Agoda's new tech-driven CEO Omri Morgenshtern lives and breathes technology, seeking to break new ground with online services to enable customers to build their travel itinerary on the platform over a period of time
Innovating the future of online travel booking
John (former CEO, now chairman of Agoda) is super smart and ‘presidential’ – he’s inclusive, approachable, the perfect CEO for Covid time as he has all the leadership qualities we needed in the crisis. I’m trying to be that, but I don’t think I’ll ever be as good as John.
Ah, but you have your own strengths. What’s the biggest?
I’ve been an entrepreneur and I grew up in tech – it’s all over me. I can talk to an engineer in a way that John probably can’t, just because I understand exactly what the engineer is saying. Not that John didn’t, but I can take it to the next level of pushing for innovation and making a difference.
What I am hearing from Booking Holdings (Agoda’s parent) is that they selected me (as CEO) because they like Agoda’s tech approach. We have a fundamental belief that we win with technology. There are lots of things to do (to succeed in the business) but in the Internet space, ultimately the winners are the ones who understand the users fastest and experiment/develop the tech fastest. That is what I stand for and one of the things I have brought to Agoda.
Tech is going to be what we live and die on in my period.
What is the one tech innovation you wish to crack?
The one that I really want to do is what I call ‘persistent’ booking.
Fundamentally, few people sit down and book their entire trip – flights, hotels, attractions, transfers, etc – at once. They may book the flight but don’t know yet where to stay, or know the hotel but can’t confirm travel dates. They may also want to book experiences later in-destination.
Where we, as an industry, have failed is to build a good enough tech to enable people to package persistently, i.e., book and build their itinerary through a period of time, in one platform that supports their travel planning and booking and, over time, gain savings because they are booking a package.
AirAsia has just launched Air Asia Holidays – flights + hotels + activities in one booking at one price – though only in Malaysia and the Philippines currently.
Yes, you can buy packages, even on Agoda, but it’s still only a minority of people in Asia that do, compared with in the US.
If you want to bring it to the masses, you need to crack the time component, make the itinerary as something that survives over time and, as time passes, people can keep adding what they need and see the savings in buying a package than individual components. We haven’t cracked this and I can tell you we will give it everything we’ve got. You’ll see a lot of movement on this from us in 2023.
We’ve just introduced a shopping cart to our platform. But that’s just the ability to add, like in an e-commerce website. That’s our first step in building a user experience where your itinerary persists through time and keeps getting package discounts.
If I can crack this, I can retire.
Why is it so difficult?
It’s a question of both tech and user experience. You can get into all sorts of problems. For instance, I book a flight and now I want to add the hotel but the booking failed. I can’t cancel the flight because it’s non-refundable.
So, we got to be smart to understand the order of how people book travel and develop interfaces such as allowing them to cancel or make amendments. Or notify a customer that they need to decide. It’s a massive technology change.
Then there are other areas such as customer support training.
The hardest thing is changing the customer behaviour. If you make it too complicated, it won’t work. It’s got to be intuitive.
But for me, this is the billion-dollar question on what separates a travel platform from a super app. Everyone wants to be a super app providing all services – kind of a WeChat. But I don’t necessarily see travel platforms becoming super apps. If anything, some super apps have become travel platforms, like Meituan, but outside China I don’t see (the concept) as being successful.
I don’t want people to buy groceries or a massage from me, unless it’s part of an experience or attraction during their travel. And if they travel with me, I want to help them build all the components through time and enjoy the discounts aggregated in the itinerary.
I think that’s enough work to do but in case it’s not, what other innovations are you toying with?
We are experimenting with a lot of services that we will be releasing in 2023. I’m very excited.
For example, price freeze. If you are afraid the rate that you’re looking at will change, pay a bit more and Agoda will lock the rate for you. If it goes down, you’ll get the cheaper price. If it goes up, the price remains as it’s been locked.
Another is a kind of insurance for when you have to cancel a booking. You pay a bit more for, say, a non-refundable room booking, which is lower-priced because it’s non-refundable, and in return Agoda will carry the risk and refund you if you have to cancel. Flexibility and the ability to cancel are really important, as we have seen during Covid.
In the B2B space, white label is a lucrative space (to double down on). We already empower the online assets and the extranet of companies such as JTB.
More interesting is distribution tech. The big chains continue to have issues with wholesale discounted rates that reach online when they aren’t supposed to. We want to provide a platform for chains to distribute to wholesalers, but with us policing the distribution so chains don’t have to play whack a mole. Also important is giving chains the visibility on where the booking goes to, to whom and ask any question they have. That open platform doesn’t exist.
Was the CEO seat your dream when joining Agoda in 2014 after selling your start-up Qlika to Booking Holdings?
I don’t think anybody – well may be some, but not me – plans to be a CEO (laughs).
I remember before Booking acquired the Israeli company, they brought us to see Rob Rosenstein (who co-founded Agoda in 2005 and served as president and CEO for more than a decade). I remember stepping into his room. He had a lot of TV screens and tons of data and I thought “Oh, this person has a tough job!”.
Definitely it wasn’t planned.
A tech-driven CEO. Should competitors worry?
Not more than they were worried with John as CEO (laughs).
We have amazing competitors. One of the values we talk a lot about at Agoda is to be humble and to me that includes acknowledging that our competitors are smart people and have their strengths. I’m not embarrassed to say – quite often we learn from them.