standing out as an online travel agent - differentiation when technology and price are not enough
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Standing Out as an Online Travel Agent :Differentiation When Technology and Price Are Not Enough
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Gearing up for emerging challenges
All travel industry stakeholders are focusing their efforts on online channels to cater to the fast growing penetration of e-commerce
Rate parity is being challenged in important hotel markets
Global hotel chains are aggressively pushing for direct channel bookings by providing exclusive discounted rates
Popularity of metasearch engines has resulted in price transparency, making it extremely easy for travelers to compare prices on a single platform, across hotels, airlines, OTAs etc.
The fast growing sharing economy players, led by Airbnb, are creating an added pressure by charging hosts a lot less
Google and TripAdvisor are offering direct bookings by displaying rates and availability via a feed from the hotel’s booking engine system
Technology and price will stop being key differentiators for the OTAs
Important for OTAs to position themselves beyond the role of a mere online agent and be recognized as a value adding entity
Three viable differentiators can be identified to help OTAs carve out a distinguished space in the travel market
– Bundled packages
– Mobile apps
– Loyalty programs
A survey was conducted to understand the customer perception of OTAs and validate our understanding that the above three elements act as potential differentiators in various markets
Emerging Challenges
Need to Differentiate
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86%
14%
Identifying key focus areas for charting a differentiation strategy
24%
76%
41%
59%
59%
41%
First time App Download Driven byIncentive of App-specific Discount
Ability to Conveniently Redeem Loyalty Points on App
22%
50%
44
%
26% 3
6%
40
%
21% 26
% 38
%
0%10%20%30%40%50%60%
I am not aware ofthe option
Desn't make asignificance price
difference
Packages are toostandardized
APAC Western Europe NAM
39
%
34
%
21%
4%
32% 4
1%
23%
4%
42%
32%
20%
4%
0%
15%
30%
45%
Once amonth or
more
Once aquarter
Twice orthrice a
year
Once ayear
OverallUsers of flight & hotel products onlyUsers of non-flight & non-hotel products
28%
50%56%
0%
10%
20%
30%
40%
50%
60%
OTA Hotel AirlineNo Yes
No Yes
Customer segment: Usersof non-flight &
non-hotel products
Customer segment: Usersof flight & hotel products only
OTA
Bundled Services Mobile Apps Loyalty Programs
Use of Bundled Services Frequency of App Use Loyalty Program Penetration
Reasons for not Using Bundled Services
79%
21%
72%
28%
No Yes
Hotel Airline
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The responses received from more mature markets were in alignment to our assumption of bundled packages, mobile apps and loyalty programs being critical elements in building differentiation strategy going forward
Emerging markets responded a little differently and came across as being more price sensitive
Formulating different plans for mature and emerging markets
Customizable bundled packages
Pushed through mobile apps
Further boosted by bonus points in loyalty programs
To know more about how customers in various markets responded, download the report
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