Faced with mounting competition from meta-search firms and brick-and-mortar operators that are making the transition to the Internet, online travel agencies must be more creative in their value offering, a new report from eMarketer has concluded.
“To succeed in the brave new world of online travel,” says Jeffrey Grau, senior analyst and author of the report, “industry players must be willing to reinvent themselves to keep up with consumer, technology and competitive forces.”
Moving “from a service model based on mass consumption to one centred on creating customised packages for groups of travellers with unique interests and needs” is the main route now, says the report by eMarketer.
This will sound eerily familiar to high-street travel retailers, who had to make the same “creative” shift in response to the arrival of the OTAs.
Like the bricks-and-mortar agents before them, the OTAs are broadening business models, highlighting bespoke holidays alongside their original core offering of cheap flights, as exemplified by Expedia’s Inspirator.
A more recent example of how the OTAs are evolving their business model is the agreement between Orbitz Worldwide, a division of Travelport, and International Speedway Corporation, a motor sports entertainment company, which will give Orbitz management of ISC’s corporate travel programme.
This will include powering a portfolio of ISC-owned websites and building a racing micro-site on Orbitz.com that will offer holiday packages, travel and race tickets.
The venture screams Long Tail, whose model makes a good case for the success of niche products. When a leading OTA such as Orbitz begins segmenting into small niches, you can bet others won’t be too far behind.