A new kind of normal

The future of online travel agents (OTAs) is a difficult one to predict, but gateways and personal communication are sure to play a decisive role moving forward.

As one of the seminars in the 'TRAVELtech: New Kind of Normal" media conference held in Sydney on Tuesday 31 August, a panel of three travel and hospitality experts discussed the future of online travel agents.

Importantly, OTAs need to position themselves in the value chain, said CEO of TravelTainment - Amadeus Leisure, Andy Owen-Jones. The three aspects of this positioning are: (1) understanding their customer proposition; (2) knowing their intrinsic capabilities and (3) monitoring their environment.

The fourth criterion, not yet tapped by OTAs, was the 'Inspirational' sphere which inspired a site's visitors to want to travel. Instead, OTAs currently play a reactive role, having prospective clients referred to them by gateways such as Google, Apple or Amazon, he said.

Mr Owen-Jones hypothesised that the dominance of these gateways would lead to a growth in travel packaging, a larger role for recommendations, and increased segmentation.

"But the core competency that every OTA will need to realise over the next five years is data management," he said.

OTAs currently don't target gateways because travel is not a regular purchase, said Managing Director of Expedia Asia Pacific, Dan Lynn. This is in contrast to the constant use of gateways, where shopping purchases, for example, are year-round events. When users decide to do seasonal travel, they naturally tend to use their gateway.

The panel progressed to discuss how OTAs were overcoming their inherently impersonal nature.

"We're seeing the use of chat and phone to help users through the purchasing process," President of HotelClub.com, Jeremy Bellinghausen said.
Whilst some OTAs still shun 'offline service', many are realising its value in retaining customers.

"It's a convergence with traditional lines," Mr Bellinghausen said.

"You want to see the dependence on offline?" asked Mr Owen-Jones. "Look at the recent volcanic ash crisis: everyone turned to their call centre. If the large [OTA] players were okay, the small players certainly struggled."

The importance of call centres was certainly important to OTAs such as Expedia in providing "the whole experience", agreed Mr Lynn, "especially in a market where loyalty is defined by whoever's cheapest."

The discussion panel also noted that the future of OTAs is difficult to predict, citing the success of small car manufacturer Fiat in a context of financial crisis.

The modern challenge for technology providers to package sites, such as TravelTainment, is to spot the unusual companies and predict their success in a particular zeitgeist, said Mr Owen-Jones.

The same concept applied to websites, he said, citing one of TravelTainment's most successful clients, German site ab-in-den-urlaub.

"Ab-in-den-urlaub was formed by a bunch of weird-looking uni kids but did extremely well because they understood the back-end of Google.

"They knew how to maximise searches based on Google's criteria, eventually allowing them to outspend Expedia by four to one."

In response to the identical layouts of OTA websites, Mr Lynn said that the lack of differentiation came down to "a lot of A-B and multivariate testing", which lead OTAs to the "most effective layout".

"If a customer goes to a site and doesn't see a search bar in the usual top left-hand corner of the screen, then they're not going to know what to do and the site will lose them," he said.

So, can we expect to see the same brands in five years' time?

"Yeah," said Mr Owen-Jones emphatically, "because someone will crack the 'Inspirational' sphere. TripAdvisor came close - they succeeded on content, but they failed on presentation."