New Online Travel Agencies are continually being developed globally and ostracize the traditional travel agencies, which are forced to adapt to the digital business model. A year ago InLobby.com entered this very competitive market of OTAs hoping to gain a market share. What differentiate you from the other OTAs?
Khachik Nazaryan: Well, I think while entering the global market, differentiation is not set as a necessary precondition. That can neither be triggered as the main goal, nor be enough sufficient for market entrance. Being different, differentiation as it is, does not imply success. This may lead to success together with new working solutions, innovative features, meeting up-to-date users' requirements.
Anyway, among those features that tend to differentiate inLOBBY from other OTAs, direct contact opportunity with hotels comes up. This core tool enables users to be in touch with the hotel prior to booking process, for learning more detailed information, acquiring help or advice. Still with a room for improvement, these tools are called on to ease the inquiry and unawareness process between the end customer and the hotel. Besides, direct contact with inLOBBY Concierge in respect to all travel related inquiries is of an asset and is valued by customers. By contacting our local representatives in number of countries, users find local support and local feedback to their inquiries and feel more loyal.
inLOBBY haunts another business concept as well, which in fact may be deemed as a ground for differentiation. inLOBBY works in a more broad scale, tending to serve as an aggregated database of hotels, hotel suppliers. With the help of this advanced aggregate, customers will get the best possible accommodation offers from an enhanced hotel portfolio, already compared and filtered out results.
The last, but not the least, we are young and this means that we are highly flexible and adaptable to digital developments, solutions. New trends, requirements and expectations are on the agenda, let them only be justified.
How are you going to convert the "lookers" to "bookers" with your business model and how can you and the suppliers (hotels, airlines etc) measure the return on investment?
Khachik Nazaryan: I think that the enumaration and listing of all marketing tools and smart devices is not expected to be heard from me. What is valued more in this looker-to-booker scheme, is the socialization of your service. Having your service socialized will help to hold the lookers, make them more loyal and by offering them the best price option will turn them to bookers.
Best price option in hand with supplementary services, more mobile solutions pursues this aim and will make our business model the booking start-point of lookers. By providing support to all travel-related inquiries of customers will result in a two-way effective outcome both for the end-customer, and for our system. Current market in this field lacks this consultation service, leaves the customer one by one with the offers. It's a blank page and by working closely in this direction our platform will seed loyality among the lookers and turn them to our customers.
Stimulating approaches in forms of bonuses or commissions are also of value. For example, by becoming an affiliate in course of simple steps, customers may merely enjoy their bookings and bonus outcomes, let them just be “main heroes”/protagonists in this story.
Among more common sources, one may not miss out, of course, the necessity for keeping in pulse all accommodation hot deals and seasonal offers, their highlighting, the provision of even more secure, easy-operating and confidential payment processing systems. And of course, easy navigation and innovative solutions, starting from hotel search, selection, booking, in mapping may be listed as prerequisites.
Monetary value of return still stays the main criteria in calculating the return on investment. We also consider and take into account the number of unique, returning, loyal customers, etc. All these indicators are considered in dynamics and help to measure the return in overall scope.
Are the contemporary "digital consumers" ready to pay extra for added value services or they are "price sensitive" looking only for the best rates and deals squeezing the profit margin of the travel suppliers?
Khachik Nazaryan: Let me note that it’s a mere illusion to presume that online platforms showcase higher prices because of value added service fees and it’s an illusion to think that these prices are higher in comparison with those offered by direct suppliers. We tend to compete with best price offers for our customers.
And if we are talking about the preferences of our visitors, the grounds here differ. People from Eastern Europe and Asia are less sensitive to price; this may be justified by a less awareness of the system options, feedbacks or comparison. At the same time, Western Europe and other countries that have been using such systems for pretty long time are much more sensitive to prices. They are willing to forego some convenient offers to get cheaper ones. Besides, the phenomenon of “nationalism” is observed in booking sphere as well: some people prefer to use their national systems and ignore better options.
Can you give us some figures from the first year of operation of InLobby.com? What buying method your visitors prefer until today?
Khachik Nazaryan: inLOBBY has been launched since September 2011 and if we consider the conversion of lookers to bookers for this time span then it goes something of about 0.34% unique visitors that have booked a hotel.
During this short course of time inLOBBY opened and put into full operation 2 new representative offices with local support in Asia (inLOBBY ASIA Co. Ltd.) and in Russia (In Lobby Ltd.). Our own hotel inventory has grown by about 84% with hotels inLOBBY has personally contracted with.
Again, the preference in buying methods highly depends on the market, even has a geographical implication. From the terms of getting direct support prior to reservation order, the Eastern European and Asian markets are among those segments that basically prefer communication-consultation-then-order method. On the other hand, the countries with more broad awareness of available accommodation options apply less for concierge services.
Issues with acquiring visas are also among the key factors, influencing the choice for buying method. This stands as one of the reasons in the markets of Eastern Europe and Asia when customers prefer the full prepayment option for getting payment letter, reinstating their payment fact and submit it to the embassies. While the rest are less sensitive to this approach.
You have added Chinese and Thai language to inLobby.com and recently you have your office in Bangkok. Do you see that Asian consumers are more reluctant to buy online? How do they react to the new concept?
Khachik Nazaryan: Generally, the whole market, irrespective of geographic location, showcases statistical growth in online buying. This concerns not only online reservations, but online shopping as well. E-commerce solutions start winning their score in the online market. As based on marketing forecasts, Asian markets are said to turn into a more rapid consumer field for online products. And here, continuous introduction and improvement of already existing online buying business models or the launch of a more advanced platforms will win the situation and be of higher preference in the Asian market.
Asian consumers are quite a good market target, a far-sighted starting point; they absorb the innovative solutions at a stroke and just need to differentiate among the existing and new products to choose the option they prefer. Unlike Western Europe, Asian consumers are relatively new to adapt to online buying models. It's just a matter of time, awareness and right choice for the product. Asian consumers are not so conservative and are more easy-going in terms of product choice. Better to say, they're more market-friendly and will definitely turn into more progressive online consumers together with the Former Soviet Republics.
Which are the trends in travel product distribution in the years to come? What new changes we can expect?
Khachik Nazaryan: The main trend nowadays seems to be the rate parity – all sources work to have the same price for a specific product. Rate parity in turn will engender trends with more specific content, more diversified offers, more integral trends with a number of integral booking inventories and solutions. Focus will be done on customer satisfaction via new possible options. However, rate parity can be achieved in a long run and during this time a lot of players of the market will be forced to leave it not being able to adapt to this new specificity.
Besides, social networks are so common nowadays that one cannot ignore their development. Many systems will look for new ways to integrate to the social networks. This also concerns the mobile applications market: its growth is expected in more rapid volumes and steps. This field is not saturated yet.
There will also be a “castling” between the old players and the new ones. The old ones have problems with being flexible and respond to market demands in a more prolonged way. More flexible and mobile, modern systems will stay in the market.
In the countries where traditional booking is still less common, the online booking market will continue growing at higher speed displacing the traditional institutions. Finally, I think that combination will win – the more supplementary services one can provide, the more demanded the product will be.