The travel industry has been hit dramatically by COVID-19. Travel agencies, travel management companies (TMCs), and suppliers are finding themselves trying to work out how to keep the lights on while planning for recovery. But no-one is quite sure about what recovery looks like or how quickly it will happen.
So how can OTAs handle uncertainty? Experience tells us that the best course of action is to adapt. In fact, Richard Branson once said, “Every success story is a tale of constant adaption, revision, and change”.
In times of trouble, sailors prepare their ships to navigate dangerous weather systems, so they can sail safely and reach their destination. Companies can do the same. Rather than erratically reacting and responding to informational noise, successful leaders move quickly and proactively to change course and chart a new one. Winners will capitalize on changes in the market. Think Netflix when they started streaming in 2007 vs. Blockbuster, who went bankrupt three years later. Opportunities will arise for OTAs, perhaps through market expansion, targeting different traveler personas or trip types, or a new product mix or technology innovations.
The travel industry is resilient. After 9/11, consumers were afraid to fly, but the industry adapted by implementing new safety measures to reassure travelers. What OTAs need to do now is listen and learn from consumers to aid a faster recovery. They also need to make sure they have the right solutions to maximize revenues at every stage of the traveler’s journey.
Last year, we released some research covering the six stages of the traveler journey, offering insight, advice, and guidance on how OTAs can capitalize on each of those stages. In light of COVID-19 and industry changes, the team and I feel it is a good time to revisit this research and share some helpful insights with you, to help your business adapt and rebound over the next 12-18 months.
Global VP and Managing Director, Global OTA
As lockdowns ease, the appetite for travel resurfaces, even if it will be some time before we expect it to resemble anything close to its pre-COVID state. How quickly travel companies and the industry bounce back is down to a range of factors. Legislation, politics, science, the economy, and more, all have a role to play. The key to returning to normal will be understanding how these factors play into customer attitudes and how OTAs can respond.
Even as we compile this eBook, nations are opening and then closing again to a greater or lesser degree. Changing destination trends, buying behaviors, and traveler needs are an expected by-product of the crisis.
One certainty is that trends in travel will be changeable for some time yet. Here are a few of the key differences we are seeing in traveler buying behaviors since the pandemic began.
Interestingly, the highest-ranking destinations are changing frequently at the moment. Some of the most visited cities have dropped out of the top 10 altogether, with only the top three retaining their position. For example, while London maintains its top ranking, Bangkok has slipped from fourth place to fourteenth, allowing Delhi, Los Angeles, and Dubai to rise. Tokyo is the most significant drop, slipping to number 20.
The outlook becomes even more changeable when we compare rankings against our Stability Index*. Below we can see that last year (the grey bars) destinations’ rank was relatively stable, with very little movement from the average. This year (the blue bars) countries’ ranking is shifting constantly. And while all cities have been volatile this year, destinations in Asia or the Middle East have seen the most disruption this year.
OTAs and other travel agencies need to rethink their targeted destination marketing approach, to ensure they are promoting content to the destinations travelers are confident to visit.
The contrast in traveler behaviors is even more apparent when you compare booking and shopping lead time data from the start of 2020, with consumer trends once the pandemic took hold. Purchasing became ever more erratic as travelers scrambled to find and book flights. However, since week 21, 2020, shopping versus booking behavior has started to normalize; however, decision windows are much shorter, happening far closer to the point of travel. For OTAs and other travel resellers, this means reviewing your retargeting windows to improve conversions.
Most new trends will be particular to the pandemic. In the interim, travel, airline, and destination marketing will have to adapt to these changes. Customer loyalty and trust are going to be more important than ever. Persona marketing will also play a central role as we see certain segments recovering faster than others – such as weekenders and family travelers, for example. Domestic bookings are leading the recovery while international search is growing but still lags behind. There is a huge opportunity for OTAs to take this data insight and use it to build stronger customer relationships and help travelers navigate this temporary situation.
In our previous eBook, How OTAs can optimize conversions across the customer journey, we talked about the immense potential for OTAs to grow conversions (and therefore revenues) at each stage of the traveler journey.
This guide focuses on the same six critical stages: inspiration, shopping, booking, pre-trip, in-trip, and next-trip. It now also focuses on the emotions at play in the buyer’s journey in a world where we are learning to live with COVID-19. These emotional buying stages are key considerations for OTAs that can help them rebuild their revenue streams quickly and efficiently. They are also essential for re-establishing confidence in travel.
At each step, we will show how OTAs can play a critical role. By taking a full view of the traveler journey, you will see the potential to engage travelers at each stage, growing conversions and gaining repeat customers. While each chapter presents some core strategies for optimizing conversion, this is not an exhaustive list of every tactic you should use. However, these are practical strategies that your business can implement to start attracting, converting, and delighting more customers as travel resumes.
Typically, inspiration is the first stage of the traveler journey. Inspiration is still an important element; however, in the near- to mid-term, we can expect assurance to be a deciding emotional factor for travelers as well.
Recent research has shown that there is pent up demand for travel, but this is accompanied by stress and worry, for example, around new checkpoints or inconsistent compliance with safety measures from fellow travelers.
Travelport research suggests that travelers need a solid understanding of what safety measures are in place before they will go ahead and book. Enhanced cleaning, flexible tickets, aircraft disinfection, and improved filtration are ‘very important’ for 71%, while upgraded cleaning in hotels is ‘very important’ for 73% of travelers.
OTAs can help assure travelers by providing information to travelers on what travel will look like in the short-term. This involves communicating how the in-airport experience has changed, the measures they can expect to see when boarding and in-flight, and what their experience at the end destination will look like.
- Describe the experience
- Be accessible and human
- Focus on relationships, not conversions
- People buy from people: use your user-generated content
Knowing what to expect is vital. Customer testimonials and up-to-date website content are essential in helping travelers to prepare. Travelport’s end-traveler research has highlighted that for a hotel stay in particular;
Trip.com has been using live streaming to encourage travelers back to resorts. A mix of travelogue, sales pitches, shopping channels, and game shows, the streams offer information and big discounts. Singapore’s Marina Bay Sands sold 2,600 rooms during one session. This activity has helped to create a peak of momentum in China for domestic bookings. Trip.com’s ability to live-stream the hotel itself, showing the potential traveler how safe it is, alongside live booking numbers on the screen, has helped reignite the appetite for domestic travel.
Customers have questions. Where can they travel and when? What is their destination’s safety rating? Is their holiday protected?
Making your brand accessible to customers to answer these questions is critical in the early days of the traveler journey. Consider adding an online chat function or creating inbound content links, focusing on new traveler search terms like ‘COVID safe travel’ and ‘COVID vacations’.
There is a lot of emotion tied up in holiday bookings — usually excitement in anticipation of the perfect break. COVID-19 has added many more: including worry about cancellation and health concerns.
OTAs can build trust by offering guaranteed refunds, providing information on destination status, step-by-step safety instructions, and detailing how your company can help them pre-, during, and next-trip. It’s not enough to just offer these; you need to promote them to customers by clearly signposting them in your advertising and on your website.
Genuine traveler feedback is always highly valued by travel customers, but in a COVID-19 world, it is more important than ever. Recent traveler stories will boost others’ confidence and help build trust. You can incentivize customers to upload reviews and photos through prize draws or other loyalty benefits, and link to relevant offers that increase the propensity to book. Platforms such as Hilton Suggests have created inspirational content and recommendations that drive potential customers to dedicated product pages.
In addition to the difficulties caused by COVID-19, old frustrations also remain. Research has shown that 50% or more of airline passengers from the US, UK, Germany, Spain, and China spend more time than they want to using digital channels to book flights. Hotels are only marginally better.
AI-powered systems like chatbots and recommendation engines can deliver more relevant search results based on people’s preferences or party make-up.
Chatbots are no longer new, but this works to OTAs advantage. Customers understand their capabilities and are comfortable using them to solve the simpler self-service queries. They also appreciate their ‘always on’ nature as rapid response to queries is expected, even outside ‘office hours’.
Repeat customers are highly valued for OTAs for many reasons and repeat purchasing is just one. The more a traveler transacts, the more data the OTA can collect on their preferences and use that to model those preferences against other travelers with a similar profile. Personalized recommendations are more likely to be picked up and appreciated, reducing abandonment rates and increasing loyalty. It is also a valuable tool for developing ancillary revenue, providing more upsell opportunities than generic offers alone.
Amazon has been using personalized recommendations for some time now, and businesses are increasingly adopting this in other spaces such as retail and fashion. The time for the travel sector to catch up is now.
In our previous eBook, we covered how to enhance the traveler’s shopping experience, so they don’t just buy from you, but they do so effectively. This means lowering your cost per acquisition, while also improving their overall experience and growing long-term loyalty.
That imperative hasn’t gone away, nor have key traveler concerns such as getting the best deal and making the most of their break. But there are new ones on the list; from 'how safe will I be’, to ‘can I get my money back if I cancel?'. The shopping stage is the OTA’s chance to convince travelers to book with them, so understanding their concerns is key to conversion.
OTAs also have their own challenges, not least the explosion in options available to the traveler that they must navigate to find the right combination of price and comfort. It’s no longer a simple choice between First and Coach — Air Canada has four packages alone (Basic, Standard, Flex, and Latitude) for what is essentially the same seat.
From understanding and selling the most appropriate travel option to the consumer, to being able to create a potentially infinite range of bespoke ‘packages’ OTAs are faced with marketing massively diverse product ranges. They are also up against individual airlines using rich content, branded fares, and personalization to cut through the clutter and appeal directly to consumers, which is their preferred sales channel. But, the OTA should not underestimate its role as a customer advocate and champion, with a world of experience and up-to-the-minute data, resources, and technologies at its fingertips.
As we mentioned earlier, safety is a key priority for travelers at the moment. Our research shows that 33% of travelers surveyed are more like to book through an agent now, and 65% stated they were more likely to book through an agent because of the enhanced safety information they can provide them with.
We have upgraded Travelport’s Branded Fares & Ancillaries to include safety measures from over 85 airline partners. This shows travelers the specific safety precautions they need to take by airline, and what measures the airline itself is taking.
Speed and clarity are of the essence to optimize the shopping process. Currently, APIs return one basic fare alongside a single upsell offer, clearly displayed for the traveler to see the price difference and what is included. As more carriers introduce more flexible options at a second brand level, displaying these options in the search response will assure the traveler.
Customers want to find what they’re looking for among the widest range of choices available. This means being able to show both NDC and non-NDC fares in a single storefront. Adding attribute-led search allows customers to choose luggage options, seating, priority boarding, or flexible booking. Convenience features such as WIFI, charging points, and in-flight entertainment are also a must. Increasingly customers are also flying with a conscience, so details about lower CO2 emissions are now crucial.
Using a ‘Just Right’ algorithm helps you deliver on value, rather than price. The customer gets the fare that best matches their needs and provides a suite of carefully curated extra features that gives them the opportunity to ‘indulge’ in a higher fare.
Customers are more likely to return for a seamless, convenient experience combined with a personalized and financially beneficial product. Creating agent-specific promotions tailored to individual customer needs greatly increases your ‘stickiness’.
Frequent flyer programs are a huge draw, but the most successful ones don’t just give points; they offer personalization. OTAs need to capitalize on customer loyalty expectations by integrating their loyalty data into search. By accessing their bespoke offers and additional services, OTAs deliver a better experience to their customers and cement their relationships with airlines.
As COVID-19 restrictions relax, we are seeing pockets of supplier content opening up in the market, but only 50% of airline capacity has been re-introduced to the market. For customers seeking multi-ticket itineraries, it can be challenging to match this content up themselves, and the undersupply means most options are not available under established interlining agreements.
Travelport’s virtual interlining partnership brings together the content available through different connection points and collates the millions of computations to produce a viable itinerary.
The multi-ticket itinerary has previously been an attractive option for very price-sensitive customers. However, since COVID-19 became a reality, we are seeing a growing trend across customer segments and persona types, including the business traveler. Virtual interlining often allows for a faster point-to-point journey, and while pre-COVID its penetration among OTAs was around 10-15%, we expect that number to have increased during lockdown. Under even the most challenging circumstances, this is a solution that can get you from anywhere to everywhere.
Short term: Safety information and options for traveler confidence
Mid-to-long term: Multiple, curated choice NDC/non-NDC; personalized packages and multi-ticket itinerary offerings
This is the moment of truth for traveler and OTA alike. After visiting an average of 38 sites, the customer is ready to book. But there are still opportunities — and challenges — for the agent.
First and foremost, the travel environment remains highly volatile with lockdowns, quarantines, and cancellations happening at a moment’s notice. As travel restarts, customer concerns over booking flexibility and insurance validity will continue to reflect this.
Customers are deeply concerned about how insulated they are from financial loss. While OTAs cannot influence individual airline’s refund policies, depending on the exposure, they may wish to offer their own financial guarantees or booking flexibility to reassure customers.
Highlighting the relative flexibility of travel providers will be a key part of agent service, from inspiration to booking. Many OTAs and other travel sellers such as metasearch Skyscanner have already been promoting their cancellation policies upfront for traveler peace of mind.
Earlier, we discussed the measures OTAs can take to reassure customers who are nervous about traveling again. However, by allowing travelers to take control of their inflight experience through seat selection, the OTA not only increases customer satisfaction and confidence, but also creates a lucrative upselling opportunity.
While COVID-19 has introduced new traveler fears, OTAs need to make sure they are also answering the customers’ concerns that already existed pre-COVID-19.
One ongoing concern is around fare transparency and what is and is not included in the price. More than three-quarters (76%) of travelers in a Travelport survey admitted that they check directly with the airline what is included in their fare and 37% said they had to check this often.
To increase trust and loyalty and attract new customers, OTAs need to improve the levels of transparency and information around the products they are selling.
Converting the customer from a looker to a booker is not the end of the story. According to our research, 71% of travelers believe it is important to add ancillaries after booking. This ranges from in-flight extras to car hire, hotels, and in-trip entertainment.
A large number of travelers who have only booked a flight will also need somewhere to stay. As COVID-19 lockdowns fluctuate, customers look carefully at providers who offer booking flexibility and generous cancellation or refund policies.
Making a feature of these will greatly enhance upsell potential, Travelport’s end-traveler research has highlighted that 64% of respondents said that fully flexible/refundable tickets are a ‘very important’ consideration. OTA Kiwi.com is doing a great job of clearly communicating its flexible cancellation policies on the homepage of its website.
Research suggests that since COVID-19 has been a real concern for travelers; over half of travelers (55%) will be reluctant to venture out of their own country. So, while international flight sales may be lower, hotel and car hire revenues are likely to rise. This is an added reason for OTAs to focus more on hotel and car hire ancillary sales, on top of dwindling air commissions.
COVID-19 underscored the importance of a comprehensive travel insurance policy, and as a result, policy ownership has risen dramatically. There has been a 528% increase in purchasing by US travelers, a trend that is reflected worldwide.
Insurance policies remain somewhat unclear to travelers. Their key concerns are medical emergency and trip cancellation or interruption. OTAs have an opportunity to expand revenues by brokering packages and cement client relationships by helping them navigate policy wordings to choose the correct cover.
Inspiration doesn’t stop at the start of the booking process, nor does the holiday only start in the departure lounge. Travelers are anticipating and experiencing from the moment they book, and OTAs can tap into that period of planning and preparation on two fronts.
By creating pre-trip guides, OTAs can pool their network of expertise to create insider guides to destinations. Guides such as Travelflan and unwrapped.co provide travelers with a wealth of inspiration for their trip and also develop another revenue stream for the agent. By featuring local points of interest, entertainment venues, and restaurants, agents can expand their revenue streams through selling advertising and promotional space. This can also add to customer assurance by keeping information up-to-date as to any ongoing restrictions or service changes as a result of COVID-19.
Planning a trip with family and friends was already a complex process pre-COVID-19. Now it is harder still. OTAs should consider creating a social environment where travelers can collaborate and collate information about their future trips. This can be done on existing platforms or through bespoke communities, like Pluto Travel’s Pinboard.
Atmosphere Research Group coined the term ‘Second wallet’ to refer to the extra pot of money that travelers allocate to entertaining themselves during their journey. ‘First wallet’ refers to the costs of travel themselves. To make the most of that Second wallet, OTAs should help customers discover extra activities and make it easy for them to select and book them before traveling.
Even with the customer safely dispatched on their journey, there is no reason for the OTA’s involvement to end. There is still a wealth of decisions to make in-trip, including taking tours, booking restaurants or experiences, shopping, onward travel, and more.
The opportunity here is more significant than ever to become your customer’s travel partner of choice. Our research has shown that 78% of travelers would like location-specific tips from their OTAs while at their destination.
With everything from local regulations and restrictions, to opening hours, to insider tips and exclusive offers, providing an information hub is a chance to increase customer loyalty. It can also help develop relationships with local suppliers, further enhancing your potential revenue stream. Even on a short break, such as a long-weekend, Travelport research suggests nine separate occasions where agents can contribute to traveler experience, ranging from airport transfers, restaurant suggestions to experiences like spas and shows.
Consumers increasingly want a hassle-free way of finding out information or adding to their trip. There is plenty of demand from customers to interact with their OTAs in-trip — from adding excursions to finding out information about onward travel, but this may not always be practical in a one-to-one conversation.
In-person interaction may also take some time to resume, and so remote access to information will be the channel of choice. But it has also given agents a chance to review how they provide their service. Some will come to rely even more heavily on automation, while others will view it as an opportunity to switch to a more ‘white glove’ service.
One of the shackles the industry labored under was dealing with matching passive information (notifications, schedule changes) into the PNR. Travelport has taken COVID-19 as the opportunity to rethink how we can make that information much more accessible.
If agents are worried that self-service diminishes customer experience and therefore loyalty and revenues, there is no need. One source reported that 79% of travel businesses experienced revenue growth when using chatbots or self-service kiosks.
Travelers’ plans change for any number of reasons. Some are within their control, some are not. In either case, our research shows that most travelers want to manage those changes themselves. The easier we can make this, the better it is for everyone involved.
Travelport’s Exchange Search allows travelers to log in to the agent’s mobile solution or agent-supplied itinerary and find a new journey option, as well as how much making that change will cost. In many cases, cost is the barrier that ultimately means the customer doesn’t change their plans. This takes any pain points away from both traveler and agent. Once the customer has the information they need, the agent can fulfill the transaction on their behalf.
Airlines can now monetize the need to change plans much more broadly than in the past. What was a high premium to change a limited number of travelers’ plans, they are now learning there is residual value in flexibility.
The good news is that travel, in all its forms, will return. The ongoing challenge is that, according to IATA, the airline industry is not expected to return to full strength until 2024. With the pool of potential travelers smaller than usual, OTAs will need to use every tool at their disposal to develop a loyal brand following and increase purchase frequency.
A loyal customer buys more than one who is signed up to a rewards scheme. These still have their uses, and 91% of OTAs have some form of scheme, but these alone are not enough. Travelport’s research has found that 73% of travelers want to book their trip end-to-end in the same place, while 70% also believe a good mobile experience would improve their loyalty to an OTA.
Post-trip, OTAs should ask customers for feedback to better understand their preferences and tailor future deals. Research has shown that seven in 10 passengers want personalized offers, but fewer than 20% receive them. This is a missed revenue opportunity for OTAs, as passengers are likely to pay on average 11% more for offers that match their interests.
It is difficult to overestimate the value of customer endorsement. Honest reviews and testimonials are a critical part of your content marketing pillar to establish your credibility, effectiveness, and quality of service.
This user-generated content is especially important on social channels where increasing numbers of travelers, including 90% of Generation Z, are spending their travel purchasing journeys.
While the incentivization of reviews and ratings on third-party platforms such as TripAdvisor or Trustpilot is discouraged, it is worth reminding travelers to leave their views as soon as possible post-trip. Launching photography competitions or prize draws via your own channels is a legitimate way of encouraging authentic traveler content, as well as enhancing customer data and solidifying relationships with existing customers.
Travelers are most likely to be thinking about their next trip shortly after (or even during) their most recent journey. The Independent found that most travelers booked their next trip within 37 days of returning home. Communication with recent customers shouldn’t just focus on their feelings about their last journey, but should also inspire them to think about the next one. Added incentives such as early-bird discounts and priority service can accelerate the booking process.
The threat from COVID-19 continues to buffet the travel industry but it is increasingly finding ways to help customers travel once more. Recovery won’t be without its challenges as travelers will remain cautious for some time, even after the most stringent lockdowns have passed, and have a new set of needs.
OTAs are in a strong position to help foster that recovery by using their wealth of expertise and the range of resources at their fingertips. Indeed, many OTAs are already using some of these tactics as part of their customer experience excellence strategies.It is now a question of redoubling efforts and maximizing every possible avenue to accelerate that recovery. By keeping their customers informed and secure in the knowledge that all their new concerns are taken care of, OTAs can drive deeper loyalty and growth in an industry that has been transformed by this pandemic.
Our experienced team of global experts is backed by industry-leading data and insight. We support our customers through recovery by analyzing the market and competitor landscape, identifying current trends, and providing traveler insight. We help OTAs recover faster by increasing their customer engagement and conversion.
Getting the most from your customer relationships is vital for recovery. OTAs need an integrated range of products that offer more choice, better communication, and more control over their trip, from the moment of inspiration to their return home. Wherever they are in their booking journey, they need to have a seamless shopping experience. If you can deliver the right content at the right time, we have no doubt you will see the overall spend and lifetime value of your customers increase.
Growth in recovery is down to identifying the right regions, markets, and personas to target. The right technology makes this easier. Travelport’s next-generation search drives conversions and profitability by always serving the most relevant, tailored content while our expert team is on hand to help you navigate the right markets at the right time.