Tuesday, October 07, 2008

Webjet vs Wego: sometimes an OTA is better than meta-search

Steve Sherlock of Oodles sent me me a email pointing out a very interesting quirk that can give OTAs a functionality advantage over meta-search. Typically I would have thought that top notch meta-search are going to be better at delivering customers to the top fare combinations versus OTAs. The OTAs would have the advantage in packaging, customer rewards, content and community and other retail elements but that meta-search would have the lead in the search and user friendliness.

But in the Australian domestic market the airlines have structured their fares in such a way that they are very user unfriendly for meta-search. The results list is full of all the fares you would want to see on a typical Australian domestic city pair (say Sydney/Melbourne) but you have to book the outbound and return separately. There are two click offs prompted by the metasearch. Here is a shot from Wego to show you what I mean

Clearly this is something on the airline side, not within Wego. Meta-search results are dependent on their source material. Since the vast majority of domestic in AU is sold as one way segments then a meta company needs two searches and two separate results to produce a fare. The bulk of long haul is still defaulted to return so they have different value. I suspect this may even be a deliberate limitation that the airlines are using to drive customers back to the direct sites of Qantas, Virgin-Blue, Jetstar and Rex.

Webjet are the largest Australian OTA (by gross bookings). They have found away around this problem through the design of their underlying technology (called the TSA or Travel Services Aggregator). They are able to capture all of the segments from multiple carriers. The customer's card is collected once and then sent to all of the points of charge. For a multi-carrier fare this may mean that the card is charged three times (once by the first carrier, once by the second and a third time by Webjet for the fees) but the consumer has only had to enter the details once. In the battle between Online Agents and Meta-search, when it comes to domestic Australian flights it seems to be advantage OTAs.

Anyone out their from Wego or Webjet care to comment - would love to do a follow up post with your views? Anyone else know of similar consequences in other domestic markets?

Update - please read the response in the comments from Ross Veitch, Chief Product Officer at Wego.com

Disclosure - in the past I provided some consulting services to Wego. The work is finished but I remain a long term fan.


Anonymous said...

Hi Tim,

You raise a very good point. It is definately a challenge for the meta-search players, who are aggregating from a wide variety of web sources, to break the search into one way segements and to then reaggregate.

However, a good meta-search platform should be searching a wide range of online travel agents and airlines direct and as such should still be able to find a great value deal for the user.

The other point I want to make is that the focus should not be meta-search vs OTA's. The focus should be meta-search vs other forms of customer acquisition such as Google or Yahoo. Global Travel Markets primary focus is on assisitng OTA's and Airlines to reduce their cost of customer acquisition and improve their ROI.

OTA's such as ebookers, Opodo, Expedia, Zuji, Netflights, etc are our valued clients - not competitors.

Dave Simmons
Global Travel Market

rossveitch said...

Thanks Tim (and Steve) for highlighting Wego's new one-way flight search UI. Previously at Wego we used a common UI that bundled up outbound and return flights into single search results regardless of the origin and destination searched. User feedback from Australians highlighted that for domestic flights users preferred to select outbound and return flights independently of each other and wanted to see all of the fares available for each flights. The same is true for some other non-Australian city-pairs where one-way pricing is the market norm.

It was also problematic from a sheer computational complexity point of view. ie. For the city pairs with high frequencies (eg. SYD-MEL) trying to create individual results for all possible combinations of outbound flight x airline x fare type x booking website x inbound flight x airline x fare type x booking website was enough to bring the Javascript engine on any modern web browser to it's knees.

So instead, when you search for an Australian domestic return itinerary on Wego we perform 2 separate 1-way searches and allow users to create their own combination of inbound and outbound flights/fares/booking websites. In cases where the booking website is different for the inbound and outbound flights this obviously requires two separate booking processes. Many users are happy to do this extra work in order to avoid extra booking fees.

In cases where the user is selecting 2 flights from the same booking website (be it an airline or an OTA) dropping a user on a booking page with the flights & fares already selected so she can check out just once is ideal but not as simple as it might seem because not all of our booking partners' websites support it. For those that do we're currently working to add support for this on our side. For those that don't we plan to instead land users on a search results page on the booking website where they will then need to re-select the flight & fares they wish to book.

We encourage anybody running an airline and OTA website to add support for external deeplinking straight to booking pages. In cases where our partners support this we find conversion rates are dramatically better than when they don't. At Wego we see a lot of API's and approaches to running booking websites and we're always happy to work with our partners to suggest ways to improve API's, deeplink or tracking methods.

Ross Veitch
Chief Product Officer

Anonymous said...

I work in the travel industry and as such I earn a low salary, I can't earn 15 bucks in 2 clicks, so I sure as hell like the idea of saving 15 bucks on avoiding booking fees by clicking twice and booking directly with Virgin or Jetstar.

Steve Sherlock said...

i agree with not paying OTA's a booking fee. have never made a domestic booking with webjet for this reason.

in my email to Tim i said:

"Once a meta search allows return flights to be booked and without booking fee – then i think they’ll give the likes of webjet and bestflights a run for their money. Plus i’ll use them instead of going from site to site".

i conceded however that this is obviously easier said than done.

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