About the author
Antoine Gross is the general manager of Southeast Asia for impact.com, the world’s leading partnership management platform that transforms the way brands manage and optimise all types of partnerships. Antoine has over 16 years of experience in marketing and technology and is responsible for spearheading business development, marketing, sales and account management, with the aim to create transformational growth for impact.com’s clients in Southeast Asia.
Every cloud has a silver lining, but for the travel and hospitality industry, it can sometimes feel like every silver lining has a cloud. The end of China’s zero-Covid policy was welcome news for hotels, travel agents and booking sites alike, but it’s going to take a while to see the full return of Chinese tourists as many still lack passports, flights are limited and tour operators are still gearing up to handle group travel. According to a recent survey, 40% of Chinese travellers aren’t planning to go abroad in 2023.
On top of that, new data from Adobe suggests that airfares have finally risen to the point where even travel-starved consumers will think twice before making a purchase - and just when demand was starting to rebound too. While the Asia-Pacific region is unlikely to go into recession this year, inflation and sluggish growth will further weaken consumers’ spending power and willingness to travel.
Faced with such uncertainties, travel and hospitality brands need a strategy that can shield them from the worst of what 2023 might bring. They need a marketing channel which has historically performed well amid economic crises - partnerships.
Partnerships: A historical perspective
Companies that invest in partnerships as opposed to making budget cuts saw a revenue growth of 29% annually. Photo Credit: AdobeStock/Alexander
Most travel and hospitality brands won’t be unfamiliar with the concept of partnerships since travel brands frequently partner with their counterparts in hospitality and vice versa. Brand-to-brand collaborations are just one type of partnership, however, and other possible referral partners also include influencers, affiliates and media houses.
When profit margins and revenues begin shrinking, it can be tempting or even instinctive to slash marketing budgets as a way of lowering operating costs. This, however, may not be your best course of action. Plenty of historical evidence suggests that investing in performance-based partnerships during an economic downturn often helps businesses bounce back stronger than before.
Traditional affiliate networks sprung up out of the 2001 dotcom crash, while coupon and cashback sites experienced a surge in prominence following the Great Recession in 2008. More recently, data from impact.com shows that brands which invested in partnership marketing, which includes partnering with affiliates, influencers, content creators and other brands, grew their revenue by an average of 29% per year from 2020 to 2022.
Partnership programmes thus have a proven track record of driving revenue growth during times of economic hardship because brands only pay when results are achieved, which means the channel carries low risk and high growth potential. And when you consider these other reasons, it’s not hard to see why or how.
The lowdown on what makes partnerships tick
Establishing partnerships can help brands tick all the right boxes when it comes to driving performance, delivering value, creating authentic connections and making an impact in the market. Photo Credit: AdobeStock/Денис Кузнецов
• Partnerships are performance-based: You only pay commissions based on how much value a partner generates for you. Compare this with programmatic advertising and paid social, where you incur costs even when no sale is made.
• Partnerships deliver measurable value: It’s easy to measure the ROI of your partnerships with a partnership management solution like impact.com. When you’re able to track conversions and sales, not just impressions or likes, identifying which influencer or affiliate partner brings in the most moolah for your brand is no longer an issue.
• Partnerships create authentic connections: Travellers are increasingly hungry for authentic experiences and the personal touch, which just happens to be where partnerships excel. Discounts from brand partners, topical content by travel bloggers or complimentary add-ons at attractions work better than traditional advertising during tough times, simply because these are trusted sources of information and consumers are more likely to respond to recommendations provided by such partners or publishers.
• Partnerships make you stand out during a downturn: This one is for the Davids in an industry of Goliaths. When shrinking margins force the big players to cut their spending, smaller brands can seize the opportunity to capture market share by pursuing an active partnerships strategy and linking up with other businesses or content creators with a similar or complementary audience. With less competition to deal with, you may just find that doors previously slammed shut have now been wedged open.
Partnership hacks for flourishing under tough economic conditions
The key to allowing partnerships to flourish is to keep your partners in the loop on new travel experiences. Photo Credit: AdobeStock/Peera
So how can your brand capitalise on the benefits of having a partnerships programme when economic conditions are less than ideal? First things first, you’ll have to strengthen your existing partner relationships.
The key to this is to be as transparent as possible. Keep your partners informed about new products and assets in your business that might be of interest to them. Maintain open conversations about how best to achieve your mutual objectives. The more they feel like part of your team, the more motivated they’ll be to promote your products or services to their audiences.
It’s also a good idea to think about attracting new partners. Not only will the decreased competition make it easier for you to present your case to even the most sought-after influencers or content publishers, but you can also use this chance to explore ways of reaching new audiences and revenue streams by looking at new partner types.
Keeping an expanding network of partners engaged during a downturn might seem a tough task, but that’s exactly what Allianz’s travel insurance arm did during the height of the pandemic. According to Edwina Sunario, a digital marketing specialist at Allianz Partners, having the right technology at their fingertips made all the difference.
“With a technology platform like impact.com, we were able to integrate and manage our partnerships in one ecosystem,” said Sunario. Even as Allianz onboarded new partners from travel bloggers and influencers to cashback sites and airline miles programmes, it managed to maintain full transparency with its entire partnership network thanks to the platform’s built-in communication and performance reporting tools.
impact.com’s platform also enabled Allianz to determine which of its partners drove the most value and at what touchpoints. As a result, its partnership programme more than doubled in size compared to pre-pandemic levels, at a time when many travel brands had suspended their partnerships altogether.
If you’d like to find out how your brand can grow its partnership programme like Allianz Partners, contact the impact.com team at firstname.lastname@example.org. Dark clouds may be gathering over the global economic outlook, but you can still make partnerships the silver lining to see you safely through the storm.
This article is brought to you by impact.com.