Marketing Strategy Guide For Online Travel Agencies (OTA) (Part 2)

Marketing Strategy Guide For Online Travel Agencies (OTA) (Part 2)

Table Of Contents:

1. Reasons why churn for online travel Agencies is High
2. The need of the hour: Data driven marketing strategy for online travel agency
3. OTA marketing strategy – Using SEGMENTATION!!
4. How to segment users for an online travel agency

Nothing can actually beat the taste of perfectly brewed coffee and the caffeine hit it brings along. So, where was I?

The churn rate of the Online Travel Agency. Also, they struggle with low look to book ratios. I didn’t have to put a lot of brains into it because our fellow marketer had already figured out the reasons as stated on the next page. Delving deep into the diary is intriguing, it is opening new avenues to learn tricks of online travel agency marketing. By the way, if you missed on how I got this diary and the first few pages, ah! Not to worry, I have the “statistics related to online travel agenciesright here for you for you.


Reasons why churn for online travel agencies is high

  • Purchase cycle dilemma
    If we think of e-Commerce where the purchases are quicker. You go to a website, like something and eventually if the price is good, you buy it. Basically, the purchase cycle for eCommerce is short.  That’s unlikely for travel. You don’t just say that ” Yay! Let’s go to Paris.” You research and read. Also, online bookings are more about attractive offers. Aren’t they? Would you not change from to in a jiffy if provided you an additional 20% discount? Of course, you wouldn’t. In shifting from to you are contributing to’s low ‘look to book ratio’.
  • User experience
    Personally, for me “Experience” is one important element while I am surfing online. If the site takes too much time to load, I would rather switch to the next tab. Many at times I have personally got really cheap airline tickets but then their ambiguous cancellation policies made me change my mind. Not that I really wanted to cancel my tickets as soon as I booked them online but still clear cancellation policies develop my trust into the platform.
  • Booking procedure
    Finally, the cumbersome booking process. How many times has it happened, when these Online Travel Websites make you fill long forms to book one single flight and that too not once but so many times?
  • Unavailability of better offers and lack of human intervention
    Obviously, there is a fight for Online Travel Agencies to be able to establish their mark, decrease churn and at the same time compete with airline and railway booking websites. I guess unavailability of better offers in Tier 1 and Tier 2 cities due to less frequent flights is also one cause for a higher churn and then comes the lack of human intervention. Usually, when people opt in for tours and packages, they are investing a large amount of money  into it, so they usually want a detailed discussion or resource on the following which is backed up by a proper research. At least, when I book a tour, I want someone to explain me every tiny mini detail. After all, It’s my hard earned money. What say?

But this is the problem statement and how I have this love and hate relationship with them. I know what is the problem, how to  bring about a change and at least try to effectively reduce attrition.

Can’t think of anything as such, let’s read further.

Finally!! Now we are talking. As a marketer, I have always felt this inability to use the existing CRM data to create more meaningful and precise marketing campaign. What is the use of collecting data if it’s not put to good use?

The need of the hour: Data driven marketing strategy for online travel agency

The long term approach of marketing obviously makes more sense for Online Travel Agency Marketing. It is because unlike E-Commerce, travel is a long term purchase and people usually start browsing months before.

I guess why this data has been highlighted is to know the importance of planning your marketing and engagement strategy well in advance to nurture your prospects along their decision-making journey, right from awareness to consideration to purchase, and even beyond (loyalty). Talking about marketing and engagement strategies, spray and pray / batch and blast is a thing of the past. Data-driven marketing is the future, in fact, present.

And with the increase in browsing over various platforms like mobile, tab, app and web, it leaves us no option other than moulding into a multi-channel marketing and engagement passage.

Now, this brings us to the most important question of the hour and that is how to achieve this? Whom to show what? Whom to target and how?

OTA marketing strategy – Using SEGMENTATION!!

Segmentation is all about creating groups of people showcasing similar user behaviour and exhibiting similar actions. Segmentation as a concept makes sense for all businesses alike, but it is more applicable in context of Online Travel Agencies and its marketing strategy.

The marketer has used the RFM model:

R stands for Recency which for an OTA would be when was the last purchase done.

F stands for Frequency which for an OTA would imply that how frequent the purchases

M for the Monetary value of the purchases that were made.

This makes a lot of sense and I’ll tell you why. Calculating the potential of a lead is a mark of a true businessman! What is much obvious becomes oblivious to the eye! Isn’t it common sense that a person who makes a high monetary value investment once a year need not be blasted with monthly deals and a person who has a higher frequency should definitely be pushed towards the loyalty program.

If you see the example quoted of a person who books bus tickets monthly and his yearly evaluation coming to $120 and in contrast a person who invests $400 in a yearly international trip. Now if you sue the same marketing strategies for both, you will be spending more on re-acquiring the bus customer than his total evaluation.

Hence, you cannot have same retargeting strategies for all your users.

Thereby segmentation of users becomes extremely necessary while planning the marketing spend.

Aha! And see that’s how marketers match. The moment I turned the page. My fellow marketer must have been pondering over the same issue. The question was what kind of segmentation do we need?

Diary Of An Online Travel Agency Marketer

How to segment users for an online travel agency

The demarcation is fair enough according to what I perceive it to be. Basically dividing in majorly into

  1. Transactional data
  2. Behavioral data
  3. Buyer persona

The biggest problem with creating segments comes is keeping a track of transactional data as well as behavioral data.

1. Transactional data

Transactional data can be extracted from our database which majorly revolve around the cost of purchase, quantity and frequency of purchases. It is obvious that those who purchase more need to be pushed towards loyalty program that can be as simple as cash-back to bring back the user to the site and perhaps the users with very low cost of purchase should be pushed to discounts, better deals or the best way out can be combination deals like flight+hotel or return flight.

2. Behavioral data

When we talk about behavioral data, in my experience, let us assume that I search for a flight between  New York and Mumbai, Please ignore my wishful thinking! If offered some discounts or on seeing a discount if I move to a better or higher monetary value flight or starts looking for non-stop flights, I am someone for whom user experience matters more than cost, so for people like me, opportunities to cross-sell increases. Please OTA marketers, assume you did not read it and focus more on the part of giving me more discounts. If adding a few hundreds can guarantee me an experience much better than what I was aiming to put my money in, then there can be nothing better than that for me. (Still, I love discounts.)

Also, behavioral data comprises of tracking past searches, frequency of purchases made and creating a persona out of it. The key is to keep collecting data from your users in order to keep adding value to their experience. It’s like if you are a 90s kid, remember getting a slam-book filled from your classmates to know them better and obviously to hear a few good words about yourself.

A short example can sum it up for you; if say a user makes frequent travel between two places near every vacation, you could ask the user if the place tags for a home or workplace and the next time before the holiday arrives, place a personalized message around, “Time to go home/work” with a discount voucher.

Or let us say take another simple example around this, if a person is looking for a holiday package for two, you can always pop a question, if it’s an anniversary or birthday and later reach out to them next year.

3. Buyer persona

I have been pondering over the case of buyer personas for quite some time and I believe it is high time that we delve into understanding who our user is and deliver what they want instead of projecting who we are and what we deliver.

I actually agree that it is very important for the user to log in and the most plausible reason for that has to be to make sense of the user journey. Many at times users search a lot of things while they are not logged in and that data is captured for an anonymous user visiting your website.  Tempting them to log in will only enrich their profiles.

I think I’ll need another cup of coffee before I can read any further and I need to dash before the queue gets any longer. I’ll be right back. Till then I shall ponder over how these travel websites market themselves.

Check Out The Amazing Webinar By The Marketer Whose Diary We Found

  • Created: 11 May 2016
  • Last Updated: 12 Jan 2022



Divya Sharma Content Marketer, WebEngage

Divya is a Digital Marketing Strategist at WebEngage. Before joining WebEngage, she played the roles of a Journalist and a Social Media Influencer at The Lucknow Tribune and respectively. She majored in Electronics and Communication from Lucknow University.

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