This is a guest blog by Ming Foong, director of Online Travel Agencies – APAC, Travelport
The OTA segment is developing into an exciting and dynamic growth driver in the Asia Pacific region. It can get a lot more exciting if all players and aspirants in this space discard the old mindset that still sees markets demarcated by national borders. We should all just “Think Borderless” if we really want OTA to take off in this region.
Customer acquisition with meta-search
Ming Foong: Online space is still very much in development in a large part of Asia. (image credit: Travelport)
For a large part of Asia, the online space is still very much in development. Most markets are dominated by one or two leading homegrown OTA brands, with perhaps one or two more international players in the mix. These early entrants occupy significant brand and mind share, thanks to savvy online marketing.
What we are seeing is a growing presence of price comparison engines, i.e. travel meta-search. This is rather different from the usual evolution of an online ecosystem where comparison engines emerge as a result of too much choice, and its role is to provide consumers with a better ability to compare and make purchase decisions.
Instead these meta-search or price comparison engines are capitalising on this developing market to establish themselves as the first point of contact for travel booking and as a means to reach customers. This makes it a mandatory channel for B2C online agencies to acquire customers. The price comparison function provided by the meta-search engines also attract customers who are already further down the purchase funnel, which means potentially better conversion for the OTAs.
The shift towards commoditising travel products through meta-search engines also help to reduce market entry barrier costs. An OTA can effectively target traffic in another market. Consumers are less concerned if the OTA brand they purchased from is a known brand within their local market. This presents itself as an opportunity for a greater network of buyer-seller relationships to form. In the past 18 months, we observed a number of global OTAs appearing on meta-search engines in Australia, Singapore, Hong Kong, etc, outside of their home country and region. There are no geographical borders on the internet after all.
As the demand for meta participation increases amongst online customers, we are developing the necessary solutions like ePricing Meta to support them. ePricing Meta is a variant of our flagship shopping product ePricing. It is specially created to help our customers on finding the lowest valid fare, along with a concentrated mix of diverse and consumer-friendly flight solutions, with a quicker response time.
We are also working with various meta-search companies like Kayak, Qunar, Alitrip, to not only assist our customers participating in meta-search, but improve efficiencies as well.
Fulfilment with O2O
OTAs in Asia called to think borderless. (Image credit: takahashi_kei/iStock)
The growth of meta-search engines is still somewhat hampered by the limited supplier/seller base. To participate in meta-search engines, the agents need to have an API connection as well as transaction capabilities. Travelport is assisting agencies with limited technical resources to participate and acquire customers through meta-search engines by being the conduit between all parties.
For meta-search engines and large audience portals, this ability to drive demand from online customers, which will then be fulfilled by a large offline sales operation is key in growing and establishing market share, particularly in China.
Whilst online shopping is common, online completion of purchase as well as after sales support certainly have room for improvement. Accessing online payment methods, trust associated with purchasing online, the complexity of the product purchased are just some of these barriers. Online-2-Offline (O2O) helps overcome these obstacles. This O2O partnership model is fast catching on with other types of online businesses as well, particularly in China, where it is evolving as part of the fulfilment and after sales process.
In countries with more established ecommerce habits, O2O is less prevalent. Often, the online operators are seen as competition and new entrant to disrupt the traditional offline models, and see less partnership or integration. Outside of travel, there are some interesting success stories particularly in retail where the integration of on and offline worked. In Japan, retailers are focused on providing product experience to consumers, who then complete the purchase online (including on a mobile device). This is perhaps a model that would work in high involvement purchases like cruise or tour packages.
The sharing economy
The core idea of the sharing economy is about commercialising or monetising a dormant resource or inventory, over an established network. If I have an apartment or spare room that I am not using, I can rent it out by promoting it over a network of holiday users. Sounds familiar? There is no limitation that the “buyers” and “sellers” need to be in the same location or market.
This approach is also applicable to the online travel world. For example, if an agency has access to advantageous or unique content, they can increase usage or sales by leveraging on an international network of users on the same technical platform and system. This is not an entirely new concept. Agents have been working with ticketing partners and consolidators in different markets. The internet provides the ease in collaboration.
The trick of course is to get it online seamlessly, efficiently and linked with the right partners.
