Throughout the first half of 2014, “online travel” frequently made headlines across various media. Especially the “love-hate relationships” among major players like Ctrip, Tongcheng, and Qunar left many people puzzled, while entrepreneurs and investors have shown increasing interest in online travel.
With the rise of the internet, the structure of the tourism industry has undergone tremendous changes. Online Travel Agencies (OTAs) have emerged rapidly, and in the past two years, mobile internet has become even more dynamic. Traditional travel agencies have faced unprecedented challenges, and there are even rumors that online travel platforms will replace traditional ones. Are traditional travel agencies really being driven into a corner by online travel? How can they transform to coexist with e-commerce? These questions have once again become a focal point in the industry.
Segment the market and offer personalized travel products
With the rapid development of online travel, travel information has gradually become more transparent, intensifying competition in the tourism market. Essentially, market segmentation benefits consumers. The traditional tourism industry focuses on segments such as transportation, tickets, accommodation, scenic spot visits, group tours, and travel agencies. This often leads to fragmented information, inefficient communication, rigid products, and limited choices for travelers. Due to information barriers and a lack of relevant technical tools, the tourism market has largely been controlled by a mix of travel agencies and service providers, making it difficult to achieve personalized services or highly segmented markets.
However, vertical market segmentation provides opportunities for small travel agencies. Currently, some small agencies rely on their own WeChat platforms or build unique “mini-stores” on the vast WeChat ecosystem, or use online platforms like travel websites. These agencies create themed or customized travel products offline, offering humanized and personalized services while still earning profits. On the other hand, the ground handling services of traditional travel agencies can also extend overseas. In some less mature tourist destinations, the ground services provided by traditional agencies remain essential.
Going online is the trend – Leveraging OTAs for mutual complementarity
Focusing on both online and offline channels is an area many traditional travel agencies explore during transformation. Some agencies with solid capabilities have long increased their investment in online travel platforms and joined the “going online” movement to seek transformation paths. Some have built their own travel websites, including those backed by major traditional agencies like CYTS (Aoyou.com) and CTS (Mango.com).
Renowned tourism expert Liu Simin stated that online travel is definitely a trend. In fact, many travel agencies have already attempted online transformation, but compared to technologically mature online travel platforms, many agencies show obvious deficiencies in development technology, falling far behind in system development. Therefore, unlike Aoyou.com, more small and medium-sized travel agencies prefer to collaborate with excellent third-party e-commerce platforms. For example, many choose to open online stores on platforms like Xinxin Travel or Tuniu, or even build their own travel websites by purchasing products like “Xinnai-Xinwai,” which is also a great form of mutual complementarity.
Focus on strengths – Return to offline service and experience
Overall, online travel accelerates the transaction speed of travel products, reducing the need for physical transaction locations and direct sales personnel. But in the end, it still comes back to physical stores. It has been said that no matter how big Ctrip gets, there are still things it cannot or does not want to do. No matter how small a traditional travel agency is, it has its own foundational resources for survival.
Industry insiders note that travel products cannot be immediately inspected upon purchase – they are a very special commodity. When disputes or unexpected situations arise during trips, customers and travel companies often need to communicate face-to-face. From another perspective, although storefront services are costly, face-to-face interaction is irreplaceable. Traditional travel agencies, with their rich experience, can handle issues more promptly and appropriately, something online travel platforms cannot match. From the consumer’s point of view, aside from the convenience brought by online channels, the ultimate experience still relies on offline service and personal touch.
Driven by mature internet technology, traditional travel agencies are encouraged to embrace online travel platforms. An industry practitioner gave an example: in recent years, the penetration of tablets and smartphones has soared, while PC market share has plummeted. Thanks to new technologies, practitioners can use mobile apps like “Peer Manager” to resolve travel agency online store issues anytime, anywhere, replacing the need for a computer – why not take advantage of that? Similarly, internet technology has fueled the growth of online travel platforms. Traditional travel agencies can fully focus on their offline strengths while complementing them, leveraging OTA power to develop their online market.