After reading Tnooz’s article “Escapio switches to hotel metasearch: Will small OTAs follow?” on the change of the German online travel agency’s (OTAs) business strategy, I began to ask myself if smaller travel portals and OTAs were really able to compete against market giants, such as Expedia and Booking.com — who are able to spend millions on research and usability.
What strategies could be implemented to succeed against the travel internet giants?
While there is no clear formula, I genuinely believe that there is space for David to beat Goliath. But in life as in the fable, the underling needs to be smart. Here are some tips on how I think small OTAs can succeed:
1. Be Personal. Travellers are humans and they are more likely to trust other human beings over booking engines. One of the biggest obstacles in travel planning is the overwhelming choice of information – hotels, ratings, flight arrangements – so here is room for smaller providers to help, counsel and support throughout the process.
2. Connect with your hotel partners. Most hoteliers would rather not deal with Expedia or Booking.com, I believe. Use this to your advantage and let your hotel partners know that you want to support them with your bookings. Negotiate special perks and pass them on to your clients. This is added value that the big ones are not able to provide.
3. Be communicative. A lot of our consumers believe that Booking.com and Expedia provide better prices or better cancellation policies. But this is not true. Small OTAs have the same policies but this message needs to reach our target. Once they understand that personal services don’t compromise on rates or policies – why would they book with the big ones?
4. Be trustable. Consumers are afraid of fraud and check for indicators that show that your company is trustworthy. Include logos and affiliations, satisfied client reviews and ratings, and talk about your history and make your staff visible on your online and offline products.
5. Find alliances. If all processes are automated, then there is a clear strategic advantage for the big ones over smaller OTAs with a personal approach: Margins are low and cost for personalisation is high. Alliances with friendly competitors or other travel providers are therefore vital. Synergies can also be achieved through customer services – 24/7 responses, online chats – and IT companies.
6. Personalise all automatic software. At our online platforms, we try to motivate, inform and connect with our consumers by using personal yet automatic messages during the booking process such as “Hey, great choice! We provide a free upgrade for this hotel”. These messages can be easily created with chat software like Intercom.
7. Find your niche. Unless you have new, groundbreaking software, it will be hard to compete with Booking.com and Expedia. Find out what your forte is and try to be the best in that slot. It can be luxury travel, diving holidays, walking holidays, etc.
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