How OTAs can stand out in a crowded market

The online travel agency (OTA) market is seeing a surge of new entrants. Integrating technology and utilizing the internet has made it easier for firms to access a wider pool of travelers around the world. Having an online platform offers a great opportunity for businesses in the space, while also creating an equal playing field for firms. From small independent boutiques to large established companies, online platforms can help capture the attention of prospective customers. However, with ease of entry, a crowded market is inevitable. Among the competition, we are seeing bigger players including banks and credit card companies further entering the travel space, offering a sense of familiarity and reliability for their clients. With this growing trend, OTAs must look for new ways to innovate and stand out in a crowded market to both gain and retain a clientele overcome with choice.

Investing in a seamless customer experience

The increasing availability of choice, and growing ease of being able to evaluate this choice, means that customer expectations in the travel market are constantly being heightened. Travelers are seeking convenience, personalization, and a seamless experience throughout their buying journey - from the planning stage to checkout. The key for OTAs to offer such an experience is through incorporating desired travel services directly into their booking process, such as insurance, currency exchange, and local or preferred payment options. With this, agencies can eliminate the friction that typically comes with dealing with multiple financial and travel service providers. The incorporation of convenient financial services into a digital platform allows for a more interconnected and efficient experience that better meets a travel client’s needs.

The inclusion of these services directly within OTA platforms can build a sense of confidence and trust. Customers can be reassured that the financial products on offer are designed with their unique travel needs in mind, backed by the expertise of their chosen travel provider. 

Leveraging data for a tailored solution

OTAs hold a wealth of data on travel trends and customer behavior, which can be leveraged to offer highly tailored financial solutions. For instance, the provision of virtual and physical travel cards is a service that can be customized based on the destinations most frequented by customers, the currencies they will need, and the security features they value.

OTAs can also leverage data to better identify what will create the most optimal checkout experience for their clients based on their usual spending habits. This could mean enabling payment via digital wallets such as Apple or Google Pay, or providing customers from different geographies a choice of their own familiar and local payment options at checkout. For example, UK OTAs looking to attract travelers from Southeast Asia could offer popular local payment methods like GrabPay.

Insurance products can also be customized by using travel data. By understanding the common issues and claims associated with certain destinations or types of travel, OTAs can design insurance offerings that provide comprehensive coverage where it is most needed. This level of personalization enhances the customer experience and increases loyalty to the agency.

Strategic advantages in a crowded marketplace

The strategic advantages of integrating financial services into OTA offerings are multifaceted. Firstly, it creates new revenue streams. Traditional income from commissions and booking fees is complemented by the profits generated from financial products. This diversification is crucial in a market where margins from bookings alone are under constant pressure.

Cross-selling capabilities are also significantly enhanced. When a customer books a flight or a hotel, the opportunity to purchase insurance or currency exchange services at the point of sale is a powerful tool. It increases the average transaction value and can improve the profitability of each booking. Furthermore, the data collected from these additional services can provide valuable insights into customer preferences, enabling even more effective cross-selling strategies in the future.

Perhaps most importantly, the integration of financial services increases customer stickiness. In a market where brand loyalty is challenging to secure, providing a broader range of services can be a game-changer. Customers who use an OTA not just for booking travel, but also for managing their travel finances, are significantly more likely to return. 

The standout approach

The traditional model of travel bookings and commissions is being challenged by new market entrants. To remain competitive and maintain market position, OTAs must adapt now to better serve consumers and their changing expectations.

The integration of financial services offers a unique opportunity for OTAs to differentiate themselves, create new revenue streams, and build lasting customer relationships. By providing a seamless and enriched customer experience, enhancing cross-selling capabilities, and leveraging unique insights into tailored financial solutions, OTAs can redefine the value they offer to travelers.

The future of travel booking is not just about selling flights and accommodation. It's about offering a comprehensive, end-to-end service that meets all of a traveler's needs. In the future, financial services will play a pivotal role, and OTAs that lead the way in this integration will set the standard for the industry.