Part 6 of the series “Diversification: The art of creating unique value”
Diversification – a risk-reduction strategy that involves adding product, services, location, customers and/or markets to your company’s portfolio to set you apart from the competition.
In Part 1 of this series, we ventured that OTAs cannot afford to blend in. Online travel is a technology-forward, dynamic channel focused on bottom-line bookings and customer retention. This coupled with high customer expectations puts pressure on OTAs of all sizes to stand out. Diversification is the route that many OTAs leverage to stand out. Over the past several months, we explored several avenues of diversification, along with key learnings and success factors. Take a minute to review these successful examples if diversification is on the horizon for your strategic plan.
Hopper made a splash into the OTA space with diversification via a new business model
Hopper entered the OTA space with a new business model – MOBILE ONLY. With astounding success to date, it is one of the fastest-growing travel apps ever, with over 35 million installs since its launch in 2015.
Hopper keys to success
- Build trust with data-driven communication.
- Address skepticism head on – positive PR helps.
- Leverage trends and understand market dynamics.
- Great user experience is key.
- Continue to innovate to delight customers.
Freebird allows travelers to take control and delivered a new solution
Freebird founder Ethan Berstein launched tech startup Freebird due to a nightmarish flight-disruption experience. He created the online flight disruption and rebooking solution to ensure travelers arrive at their destination despite delays. After the initial launch for leisure travelers, Freebird shifted its focus and to date, Freebird has 10 TMC partners and over 100 corporations that utilize their service.
Freebird’s keys to success
- Be flexible.
- Take on big problems.
- Challenge the status quo.
- Always do right by travelers.
Wing On diversified through transformation from a brick-and-mortar only agency to an OTA
In 2014, riding on the continual growth of Asia Pacific gross bookings, Wing On Travel pioneered the development of a real-time online travel booking app in Hong Kong. The Wing On Travel app to date has accumulated more than 1.7 million downloads and accounts for 50 percent of the company’s revenue today.
Wing On’s keys to success
- Travel technology expertise.
- Delivering beyond expectations.
- Offering great varieties of travel products for one-stop shopping.
- Facilitating booking by providing more payment methods.
- Capturing and retaining customers with limited-time offers.
- Strong CS support via in-app chat, hotline and physical shops.
Expanding beyond borders is often offered as an option for diversification. However, there are many complexities to consider, and each company must decide the optimal route for implementation. Most OTAs choose to build, buy or partner in order to expand across borders.
Key takeaways
- If global expansion is your choice for diversification, it may not always be an easy path.
- Start a review process with a detailed check list to determine viability.
- Determine whether your path for global expansion will be organic or through a partnership or alliance.
- The rise in artificial intelligence with AI-powered assistants and AI-powered search.
- Continued explosion of “off the beaten path” experiences, such as glamping in Mongolia.
- Virtual reality travel previews to explore desired destinations before clicking “purchase.”
- New expectations to watch with Gen Z for entertainment, personalization, relationships and response on demand – 43% use OTAs to plan trips and travel an average of 29 days per year.
