- One-stop shop superapps necessary to capture today’s digital-first traveller
- Enhanced offerings and personalisation to provide travellers with more flexibility and peace of mind
- Building an all-inclusive marketplace to benefit both consumers and merchant partners
The past decade’s explosive growth path, coupled with soaring demand for digital-first experiences to accommodate changing consumer behaviours and purchasing patterns, have presented OTAs with many opportunities.
GlobalData noted that from 2015 to 2019, the OTA market saw a growth of 9.4 per cent compound annual growth rate (CAGR), reaching US$480.3 billion. Looking ahead, the online travel market is forecast to amount to about US$691 billion by 2026 from roughly US$433 billion in 2021, according to Statista.
On the other hand, intense competition, such as Google’s growing presence in selling travel online, and hotels focusing on direct bookings, have posed serious hurdles.
Showing no signs of backing down, OTAs are powering ahead by breaking through the limitations of their current offerings, capabilities and markets.
Building superapp capabilities
Beyond their web-based marketplaces, expanding their service suite with superapp capabilities seems to factor greatly in some OTA playbooks.
This is in line with evolving needs of consumers who are now expecting the convenience of what Agoda’s CEO John Brown aptly described as “a mobile one-stop shop app where you can get all your travel needs met”.
“From having the widest choice of accommodation – hotels or homes; flights to anywhere in the world; packages if you want to pick up deals; and on-ground activities from a practical airport transfer to a fun cookery class; tickets to key attractions – everything is in one spot,” he told TTG Asia.
The company spent the last 17 years building agoda.com and the Agoda app to make searching and booking travel easy and stress-free.
Alfan Hendro, chief operating officer, Traveloka concurred: “We recognise the importance of delivering a connected experience, with technology as an enabler, particularly among millennials, who appreciate being able to manage all aspects of their digital life from a single app.”
For instance, Traveloka’s superapp allows users to purchase a wide range of accommodation, travel, local services, and even financial services products.
Travel activities and services booking platform Klook’s recent rebrand also marks a fundamental shift in how it engages with customers.
Chuan Sheng Soong, vice president, corporate development, Klook, explained: “We are pushing the boundaries and constantly introducing new ways to deliver joyful experiences. Customers can now discover and book the best of what any destination offers across three categories – play, stay and move.”
Meanwhile, the Booking.com app enjoys strong traction of over 100 million monthly active users, with app bookings increasing by 25 per cent year-on-year for the past six years, according to Laura Houldsworth, managing director, Asia-Pacific, Booking.com.
She told TTG Asia that it is “catering to the increasingly mobile habits of our audience, focusing on furthering our app-first approach”.
Broadening complementary services
The pandemic also provided OTAs with an opportunity to cast their net wider and build onto its suite of offerings to provide a better travel experience.
To thrive in the new era of travel, Houldsworth reckoned that “the opportunities are greatest for those that address the needs of the endemic traveller – particularly as it comes to safety, flexibility and convenience”.
For instance, Booking.com addresses health and safety concerns by continually updating the support it provides, including enhanced transparency to consumers on cleaning and hygiene information when booking on its platform.
Similarly, Klook has expanded its services to include Covid-19 testing and travel-related insurance, and invested in a strategic partnership with insurtech company, ZA Tech.
One of the first movers towards more flexibility in bookings during the pandemic, Agoda’s EasyCancel provided travellers with the flexibility and security to change their plans up to 24 hours before.
Booking.com also highlighted options for flexible cancellation policies at properties that opted to make these cancellation options available.
Traveloka even facilitated the convenience of worry-free purchases with a buy-now-pay-later feature, Traveloka PayLater for Indonesia, that can be used for any transaction on the superapp.
Brown added: “Seamless experiences will be the name of the game and being able to diversify our offerings (e.g. payment options), will help us cater to and meet the needs and requirements of each traveller.”
Traveloka’s Hendro also sees personalisation for consumers as another opportunity – where the market for travel services continues to be highly fragmented in South-east Asia due to a gap between what discerning middle-class consumers expect, and what service providers can currently deliver.
That is why Traveloka provides travellers with the freedom to customise a travel plan that is tailored to their needs, along with the flexibility to make flight bookings on different airlines on a round-trip.
“Greater digitalisation will provide stronger data insights into the unique behaviours of South-east Asian consumers, and lifestyle services will become less fragmented as a result. We expect this to transform the customer experience, by necessitating personalisation never before seen in the world, in turn retaining and attracting customers,” he opined.
Several OTAs have set their sights on untapped traveller segments to expand their customer reach, as well as empower their business partners.
Houldsworth shared: “Our latest research revealed that 82 per cent of LGBTQ+ travellers have experienced less than welcoming, or uncomfortable, experiences while on holiday – this underscores the importance of understanding LGBTQ+ travellers’ needs in order to provide an inclusive stay for everyone.”
Recognising the important role properties play in providing a more inclusive experience, Booking.com created the Travel Proud programme which displays inclusive properties on a separate page on the platform.
The pandemic also made Klook realise “that domestic tourism was severely untapped in terms of potential and that it is now here to stay”.
Interestingly, the company surpassed 2019 revenue in 2021 for domestic travel, with monthly active users exceeding pre-Covid levels and its focus on building up an inventory of hyper-local activities also bore fruit.
Soong added: “Our domestic markets are resilient with strong growth potential and we continue to see strong demand across verticals such as car rentals and staycations.”
Klook also recognised early on that some merchant partners were struggling to keep pace with the accelerated shift in digitalisation during the pandemic and needed assistance.
As a result, the OTA launched Flickket, a dedicated technology solution to empower its merchant partners by helping them digitise faster and expand their product distribution globally.
Since 2020, the number of merchants coming on board to digitally transform their business has increased eightfold, Soong noted.
Strategic partnerships were also inked to open new doors. For example, Klook integrated with Google, bringing the Things to Do platform into its digital suite of offerings for travel operators.
Agoda’s Brown summed up: “We’re operating in an extremely competitive industry but that helps us innovate and drives us to deliver a better experience for our customers. Competition is healthy, helping to drive growth and innovation for the industry overall – the more accessible travel can be, the bigger the overall tourism industry becomes.”