Online travel OTAs turn focus to loyalty and experiences


G


rowth in online travel in Europe is no longer driven by the big online travel agents (OTAs) but by a range of players – airlines, hotels,


metasearch sites – according to Francesca Benati, Amadeus executive vice-president for online travel in western Europe, the Middle East and Africa. Direct sales by travel suppliers are growing


faster than OTA sales, she suggests, arguing: “The OTA business in Europe is highly consolidated and very mature especially in Germany, the UK and Scandinavia. “Online penetration reached a peak and


can’t grow as before. There is a battle for market share in Europe. It is very difficult to grow organically. If an OTA is growing in Europe, it is at the expense of someone else.” She adds: “The focus of key OTA businesses has changed. Until now, people competed for bookings online. Now, there is a move to post-booking, to how to serve the customer better after the booking.” Also, there is increasing understanding


of “the tremendous value in loyalty”, Benati says. “The cost of acquisition of customers was going to the sky. We talk about trying to reduce the cost of acquisition and about the lifetime value of a customer. “Online players are concentrating on how


to win the loyalty of customers, and to do so globally.” She identifies at least three developing


trends, explaining: “First, there is a move away from selling trips to selling experiences. For example, some major online players are really focusing on the post-booking experience now, on the need to assist the traveller once they leave. “Second, there is a different level of


The online travel sector is changing, says Francesca Benati, Amadeus executive vice- president for online travel in western Europe, the Middle East and Africa, and managing director for Italy


FIGURE 32: ONLINE PURCHASE OF TRAVEL AND ACCOMMODATION, 2018


Highest rate: Norway (59%)


%


10 20 30 40 50 60


0 Travel Accommodation Travel & accommodation +1 -1 +4 +1 +2 -1 Highest rate: +1 +1 +1 the Netherland (51%) +1 +2 -2


Highest rate: Norway/Denmark (63%)


+1 +1 +1 +1 +3 -1 54% 42% 33% 23% 24% 27% 9% 24% 26% 26% 10% 29% 45% 39% 39% 32% 13% 34% change YoY


EU France Germany Italy Spain UK


Norway


Netherlands Denmark


Source: Eurostat


service. For example, with payment – when you book a holiday you might decide to take a loan and split the payments. It is another area in which an OTA can create loyalty. We will see more and more OTAs supporting payment. “Third, we see consolidation of the


touchpoints with the customer – for example, through Facebook and Instagram. Loyalty is not only about a booking.”


Mature online market The online market is changing in other ways that will close the gap between it and the offline sector, Benati suggests. “Offline is no longer an advantage as artificial intelligence [AI] and chatbots fill the gap between the physical world and the online world,” she says. “AI is already a reality in performing basic


tasks at the big OTAs. “Until this year, there has been


co-existence between the online and physical worlds. But technology allows online players to close the gap with physical agencies. I suspect there will be a further contraction offline as more people move online.” Benati insists: “I’m not saying technology


will replace people. In reality, the gap will never be closed entirely. But it will be harder and harder to create a competitive advantage offline.”


She adds: “Use of these tools won’t


replace human interaction, but can free time to be more focused on sales. “Technology can be very powerful in the hands of a good agent. It can fill some gaps for the online sector and create a better experience in retail agencies.” Benati identifies a further development


Travel Weekly Europe Report 2019 | 19


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52