An increasing number of companies from outside of travel are entering
the online travel agency (OTA) space, according to Phocuswright, the
leading travel industry research and events authority.
This comes ahead of the 2023 Phocuswright Conference,
which will be themed around what recent powerful advances in technology
could mean for the future of the industry – and how travel businesses
must adapt to remain relevant.
Although outside players are plugging into online travel companies’
platforms, it is mainly the OTAs that will reap the rewards of this
trend, according to Phocuswright.
“Historically it was travel suppliers who partnered with the OTAs in a
bid to supplement their core products,” said Lorraine Sileo, senior
analyst, at Phocuswright. “However, non-travel brands, such as financial
institutions, retailers and loyalty clubs, are now partnering with OTAs
to sell travel.
“These companies now really want to get into the travel business –
and technology is enabling them to do so. Over the past two years,
several have launched travel booking platforms or announced ambitious
plans to do so, even though the online travel agency market is already
near saturation and uber competitive.
“The goal for these companies is not to gain substantial revenue
directly from travel, but to keep their customers coming back, for
example by encouraging card usage and giving customers more ways to earn
or redeem loyalty points. But, for the OTAs, these partnerships can be
directly profitable.”
This trend is set to benefit the big brands in the OTA space, as many
“outside” companies will simply be tapping into their various
plug-and-play models without needing much experience or expertise in the
travel sector. One example:
Citi – In March 2023 Citi officially launched Citi Travel with Booking.com,
which is powered by Rocket Travel using Agoda’s technology. Citi
ThankYou cardmembers can access inventory on the bank’s website or app
and have the option to pay for travel with their Citi credit card,
ThankYou Points, or a combination of the two.
“Considering the proliferation of plug-and-play platforms,
white-label offerings and API integrations, it’s no wonder that becoming
an OTA is hard to resist for finance companies,” added Sileo.
“The advantages for banks, rewards programmes, retailers and other
membership organisations to offer additional value with little upfront
cost are obvious. And we anticipate more offerings to launch in the
coming months and years – particularly as AI advances and opens new
possibilities.”
This year’s Phocuswright Conference, titled ‘You, Me & the
Machine’, will be held from 13-16 November at the The Diplomat Beach
Resort in Ft. Lauderdale, Florida, and will centre around the massive
implications of artificial intelligence for every aspect of travel –
including how generative AI is infiltrating the traveller trip, and the
early results travel leaders are seeing between AI and the travel
journey.