Online Travel Agencies (OTAs) entered the travel industry a few decades back and have seen tremendous growth over that time. In 2015, they earned $246 billion in global travel sales (↑19% YoY). However, their technological abilities are now being matched by hotels and airlines, and their competitive prices are becoming less of a differentiator due to a reduction in price parity laws, the emergence of sharing economy players like Airbnb, and the increase in price transparency due to metasearch engines. To remain competitive in the coming years, OTAs must look to other differentiators. In order to determine these differentiators, WNS DecisionPoint(TM) conducted a survey of travel platform users in North America, Western Europe and Asia Pacific to understand how customers use OTAs and what determines their buying behavior. The results uncovered the differentiators OTAs can leverage to form a successful strategy in the future: - Bundled packages. As airlines and hotels push direct bookings, OTAs’ ability to offer hotels and flights in customized bundles with other offerings, such as car rentals and tour packages, allows them to provide more convenient options. - Mobile apps. OTAs’ apps, on average score much higher in app quality than hotels and airlines. As more people turn to mobile as their primary method of accessing the internet, OTAs can capture more of the market with safe, easy-to-use and robust apps. - Loyalty programs. OTAs have some distinct advantages when it comes to the potential of their loyalty programs. By leveraging their wide variety of offerings, they can appeal to the leisure market with more options and a quicker redemption cycle. To discover the complete roadmap for OTAs to stand out in the coming year, read the full report at http://www.wnsdecisionpoint.com/our-insights/reports/detail/60/standing-out-as-an-online-travel-agent

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wnsdecisionpoint.com
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 by
Incentive of App-specific Discount
Ability to Conveniently Redeem Loyalty Points
on App
22%
50%
44%
26%
36%
40%
21%
26%
38%
0%
10%
20%
30%
40%
50%
60%
I am not aware of
the option
Desn't make a
significance price
difference
Packages are too
standardized
APAC Western Europe NAM
39%
34%
21%
4%
32%
41%
23%
4%
42%
32%
20%
4%
0%
15%
30%
45%
Once a
month or
more
Once a
quarter
Twice or
thrice a
year
Once a
year
Overall
Users of flight & hotel products only
Users of non-flight & non-hotel products
28%
50%
56%
0%
10%
20%
30%
40%
50%
60%
OTA Hotel AirlineNo Yes
NoYes
Customer
segment: Users
of non-flight &
non-hotel
products
Customer
segment: Users
of 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%
NoYes
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

5. 44 Wnsdecisionpoint.com
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Email: perspectives@wnsdecisionpoint.com
Website: wnsdecisionpoint.com
@WNSDecisionPt
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