Dean Wilson, managing director & VP international for corporate trade company Active International reflects on the benefits of this concept for travel companies during an economic downturn.
Over the last year we have experienced a 316% increase in
media billings from our clients in the UK travel sector –
predominantly tour operators, hotel chains and airlines.
We expect the growth in corporate trade to increase in the
travel industry because of its ability to unlock extra value
from media and marketing campaigns. As the economic
uncertainty continues travel brands will be looking look to
maximise their inventory in exchange for advertising
opportunities and ways to win new customers.
Corporate trading businesses, like Active International
provide a service that in its simplest form enables travel
businesses to generate extra value and new customers from
their marketing campaigns by utilising their inventory such as
rooms, seats and holiday packages.
Hotel groups are already using corporate trade by
exchanging their rooms at full market value, in return for a
credit which they spend on their marketing campaigns to
help promote their brands and increase awareness of their
properties. Active then sells the rooms to its customer base
and helps drive new business.
Using corporate trade enables those in travel industry, or
their media agencies, to use their inventory to help fund
anything from TV ad campaigns and digital activity, through
to printing and corporate hospitality.
Good corporate trade businesses will only sell any inventory
they receive as part of a deal with the travel businesses prior
approval. In addition, they will have an inclusive approach
in working with the travel company’s normal media owner to
make sure any advertising choices are on plan so that
communications objectives are not compromised.
To demonstrate its value in 2010, Active International’s
clients used over $136 million worth of inventory to help fund
There are four corporate trade deal types that are popular
amongst those in the travel sector. These include:
- Bill Payer – any hotel, airline or venue that has
expenditure for refurbishment, such as new
carpets, can use a corporate trade company to fund
the purchase in return for a multiple of their
inventory, such as hotel rooms and seats.
- Cross Purchase – working alongside the travel
client’s media agency the corporate trade company
will trade, where possible, planned media
expenditure. In return the corporate trade
business will guarantee to bring in new business
expressed as a percentage of the media campaigns
the corporate trade company trades.
- Contra Transaction – a straight trade where the
travel business pays for media space using, for
example, rooms or airline seats.
- Cash and Trade (for hotels only) – the
corporate trade company handles a media
campaign for a hotel group for which they pay
partly in cash and rooms. The corporate trade
business gives rooms to a media owner, for
example for a conference they are handling,
because the media owner has paid for the
conference with the provision of media space.