Free holidays for all: fantasy or future?
A significant amount of the services we consume are totally free: Google or Bing, Facebook and Instagram, using WhatsApp, and of course mainstream TV and radio. These aren’t public services, they live off advertising.
But could a holiday ever be paid for by advertisers and with zero cost to travellers? As outrageous as this might seem, there are plenty of precedents. FAM trips, social media influencer tours, luxury brands taking wealthy target audiences away for the weekend, corporations and their week-long ‘retreats’ for clients.
But normal holidays free for ordinary people? Martin Eade from travel technology booking engine provider Vibe comments, “years ago timeshare promotors used to give away free travel products, for example hotel stays or tickets to Disney”. Whilst Mark Ross-Smith from StatusMatch, a tech provider to airline loyalty schemes, points out that “airlines have been giving people free travel products in the form of points redemptions for years in return for hitting spending thresholds”.
Ultimately this is simply a question of whether or not an advertiser is prepared to cover the cost of someone’s holiday: the service providers don’t care who actually pays.
The holiday format presents an enormous amount of opportunities for advertisers to sell. Several hours on an airplane, the hotel room, the transfer, the restaurant spaces, and more – all of which right now have limited amounts of advertisements.
Barry Klipp from InterLnkd – who’s engine matches fashion and beauty brands and products with holiday bookings, to provide OTAs and airlines with a new stream of ancillary revenue – believes this is something that could be on the horizon: “We drive a revenue stream from cross-selling FMCG goods ahead of the travel date. Could that alone pay for the whole holiday? Clearly not, but you can be on your way towards covering part of that.”
In the opinion of Alex Barros from revenue management experts BEONx, nowadays many hotels need to rethink their business model anyway, “the days of focusing on RevPAR are over, hotels need to think about maximizing revenue from the whole guest experience such as concierge services.”
Spencer Hanlon from B2B travel payments provider Nium highlights that many travel providers or tour operators give up to as much as 3 per cent of their revenues over to handling payments, due to old-fashioned financial infrastructure: “If there’s no payments from the consumer side of things, that drastically reduces the financial transaction costs – all that’s left is one lump-sum B2B payment to the supplier that with modern technology should be almost unnoticeable as a transfer cost. You’re 3 per cent of the way there already.”
It is also possible that destination marketing organisations might step in sometimes to give free or discounted holidays. Carlos Cendra from travel intelligence provider Mabrian comments “We constantly see how destinations invest millions in what are called ‘co-marketing agreements’ with airlines in order to co-finance inbound seats during low-season.”
There are a lot of other industries out there that might want step-in to offer parts of the package directly too, providing a commission or discount. Katie Crowe from travel insurance provider battleface comments: “What better complement to a holiday than an insurance policy promotion?”Who knows, if this ‘freemium holidays’ model proved profitable one day we could even reach a situation where – in order to compete for travellers – someone even pays people to go on holiday? All we need is someone to actually step forward and do this.