Today’s blog post is the continuation of our posting published on July 21, 2009

Assuming that the BVI micro-niche does in fact appeal to us from a product perspective, our next step in determining if this niche is worth investing in entails two follow-on tasks: assessing the market size and competitive intensity, and identifying which segment (or segments) within the niche would be most attractive to travel affiliates from a financial perspective.

Understanding the Market

Determining the niche market size and the current level of competitive intensity among the players currently competing in the niche includes undertaking the following tasks:

  • Document key statistics such as surfer volume for various keywords associated with travel to the British Virgin Islands, where the sources of these BVI related surfer volumes and keywords emanate from, and how these keywords are trending
  • Conduct an analysis of the PPC marketing cost of certain select keywords, and estimate the level of investment required to achieve a competitive position of 1 – 3 in a keyword PPC campaign
  • Flesh-out the current competitive landscape by identifying the major players in the niche (both other travel affiliates as well as travel suppliers), and which segment(s) within the niche these players compete in, their products and services, strengths and weaknesses, and overall competitive positioning

Based on the output from these tasks, we can then make our first ‘go / no-go’ decision relative to whether further investment of time, effort and money is merited in this niche, and which niche segment (or segments) would be most attractive from a financial perspective

Identifying Supplier Partners

Once we’ve identified the segment or segments we believe would be the most potentially rewarding, we’d next revisit the competitor analyses to review the travel suppliers from the following perspective:

  • Which segments they compete in
  • How broad, deep and secure is their access to travel product
  • What is the quality, structure and benefits of their affiliate program
  • How these players stack-up as potential strategic partners.

For example, starting at the ’30,000 foot’ level, here is a sampling of travel suppliers working in particular segments that, from a travel affiliate perspective, might prove to be a good strategic partner for travel affiliates assessing a BVI micro-travel niche program:

Online Travel Agencies (OTAs)

  • Expedia.com: Arguably one of the most powerful travel brands on the Internet and most formidable of all the OTAs, Expedia’s buying power pretty much assures its travel affiliates will have steady and secure access to BVI hotel/resort inventory (at least 15 properties by our count). Expedia’s merchant model (air + hotel / resort) also presents an attractive travel package offering for both travelers and travel affiliates.To assess how the OTA might fit with a BVI travel affiliate niche program at a more detailed level, we’d then dig deeper into Expedia’s travel affiliate partner page or Commission Junction to learn more about their program.
  • Travelocity.com: Like Expedia, this OTA also has deep supplier relationships with 13 properties in the BVI (and tens of thousands more elsewhere around the world), and has strong brand awareness among travel consumers. Travelocity offers two programs in its Affiliate Partner Network; the Travelocity branded program and a privately branded program under the World Choice Travel banner. The revenue share elements of the TravelocityWCT are quite generous and WCT’s partner support operation is considered one of the best in the industry.We’d then seek to understand other benefits and strengths of Travelocity’s travel affiliate program by checking their website, or information about Travelocity residing on Commission Junction, their preferred affiliate network.
  • Priceline.com: Still championing its ‘Name your Own Price’ value proposition which made it famous (and hugely profitable), Priceline offers perhaps the strongest hotel program of any of the OTAs. This hotel program is also available through its sub-brands, which include Booking.com, Active Hotels, Agoda, Lowestfare.com. Priceline also offers one of the richest travel affiliate commission programs of any stripe.We would then drill-down on the details of Priceline’s affiliate program posted on their website or made available at their affiliate network of choice, Commission Junction.

Hotel Aggregators / BedBanks:

  • HotelsCombined.com: Part of Orbitz Worldwide, HotelsCombined prides itself as being “…the world’s leading hotel meta-search engine with the largest hotel database and unequalled search technology, empowering leisure and business travelers to compare prices and book unbeatable deals directly from hotel or prominent online travel agent website partners.”They also boast that they “…deliver more than 900,000 real-time international
    hotel deals (this sum includes 8 hotels and resorts in the BVI), with all prices inclusive of taxes and fees.” Expedia evidently agrees, as they signed a partnership deal with HotelsCombined in February 2009 whereby Expedia can access HotelCombined’s Asia-Pac database.

    We’d validate this and other travel affiliate program information HotelsCombined has made available on their website, or on LinkShare, the bedbank’s preferred affiliate network.

  • Hotels.com: The ‘granddaddy’ of online hotel aggregator sites, Hotels.com lists more than 44,000 hotels, resorts and inns as well as over 3,000 vacation rentals, all at ‘special internet rates’, and an additional 38,000 properties sourced from a GDS. Not to be forgotten, they are also one of the larger players in the BVI accommodation market, with 20 properties on their list.Part of the Expedia family, Hotels.com operates its travel affiliate program under the Interactive Affiliate Network (IAN) moniker, which is where we’d begin a more granular vetting and analysis of this potential partner.

Home Exchange and Vacation Rentals Aggregators

  • Homeaway.com: The ‘800 lb gorilla’ of the online vacation rental market, HomeAway offers access to more than 115,000 vacation rental homes, condos, guesthouses, cottages, and cabins in more than 90 countries. In the British Virgin Islands, travelers can choose from 119 properties ranging from beach houses to condos and villas (this is the largest BVI accommodation database we’ve found).HomeAway has rolled-up a good portion of the home vacation rental market, and today the Company includes the following brands under its corporate umbrella: VRBO.com, VacationRentals.com, CyberRentals.com, Holiday-Rentals.co.uk, GreatRentals.com, A1Vacations.com, FeWo-direkt.de, VacationVillas.net, Abritel.fr and HolidayRentals.fr. Many – though not all – of these sites offer travel affiliate programs.According to HomeAway’s travel affiliate webpage, their program pays affiliates for delivering a homeowner or property manager who summarily lists their property with this online market maker. This program enables travel affiliates to earn up to 24% of the listing fee (with 20% being the base commission). Analyzing the information on HomeAway’s travel affiliate info page, as well as checking out their program details on Commission Junction, their preferred affiliate network, would be our next step in the coarse-screen process.

Yacht Rental Portals:

  • Boatbookings.com: If your customers are looking to charter a yacht (bareboat or crewed, motor or sail, monohull, catamaran, or super yacht), then BoatBooking.com might be the right partner for you. With offices in London, Cannes, Athens, Ft Lauderdale, Newport and Singapore, Boatbookings works worldwide, primarily through the Internet, to match boats to our customer’s requests. Because they put their people “…in the ports, near the boats,”Boatbookings has intimate knowledge of and in-depth experience in the charter yacht industry, and can provide recommendation on the ports, itineraries and crew (if required), that customers seek to arrange. Using a worldwide network of independent charter operators, they pretty much cover the world and promise to make good on their pledge of “Any Boat, Any Where.”Boatbookings offers two travel affiliate programs: a generic link to their site which enables the travel affiliate to receive a portion of commissions generated from the customers they provide to Boatbookings, and a ‘White Label’ program, where Boatbookings creates a ‘mini-site’ that fits within the affiliate’s site. In either commercial venture, all of the customer handling, reservation and customer care processing is handled by Boatbookings.com.Their travel affiliate program is quite generous, with commissions starting at 10% of the commission Boatbookings earns. Commission levels increase based on the travel affiliate site’s page rank and the volume of business transacted between the two parties. Boatbookings provides real-time electronic tracking and reporting. This, as well as much more information about their travel affiliate program is available on the Company’s travel affiliate information page.

The information sourcing for the British Virgin Islands strawman and follow-on coarse-sort competitive and partner analysis outlined above are examples of just one approach travel affiliates can use as first-steps in identifying and assessing the travel niche / specialization possibilities available in the travel affiliate space today.

There are many other sound and effective analytical frameworks that travel affiliates can use to delineate product and partner opportunities, which would then be followed by a more rigorous fine-screen analysis (elements of which would include discussions with the executives responsible for the potential partner’s travel affiliate program, SWOT analysis, and reference checks, among others). Also, based on our experience, choosing the ‘right’ partner often ultimately depends on how well the potential partner aligns with the travel affiliate’s business profile, customer base and product portfolio, so it’s imperative that the travel affiliate knows – and acknowledges – their capabilities and competencies.

The other major point TravelDividends want to drive home is that travel niches are the future of the travel affiliate industry.  What started out as a small movement by a few online travel companies almost a dozen years ago in the U.S. (and more recently in the UK and Western Europe) to specialize in travel niches, has mushroomed today into a world that requires all but a few of the online travel players to follow if they want to remain viable and profitable.

That’s why travel niches – whether super- or micro- in size – continue to rank highest on TravelDividends’ list of travel revenue opportunities.  Do you agree with our premise…what are your thoughts on this subject? What do you think the top travel affiliate marketers are specializing in to remain successful at their trade?  We’d appreciate your thoughts on this subject.  Drop us an email or leave a comment…and thanks for sharing!

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