By Tony Harradine
Managing Director, Active International Australia

A combination of a strong Australian dollar and skittish consumer confidence has, in recent times, created a perfect storm for the domestic tourism industry in this country.

One of the biggest problems travel brands face as this situation continues is how they can promote themselves with marketing campaigns while having to cope with diminishing cash flows.

One solution is corporate barter. If you’re not familiar with  how it works and how it can help the travel industry, it’s likely that over the next couple of years you will not only hear a lot about it, you will possibly use it for your own travel brand. It is already well-established in the UK, for example, where the travel industry has been benefitting from corporate barter for several years.

How?
Corporate barter can help travel brands maximise the value from their inventory by using it to extend their marketing reach and drive new business to the brand. Corporate barter businesses, like Active International, provide a service enabling travel businesses to generate additional marketing value and therefore, attract new customers by utilising their inventory such as rooms, seats and holiday packages as a way of payment.

Hotel groups are already taking advantage of corporate barter by exchanging their rooms at full market rate, in return for marketing value which is used to help promote their brands and increase awareness of their properties, these budgets may otherwise not exist.  Active then sells the rooms to its client base which drives new business to the hotel.

Using corporate barter enables travels brands, through their media agencies, to use their inventory to help fund anything from TV ad campaigns and digital activity, through to printing and corporate hospitality.

Corporate barter companies have media partners across broadcast, digital, print and production. Working with a travel company’s normal media buying agency, corporate barter companies leverage their relationships with media owners to enable travel companies to access media space at their normal cost and quality parameters.

We are seeing corporate barter becoming increasingly mainstream in the travel industry and we expect it to be a discipline that’s set to grow strongly for the rest of 2012 and into 2013. Travel brands that don’t look at the value corporate barter can generate could be missing an opportunity not only to increase exposure for their brand but uncover sales revenue opportunities.

There are four deal types that are already highly popular in the travel sector in the UK and can be equally leveraged by travel businesses in Australia. These include:

• Bill Payer – a hotel, airline or venue that has an upcoming expenditure for refurbishment, such as new carpets, can use a corporate barter 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 barter company will trade, where possible, planned media expenditure. In return the corporate barter business will guarantee to bring in new business expressed as a percentage of the media campaigns.
• Contra Transaction – a straight trade where the travel business pays for media space using, for example, rooms or airline seats.
• Cash and Trade  – the corporate barter company handles a media campaign for a hotel group for which they pay partly in cash and rooms. The corporate barter 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.