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  • Writer's pictureValentina Buticchi

Travel agencies vs OTAs: a differentiate business model

Travel agencies are facing the challenge to remain competitive in the current digital era. This is because the internet growth allowed big transformations in the travel sector, bringing autonomy, flexibility, and reduced costs in the booking process. As a result, nowadays the travel market is dominated by Online Travel Agencies or OTAs; a business model that changed the dynamics by taking advantage of the technology advancement: today two main competitors, Expedia Group and Booking Holdings, dominate the market.

On the other hand, there is a gap in OTAs' supply that could be filled by traditional travel agencies. Indeed, a market research was essential for analyzing the consumers’ benefits sought in order to develop a business model that could supply services specifically developed for the identified targets.



The work consists of an initial overview of the tourism sector with a specific focus on OTA, Travel agencies and Niche agencies which are a particular configuration of a travel agency, specialized in certain services, demographic, or types of travel.

Furthermore, the sector analysis showed the importance of social media on people traveling decisions. As a direct consequence, it’s essential to be present and active on these platforms for advertising and targeting purposes. One of the most effective ways of advertising is the travel influencer figure: they are becoming more and more famous on social media like Instagram and TikTok, the focus is to deliver useful contents, full of information and not only aesthetic ads.

In the end, the sector analysis shows an important recovery trend, the Covid-19 pandemic dropped the travel sector revenues in the past 2 years, but it seems that the global GDP is reaching again the level of pre-pandemic. ​). It's important also to highlight the many opportunities offered by distance work.


The analysis continues with a qualitative analysis conducted on a sample of 10 people from different countries (Austria, Czech Republic, Finland, Germany, and Italy​). It’s important to highlight the importance of personalization and flexibility and the fact that travel agencies are considered as strict and non-flexible. Also, remote working is highly increasing travel wishes and possibilities. While conducting the interviews, some repetitive ideas came out and two attractive services were discussed: Hobby trips and personalized itineraries by local staff. People nowadays would buy from a travel agency something that they couldn’t properly organize or find by themselves, the topic of experiencing non-travel activities is very established in the travelers’ mindsets, as much as the wish of mixing a vacation/city seeing with their favorite hobbies (like surf weeks or Bonsai experiences).


Starting from the insights emerged during the qualitative analysis, was created a survey which was spread among 785 respondents from over the world with a specific focus on Europe, in order to investigate the consumption habits of travelers in order to identify clusters of consumers based on their purchase preferences and to test the Hobby trip and the Local staff personalization purposes. Moreover, a section focused on remote working allowed examining further opportunities.

The cluster analysis identified 5 different clusters, among these, three of them were discovered and considered as targets: independent travelers, TA possible users, and home office enthusiastic.




Independent travelers is the cluster interested in basic services and that like to organize their trips, they seem to be the perfect target for OTAs but they are also interested in personalized activities and experiences. To attract them is essential to focus the attention on a very structured social inbound marketing campaign, indeed, the topic is to put travel agencies instead of OTAs in their basket of choice; TA possible users is the cluster that mostly fits with travel agencies supply, they are looking for comfort and organization with a high willingness to pay and a strong interest in participating in hobby trips and personalized itineraries; home office enthusiastic are not interested in the typical TA's services, on the other hand, they like to travel and have the possibility to work a remote basis, allowing opportunities for travel agencies in launching new services. As a matter of fact, they have the highest rate of remote working possibilities connected to the desire of working in different places, as shown in the following graphics.



This study gave different starting points for creating a new business model that could help travel agencies in facing the strong competition of OTAs.

In particular, it has to be active in a Niche Market, online based without a physical presence, but with a strong counselling service with operators (by phone or webcam). The aim is to offer a unique value proposition to the targets, focused on consumers' interests and developing strategies based on their benefits sought: focus on two different services, which are hobby-based trips, to catch TA possible users and Independent travelers targets; and a remote working accommodation and legal service, to capture the attention of the home office enthusiastic segment. Going more in deep regarding the two different proposals they could be implemented as follows:


·Hobby trip proposal: it will include the possibility to mix the vacation/trip with the favorite hobby of participants combined with personalized itineraries by local staff. Allowing a high degree of personalization and flexibility. The essential services must be included in the offer, such as 24h assistance, medical and luggage insurance, and availability of operators. The proposal is not limited to a specific age, in order to fill the demand gap and differentiate the model from competitors.

To execute the model is essential to build a website that guarantees an easy user interface, peer reviews, and a space dedicated to a cost transparency policy. People, during the study, highlighted the importance of perfectly knowing what they are paying for. In the end, as anticipated, it is essential to focus the advertising on social media, particularly with tourism influencers and contents based on videos and useful information, combined with inbound communications targeted on hobbies.



·Remote working proposal: this proposal will include two different sections, one dedicated to a page where people can search for accommodations, similar to OTAs, but the focus it’s going to be over quality rather than quantity. Indeed, all the accommodations provided on the website have to be certificated as places suitable for remote working purposes (stable and fast internet connection, lights, and noise control). The revenue model it’s based on a percentage of the booking fee plus a non-mandatory legal service for obtaining working VISAs. The second section of the model includes a remote workers' community, totally free, where people can exchange suggestions on places to go for working or home office tips.



All in all, the market research study showed what consumers are looking for while traveling, allowing the development of specific services that could attract their interest and make them switch from OTAs. Differentiating the supply, in order to fill the gap in OTAs supply, is the only way to remain competitive in the tourism market.

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