How the downturn could promote direct booking

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. Photo credit: Getty Images / PeopleImages (working at a computer)

According to the Q3 2019 global consumer survey from analytics firm GlobalData, online travel agencies were the primary choice of booking channel for 44 percent of global respondents a year ago. Since then, disputed refund policies, coupled with a lack of efficient customer service, have shifted travelers' expectations, giving 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 and tourism analyst at 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.”

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The survey found a “strong desire” for products and services that align with time and money constraints because 82 percent of travelers are “always,” “often” and “somewhat” influenced by these factors. GlobalData’s latest COVID-19 consumer survey also found that 80 percent are “always,” “often” and “somewhat” influenced by personalized service—a quality many OTAs lack. 

Bonhill-Smith suggests OTAs are unlikely to be overtaken anytime soon, but also indicates 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 capture more business going forward.

“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.

“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.”