Tour Operator Software: how can I hold my own in travel sales against Google & Co. — The Omnichannel Principle
Google, Kayak or Expedia: how can tourism companies meet the challenges posed by metasearchers or online travel agencies (OTAs)?
How the best software solution enables travel suppliers to be seen
Tourism companies rely heavily on lead generation through metasearchers and search engines, as these channels make all providers comparable and thus much more visible to the end customer. At the same time, the provider would prefer to receive and process their bookings directly. However, the marketing and IT budgets are not the same and so, an unequal competition for the booking end customer has emerged between metasearchers, OTAs and the travel providers. At the same time, these three parties are dependent on each other, and have become a so-called "coopetition," a mixture of cooperation and competition.
An important decision criterion for or against a purchase, is the price of the service offered by any travel supplier. To be found on the first page in all channels, many providers usually set the lowest entry price of the basic product. Additional services are only offered later in the sales process to keep the starting price as low as possible.
One of the biggest challenges of the travel industry is how do I sell additional services flexibly and at the best possible price? And does the distribution channel allow me to sell these additional services at a flexible price at all?
Tourism service providers: strengthening direct sales
Direct sales are an effective means with which travel supplier can make themselves less dependent on indirect sales channels such as metasearchers or OTAs. The goal must be to be represented in all channels (omnichannel), but to strengthen the company’s own channels, such as the website, mobile app, “book now” via social media, or call center.
This can be achieved by pushing personalized and exclusive ancillary services.Holger Voss, Director Business Development at ISO Travel Solutions GmbH, explains where and how modern tourism IT solutions can assist travel companies.
Holger, what current challenges do tourism service providers have to master to operate successfully on the market?
On the one hand, they must be represented with the optimal price in all channels, i.e., they have to pursue an omnichannel approach. That means they have to reduce their product to a basic product that allows this entry-level price. On the other hand, they must, of course, offer added value through ancillaries. In any case, it should be possible to present these additional offers in all facets in their own direct channels, such as their own website, mobile app, or call center. Flexible bundling or packaging of additional services to the basic product is an excellent way to do this.
What is the situation with external channels?
External channels are somewhat more difficult to control. However, it is important to be represented with all variations of the basic product. In addition to a basic product, such as an overnight stay in a hotel room, other services must also be bookable. In the case of hotels, these additional services can include a gala dinner in the hotel restaurant or a visit to the spa. In the case of a flight booking, these can be ancillaries such as seat selection or baggage, but also external additional services such as insurance, excursions, or rental cars. These offers can be stored in a simple rate code – the basic price of the room with option A) gala dinner, or option B) a spa visit.
More flexible configurations can be achieved through a (dynamic) package price with optional services or additional price. And precisely here lies the challenge of being able to present and offer these flexible offers in the same way in the external channels (metasearchers and OTAs).
What are the dependencies between external and internal channels? What are the possibilities for your own channels?
Basically, search engines always earn money. They try to present all market participants with their offers. A customer decides whether to book via Google, via a travel agency, or with the service provider directly, if there is an additional benefit. This additional benefit can be an exclusive product offering, upgrade, or additional service.
With a direct booking, customers can more flexibly add further services after booking via a "Manage my Booking workflow", make changes to the itinerary or simply convert a trip into a voucher. With an expansion of the own technology, a "care" of the direct booking customer can be best possible. In this way, customer data can be accessed directly, and this can be done throughout the entire process sequence: during the initial booking, periodically during the travel planning period, as well as during and after the trip.
What solutions does ISO Travel Solutions offer?
A reservation system with dynamic packaging and Super PNR functionality is needed that intelligently allows this flexible control and booking of offers and additional services. This dedicated system sits on top of the PMS or PSS or Ticket System and must enable the enrichment and packaging of at least two individual services, as well as the presentation of additional offers and bookable individual services. This can be a fixed part of the main service or presented as a variable bundle or additional service.
With Pacific, ISO offers a modern reservation system with internal and external inventories. Various ancillary services can be combined and activated for specific sales channels via the flexible Pacific package definition.