One of our clients in the travel industry—a leading resort brand management, travel and hospitality group—has added over $4 million in annualized profit to their projected bottom line this year simply by using experimentation.
Another has increased conversion rates 6%—an ongoing projected annual profit impact of $11MM—through rigorous testing into their direct booking customer experience.
You read that right. And it’s too important not to share; we think we just might have the answer for travel companies seeking to compete with Expedia, Travelocity, and all the other Online Travel Agencies (OTAs) out there to provide the ultimate traveler experience.
Technological Gap in the Travel Industry
As we’re sure you’ve noticed, the travel industry has largely found itself in a technological lag. Online Travel Agencies (OTAs) like booking.com and perhaps now even Airbnb—those known for ‘getting heads in beds’—have quickly become the dominant players and pose a significant threat to hotels, resorts, parent brands, and others in the hospitality industry. Our results show that experimentation presents a massive opportunity for travel companies to reduce their dependence on OTAs and regain control over the booking process.
The travel industry’s technological gap is glaring when compared to other sectors; just think about how easy it is to purchase something from Amazon vs. picking a vacation package. This is because e-commerce platforms like Amazon offer flexibility and quick adaptability to stay aligned with current UX/UI trends. And they experiment—testing into every aspect of the customer journey.
In stark contrast, numerous hotels and resorts still rely on antiquated booking engines that offer suboptimal user experiences. I’m not saying you want kids to have access to a “buy now” button for Disney cruises, but you get the point. Innovation is imperative to bridging this technology gap and delivering a seamless booking process.
The Experimentation Revolution
Experimentation lets you know, with data, whether a business decision is right for you and when. This is especially true in regard to pricey booking engine upgrades. One example was when we were working with a collection of luxury all-inclusive brands to test a new booking engine. Results showed a surge in booking conversion rates and there was initially significant excitement about the new engine. However, our analysis was able to determine that profit would ultimately decrease and the client determined that the revenue increase didn’t justify the added cost at the time. Testing data was key in making the right decision for their business.
To win back customers and convince them to book direct, hotels, resorts, brands, and travel and hospitality groups have to step up their use of experimentation. OTAs like Expedia and booking.com are prime examples of harnessing experimentation to drive growth. According to Harvard Business Review:
booking.com runs over 1,000 tests simultaneously to the point where two customers in one location may never see the same landing page. This radical experimentation is what helped this small Dutch start-up grow into one of the world’s largest OTAs in less than twenty years.
With today’s fast-changing and ever-evolving nature of business, companies need to lean into data and testing to get results. Our clients see experimentation drive results all the time:
- We observed a 14% increase in booking conversions by highlighting clear value propositions—such as financial savings and confidence in booking to maximize relaxing vacation time—while booking search results load.
- We saw an 18% increase in travel protection attachment rate by adding a pop-up modal warning the customer about the dangers of missing out on travel protection.
- A test resulted in a 10% increase in booking conversions by providing a “reserve your price” countdown timer in the booking funnel, thereby increasing urgency.
Maximizing Returns Across Marketing Channels
Experimentation also extends beyond the on-site experience to inform broader marketing strategies. For example, we learned in one test that a key blocker to booking was that users tend to have lots of questions about what exactly is included in an all-inclusive vacation. We tackled this problem for one client by running a series of iterative tests to find the best way to proactively answer these questions and merchandise packages to customers. As we figure out what resonates, we are able to replicate messaging and design across other platforms to round out the user journey, such as social media, email, SMS and paid advertising.
This is critical because there is a direct correlation between return on ad spend (ROAS) and return on investment (ROI). Experimentation programs can boost growth by combining paid media with site experimentation. Marketers often rely on awareness and demand generation spending to drive pipeline. While demand spending can produce linear results, outstanding customer experience enhances engagement, wallet share, and lowers customer acquisition cost (CAC).
Taking a holistic look at data through Customer Journey Analysis (CJA) also provides valuable insights into understanding the customer’s journey from start to finish, helping to create personas and bespoke strategies for more effective marketing campaigns.
Strategic Learning for Direct Competitiveness
The facts speak for themselves. Experimentation is an extremely powerful tool for travel companies to catch up, compete, and excel in the digital landscape—and it’s not just doing on-site CRO or running some A/B tests on the side. It requires a strategic, integrated approach to intentionally create a better experience for customers at every stage of their journey. The more travel industry leaders embrace experimentation and utilize data to give their customers the experience they want and deserve, the more we’ll make the booking experience as relaxing as the trip itself.
If you’re looking to increase your bottom line, improve customer experience, or if we piqued your interest and you just want to learn more, give me a shout at melanie.buck@crometrics.com.