3 Simple Strategies to Increase Revenue As an OTA

Online travel agencies (OTAs) and tight margins go hand-in-hand. This is because it’s not easy to repackage and resell already low-margin products to the budget-conscious and price-sensitive travellers that constitute a large part of their audience. Then there’s the hyper-competitive online landscape in which they operate. Thanks to the Internet, OTAs can now reach a wider audience. However, they also have to compete with a large number of competitors.

These challenges make it hard for OTAs to increase their conversions and revenues. Fortunately, OTAs can sell more, earn more, and increase their profitability. The key: adopt the three strategies highlighted below.

#1: Target Under-served Regions

By targeting travellers in under-served regions, OTAs can increase revenues. There are many ways to do this: create localized, mobile-responsive websites, set up local call centres, and offer content in the local language. Another strategy is to negotiate deals with local carriers, increasing the number of options available to PNG customers.

Social media also provides a powerful way to reach and convert potential customers in previously-underserved regions. Through dynamic banners, tailored promos, and interesting content on popular social channels, OTAs can target specific segments of travellers like families or budget travellers, and also offer niche content like multi-city trips, solo trips, experiential trips, and so on to appeal to these travellers and increase their conversions.

Also, personalized marketing, facilitated through data and technologies like AI, can help OTAs to target specific individuals or groups by their preferences, budget, purchasing power, past travel and search history, and other factors. Through such marketing efforts, OTAs can entice more travellers in more locations to travel more, thus capturing their attention - and their wallets.

#2: Optimize Payment Processes

Payments, particularly cross-border payments can be the most complex aspect of an OTA’s business. With cross-border payments, travellers often face challenges like lack of transparency, slow transactions, and high costs that put them off from completing purchases, affecting OTAs’ revenues and profits. Payment fraud, disputes, and complicated reconciliations can also constrain an OTA’s financial health.

To minimize these challenges, OTAs must optimize their cross-border payment processes. To start with, they must only work with payment partners that offer secure platforms and safe, user-friendly payment mechanisms like payment links.

Payment links are personalized, easy-to-navigate URLs that enable travellers to make fast, secure payments to OTAs. By offering this option, OTAs can enhance customer experiences and satisfaction, which will ultimately lead to higher sales. The mechanism’s underlying technology can be integrated with the OTA’s booking systems and CRM platforms to provide a comprehensive view of customers and transactions. OTAs can then use this information to create personalized offers that are more likely to get customers to complete their purchases and positively impact the OTA’s revenues and profitability.

#3: Leverage Better Itinerary Composition

OTAs can improve their market position, performance, and profitability by improving flight search and composition, without the need to add additional content sources. Technology solutions like Trip Ninja's SmartFlights API solves complex search problems in travel, making flight content work harder via a simple and cost-effective API integration. With Trip Ninja's FareStructure (multi-city) and Virtual Interlining solutions, OTAs can generate and deliver itineraries that are not only cheaper, but also customized to more closely match different their customer demographic's preferences to boost conversions and markup.

In the post-pandemic era, OTAs play a crucial role in influencing travel trends and in the revival of the travel industry. That’s why the OTA market size is expected to grow at a healthy CAGR of 12.98%, from USD 616.6 billion in 2023 to a massive USD 1,178.7 billion by 2030.

That said, OTAs face multiple challenges when it comes to driving revenues and profitability. Fortunately, they can mitigate these challenges by targeting underserved regions, optimizing their payment processes, and adopting a powerful yet cost-effective technology like SmartFlights.

Discover how Trip Ninja's SmartFlights API is helping to transform the sales and revenues of OTAs worldwide. Schedule a free demo today.

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