Travel Marketing: Travel Clubs versus Online Travel Agencies

The top online travel agencies (OTAs) invest billions of dollars for one purpose – to get the right travel products to the right customers at the right time. Major OTAs like Expedia have been successful by creating multiple brands across different websites targeted to different audience segments. This has been a mixed blessing for airlines and other suppliers (they pay high fees to OTAs), but for regular consumers OTAs have been wildly popular.

The reason is simple – OTAs make it easy to find fares online, search for hotel rooms, plan trips and so much more. The OTA value proposition isn’t limited to one category but meets every imaginable need for the connected traveler. The diversity of OTA brands proves how much opportunity there is to serve the needs of unique audiences online, and even non-travel brands and organizations can add new revenue and increase member loyalty through a travel club offering.

Travel Clubs Outside the Travel Industry

Credit unions, for example, often provide vacation loans to their members. For an additional subscription fee, credit unions could offer their members access to a private travel club online, where they could plan their flight and hotel at discounted rates, talk to a travel agent around the clock, expedite their visa processing and even coordinate/collaborate with others online to plan a group trip.

Airlines, hotels and other suppliers can afford to offer discounted rates through a private travel club, because even with a discount, the cost of acquiring customers is less costly than it would be through an OTA. By offering a travel club, a brand or organization can do for its members what would otherwise be done by an OTA – connecting them to travel products and services they value, and improving their lives within and outside the organization, whether it’s a credit union, alumni group, employee group, or retail loyalty program.

Travel clubs require no overhead or managing of vendor relations – everything can be offered through a “software as a service” platform. Essentially with a travel club, any organization can act as an online travel agency – one that is private, exclusive and elite – without having to get into the travel business.

Travel clubs can be effective in any organization – credit unions, alumni groups, employee groups, loyalty programs – because nearly everyone aspires to travel, and the savings on one trip booked through a travel club often makes up for the price of yearly membership. There is no downside for the organization, so long as it offers a travel club that truly adds real value and justifies the cost of a membership.

The Appeal and Benefits of Travel Clubs

Not only does the travel club increase revenue from membership fees, but it builds loyalty and brand affinity – ultimately turning that into brand equity by, for example, increasing the number of vacation loans given to credit union members. With a loan in hand, the travel club will help stretch their travel dollars a little wider through discounts and low-cost access to elite services such as medical evacuations in case of emergency. This is much more value than the member would get through a random (and anonymous) booking on an OTA website – travel clubs help personalize trip planning and even provide a social feature for group trips.

Travel clubs can function as sort of bespoke OTA for organizations that are willing to offer it to their customers or member. Even if the value of the included benefits doesn’t register with the end user, the novelty/exclusivity/uniqueness of a private booking engine – connected to a non-travel brand or organization they value – can be highly appealing to members and potential customers. Many financial services companies offer a booking engine on their websites, not because they want to be OTAs, but because it’s easy enough to do, adds real value and at the end of the day it drives ancillary revenue and brand value. 

Membership Fees and Travel Benefits

In fact, we could think of credit card programs like the American Express Centurion as travel clubs, where people pay hundreds of dollars in membership fees just to be part of the Amex brand. In their minds, the price of a card membership is well worth the benefits they receive in return, including travel benefits such as frequent flyer miles, lounge access and concierge services. And while American Express falls outside the travel industry, it has a customer base that responds to travel as a “value add” to its core financial services.

As an alternative to online travel agencies, the travel club concept is useful for any brand, group or organization that wants a quick and easy way to increase revenue from membership fees, strengthen loyalty and add value to their brand. Custom Travel Solutions can help non-travel brands and organizations set up an online travel club without taking attention away from their core products and services – attracting new business through the appeal of elite travel and lifestyle benefits.

Did you enjoy this post? Read more on our blog about how airlines can strengthen loyalty and revenue for frequent flyer programs through a travel club offering.

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