Press Coverage

Comment: Corporate trade can work for travel

Dean Wilson 16 Dec 2011

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 media purchases.

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.

Dean Wilson

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