Social travel sites are screaming for attention – but industry and consumers are not really listening
For years we have watched as startup after startup has attempted to marry social media and travel into a profitable, or even just a revenue-generating business model.
But maybe it’s time that entrepreneurs look elsewhere for their startup glory.
PhoCusWright recently released an infographic showing how US travelers use social media and the data leads me to conclude that travel-specific social media just isn’t doing much to drive bottom line revenues for travel companies.
Take a look at the chart:
Before I jump into my analysis, let me clarify first of all that I am referring to social media where travel is the primary focus. These include social trip planning sites and social trip sharing sites.
I am not including travel communities like Travellerspoint and Bootsnall or travel blogs, since they are primarily content focused. In addition, based on the infographic you may question my conclusion that bottom line revenue is related to traffic from social media sites.
Since I don’t know the conversion rates of social media referrals versus direct traffic to a travel website, I cannot definitively conclude that the two are related.
If, however, we assume that the mean conversion rates apply to referral traffic, than I think it is reasonable to conclude that the revenue generated by the referral traffic would be proportional based on the overall traffic to the website.
Okay, so now that I have prefaced my argument with some assumptions and caveats, let’s continue.
How are travelers using social media?
According to the research, 22% of travellers who use social media are looking for deals in relation to travel compared to 65% who look for deals in general.
There is no clear indication what type of deals these travellers are looking for specifically, but I would speculate that they are air and hotel deals.
What is surprising though is that if this is true, it seems that users are either not finding deals or are not converting on those deals through the social networks.
Again, purely speculative on my part but given that only around 3.5% of referring traffic to travel websites is coming from social networks in general, it would seem reasonable to assume that these deals are not converting into significant traffic to travel websites.
It is interesting to note that this behaviour seems to be more impulse driven, since the propensity to share is higher DURING travel than AFTER travel.
So, it’s fair to say that people like to use social media in order to share their experiences while travelling.
But the social networks that are included in the research are all established social networks and are not specific to travel. When I asked for more clarification on whether those surveyed were using travel specific social networks to share, the results were so small that they didn’t even register as a rounding error.
I repeat: not even a rounding error.
So even the largest travel specific social networks like Gogobot and WAYN combined are insignificant in terms of overall use around both searching and sharing when compared to the behemoths of social media like Facebook and Twitter.
Show me the traffic
Most of the social travel sites I can think of list their revenue models as affiliate links or booking links to travel websites. They provide a forum for users to interact, plan their trips together, and then send them off to a travel website to complete the booking.
In the process, the social network gets a commission for referring the sale. This sounds great, except that it doesn’t really seem to be happening.
Again, according to the report, about 3.5% of traffic to travel websites (both OTAs and hotels) comes from social networks like Facebook and Twitter.
That means that the referred traffic from travel specific social networks are, as mentioned earlier, not even significant enough to be considered a rounding error.
But what about ad revenue? Surely these sites are driving PPC or some other ad campaigns to generate traffic and revenue for their partners?
They could be, but when I asked PhoCusWright about this, I was informed that the traffic includes all referred traffic from the social networks. This would indicate that regardless of how the social networks are driving the traffic to travel websites, the bottom line is that they are sending very little in the grand scheme of things.
Do we need travel specific social networks?
Given that social media in general generates so little traffic to travel websites, do we need dedicated social media sites for travel? I don’t think so.
I don’t see myself as particularly different from the average person, except of course that I have to try every new thing that I see. That said, if something has utility I tend to use it… if it does not, then I don’t. Simple.
When I look at the numbers that PhoCusWright has published with regards to how social media users interact with travel brands, I am pretty average.
In fact, in many cases, I use social media even less than than the average in most cases. From my analysis, travel social media sites try to solve problems that, for me, are not painful enough for me to commit to a new platform.
It has taken time and effort to build, curate, and cultivate my relationships on platforms like Facebook and Twitter. These are platforms that provide daily utility and benefit.
To put that much effort into a platform that I might use once a year to plan a family vacation seems unreasonable, no matter how amazing my trip will be.
Some try to overcome this obvious drawback by integrating with existing social networks like Facebook or Twitter. But really, what’s the point? If the new platform is just going to publish my photos and share my updates on Facebook anyway, why would I bother using a separate service for that?
Oh and, dare I say, I enjoy the trip planning process. I have not found a single social trip planning tool that has reduced my trip planning pain.
Why? Because, for me, there is no pain.
Another popular travel social network theme is the sharing site. According to PhoCusWright, about 50% of users posted trip related updates via a mobile device.
This seems like a reasonable thing to do since most travellers no longer travel with their laptops. This is compared to 31% of users who update their social networks in general while on a trip.
Keep in mind, these are people who are updating friends and family on an existing or more established social network like Facebook or Twitter.
Where is the gold?
If you’re like me, then you are probably wondering why so many startups have popped up and continue to get funding to solve problems that a) don’t exist and b) are not revenue generating.
Where IS the social travel sweet spot?
If you take the PhoCusWright results at face value, it would appear that the gold is on the mobile sharing side since that seems to be the activity with the highest engagement with travelers.
The issue remains, however, whether there is enough gold to split between the behemoths of social media and some unknown startups.
Add on the extra complexity of having to market an app in the haystack that is the Apple iTunes or Google Play app stores and you can see that playing in the mobile social travel space becomes a complicated endeavour.
If you look a little deeper you may see that the lack of traffic to travel websites may be where the gold actually lies.
If someone can figure out how to drive significantly more traffic to travel websites from social networks, be it Facebook or a dedicated social travel site, then that traffic can be monetized more effectively. But building traffic on that scale is expensive and time consuming.
For now, and from my point of view, status updates, asking questions, posting photos, and sharing trip experiences are all activities that are covered well by the existing social network incumbents.
For a new travel social network to be successful, it’s going to have to provide something that is significantly different from the incumbents AND it is going to have to solve some real pain for travelers.
Being social should be a feature of a larger travel ecosystem rather than a business in and of itself. This is a wheel that does not need re-inventing.
What do you think? Am I just being pessimistic? And IS there a REAL opportunity for travel specific social media?
Stephen Joyce is a contributing Node to Tnooz and has been working as a travel and tourism technology consultant since 1995. Stephen is the CEO of Rezgo.com, a cloud based software as a service reservation and booking platform for tour and activity providers.
Stephen is the Board Chair of the OpenTravel Alliance.
Stephen is a graduate of Capilano University, is a certified commercial pilot, and holds a certificate in IT Management. His personal blog is the Travel & Tourism Technology Trends.