Word of Mouth Sells the Trip. Who Takes the Booking?

A dinner in São Paulo. One of the guests just came back from the Atacama Desert and is passing her phone around the table: salt flats at sunset, a pool facing a volcano, a guide who knew the name of every star. Two people at that table will be in Atacama within a year.

That's how most luxury trips begin. The trip is sold before anyone opens a website.

Three kinds of players build a destination

Destinations get built by three kinds of players.

Some lead. A lodge that opens in a place nobody visits, or a tourism board that spends years positioning a region, creates demand where there was none. They take the biggest risk and they pay for most of the early marketing.

Others follow. Once travelers start arriving, new hotels and operators open to serve them. Supply follows demand, and as long as there are more travelers than rooms, everyone fills up.

And some attach themselves to the route. A traveler flying to Atacama has to pass through Santiago, so someone sells a day in the wine valleys or a walk through the city on the way. They don't create the trip necessarily, they just add a piece to it.

All three depend on the same engine. People go, they have a great time, they tell someone, and that person goes the next year.

The channel marketing forgets

Word of mouth is the biggest marketing channel in almost every industry. It decides which restaurant people try, which TV they buy, which team their kids support and where they travel next. In Nielsen's global study of trust in advertising, 88% of people said they trust recommendations from people they know more than any other channel.

Yet when marketers plan, they think about ads, branding, social media and search. Word of mouth rarely gets a line in the budget, because it looks like luck, something that just happens to a brand.

Growth writers, like Sean Ellis and Morgan Brown in Hacking Growth, have argued the opposite: that referrals are a loop a company can design and feed. In travel, most marketing already feeds that loop, whether anyone planned it or not. A post-stay email reminds a guest of the trip, and makes it a little more likely she brings it up at dinner that week. An Instagram ad does the same for someone who went three years ago. The ad may never close a sale on its own, but it keeps the conversation going.

Then comes the booking

The recommendation is only half of it. The traveler at that dinner table now knows exactly where she wants to stay. The next question is how to buy the trip, and this is where things get confusing.

She could write to the lodge, but the lodge sells rooms, and she also needs the flight to Calama, the transfer to San Pedro, the guide for the geysers and two nights in Santiago on the way. So she calls an agency, or an advisor, who can arrange all of it.

The hotel created the desire and earned the recommendation. The booking went somewhere else, along with a share of the revenue. She picked the one party that could sell her the whole trip.

"But travelers like booking through advisors"

Many do, and for good reason. A good advisor makes a complex trip simple, and advisors live on referrals too. Their best clients come from other clients' dinner tables.

Whoever gets the call needs to be able to sell the whole trip. Today, when the call reaches the hotel, the hotel often can't.

Owning the answer

For hotels, a stronger direct channel means having an answer when a referred traveler writes and asks, "Can you arrange the rest?" The transfers, the guides, the day in the wine valleys. With that answer, the hotel keeps the booking that its own guests generated.

Word of mouth will keep selling trips at dinner tables, the way it always has. What's changing is who is ready to take the call.

Sources

• Nielsen, Global Trust in Advertising study (2021), via Nielsen Insights: nielsen.com