you its wrong. Obviously, given enough time, whatever you believe now can always turn out to be wrong as circumstances change. I didn’t get the impression TF is so blinkered that it will never change, or that it hadn’t properly thought its strategy through.
It’s really surprising to still see this attitude exhibited in the executive suite of travel companies, and Russell is probably not alone. How can he and others who still think that the social web is a fad dismiss it out of hand without ever having tried it?
Having said that, it’s probably better that he doesn’t engage as success with social media and social networks requires the right mindset and corporate culture, which starts at the top. With the attitude he displays they probably better stay away rather than just dabble in social.
Too bad, because he is leaving business on the table, for sure, as so many studies and statistics now clearly show.
@joe – thanks for commenting. I wonder whether there is a wider trend around such attitudes dependent on sector (tour op, airline, hotel, etc), geography, company size, etc?
My impression is that factors like geography and segment play a role here, the latter probably more so. Tour operators who are selling the majority of their products through the agency channel have been least affected by the first wave of online travel. Those selling more complex long haul products, probably even less. The pressure on them to compete against the major OTAs is not there, some in fact can sell some of their tours through this channel.
It seems that suppliers are the most active, broadly speaking, in using social web tools and travel agents seem to start getting involved as well using them as a way to generate customer loyalty.
@joe makes an excellent point – it’s a terrible idea to dive into social computing without strong executive support.
In fairness to Russell, it appears that he is merely trying to be conservative with his marketing spend – relying on well tested channels where he is able to measure the results.
It is clear that not every social platform is appropriate for every business or strategy, so conceivably, there may be organizations that gain no appreciable benefit from social media.
I personally doubt that Trailfinders is one of those companies, but simply that the ROI on social efforts is either perceived to be too low or too difficult to measure – valid reasons to hesitate.
@Lee also touches on an interesting point – providing outstanding customer service is the top priority – accomplishing that objective goes a long way to support the success of any social initiative.
It sounds to me that this may be more a case of clearly understanding customer needs and understanding the most engaging and efficient techniques to satisfy those needs.
My guess is:
a) Mr. Russell has not yet found such a technique in the social space, and
b) He needs to look harder to identify social solutions that will help his customers.
Russell should understand that if he does not engage his clients through social channels, that he has opened the door for his competitors to engage his customers.
Of course Trailfinders customers may not use social media at all, again, highly unlikely.
All: Great discussion here. Thank you all for contributing.
Perhaps one off-topic observation is the margins being achieved at Trailfinders.
£13M off of £600M is just a 2% margin – hummmmm… Some outbound specialists are running on margins of 30-40%.
Not saying for a second that engaging social media would improve this at all, but one wonders how a similar operator with a more 360-degree view of marketing would fair…..
Saying “Twitter and Facebook are not for us” is a limiting viewpoint in my opinion.
If we stopped thinking about social media as a marketing & advertising channel – and instead looked at the service, PR, operations, and management benefits – I feel the business case would become much clearer in any company.
What if Trailfinders used semantic analysis to determine what consumer opinion about their industry and then adjusted operations accordingly? What if they used online feedback to make their customers happier and encourage positive word of mouth?
It’s important to think through all the possibilities and opportunities before writing off an important part of business today.
- Josiah
ReviewPro
Great discussion here and let’s honour the fact that some people might go against the trend because they worked out it didn’t fit with their business.
Trailfinder is a very respectable tour operator in the UK and it’s true their customer service is very good. I have used myself TF before. However, it was a long time ago (last time was 4 years ago for my trip to Dubai and Muscat).
I can think of different reasons why I didn’t book anything with them lately but one thing I know for sure is that the TF brand doesn’t bring any emotion to me. I have lost touch with the brand.
The only touch point I have with the company is when they send me their brochure by the post (twice) and I make fire with it for my BBQ. The other touch point is when I passed by the store on High Street Kensington and I keep thinking how much they must be renting the buidling and how profitable this shop is.
Now this denial of thinking long term in their marketing stragegy is great news for other players in the travel industry.
It leaves a wider scope and imagination to think big on what an operator should be doing on Social Media. For once smaller companies can really make a big difference in marketing without having to spend huge amount of money in traditional distribution channels. Facebook, Twitter, Vinivi Opinions, Quora, YouTube, Dailymotion, blogs and so on are the way forward to MARKET your travel agency to different generation(s) of travellers.
We are very fortunate in this industry that travel triggers content sharing between suppliers and customers. Destinations, hotels, tours, restaurants and more are sexy topics to market on Social Media platforms. More importantly, it creates a lot of engagement and conversations to make sure we don’t ruin our holiday or our business trip. Experts have never been so important because they can share their experience with others. And travel agents should be part of this conversation.
As for TF, keep printing these brochures and make sure your website is not bookable…
It’s not an either / or game. We live in a multichannel world where consumers like to explore and buy when and how they want. Social is just another channel that needs to be joined up, and one that is capturing a lot of consumer attention. To ignore it is a little bit nuts.
This kind of ‘bricks and mortar’ silo-based thinking is dangerous but if you think in those terms then make no mistake, Facebook is the biggest shopping mall in the world, where the footfall is off the scale. Who wouldn’t want a piece of that action?
A long-term engagement strategy based around content and community would surely grow the £13m profits into a far healthier number. Maybe the thing for Russell to think about is the competition. If he’s not interested in doing the social thing then competitors will definitely step in and fill the gap.
Of course, the irony of this fantastic debate is that one wonders if the PR folk at Trailfinders have actually realised the discussion is taking place – they may not have discovered Google Alerts yet
Doubtful. It’s 2011 and you can’t book online. Kinda says it all.
A quick look at Google Trends suggests that the Trailfinders brand is slowly being forgotten about: http://www.google.co.uk/trends?q=Trailfinders
Wow…that seems to say it all.
I recall, around the time I left Trailfinders myself, hearing a story about the TF guys having some “Only spiders trust a web” T-shirts made up.
Picture or it didn’t happen! That I’d love to see… ; )
Will see what I can dig up.
Came from a very reliable source…on the inside.
Stand by.
@Kevin May – they are probably too busy working with B2C publications
Seriously, I am sure one executive will jump on this debate eventually.
@guillaume – we have asked. No response as yet.
To a solid company such as Trailfinders, who already have good marketing and customer service and a very large customer database it must be about communicating with that audience. Not just with offers but by really talking to them eg finding out why they had not booked for a while and asking them what would bring them back.
They should also make it easy for their customers to “spread the word” regarding their great products,service, pricing etc. This is were social media kicks in. Getting your customers to tell the world that you’re a great company to buy from.
Totally agree with you.
Why not simply knock up a platform for their customers to share their photos and experiences…get them talking, inspiring each other, offering tips etc.
Their clients are, after all, from the slideshow generation, for the most part. They love nothing more than banging on about where they’ve just been, and the lovely taste of something-or-other they had in that little trattoria in, where was it again, my love…
(Their Australian customers were, anyway).
There are many ways to be visible online, generating chatter, sharing engaging content etc etc. without a booking engine being the centrepiece of your activity.
All a bit sad really. It’s (or was) a great brand with loyal clientele who, well, seem to have moved on.
I don’t believe I just read about 20 comments saying the same thing. But why would TF respond, this forum IS social media, and they don’t do social media apparently. Can’t argue with an old school tour operator making £13 annually though, can you? Sure they likely aren’t growing, and will be losing share over the next few years, but for now, it sounds like a nice offline tour operating business, so let’s give them a break and move on to more interesting topics!
Hey Bruce,
If it wasn’t an interesting topic, why did you leave a comment then?
Ouch. I wouldn’t have read all the comments if it wasn’t an interesting topic, a little American sarcasm there… My point is that Tnooz readers pretty much agree on the importance of social media (and having a booking engine on a travel website), but there are a lot more interesting things going on in travel today like the airline vs. GDS war, Google/ITA, private flash sale sites, globalization and localization, the social/mobile mashups (mocial), etc…
@bruce – Americans, sarcasm? Wow, that’s a first, too…
This is a worthwhile discussion to have and, hey, Tnooz is the only place where such debates seem to take place, so I’m not going to trample all over the enthusiasm from those that do want to have it.
But what I will ask you is if you think a 2% margin for an “old school” operator means it is doing well?
@bruce @Kevin May. Imagine a second that Google is saying they make a 2% margin. We will be laughing no?
Unfortunately I know of other offline tour ops who are in the 2% margin range. Sure, @guillaume, that sucks, but if you’re doing 600M/year gross revenue, that’s still good profit for a privately held company. BTW – I totally agree @guillaume, while ROI is always important, its not the bottom line when we’re talking about innovation and building for the future.
Bruce — Seemed to be a big topic at the Class of 35 discussion yesterday. I agree completely with you that this really *shouldn’t* be a topic of discussion (HOW to use social media, sure. But whether it’s worth it? So very 2005).
But apparently not everyone thinks as we do (shame, isn’t it?).
@evan – yes, very 2005, thus why the snorts of derision from many here.
I’m presuming (and hoping) that the “Class of 35″ tackled the other hot topics you well know are debated here as frequently as social media – devices, distribution and search.
Ever the sucker for the underdog in a one sided argument, I feel the need to counter the social media proponents.
Whilst I am a big fan of social media and use it to promote my own company, I do feel a lot of nonsense is talked about it, especially by those within the social marketing bubble.
Here is the crux, if you are to call out trailfinders for not using social media (note one relatively minor channel), then you should be calling out expedia for not using direct mail and physical retail. DM and retail may be declining, but both probably offer much higher ROI and volume than social media.
The really interesting question to me is, is there any latency to social media? I have a sneaky suspicion that there isn’t. By not participating now, you aren’t damaging your long term prospects in the channel. I’d argue that you are only ever a great piece of content or thoughtful engagement campaign away from being in the game.
And as for that L2 Digital IQ Index for travel report, it is worth pointing out that they qualified being a significant source of traffic as being a top 8 source of traffic. Which basically means bugger all. Stumbleupon is a top 8 source of traffic and trust me I’d trade the 10s of thousands of stubmleupon impressions we’ve had for a nice cup of tea and a biscuit.
Right, off my hobby horse….
@ben – great comment, thx for putting forward an alternative view.
Only comment to make is that participating in physical retail is probably a lot more costly than many aspects of using social media, one suspects.
As for DM, not sure it can be quite as two-way as social media perhaps can, no?
@Kevin, yes the merits of different marketing channels all have their own risk and return profiles and pros and cons. For me though, the point is that neglecting social media as a channel is no more controversial than neglecting direct mail as a channel IMHO. It is merely a rational business decision that prioritises opportunity based on the skills and resources of an organisation.
Hi Ben,
Good to hear from you.
You ask a very good question here “Is there any latency to social media”"
There is one thing I know for sure, the social aspect of our lives is not going away anytime soon and there are no boundaries anymore. Brands need to be more social than ever, in travel especially. And I don’t think we have achieved half of what we should be doing.
I am a bit tired of this dilemna / debate of Social Media and ROI.
Does everything has to be measured on ROI?
What is the ROI of me commenting on this topic? What is the ROI of me sharing a picture of my meal on Foursquare? What is the ROI of writing a hotel review on my blog? What is the ROI of responding to questions on Twitter? What is the ROI of giving advice to my peers? What is the ROI of contributing on Quora? What is the ROI of connecting with peers on LinkedIN?
DM is so impersonal and boring that I don’t pay attention to them anymore. The last time a company got my attention on DM was Mr and Mrs Smith because the emotion element got me when I opened the enveloppe. And I book a hotel with them as well…
I can only give you my personal story. I hired a company called FunCitySocialMedia & they got me up and going on my Facebook page with a mini-clickable web site on it, twitter, blog & now they are working on a traditional web site to match the facebook page. I do have to engage in the conversation every day & work it – it does not happen all on it’s own. My business has more than doubled in sales since I started using them & I got involved in Social Media. So I am a fan!
Hi Cyndy,
Good for you and I am glad it works for your business. You are a clear example of what I was saying earlier. Small companies can stand out from the crowd by engaging more than the big guys and cherish your customers on a personal level.
If it is the will of the people for his products to be sold on Facebook and other social media channels, than that is what will happen or he will go out of business. If the customers don’t care about how he is selling his products, then he can do what he wants Time will tell but I think the writing is on the wall for all over the next 20 years….
Here http://bit.ly/jbVA6n is a great case study about Caterpillar using social media. Lessons to be learned for travel companies how to engage with their B2B customer base.
All: Gotta love irony. While all the hand-wringing above was taking place, Trailfinders was named top travel company (alongside Kuoni) by readers of consumer watchdog magazine Which?.
As my US colleagues often say: “Go figure.”
Not really surprised. The most important success factor remains a great product or service providing value for money and delivered with excellent customer service. All this could be leveraged very effectively via social media and that’s what they seem to be missing out on. Looking ahead, if I was in their shoes, I wouldn’t rest on my laurels. Customer behavior is shifting in every segment, including theirs.
OK, let’s step back for some perspective – What if a major tech hardware manufacturer, software developer or music service decided to avoid participation in social media or only use it for old-school, Web 1.0 one-way, broadcast communication?
Without knowing the name, many would jump to call them the stupidest tech company on the planet, right? Wrong – I would call them Apple.
Apple Inc. does not have an official Facebook page (although its wikipedia-based interest page has close to 700,000 fans.) True, Apple does have an AppStore page on Facebook (2 million Likes) and iTunes Music (US) has 15 million Likes, but aside from fans being able to comment, Apple only posts – there is no conversation. There are other geo-centric Facebook pages for UK, MX, DE, FR, CA, CH, IT, AU & Nordics that only Like other Apple pages. Not a lot of sharing and not very social.
The same goes for Twitter – no company account, but ones for AppStore & iTunes (this time broken down by genre – iTunesMusic, iTunesMovies, iTunesTV, iTunesPodcasts & iTunesTrailers.) iTunesMusic has 1 million followers and follows 5 (the other Apple accounts.) AppStore has 1/3 that number of followers and only follows 5 Apple accounts. There is no interactive communication with followers. It’s an effing electronic billboard.
Yes Apple fans, there is Ping, the music based social walled garden, but with its roach-motel approach to external information sharing, social is relegated to little more than a product feature. Only 13 of the nearly 1,000 people I follow on Twitter use Ping, and most are pundits or Tech Editors.
So the question is, “Could Apple afford to completely ignore social media?” Based on their current approach, Hell Yes. Social computing has virtually no impact on Apple’s share price.
Could Apple be more successful if they fully embraced social computing? Hard to say – one could certainly argue that open interactive communication across multiple social networks would whip already indoctrinated followers into an ecstatic frenzy of adoration.
BUT – Apple doesn’t. Corporate identity on social networks does not align with Apple’s strategies. Broadcast participation is accepted on a product basis only – this is advertising, not social networking. True, Apple wanted to hook Ping to Facebook, but Zuckerberg rebuffed them due to their selective approach to participation.
Bottom line – Apple leadership does not support social computing, at least by the same definition that the broad industry would describe. Social efforts at Apple will not move forward if Jobs is not on board.
The same applies Travelfinders, or any other entity evaluating its social computing strategy – if there isn’t support from executive management, it’s not going to work.
Both Apple & Travelfinders could both do really cool (and probably profitable) things in social. Yes, they may be missing out on opportunities. However, that does not mean that they cannot afford to steer clear of social media – for the immediate future.
I would argue that both firms should have plans established for social implementations at least as a defensive strategy if margins or market share begin to erode.
If Google’s Android Wallet starts to hurt Apple or some company creates an iPad killer (at least an iPad margin killer) Apple may need to alter its social strategy.
My thinking is that Travelfinders is much closer to that point, but unless there is a change of heart at the top (which is not exactly a common occurrence these days) Travelfinders can’t afford to take the leap into social computing.
My first suggestion to Travelfinders would actually be to try taking the leap into eCommerce – it seems a lot of Tour Operators and wholesalers have done pretty well with that approach…
OK, here’s a short response: There’s an exception to every rule – Apple sure is one.
Was once on the London Eye, when after several libations, I asked the UK Sales Director of a rather large Asian airline what it was about Trailinders that made them so special. He said it was because they were honest and folks trusted them.
If a lot of social media work is to gain authority (rather than just SEO as a lot of rather deluded senior folk at the Barclays Travel Forum yesterday thought) then why should TF spend time on SM rather than concentrating on the channels that work for them – namely big, regional, well-run, hybrid call centres/shops with staff, who those in the know know, are some of the best in the business.
Lee (Travolution) – looking forward to the extended interview with Tony Russell next week – I suspect they may spell out why the route they’ve chosen works rather well for them and why, a wee bit like Ryanair I suppose, they don’t give a monkeys about Social Media.
If Trailfinders isn’t bothered about social media, can I set up and run a TF-branded f-comerce channel? Like to think I could turn a v tidy ROI