GlobalData: Travelers May Choose Direct Booking Over OTAs Post-Pandemic

INTERNATIONAL REPORT—Online travel agents (OTAs) were the primary choice of booking channel for 44% of global respondents in Q3 2019, according to GlobalData, a data and analytics company. However, disputed refund policies, coupled with a lack of efficient customer service, give leading service providers an opportunity to boost direct bookings in post-pandemic travel.

“OTAs dominate the online travel market space, but the lack of efficient refund policies in place has been one of the greatest areas of concern during COVID-19,” said Johanna Bonhill-Smith, travel & tourism analyst, GlobalData. “The process of refunding a customer on a third-party site is considerably more complicated than when having booked direct, giving hotels and airlines the upper-hand in servicing customers through this pandemic.”

There is a strong desire for products/services that align with time and money constraints as 82% of travelers are “always,” “often” and “somewhat” influenced by these factors. When it comes to a personalized service, 80% are “always,” “often” and “somewhat” influenced by this. OTAs are unlikely to be overtaken anytime soon; however, leading service providers with a strong social media presence and an easy-to-use online platform and travel app will be able to more effectively personalize offerings and service today’s traveler, thereby allowing them to exploit this window of opportunity.

Prior to COVID-19, 44% of global travelers booked through an OTA. Slightly less booked directly with 36% commonly booking with a lodging provider and 32% directly with an airline. However, COVID-19 is likely to have changed attitudes. When booking direct, customers are more likely to encounter better customer service, more flexibility and refund options alongside more favorable prices.

“Tourists typically book with an OTA to find the most effective deal as online platforms offer a wide variety of choice when choosing accommodation, flights and general experiences with a destination,” Bonhill-Smith said. “However, COVID-19 has accentuated a series of problems within the structure of an OTA as customers’ battles with refunds and questionable levels of customer service show. This has caused considerable brand damage for OTAs, which has impacted relationships with both consumers and suppliers.”

She continued, “Service providers that typically work with OTAs should be grasping this opportunity and encouraging tourists to book directly. Creating a travel app will offer direct booking providers an opportunity to increase levels of personalization through both analyzing data more effectively and paving the way for more tailored recommendations. This will likely lead to greater levels of customer satisfaction; a lucrative offering in light of the colossal slump in travel demand brought on by COVID-19.”

GlobalData’s latest COVID-19 consumer survey (Nov. 4-8) had 5,820 respondents, while its Q3 201l9 global consumer survey had 29,744 respondents.