Ai Editorial: Targeting traveller’s wallet? Don’t miss out on meeting mobility needs!

First Published on 4th July, 2017

Bookings for ground transportation and mobility at large haven’t been streamlined yet. They aren’t booked as some of the other trip essentials, say hotels, car rental or flights, are shopped for. Ai’s Ritesh Gupta spoke to Rentalcars Connect’s MD Fraser Ellacott about how this lucrative pie is shaping up.

 

What can simplify travel shopping?

If one scrutinizes overall trip planning and booking process, then the time spent on taking a decision, buying trip essentials from various merchants, completing a transaction without any hiccup etc. are some of the major hurdles that can hamper the experience.

Travel suppliers and e-commerce intermediaries are assiduously looking at the blend of content, technology and data to figure out the intent and come up with a relevant offering as per the stage of the journey. The key here to be a part of those, as Google says, “micro-moments”. These moments can be scattered across various ecosystems, such as Facebook or Google, airline.com, OTAs, meta-search engines etc.  

Consumers do find a way out, and there are plenty of examples of how the blend of devices, technology, interfaces, one-touch payment etc is resulting in new experiences:

·          Seeking details from a chatbot and eventually completing a transaction.

·          Interacting with a family member over a messaging platform, deciding on a restaurant and ordering a cab together from respective locations.

·          Starting a search within in an ecosystem, say Facebook, and with just one more click gaining access to offers from different vendors to book! 

So the onus is on the entire travel e-commerce sector to be a part of this era of seamless, contextual shopping.

Choice and seamlessness

Established organizations like the priceline group are looking at the entire travel booking funnel, and it is clear that they aren’t averse to embracing change and astutely looking at the collaborative route to break through the shackles of complexity.

For instance, booking.com is now looking beyond accommodation. The team is always evaluating new ideas, like the new chat interface Booking.com Assistant, for example.

As for content, bookings aren’t just restricted to conventional or long-established options – be it for accommodation or transportation.

So, another priceline company, B2B car rental specialist Rentalcars Connect, is keen on expanding its “ride” and “drive” offerings.

“We assess the future from two lenses,” says Rentalcars Connect’s MD Fraser Ellacott, referring to B2B partners, including airlines, OTAs etc., and the consumer lens, developing the product for the B2C business. “Transport can be difficult, complex, and fragmented. And it’s only getting more complex as consumers are given more and more choices,” says Ellacott. “As customers we’re faced with a barrage of different suppliers, transport types, ways to buy, ways to pay… it’s confusing, especially when you’re in a place you don’t know. We need to solve the customer problem – make it easy for them to get around and work with our partners to create a frictionless future.”

 

Ground transportation content

The team acknowledges that there is a need to offer integrated solutions for ground transportation to its partners. According to Ellacott, as per one of the recent company surveys of over 3000 partners spanning across all major markets, 83% are considering options beyond car rental, and 78% strongly looking for one partner for seamless integration and offering choice to their customers. “This is a big validation of our strategy (to scale up ground transportation capability) and craft a frictionless experience, easing out hassles associated with bookings (related to this part of travel),” he said. So on the B2C side, there is Rideways offering for bookable taxis, transfers – luxury cars, mini vans, compact cars etc. and further being scaled up to train and shuttle buses over the next six months. “All products are offered to partners as well. We are looking at all forms of transportation, mobility in general.”

“If one considers a trip for a family, it would feature airport experience, then reaching to the accommodation booked for the destination, getting around via various ground transportation options…it’s about offering easy solutions to all of this, and we are looking at content to match the needs of travellers,” shared Ellacott.

Monetization – massive opportunity

Ellacott acknowledged the evolution of booking.com and mentioned that his team is closely aligned and supporting the broader portfolio. He added that in-trip experience and excursion do account for massive share of a customer’s wallet. Overall, the car rental category stands at $60 billion and ground transportation $200 billion.

If we talk of bookings on the excursion side, there is a big gap as of today. As for the opportunity, as per my recent experience to Iceland, it took 5-6 sessions spanning over a week to understand the location and the sort of in-trip experiences that suited my preferences. For a couple and child (kid under-11 is generally free to travel) one can spend around $1500 or so for 4 day-long excursions (two of the most costliest tours and two starting range ones) as per the price list of itineraries being sold by two of the leading bus operators (the most popular transportation other than car rental). If we Google “Reykjavik to Jorkulsarlon, an exotic 700 km return, 12-hour road journey”, there are only few bookable options, although there is plenty of content from review sites, blogs etc. including Lonely Planet, Viator, there was only one vendor and that too at the bottom of the search. Even post booking, there wasn’t any proposition considering the data trail - Google (search, videos, check-in details with Gmail), Booking.com, Airbnb.com (including clicks on the “experiences” section) and Finnair.  

Ellacott asserts that vital steps are being taken in conjunction with airlines. He referred to a widget launched on Finnair’s website, featuring transportation options. “Increasingly we are finding that airlines are looking at broader interest-, experience and ancillary aspect attached to that. Airlines have a wealth of data, who is going, where they are going…such contextual, meaningful data can contribute in personalised offers, and airlines are well placed to do it.”   

 

Partnerships driven by data

When companies open up their respective APIs, as we have experienced, it results in experiences that save consumer’s time and effort. In fact, simple interfaces or the post booking service aspect via timely reminders or notifications, can get customers hooked to book often. But airlines do need to facilitate sharing of data, although the reluctance to do so is also understandable. But, as Ellacott also says, data is key to raising the conversion rate. “We have over 400+ strong team that is involved in testing and iteration to work out best possible options,” he said. Initiatives like A/B testing are done and airlines tend to benefit from best of the results. Ellacott, who has worked with three airlines during his career, said airlines need to step their data sharing capabilities, and tend to opt for white-label solution since it is easier to work out technically. “Ultimately consumer knowledge is power, there is a need to understand how engines behind the product work and accordingly one can personalise the offer. Those airlines that invest in this are well place to capitalize on this,” he said.

Other than airlines, Rentalcars Connect is exploring possibilities with various ecosystems to capitalize on the intent of the travellers. “Social media, review sites etc. are rich in terms of consumer data, and imagine how significant the opportunity would be when one can refine and present with relevant options, be it for a business or leisure traveller,” said Ellacott. Indeed big OTAs are well-placed especially using scale to their advantage, as they are able to address issues with talent, technology and capital, and be part of the emerging trends.

It is clear that established online travel groups are in a position to broaden their partner base, be it for top of the booking funnel and moving down, for instance, partnering with an airline when abandonment happens on their airline.com. “We don’t prioritize investment or show inclination toward any one partner. But do we work closely with airlines to make them understand the significance of intent, not to bombard customers with irrelevant options across various touchpoints, rather streamline the booking flow with vast products to choose from but only presenting refined, best suited options. Also, being sophisticated with retargeting in terms of relevance, frequency, and maximize the attachment rate. If done in an unplanned manner, then retargeting can adversely impact the brand loyalty as customers tend to unsubscribe, get annoyed,” shared Ellacott.

In all, Rentalcars Connect is forging data-driven partnerships with various stakeholders.

Gearing up for trends

Ellacott mentioned that in addition to content, data and integration of the offerings, payments in another area of focus. 

Also, it is imperative for the company to keep a tab on how some of the trends are expected to impact the functioning of the car rental industry. So be it for self-driving technology or evolution of the traditional car rental model, Rentalcars Connect’s leadership team is constantly evaluating how mobility is shaping and how in certain markets people are going about car ownership. A case in point is peculiar ways in which China has shaped up over the last 18 months or so. For instance, in first- and second-tier cities in China, car sharing has gained prominence, a trend unsettling what was once a key segment for car ownership. Supply of ride sharing services has resulted in extra convenience for short-distance mobility requirements.

“We are observing trends in China, this market is going to leapfrog compared to any other when it comes to mobility,” said Ellacott, referring to access vs. ownership as well as China-based bike hire company Mobike gearing for operations in Manchester and Salford. The GPS-tracked smart bicycles can be locked anywhere and unlocked using a smartphone app.

 

Hear from senior travel industry executives about latest trends in ancillary revenue generation at the upcoming The Mega Event Asia-Pacific 2017 - 4th Annual Profitabilty Summit, to be held at the Grand Mercure Roxy Hotel in Singapore (23-25 August, 2017).

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