Industry Perspectives

Targeting domestic travelers with country rates

As domestic travel demand continues to grow globally, we explore how you can reach new guests and unlock local bookings using country rates

This summer, many travelers are choosing to vacation closer to home due to fear around the spread of Coronavirus (COVID-19). While some signs of repair are visible, international travel has been highly impacted. You can tap into this increased demand for domestic trips using a solution that already exists but one that you may not have considered adopting to attract local bookings: country rates. 

The country rates tool helps you target customers in specific regions by setting up a specially discounted rate. This can give you a competitive edge as well as a boost in your property’s visibility. In normal times, this tool might be used to target a specific geographic region to strategically engage demand on our platform. But the tool is equally useful for attracting travelers in your own region. It's all about understanding booker trends at this moment in time and making sure you have the right combination of rates and visibility. 

Traveler actions and intentions

When you dig into the existing trend data, it highlights a unique opportunity for you to tap into the domestic market. 

To begin with, domestic accommodation bookings historically represent around 45% of Booking.com’s total business. But in April of this year, the domestic share increased dramatically to approximately 70%. This trend extends into the near future, with a recent Booking.com survey* across five markets indicating that a majority of travelers intend to take a domestic trip first, with international trips to follow as they gain the confidence to travel more freely. 

Wish list data from users of the platform also supports this finding, with in-country stays featuring in over half (51%) of all those who wish-listed globally on the platform since the beginning of the year. This is up from 33% during the same time last year, reflecting the deep disruption of travel patterns since the pandemic began.  

On an emotional level, domestic travel may initially feel safer for consumers as it doesn’t require as many safety measures and feels more familiar. There is also an undercurrent, at least at the moment, of travelers wanting to support their national economies while enjoying nature in nearby locations. 

Using country rates in combination with promotions

How you set up and utilize country rates should be informed by your own local knowledge, as well as an understanding of how rates and promotions work together. What do you want to provide, at what price - and how are you going to do that? 

It’s helpful to think of your pricing strategy as three separate components: base rate plans, targeted rates (country rates, in this instance), and promotions. These three can all coexist, but it’s helpful to also understand how stacking works when you combine them. 

First, understand which discounts are going to be visible to everyone. If you have a targeted country rate in China and an Early Booker Deal, then the latter promotion will stack, but it can only stack for a very segmented group. Only a very small fraction of people in China who are booking far into the future will see this combination. 

Second, if you use a targeted rate and a deal, then the two will always potentially be stacking. But this can be avoided by adhering to a simple rule: use a rate as a rate and a deal as a deal. Don’t mix the two, because suddenly there might be too big of a discount that you don’t want to have in the market. 

Beyond domestic: anticipating trends

The next stage beyond domestic travel where we expect to see better performance is within traditional international corridors - adjacent areas with regular patterns of cross-border travel like the US and Mexico or The Netherlands and France. The last area to repair will be full international travel. You can, of course, utilize country rates to tap into each of these scenarios as they unfold.

Borders are still closed in some destinations, but even where they are opening there is some resistance from travelers because they don’t know what the regulations are in different countries. Perhaps most important, travelers don’t know what they might be faced with if there are future border closures. Even when international travel finally does recover, being able to offer flexible reservations for customers may become a new reality. 

All of this traveler uncertainty points to a need for you to adapt your marketing efforts to account for increased domestic demand right now. You can do so by setting up country rates from the extranet, which includes recommendations that are personalized for your own situation. 

* Research commissioned by Booking.com and independently conducted among a sample of 4,707 adults in US, UK, DE, FR, IT who have taken a trip in the last 12 months. Respondents completed an online survey between 24th April and 1st May 2020.  

 

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Takeaway
  • Country rates are usually used to target international travelers, but they can also be used to reach domestic bookers
  • Domestic bookings have increased from 45% to 70% since last year, with survey data and customer wish-list data supporting this dramatic spike in domestic travel
  • You can combine country rates with other deals, but in some situations, you might not want to
  • Country rates can play an important role in your recovery as international travel corridors and full international travel opens up

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