What causes people to buy from OTAs?

Today millions of travelers around the globe use Online Travel Agencies (OTAs) to plan their leisure and business travel. OTAs are getting popular among travelers even though there are still people who prefer travel agents expertise instead. Although, OTAs evolved their introduction in the 1990s, the corona pandemic provided new and exciting opportunities for them to attract more users and increase revenue. Due to the pandemic, people barely visit travel agents expertise and choose online service for information and booking. According to Statista, the global online travel market is expected to reach $833.52 billion in 2025 at a CAGR of 10%.

What’s OTAs?

An online travel agency (OTAs) is a web-based marketplace that allows consumers to research and book travel products and services, including hotels, flights, cars, tours, cruises, activities and more, directly with travel suppliers (Expedia group). Expedia, Orbitz, Airbnb, bookings.com, tripadvisor, Travelcity, Hopper, and Priceline are some familiar OTAs.

So the question arises, what influence these travelers to purchase from OTAs?

Below we will discuss about five influencing factors with supporting reviewed scientific publications.

Values:

People are certain about getting good value and benefits with the purchase from OTAs. A result imply that quality of benefits, monetary, social status, preference, and information values predict purchase intention toward OTAs, with the chief driver being the quality-of-benefits value, followed by the preference value.¹

Payment and refund policies are also important drivers for OTAs. Results from a study show that refund rate has great effect on the customer’s payment decision, while transaction cost has great influence on the hotel’s operational decision.² When the refund rate is greater than a threshold, the customer prefers online payment.

Additionally, sentiments plays vital role to understand customer buying intention and brand attitudes.³The qualitative aspects of OTAs can help service-providers understand customers’ brand-attitudes by focusing on the important aspects rather than reading the entire review, which will save both their time and effort.

Price:

Social currency have become an essential factor in motivating the customers to co-creation content related to products and services (Zinnbauer & Honer 2011). Social currency, attitude and subjective norms influence customer experience concerning online travel agencies.⁴

Quality:

Further, the quality of content on OTAs portal aids as drivers influencing booking intention among travelers. The study explored localization, website quality, product information, perceived interactivity, price and promotion, e-security, customer value, service quality, electronic word of mouth (eWOM), marketing and brand promotion amongst the identified determinants to define the relative dependence and driver powers.⁵ Another study supported this by showing the positive impact on electronic loyalty from the quality of services, website quality, infrastructure and electronic purchase.⁶Research which carried out a questionnaire survey on Chinese tourists visiting Korea with experience of using the online travel agency web also favor that in the e-service quality, convenience, interactivity, information validity, credibility had a positive impacts on perceived value and satisfaction.⁷

Increasing levels of competition are faced by OTAs thus, experience an ever greater need to evaluate the effectiveness of their Web sites. The study was conducted to examine the influence of perceived Web site quality on willingness to use online travel agencies. Ease of Use was found to be the most important dimension in determining Willingness to Use, followed by Information/Content, Responsiveness, Fulfillment, and Security/Privacy.⁸

Loyalty:

The result of research conducted to analyze factors that influence e-Loyalty of customers indicates that customer e-Loyalty is predisposed by e-Service Quality through e-Perceived Value and e-Trust. Hence OTAs popularity depends on innovation, convenience it offers as well as how trustworthy it is.⁹

Sentiments and duration of trip:

Does length of stay, demographic and socio – economic characteristics impact on purchasing behavior of OTAs. It was founded that short-duration travelers were more intended to use online travel agencies, where Long-duration travelers preferred their traditional travel agencies.¹⁰

From my point of view, online travel agency is growing popularity not only in developed countries but also in developing countries travel industry. Online travel agencies have rather advantage of reaching out to the larger audience. Fast processing of information and transaction is crucial aspects of OTAs for its popularity. The quality of portal, details about the product and service are another important factors affecting OTAs success. Users also gets best price from OTAs, easy payment and refund policy which aids on its utilizations.

Looking into future if vulnerability in booking system (altering or cancelling service) is improved to ensure trustworthiness, OTAs future is very bright.

References:

¹ShaliniTalwar, AmandeepDhir, PuneetKaur, Matti Mäntymäki (2020) why do people purchase from online travel agencies (OTAs)? A consumption values perspective, International Journal of Hospitality Management 88:102534

²Guang-XinGao, Jian-WuBi (2021) Hotel booking through online travel agency: Optimal Stackelberg strategies under customer-centric payment service, Annals of Tourism Research 86(2):103074

³ArghyaRay, Pradip KumarBala, Nripendra P.Rana (2021) Exploring the drivers of customers’ brand attitudes of online travel agency services: A text-mining based approach, Journal of Business Research 128(2):391-404

⁴AnuragSingh, Nripendra P Rana, Satyanarayana Parayitam (2022) International Journal of Information Management Data Insights, Volume 2, Issue 2, 100114

⁵MahakSharma, RoseAntony, Rajat Sehrawat, Angel Contreras Cruz, Tugrul U. Daim (2022) Exploring post-adoption behaviors of e-service users: Evidence from the hospitality sector /online travel services Technology in Society, Volume 68, 101781

⁶S. H. Jafarpour, A. Mahmoudabadi and A. Andalib, “The impact of quality of service, website, shopping experience and infrastructure on online customers’ loyalty,” 2017 3th International Conference on Web Research (ICWR), 2017, pp. 163-168, doi: 10.1109/ICWR.2017.7959322.

⁷G. G. Ronsana, M. R. Shihab, B. H. Syahbuddin and W. R. Fitriani, “Factors Influencing Customer’s E-Loyalty in Tourism E-Marketplace,” 2018 International Conference on Information Technology Systems and Innovation (ICITSI), 2018, pp. 237-241, doi: 10.1109/ICITSI.2018.8696021.

⁸Young A. Park PhD, Ulrike Gretzel & Ercan Sirakaya-Turk (2007) Measuring Web Site Quality for Online Travel Agencies, Journal of Travel & Tourism Marketing, 23:1, 15-30, DOI: 10.1300/J073v23n01_02

⁹Niu LX, Lee JH. The Intention of Repurchase on e-Service Quality by Online Travel Agency Site. The Journal of Industrial Distribution & Business [Internet]. 2018 Jul 30; 9(7):61–70

¹⁰Sujay Vikram Singh, Rajeev Ranjan, “ONLINE TRAVEL PORTAL AND THEIR EFFECT ON TRAVEL AGENCY: A STUDY ON OUTBOUND VISITORS OF VARANASI.”, IJRAR – International Journal of Research and Analytical Reviews (IJRAR), E-ISSN 2348-1269, P- ISSN 2349-5138, Volume.6

How to successfully master website design for your tourism business?

An effective website is important for your tourism business as it is one of the first touchpoints in online marketing. We developed a framework of the most important core factors in website design. Instead of digging deeper into each of them, we look at the whole picture.

STRUCTURE AND DESIGN

First, let’s start with the basics. Design the website in an easy, clear and simple structure. Be visual! Hence, make customers remember your website. Furthermore, include a navigation panel. You want to make sure that your customers find exactly what they’re looking. And pay attention: less is sometimes more. An over-designed website is not only daunting for the visitor but also impacts the page speed. Trust me, the goal is to attract more customers, not to lose them.

ACCESSIBILITY

Ensure quick-loading pages by choosing the right technology, smaller compressed images and a simple website design. Pay attention to the general accessibility on different platforms, devices and browsers. Don’t despair! You can even make a test run and check the page speed on different devices before you publish it.

ENGAGING CONTENT

There is no need for an attractive and clear structured website if your visitors are getting bored to death. Hence, create engaging content by integrating your personal story and stating your missions, vision and goals clearly. Show your customers that you care and include their testimonials and reviews as well as your values by adding sustainability certificates or Corporate Social Responsibility awards.

STORYTELLING

Most importantly, think about your customers and their values and implement them in your story. Don’t forget to add a beginning and an end and build up excitement. Captivate the customers with a powerful message.

Include interactive elements like videos or photos of your products or links to your social media channels. Then, think a step further and use chatbots to guarantee a round-the-clock personal customer care. Furthermore, retarget customers with discounts or feedback sections.

All in all, the possibilities online are endless. Just remember: taking your customers’ needs and your own values into account is the goal to succeed in digital marketing. Use Website Analytics and Search Engine Optimisation and dedicate a website manager to ensure constant updates, trouble-shooting and optimisation.

Follow this framework and you’re all set to go! What are you waiting for?

Get a master’s degree in tourism business

Are you looking for an international tourism-focused master’s degree programme in business? Tourism Marketing and Management programme by University of Eastern Finland provides a unique learning experience for students who have finished their bachelor’s degree and are looking for new skills and knowledge in developing tourism industry in a sustainable way. Read more about the programme at www.uef.fi/tmm.

What is online business in tourism?

Online business in tourism, digital tourism business, e-business in tourism, e-tourism; call it what you will, it still has a huge impact on how tourism business is conducted. Most of tourism businesses and large part of marketing are now online. The internet is most often used medium to search for information about a holiday or destination. Skills and knowledge of online tools and channels are critical for the competitiveness of a tourism business or destination.

Director of our master’s degree programme in Tourism Marketing and Management, Juho Pesonen, has made his lectures on the topic freely available for anyone interested in the topic. The course was given for the students of Finnish University Network for Tourism Studies during Fall 2016. You can see the course content and access the lectures on YouTube through the course time table below. YouTube videos have links to SlideShare presentations if you want to take a closer look at them:

Juho Pesonen teaching the course

Thursday 3.11.2016

9.00-10.30 Introduction to E-business in Tourism: history and context

10.30-10.50 Break

10.50-12.30 Theoretical background: central concepts of E-business

12.30-13.30 Lunch

13.30-14.30 E-business in practice: what to do

– website

– E-commerce

14.30-14.45 Break

14.45- 15.50 E-business in practice: what to do

– social media and content creation

15.50-16.00 Break

16.00-16.45 Practical examples

Friday 4.11.2016

9.00-10.15 E-business in practice: what to do

– analysing and managing online business

10.15-10.30 Break

10.30-11.25 E-business in practice: what to do

– mobile devices

11.25-11.35-Break

11.35-12.30 E-business in practice: what to do

– Search engine marketing

– Security

– Customer Relationship Management

– Marketing automation, artificial intelligence

12.30-13.30 Lunch

13.30-14.30 Destination management and marketing in the era of online business

14.30-14.45 Break

14.45-15.30 Future of tourism in digitalizing world: where are we going?

15.30-16.00 Final conclusions

These lectures provide an overview of a wide topic of marketing and managing tourism business in digital environment. A more in-depth view of the topic can be achieved for example in our Master’s Degree Programme.