How Technology Enables OTAs to Sell Profitable Multi-city Flights

May 8, 2024

A multi-city itinerary, or any itinerary with 3+ segments, are growing in popularity within the travel industry as travellers are looking to consolidate travel and save money on trips. No wonder 20% of global respondents to one 2021 consumer survey said that they typically take multi-city trips.

By booking multi-city flights with an online travel agency (OTA), travellers can find personalized recommendations based on their unique preferences and interests, as well as great deals that match their travel budgets. Smart travellers understand these advantages of OTAs, which explains why 72% of them prefer to book their trips online.

But, with Multi-City search still being eclipsed by one-way and round-trip itinerary searches, how can OTAs capitalize on multi-city searches to provide superior multi-city composition to their travellers while earning more revenue per search?

This article explores how OTAs can achieve these objectives with technology.

Multi-city Flights: The Benefits for OTAs

Travel agencies have always operated on tight margins. This fact was true when travellers and travel agents conducted business in person or over the phone. And it remains true now, when travel has “migrated” to the internet and more travellers conduct a lot of their travel-related business, including research, trip planning, and bookings online.

Operating in the online space allows OTAs to reach a much wider audience than traditional, brick-and-mortar travel agencies. At the same time, they also face fierce competition from many more agencies. To succeed in this hyper-competitive landscape, they must be very strategic about the type, quality, and quantity of flight itineraries they sell to potential and existing customers. Simply repackaging and reselling already low-margin products will not help them to increase revenues or profits.

So, what can?

Answer: Selling multi-city flights.

Technology: The Key to Generating Higher Revenues from Multi-city Flights

By selling personalized and price-optimized multi-city flight itineraries, OTAs can substantially boost their revenues and profits. And the easiest and most cost-effective way to create and sell such itineraries is by leveraging technology.

Using data analytics technologies and machine learning algorithms, OTAs can analyze historical data, such as customer behaviors, price and travel trends, popular destinations, and available inventory to understand the current demand and forecast the future demand for multi-city flights. The algorithms can also analyze complex factors like travellers’ travel purpose and dietary restrictions, and then generate tailored suggestions and curated itineraries for each traveller. In this way, OTAs can help travellers to find the multi-city flights and routes that match their individual tastes and thus deliver bespoke travel experiences that are most likely to result in conversions and sales.

Big Data analytics can also help OTAs to optimize their customer segmentation strategy for multi-city packages, and then determine how best to target and attract these segments. They can also make dynamic pricing adjustments based on a host of different factors like seasonality or inventory to consistently present cost-effective multi-city options. In doing so, they can increase their multi-city conversions and overall revenues.

OTAs can also help customers - and themselves - by adding chatbots to their websites. AI-powered chatbots provide instant assistance to users and guide them through the multi-city booking process, reducing the time and effort needed to make reservations and enhancing user experiences. Furthermore, chatbots can continuously learn from user interactions to improve their ability to understand and satisfy customers’ needs, thus fostering customer loyalty and positively impacting OTA revenues and profits.

OTAs can also maximize multi-city revenue per search with Trip Ninja’s SmartFlights API. The API’s FareStructure feature uses machine learning to improve flight search and composition within two sub-second API calls to create multi-city itineraries that are up to 90% cheaper than non-constructed (i.e. standard GDS) trips. With FareStructure improving multi-city trips OTAs can offer their travellers savings while more than doubling their revenue per search.

Multi-city itineraries are smaller volume but arguably the most important itineraries to offer travellers when focusing on profitability. Leveraging sophisticated technologies like Trip Ninja, OTAs create multi-city itineraries that are significantly more profitable.

Want to know how you can optimize your multi-city offerings and revenue per search with Trip Ninja? Book a demo today!

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