Travelers in both mature and emerging markets are increasingly going online to search and book travel. The shift to online and mobile booking channels continues worldwide, shaped in individual markets by a variety of factors such as technology infrastructure, credit card and smartphone adoption, macroeconomic circumstances and demographic conditions.
However, despite the growth in online travel, today‘s connected travellers do not limit themselves to either online or offline – they rather seek out benefits from both worlds. This presents an opportunity for forward-thinking travel businesses at a wide range of touch points.
Building on new retailing capabilities to accelerate growth
We took this topic as a central theme of a recent panel at this year's Arabian Travel Market. Retailing successfully -- regardless of touchpoint -- is especially vital in emerging markets, such as the Middle Eeast, which is enjoying growth at over 60 percent. There are many opportunities, such as new capabilities in retailing, merchandising and personalization, as well as emerging technologies like artificial intelligence or big data will change the game.
Our panel included Raymond Vrijenhoek, Otravo's CEO, Bader Al-Bader, Rehlat.com president, Antonella Vecchio, Sabre's VP Western Europe & Online, and Dean Bibb, Sabre's Interim SVP EMEA. Here are some pullout quotes from the panelists on how travel business can remain competitive in complex, ever-changing travel and technology landscape.
This is especially key in local markets where regional players have managed to thrive, despite the increasing dominance of larger companies. On the OTA front, the large conglomerates' market share has grown from 38 percent in 2011 to 65 percent in 2015. As Otravo and Rehlat.com have found, leaning into regional differentiation can deliver real results.
One of the key learnings from these regional companies is that the lines between online and offline have blurred. Many regional agencies rely on brick-and-mortar for a majority of their business. As the expectations of the modern traveller evolve, these agencies must match the consumer's growing sophistication. Consumers use multiple devices to plan their trips and do not limit themselves to either online or offline. In reality, they seek out benefits from both worlds.
Nurturing success in a competitive marketplace dominated by giants
It's all about matching marketing strategy to the market and brand position, says Vrijenhoek. The reality of competing directly with the majors is not an attractive proposition. Smaller outfits must use size to their advantage, leveraging local market knowledge and speed to rapidly deploy marketing that resonates with the home market.
Rehlat's Bader Al-Bader echoed these sentiments, emphasizing the importance of understanding the local market and knowing what the traveler wants. Al-Bder talked about the importance of personalization and offering relevant and customized offering to the local traveler who wants to feel special and taking care of. Equally important is to hire the right team with the right skills for the specific market. These are all factors helped Rehlat to grow and find its position in a fast evolving industry.
One of the competitive advantages of Rehlat in the Middle East has been its focus on fraud. Many in the region are still very cautious about paying online. For fear of being ripped off, many consumers prefer paying face-to-face. This specificity of the regional consumer means that many travelers are more likely to trust brands they know. That has led to intense competition between local, regional and global OTAs, says Al-Bader, which was confirmed in a recent Sabre study that found the split between local and global OTAs to be 26 to 43 percent. ,
Sabre study: 43% of travelers in UAE use global OTA’s Expedia and Booking.com while only 26% uses local and regional ones.
Serving today’s demanding travellers today’s interconnected world
There are some critical steps to take when competing in today's travel industry, says Sabre's Antonella Vecchio. Leaning on her experience in Europe, here are some key points that extend to travelers across geographies:
- Looking at the consumer perspective, today’s travellers don’t really think in terms of “online” and “offline” any longer. What they really expect is a seamless, convenient experience when searching, shopping and booking travel across multiple touch points. We as an industry are tasked to deliver this.
- The market landscape is definitely changing. Many mature travel markets like the United Kingdom, France or Scandinavia display high online penetration. Western Europe becoming increasingly hybrid.
- The new structure enables us to share expertise and best practice more effectively across the team, improve our market agility, and to serve our customers more efficiently across segment lines.
- I think we as an industry are facing really exciting times when it comes to emerging technologies. New technologies are providing tools to help increase efficiency, build deeper connections with customers, and inspire new travellers. Our research division Sabre Labs has recently released a detailed report on new technologies and their impact on travel.
Bricks and clicks: The best blend for today's traveler
When it comes to the place for brick-and-mortar agencies, Sabre's Dean Bibb made the point that personalized service matters more in the age of overninformation. He said:
- I definitely think there is still a place for brick-and-mortar travel agents. Consumers still see some distinct benefits in booking travel offline, especially when it comes to the human interaction, the personal service, and the support when something goes wrong. I believe that this especially important in the case of complex itineraries – the personal connection allows a travel agent to establish a level of trust that can be hard to match in a digital interaction. Fortunately for agents, these complex itineraries are often high-yield products.
- There is a huge amount of options out there and in many cases consumer feel overwhelmed. The path to purchase for travel products has become more complicated thanks to the growth of devices and channels. Some estimates suggest travellers look at an average of 38 websites before making a booking decision. Consumers may start on a desktop, drop out of sight and then restart searches on a different device. They also now look for more inspiration and validation of their choices on review sites, on social media and among their own peers.
- This is an opportunity for the travel agent: The can position themselves as trusted experts who help navigate this complexity. Armed with the right content and promotions, they should be present in “moments that matter” when people are looking for help and inspiration. Agents should determine how they can add value in this connected world and how to position themselves as more of a concierge and travel advisor who caters to traveller’s needs.
- That said, I think it is absolutely essential that travel agents leverage the power of technology to enhance their service offer. Take the new Sabre Red Workspace: It features a variety of tools to help travel agents to serve their clients better and more efficiently. The Decision Support Bar contains integrated widgets that provide deeper insight into travel options such as fare trends, alternate airports, alternate travel dates, and travel seasonalitySpecial Panels feature configurable and customizable widgets. Paired with the travel agent’s creativity and their expert destination knowledge, this creates a powerful service proposition.
The panelists understand the urgency of evolving distribution to include all potential touchpoints. As part of this shift, the GDS is an efficient and thorough way to distribute travel worldwide. Consumers prefer transparency and access to all available inventory. This gives them the confidence to buy because the uncertainty around incomplete information leads to abandoned carts.
Through technology that integrates inventory with data insights, the blurred lines between online and offline matter less. Because the consumer matters more -- and the consumer wants to purchase the right trip for them on the best channel that's convenient for them.