When I caught up with Tim Hughes, vice president marketing of Agoda in Bangkok, the unexpected had just happened in the Rugby World Cup currently taking place in the UK. Japan had snatched victory from the jaws of what seemed to be sure defeat by the South Africans – with a score of 34 to 32 – the winning points scored after time had expired.
Now I am no rugby fan but I even know shocking that is – it prompted the Guardian to proclaim in this article, “Japan beat South Africa in greatest Rugby World Cup shock ever”.
Hughes: “The magic in online travel is the nuance, it’s a game of inches.”
Hughes had watched the match in an Irish bar in Bangkok, surrounded by every nationality except Japanese. “We all just hugged each other, we were so happy for the Japanese.”
And that to Hughes is what online travel is all about – a game of inches. “The magic in online travel is the nuance, it’s a game of inches. The core of every OTA is the same – get customer to site, convert, repeat. The winner is the one who can exploit the difference, and can consistently do that and do that a lot.”
Hughes, who had his own blog, BOOT (Business Of Online Travel), before he came to Bangkok to join Agoda, said technology had delivered a lot of what it had promised in providing more options to more customers. At the same time, it has made travel distribution more complex with different types of intermediaries and shifting business models.
For instance, meta-searches now offer instant booking which means they are bleeding into the OTA space. Agoda pulled out its content from Trivago two months ago, for instance. At the time, CEO Rob Rosenstein said Agoda regularly reviews its performance marketing channels and cuts “the least attractive ones now and then to remain focused.”
Hughes also spoke of how the rise of online travel changed broke the link between how consumers research and how they book travel.
“When you think of it, the move from offline to online changed not only the techonology in travel but it split up the travel booking funnel. The process by which customers go from the idea or inspiration on where to go to the actual booking. The traditional travel agent had the top and the bottom of the funnel at the same time. You want to go to have a beach holiday, the agent guides you down the tunnel and sells you the booking.
“OTAs have got the mid-funnel – content and reviews – and the bottom of the funnel (the booking) but left the upper funnel to TV, blogs, etc because there is no money to be made online in the upper funnel. Offline the travel agents made money precisely because they were good at the upper funnel.
“The question to ask is, what role can the web play in the upper funnel in a way where it can be monetised?.”
On the hotel space, where Agoda is clearly focused on, he said hotels should look beyond RevPAR when debating whether an OTA customer is a good or bad one. “They should look at all revenue sources when assessing OTAs .
“I’ve never been upsold on check-in on anything – if I check in at 8pm, I’ve not had anyone else, would you like to order room service now and influence me on my decision. A single person ordering room service at a certain time – there must be some data point that tells me that – but no one does that. There is so much hotels could do with data.
“They could look at patterns and data, match check-in times with f&b spend, day of week and f&b spend, and come up with experiments, the way OTAs do all the time on their websites.”
He also said that the growth success of OTAs was based as much on people as technology. “Companies like us have 2,000 staff, half of whom are customer and hotel-facing. Finding good people and keeping them is as much a challenge as innovating with tech.”
Note: Tim Hughes is speaking at the WIT Conference, Oct 19-22.
Photo credit: Rugby World Cup
