In recent years, “deposit tour”, “member tour”, “one-yuan tour group” and other low-cost tour has gradually become a common way to grab market share between major travel companies. Although this way of gaining customers can increase the source of customers to a certain extent, but if not handled properly, it will also bring corresponding risks for themselves.
Customers of Beijing Haitao International Travel Service have been asking for money back after the company failed to return deposits as promised, sina.com.cn reported. In this case, haitao Tourism encountered the crisis of consumer door-to-door rights protection, mainly because of the tourism financial model of “pay first, travel later”. However, the occurrence of this rights protection event did not attract the attention of major travel companies, and the tourism finance model is still hotly favored by OTA.
“Tourism + finance” is hotly pursued by OTA, what is the charm behind it
Nowadays, the mode of tourism finance has become the new competition object of various tourism enterprises. Especially for online OTAs, the development of travel finance has become a trend. So what is so appealing about this model that otAs are jumping on board?
OTA has a large capital loss in price war, and “tourism + Finance” can make up for the loss. Price war is the most common way of competition between travel companies, which is mainly manifested by low-price travel. However, the profit margin of low-price tourism is small, which is difficult to support the cost of platform expenditure. In order to maintain sufficient competitiveness of the platform, the platform needs new profit channels, and tourism finance is undoubtedly one of the most convenient and fast channels. It can make up for the loss of profit caused by price war, and is an efficient way of flow realization.
Related tourism financial products can stimulate consumption and increase the passenger flow of the platform. For young people, financial constraints limit their ability to travel further. At this time, the platform’s tourism financial products will play a big role. Such as the holiday travel network launched “tour stage”, way cow “down payment start”, donkey mother “little donkey white”, “little donkey stage” and other tourism financial products. These products provide people with the possibility to travel before paying, which to some extent stimulates people’s consumption desire and helps attract more people to make purchases on the platform.
Realize flow realization, further expand profit space. The reason why tourism finance can become a hot development mode is also because of its strong liquidity capacity. As we all know, OTAs are a huge entry point of traffic, with a large number of customers in their hands. If OTAs can monetize this traffic, they can make a lot of money for themselves. Therefore, it is imperative for OTAs to find channels for monetizing traffic, and the travel finance model is one of the good channels for monetizing traffic. When the platform flow is larger, the tourism finance products produced by OTA under the tourism finance mode will be sold more widely, and the more products sold, the profits obtained by the platform will increase accordingly.
For example, online OTA such as Ctrip, Qunar and Tuniu all have insurance commission business on the platform, and OTA can make considerable profits from every insurance sold. Ctrip, for example, will charge channel fees when it cooperates with insurance companies. If ctrip sells an air accident insurance for 20 yuan on its platform, it will charge channel fees of 18.5 yuan, according to 36kr. It can be seen that the tourism finance model brings considerable profits to OTA.
There is a huge profit space hidden behind the tourism finance model. Capital always pursues profits. Under the guidance of profits, OTA is actively developing tourism finance. But can OTAs really make their dream come true by developing a travel finance model?
As OTA crosses over into finance, the road to gold is fraught with difficulties
For online OTAs, large user scale and cash flow are the advantages of their development of tourism finance model, but this does not mean that OTA’s development of tourism finance is bound to be smooth. In recent years, numerous travel enterprises have entered into the tourism financial products, but there are also many failures. This is mainly because of the difficulty of this mode in practice.
First, the threshold is low, replicability is strong, the product is difficult to survive the competitiveness. OTA for financial products, mainly around the tourism industry chain, mutual gold business is focused on the implementation of financial management, consumption stage, insurance sales, etc., and because business scope is narrow, the financial product is of strong replication, OTA launched between financial product homogeneityphenomenon serious, lack of competitiveness.
Such as prepaid financial products, Ctrip has Ctrip Treasure, where to take flowers, etc.; Again such as installment products, donkey mother has little donkey installment, flying pig can use ant flower bai. The products are very different in name but not in essence. However, as the tourism financial products produced by OTA gradually become homogenized, OTA lacking market competitiveness can hardly rely on these products to increase traffic for itself.
Second, tourism finance seems to be profitable, but in fact it is difficult to make profits. Otas are in finance to make more money. In practice, however, for OTAs, inbound finance is a new crossover venture, not an old one, so its practical application is often limited by many factors.
On the one hand, the platform develops tourism finance at high cost. The problem is most obvious in low-cost travel, such as tongcheng’s “one-yuan tour” campaign. In this activity, users only need one yuan to participate in and enjoy a number of services. However, both tickets and accommodation require high costs, which will be paid by OTA. Such low price and high cost approach makes it difficult for OTA to make profits. On the other hand, cooperation in the form of sharing diverts platform profits. As for the tourism financial products, OTA needs to cooperate with banks, insurance companies and other relevant institutions in the form of sharing, so as to improve its risk control ability. However, the profits generated by OTAs are diverted away, resulting in lower actual profits.
Third, lack of grasp of big data technology, platform risk control ability is low. In the development of tourism finance, OTA has an obvious feature of scale expansion, so as to expand the flow entrance and open up a broader market. However, in the process of pursuing scale expansion, platforms often fail to accurately assess the market trend of financial products by analyzing user data due to the lack of big data technology. As a result, OTAs run the risk of losing a lot of revenue as bad debts explode under rampant growth. Finance itself is a risky industry. OTA needs to constantly improve its risk control ability in order to avoid being bitten back.
Fourth, payment license is not easy to obtain. For a platform, owning a payment license can build a bridge between end consumers, merchants and banks to realize the interconnection of funds. For OTA platform, it helps to better connect various businesses and promote the realization of business closed loop.
However, getting a payment licence is not easy. Recently, in order to further standardize the online payment market and strengthen control, the Central bank has suspended the issuance of relevant payment licenses, making it more difficult for platforms to purchase payment licenses. Due to the central bank’s control, it is difficult to obtain payment licenses, so OTAs have to rent someone else’s channel or obtain authorization to cooperate through other channels to make online payments. For example, in the cooperation between Meituan and Alipay, we often use Alipay for payment when using Meituan. But this is not conducive to building their own O2O ecosystem.
The “tourism + finance” mode has a vast profit potential, which attracts otAs to scramble to dig. However, the road to dig is not easy. How to break through all the difficulties has become an urgent problem for OTA to solve.
How can OTA cut through all the obstacles and keep the gold dream from falling apart
Otas are increasing mutual payment service, apparently seeing that mutual payment service can bring more profit margins and is a new profitable growth point. But there are too many obstacles in the way. So, how can OTAs cut through the hoops to make their dream come true?
First, acquire payment licenses through acquisition or self-built channels. For OTAs, being able to have their own payment license helps build their own business ecosystem. Although it is difficult to apply for payment licenses at present, platforms can acquire payment licenses by acquiring enterprises with payment licenses. For example, Meituan-Dianping acquired payment licenses by acquiring Qianbaobao, and folded Up Alipay to promote Meituan-Dianping. In this way, Meituan has its own payment channels without relying on others, and helps to build a closed loop, build its own business ecosystem, and better develop its own financial business.
Secondly, optimize the data analysis technology and enhance the risk control ability of the platform. The most important thing for OTAs to enter the financial field is to have user data, such as transaction information, credit rating, product satisfaction, etc. As the risks of financial products are complex and diverse, it is difficult for platforms to assess the risks of products if they do not have sufficient data and information, thus causing economic losses.
As a result, OTAs need to continuously optimize their data analysis techniques to further improve their risk management capabilities. Existing many related financial products on the market for comparative analysis, focus on understanding the users of the products structure, customer satisfaction, the yield of product and product size etc., the risk of corresponding contact form internal and external financial products, to establish a reasonable risk rating, for future access to financial products, promotion and implementation process to provide risk assessment basis.
Finally, appropriate marketing, improve product competitiveness. Most OTAs in the market today don’t pay enough attention to marketing their travel finance products to get people to know what they do and to impress them. In this regard, OTA should try to change its marketing strategy, cooperate with some stars with their own traffic, and let the star effect drive the circulation of their own products, such as the cooperation between Hornet’s Nest and Huang Xuan. Or advertising, by fully explaining the value of the product to the public to better understand the product. Only by marketing their products can OTAs drive more traffic and make their products more competitive.
Travel more profits for financial model helps to OTA, but OTA incoming financial sector, will really become profitable, it is hard to generalize, after all, the platform operating financial ability is different, have different risk control ability, develop financial model can bring much profit for its space is not known. For OTA, if they want to realize their dream of gold digging through “tourism + finance”, they need to constantly improve themselves and improve their strength. Otherwise, OTA’s dream of gold digging may be just a dream after all.
Article/Liu Kuang public account, ID: Liukuang110