Online travel is bigger than ever. There are some 148.3 million travel bookings¹ made on the internet each year worth US $524 billion². Travel shoppers do not book the first thing they see, they enjoy their ability to search a number of travel options via a number of different devices before they make a booking. This boosts look to book ratios to a record high level of 4500:1 according to Pegasus Solutions³, the largest global processor of hotel transactions. Online travel intermediaries by their nature are literally in the middle of this complex supply chain dealing with millions of searches made by hundreds of travel organisations every day.
When it comes to managing hundreds of agents you would need key travel metrics. Intermediaries tend to focus on the traditional travel ratio: look-to-book.
The graph above shows the top 10 look-to-book ratios by agent for one of our clients – an agent being any travel organisation sending in a request for travel products. Here we can simply see that Sun Glow Tours had almost two times higher look-to-book ratio compared to Gateway Holidays. This could mean several things: If they had similar number of bookings, this means Sun Glow Tours made twice as many searches as Gateway Holidays. This is commonly considered bad because more searches generally mean more impact on the server resources and infrastructure. But what if Sun Glow Tours delivered more than double revenue than Gateway Holidays with the same amount of bookings?
If both agents made a similar number of searches, this means Gateway Holidays brought two times more bookings than Sun Glow Tours. More look to book proved less numbers of bookings for Sun Glow Tours in this scenario which justified the traditional thought of high look to books is bad. But again what if the fewer bookings made by Sun Glow Tours were worth more than the bookings of Gateway Holidays?
A real-world example
The graph above shows the total revenue generated by a number of agents compared to their look-to-book ratios over a certain period of time (one day in this example). As sudden changes grab attention, we spotted two agents with similar look-to-book ratios bringing significantly different revenues.
When an agent with a similar look to book is bringing 8.5 times more revenue it’s time to consider different metrics to manage agents as look to book alone fails to give a clear insight of which channels are bringing the most revenue.
Triometric recently introduced a new way of looking at the performance of your agents. We call it – Revenue per Search – a simple and powerful travel metric – which indicates the revenue contribution generated by a single search. It is measured by dividing the overall revenue an agent brings in a certain time period by the amount of searches the agent makes during that time. It is not rocket science but can be as powerful as a rocket, when evaluating with which agent to spend your time and energy.
Euros per Search by Agents
The graph above shows the top 10 Euros per Search ratios of the same client’s agents on a different day. Regardless of how many searches or bookings those agents have made, ZZZ Beds Ltd is clearly the winning agent of this period delivering the most revenue to the table – almost 4 times more than the next one.
Revenue per Search metric can further be sliced and diced to identify which hotels in which cities/countries are bringing the most revenue in what period of the year by which customer segment and so on. You’ve got the point.
Triometric recently hosted a 30-minute webinar covering the strength of Revenue per Search plus other key metrics to manage travel businesses. Definitely worth taking a look, if you want to find out more about evaluating performance using Revenue per Search.
The graphics above are taken from the Trio analytics platform.
² World Travel Market Global Trends Report 2013