By Donggun Lee, Founder & CEO at MyRealTrip
COVID-19 has changed the business of OTAs and created new opportunities.
As you may know, COVID-19 forced many OTAs to change their business focus from outbound to domestic travel. This was not an exception for us, as 99% of our revenue was gone and we lost huge numbers of customers and markets. Situation got even worse as travel restrictions got higher.
This required fundamental transformation in business and new strategies to deal with the change. Instead of sending local users abroad, we needed to keep them in the country. At the same time, new lifestyle and standards emerged due to COVID-19 and influenced users’ decisions.
Domestic travel requires even more sophisticated products and services than outbound travel. Customers have easy access to information for local destinations, and they have plenty of knowledge and tips to travel. Also, there is no language barrier plus less restrictions in basic travel needs such as visa, local currency, and transportation. We need to eliminate the pain point, which is low-quality products and services. In addition, due to the new normal from COVID-19, customers demanded new values for travel. Safety, hygiene, and distancing became more important and even critical.
Domestic travel market, which was relatively underdeveloped and outdated, became a blue ocean and new players competed upon new standards. We can see this clearly through data. Car rental market in Korea has grown by more than 20% after COVID-19 due to people’s needs for safety and distancing, and rental car bookings doubled in just three months as we renewed our products and added safety insurance to our services.
Although these initiatives came from an unavoidable situation of the pandemic, this should not be considered just as an alternative of outbound travel. This could rather be an opportunity for us to create tremendous amount of value-adds in the future. If we think on the other side, the pandemic created an opportunity for OTAs to accelerate their global expansion by strengthening domestic travel products and services.
OTAs that focused on outbound travel now have gained ground to appeal inbound travel from travelers around the world by building strong contents and products customized to new needs.
Even more, companies expanded their boundary by launching new types of travel products than focusing on traditional competition. For example, although traveling between regions and tours were restricted, people still had the desire to travel, and live online tours were released to satisfy those needs. At the same time, video chat services such as Zoom and virtual meetings like metaverse emerged and accelerated the trend.
OTAs now have the base to launch these new types of products worldwide. If we take live online tours as an example, it can be released to global customers to promote tourist attractions or other localized contents. Language and channels are still limitations but a strong fundamental has been built. And the boundary of travel can even expand further by utilizing virtual tours from metaverse.
The pandemic is coming to an end and travel is ready to rebound. Although it has been a tough time for the travel industry, it can also be an opportunity for us to develop new markets and ideas. Localization is in the center of revolution—which eventually can be the drive for OTAs to further expand to the world.