Why Convergence and Mobility are an Online Travel Agency's Best Friends in Competitive Times

Read | Oct 16, 2021

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AUTHOR(s)

A WNS Perspective

Key Points

OTAs face increasing competition from digitally savvy tour operators and meta search websites
To address this challenge, OTAs should view emerging channels as growth drivers, and allow customers to buy on any channel of their choice
OTAs need look beyond mobile site optimization, integrate richer CRM functionality, combine meta search and data customization for better search results, and dynamic packaging

These days, the boundaries between online travel agencies (OTA) and tour operators are blurring as operators come up with their own versions of packaging, price look-up and comparison tools, and user reviews. What is more, meta-search Websites like Kayak and TripAdvisor now offer consumers a single view of travel products across OTAs, and buoyed by billions of dollars of investment1, pose a grave threat. According to some sources, meta-search is the fastest growing category in the travel industry2.

For OTAs, the unmet customer need around convergence and mobility presents an opportunity to respond to these fierce competitive pressures not only from tour operators and meta-search Websites but also search engines and brick-and-mortar travel agencies that have taken the online route.

Why Convergence and Mobility are an Online Travel

Embracing Convergence and Mobility in a Digital World

The digital revolution has transformed the way travelers plan, research and purchase their trips. To the next-generation traveler in particular, the ability to access Websites and booking information through any device of their choice is extremely important. Forrester estimates that 49 percent of online retail, travel and daily deals sales in much of Europe will be bought through mobiles and tablets by 20183; and the rest of the world is likely to follow suit. That means OTAs should view newer channels as growth drivers that can potentially boost revenues by allowing customers to make the purchases they want, via the channel of their preference.

However, this poses some noteworthy challenges. Delivering on the promise of convergence requires OTAs to build and integrate a growing number of channels. They need to optimize the mobile channel, undertake complex IT implementations, forge strategic alliances and ensure flexibility to react to an evolving market. This puts pressure on limited organizational resources, and as a result OTAs must prioritize specific initiatives based on their strategy.

Case Study

A Leading European OTA Achieves USD 7 Million in Incremental Sales

As a starting point, WNS has identified some trends that OTAs could consider as they develop their vision for the future.

Beyond site optimization for mobile devices Companies are moving beyond optimizing their booking sites for just mobiles to optimizing for a range of devices, including tablets. This enhances customer engagement in a very limited interactive space. Companies are now focusing on functionality that moves beyond travel planning and booking to continuous engagement with customers through effective CRM, directed marketing and loyalty management.
Integrating richer CRM functionality Ancillary sales and cross-sales have remained a contentious issue in the mobility space. Existing platforms have been struggling with executing multi-layered products / services purchased through smaller mobile devices. Now, companies have begun to focus on seamlessly integrating CRM into mobile platforms to enrich the customer experience. A case in point is British Airways' 'Know Me' program, which brings together information on important customers from across internal and external data sources to ensure tailored attention.

Case Study

Redefining Customer Experience to Boost Revenues for a North American OTA

Combating meta-search with data customization for search results Meta-search has prompted companies to look for ways to improve search results based on customer information such as past transactions and preferences. If they are able to pull this off, travel companies will also be able to forge a distinct brand identity assisted by customer intimacy.
Dynamic packaging through mobile platforms Dynamic packaging has been a game changer for the online travel business, and has helped travel companies to offer personalized choices and better services resulting in improved sales. With convergence, the challenge is to extend such dynamic packaging models to mobile devices.

The Opportunity OTAs Have Been Waiting For

Changing market dynamics mean that OTAs are faced with a new breed of well-funded competitors that pose a serious threat. In this battle for customers, the winners will be those who move closer to travelers by giving them the experience they truly want — one that is seamless and personalized.