Online Travel Platforms not addressing Real Issue
Willem Niemeijer
CEO at YAANA Ventures - Accelerating Growth and Sustainability in Travel & Hospitality Ventures
Technology helps us to sift through large amounts of data and present it in a way that makes sense to us. The Internet makes the results available to billions. The travel industry is heading this way too, with the mushrooming of travel platforms, all seeking to replace the tour operator or travel agent.
On current evidence, this isn’t going to happen. Here’s why.
Allowing the consumer to be in touch with the service provider is the ultimate goal. But isn’t adding value the basis of any successful business? With online travel platforms, offering a lower price is usually the only add-on that they can come up with.
Allowing the consumer to be in touch with the service provider is the ultimate goal. But isn’t adding value the basis of any successful business? With online travel platforms, offering a lower price is usually the only add-on that they can come up with.
We’ve seen this before with hotel booking platforms, which took that industry by surprise and reduced good hotel sales people to commodity peddlers. According to the platforms, the only differentiating factors between hotels are price, star rating and a bevy of facilities. This may be true for the time-poor business traveler on a specific budget, but not for the leisure traveler. For them it’s all about the experience. Choosing from a staggering 1396 hotels in Bangkok doesn’t help the experience seeker.
It makes little sense then, to take the online platform model and try to force it onto travel experiences that combine hotels, guided tours and recommended ‘do-it-yourself’ journeys. It doesn’t work because local, authentic encounters and personalised attention are still the measure of a good holiday on the ground.
Travel platforms that have knocked on the doors of Khiri Travel, our destination management company, with offers to replace its traditional clients (tour operators and travel agents) with the ‘opportunity’ to connect to travelers directly are making an essential mistake. These online platforms do not add value for the customer. They merely offer a ton of products for them to choose from. And unlike hotel booking platforms, it’s very hard – or even impossible – for the holidaymaker to see if they are getting a price advantage.
Conversion rates are a solid way to test the success of online travel platforms. Dig a bit deeper and you have the answer as to why nearly all platforms are knocking on everyone’s door saying: “Please upload your products. We’ll just take a little commission.” They are using technology to let dumb volume replace relevance and efficiency. In other words, if you have 10,000 products and a very small percentage of them attract one or two bookings a day, is that being successful or inefficient? And who bears the cost of this inefficiency?
Delivering the perfect travel product to the informed customer needs a radical rethink. It’s imperative for tour operators and travel agents to stay on top of local developments in their destinations. Some already do so by shifting their product management to trusted suppliers, leaving them to focus on customer needs.
In the travel industry, delivering on promise isn’t good enough. It’s about exceeding expectations. That is complicated, as most travel products are used once by clients, then expected again, or a variation of it, in a separate country for next year’s holiday. However, successful tour operators and their network of suppliers can and do deliver on this as they have a deep understanding of their clients which is built on trust, experience, and in-depth local knowledge of the possibilities available.
The challenge is open for technology to improve on the quality and efficiency this DMC network delivers.
International Partnerships Coordinator, TOGETHER NZT Project, PMUC Thailand
7 年Willem, thank-you for your article. I agree with you that tour operators and DMCs have the potential to add more personal service and more value than nicely designed but largely impersonal online booking hubs. However, from the perspective of someone who has worked hard to push more authentic / responsible experiences 'up the chain' to DMCs, it's also true that many DMCs and tour operators have been too complacent and stuck with 'the same old stuff' that they know. So, the better 'experience hubs' are also responding to real demand from tourists / travelers who know that there are simply much better experiences out there than those which are being offered by many tour operators, but have previously found it difficult or impossible to connect or get to these experiences. From a supplier perspective, DMCs can organize 'the whole package', prepare guests and manage expectations with good pre-departure information, provide good training for tour guides and leaders. If the emergence of hubs further motivates tour operators to do more product research, and engage with the time-consuming process of improving products, that is a win for the experience suppliers, such as local communities, CBT groups, etc.
Wege entstehen, indem man sie geht.
8 年Hi Willem, thanks for taking the time to write this article and put your very valued opinion about this topic into words. Unfortunately I've just discovered this, not 8 months ago when you first wrote it. While having thoroughly enjoyed reading your piece, I also couldn't agree more on the facts and positions you present here. Also we are facing this 'hype' in our country and along with it the problem, that on first sight, clients might THINK they can tailor their own experiences a lot better (and more directly) by rather choosing an Online Travel Platform over a specialized operator. You and me know better. But in our time of the buzzing sharing economy, when people still tend to believe they want (and need) to be in control of EVERYTHING due to the easy access to EVERYTHING, the manifold popping-up Online Platforms simply service a need, which obviously exists in the markets. Clearly some of those platforms are here to stay, too - as there will always remain SOME customers (out of the sheer masses). But the great consolation to me in this scenario is, that in the end factors like authenticity, quality and SERVICE will prevail. As soon as clients start to realize that -as you pointed out- the added value comes close to none with those mass-orientated businesses, nature (and business) will take its' course. All we have to do is be patient and...endure. ;-) Having said that, I (and we) couldn't appreciate more, that Khiri doesn't trade in their personal, highly professional specialist services (which are worth a heap more than they would pay you!) to such companies in favor of a numbers-based proposition. Please continue the way you think and operate. To me it is a decent proof that after all money and masses do NOT rule the world, but loyalty, a bit of idealism and most importantly: values. Thanks. Hope to be meeting you again soon. cheers Nico
Operating Partner / Entrepreneur / Board Member
8 年Dear Willem, It was lovely to meet you in our Evaneos office in Paris a couple of weeks ago. I do wish that I had known about the existence of your article, nevertheless, before our meeting. In the absence of a face-to-face discussion on the topic, I feel that I must respond in writing, on behalf of Evaneos. You describe ‘online travel platforms’ in general as cold, technology-only itinerary aggregators. While I cannot speak for other online platforms or price comparison sites, Evaneos itself could not be further from this description. On the contrary, Evaneos would best be described as a traveller friendly online marketplace for tailor-made holidays, putting the spotlight on the human touch through the DMC meeting travellers' needs and expectations. More specifically: - On your argument of a one-and-only added value of online platforms for travellers, I would say that you're perhaps missing Evaneos’ fundamental value propositions. You stress the importance of authenticity and access to local expertise, two core benefits of booking a trip with a local travel agent via Evaneos. Last but not least is of course trust, (Evaneos acting as the trusted third party between the traveller and the DMC). - On your argument about personalised attention being the measure of a good holiday on-the-ground, we couldn't agree more. That's precisely what Evaneos’ partners (the DMCs) offer to travellers. But in order to tailor-make trips, DMCs need to be able to communicate with the travellers in the first place, hence the very existence of Evaneos. - On your argument that online platforms provide ‘no added value’ by offering travellers a ton of products, again we are in agreement as to who should be the ones adding the value for the traveller. Like I said, I can't speak for other platforms, but Evaneos certainly puts the emphasis on the DMC, and the products offered on our website therefore serve only as customisable trip inspiration. It's the DMC who adds the essential value by meeting the traveller's needs and tailor-making their holidays. Evaneos’ value proposition is 1) to bring travellers directly to the DMC (so that they can add value and demonstrate a price advantage if need be), and 2) to provide the tools to these DMCs to help them convert. As you rightfully pointed out, it's all about conversion rates, and I believe that Evaneos has a large heads-up thanks to its rigorous DMC selection process, its advanced marketing know-how, and its qualitative long-term partnership approach. Partners of Evaneos benefit from free access to advanced tools that help improve their customer relationship management and boost their conversion rate of enquiries to bookings. I invite you to speak to one of our 650 agents across the world again to discuss the added value of Evaneos’ model. We look forward to meeting you again. Best regards, Thibault Monnoyeur Evaneos
Verbind mens, natuur en klimaat!
9 年Interesting topic I believe. I think if you are a genius in using all kinds of platforms you can create a complete new service. If you can find a perfect match with quick scans on the internet, and you'll be able to help a traveller with such information, you can be a modern kind of touroperator / travel agent in such way. I believe that people are still willing to pay for the extra service, because you're better and faster then they are. And you take a way a lot of sorrow for them. Their own custom made travel created by bits and pieces of your smart search. Are is this too positive thinking?