Today’s travel agency operates in a highly competitive market and may have to compete with online aggregators in all shapes and forms, as well as the travel service provider itself. Therefore, it’s crucial for the modern-day agency to be as flexible and dynamic as possible and to look at opportunities as they are presented to stand the best chance of success. Consumers will often turn to aggregators to make their lives easier as they plan their getaway, but what impact do these aggregators make in today’s market? How do they impact the Australian travel agency, and are there opportunities to work with aggregators?
Understanding Fare Aggregators and Booking Engines
There is a plethora of aggregators using a variety of different business models. Some are purely fare aggregators, while others are more of a comparison site. Some are connected to the travel principals, while others are not, and some charge fees, while others rely on display advertising to pay some of the bills.
Companies like Cheap Flights (cheapflights.com.au) will scour the internet for the best possible deals. In doing so, they will look at some of the other fare aggregators as well as various search engines and other sources. They will aim to make the information available as quickly and effortlessly as possible and try to differentiate themselves from the market.
They will typically feature a sophisticated, on-site search engine that allows the consumer to hunt using a variety of parameters.
they may claim to offer the broadest range of options at the lowest price and, to help them specialise, may also focus on a particular sector.
Some consumers are wary of these sites. In the past, some fare aggregators may have teased a specific price but then displayed a different fare later on in the process. Most have a sensible and straightforward approach to business, however, as this is a competitive market and may rely on the survival of the fittest.
Other aggregators may take a different approach. Expedia (expedia.com.au) is now a globally renowned travel platform that will often deal directly with the original provider. Almost 80% of their revenue is derived from retail travel through the eponymous brand as well as other brands like Orbitz and Travelocity. The company can be considered a direct travel agency competitor and does not simply focus on airlines but also on hotels, car rental companies and cruises. Nevertheless, they make most of their revenue from hotel bookings by buying rooms in advance at a discounted cost and advertising them online at discounted rates.
Unrivaled Booking Power
Expedia and others certainly benefit from the economies of scale. Their booking allows them to negotiate deals far beyond the reach of an independent travel agency. They are also able to negotiate more favourable commission rates, once again due to the sheer volume of throughput. In addition, they have a sizeable army of independent contractors who will interface with hotel properties and gather data about availability.
Booking.com is another giant online aggregator. Indeed, it is estimated that Booking.com and Expedia control over 80% of the relevant market in Europe, and much the same in Australia. Booking.com uses the agency business model and largely operates through commissions. The company has extensive contracts with hotels and takes a commission of anywhere up to 30% each time a booking is made on its site.
The Different Approach
It’s important to remember that the results displayed are biased. When the consumer sees an option to book a particular hotel, that listing may have preference due to the size of the commission deal negotiated with the aggregator. Hotels may also join the company’s 'preferred program' and pay even higher commissions for further preference.
Nevertheless, the hotel is not allowed to offer the same type of room at a cheaper rate on its own web pages, and the rate must at least match. Booking.com makes it very easy for a customer to browse and book though, with sophisticated technology resulting from their clear investment in this area.
White Label Opportunities with Forward-Thinking Aggregators
Travel agencies can take advantage of other aggregators and even use the opportunity to 'white label' third-party specialist search engines. They can do a deal to display the booking engine directly on their site and thus offer visitors even more options than before.
Campervan and Motorhome Rentals
ROAVER is an example of this approach in the campervan and motorhome rentals segment. The solution was designed and developed so that it would seamlessly integrate into a travel agency’s website. This would give consumers an efficient way of searching and comparing motorhome rentals and camper vans across Australia. We wanted to bring more people into the world of campervans and motorhomes and invested in the right type of technology to make the search process a lot easier.
Travel Agency Integration and Back-End Support
ROAVER has real-time search results and a powerful booking engine and comes with a back-end CRM that will allow the travel agency to manage its customers. Importantly, it will also allow the agency to sell access to this data under their own brand through the white label approach. The customer won’t be tempted to click away to another site to actually make their motorhome rental or camper van booking.
Consumers Craving the Human Touch
Of course, some consumers will always want to book with somebody they know. They may do research on some of the bigger comparison sites, but they always come back to the travel agency’s own website to make the actual booking. If the agency has a brick-and-mortar presence as well, some consumers will knock on the door. They will want to cherish the human connection, especially if they have questions about a complex booking.
Consumers are using aggregate sites to check and compare the travel market, and if you run a travel agency, you should tap into this opportunity. Work with online booking engines like ROAVER and this will give you chance to not only survive but thrive during the post-pandemic recovery.