Seeking Expert Guidance on Developing a Comprehensive Bookable Services Platform

Question

Hello AltexSoft team and community,
 
We've been following your site and reading your insightful articles on GDSs, OTAs, booking engines, APIs, and more. Each article has sparked our curiosity and interest further.
 
Our Vision:
A little very non detailed short backstory of our idea, in summary, our idea is to create a platform that displays bookable services no matter the industry. From travel related services to beauty related services and everything in between. Our ultimate goal is to create a single big platform that connects businesses with bookable services to customers creating a one stop solution and a platform where all individual businesses and booking systems can reach out to customers. Therefore, for our startup to fulfill its goal we need to fill our website with content. The problem is that with other industries everything is fragmented. The beauty industry for example, businesses are fragmented. Some businesses use booking systems and others use booking systems with customer platforms that lets customers browse through saloons that have subscribed to its booking system only, while other businesses use their own created booking system etc meaning that getting content would require us to contact many platforms and individuals asking to get access to or invite them to display their services on our platform. This is all hard and we will save this for later. But, what made us interested in the travel industry and the content there is availability. We have gds's for example. You get plenty of content by integrating with one of these gds's. Generally, the travel industry is made in a way for other businesses to sell. So the content is already there and ready to be sold.
 
Phase One: Online Travel Agency:
Our goal is to provide a comprehensive range of travel services, including flights, hotels, activities, public transportation, transfers, car rentals, cruises, ferries and whatever fall under the industry of travel. We aim to integrate these services via APIs to capture the entire booking experience on our site. While managing bookings is not our priority, controlling pricing to add markups is essential.
 
Questions:

Integrating with Major GDSs:

- We understand that integrating with major GDSs (Amadeus, Sabre, Travelport) requires credentials that can be costly and time-consuming. Alternatives include:
     - Consolidators: Like Mondee, picasso travel etc, which buy fares wholesale.
     - Companies (dont know what to call them): Duffel, Travelfusion, Flightslogic, Mystifly.
each of these companies have their strengths like presence in a specific region or partnerships with specific types of airlines etc
   
   Questions:
   - What are the differences between these companies and consolidators? We know that consolidators buy flights seats in bulk. Other than that then what?
   - Which would benefit us more in terms of rates, flight inventory, and customization (markups, commissions)?
   - Are there better options than these companies?
   - Should we combine APIs from different sources? Any tips?

Hotel Integration:

- We are considering Hotelbeds because of what we heard about their large inventory and good prices, as they also offer other services.
   
   Questions:
   - Is Hotelbeds the best overall choice for us?
   - Do they lack anything specific in their inventory?
   - Would combining suppliers to complement each other's weaknesses be a good idea? For example, combining with Agoda for their strong Asian market inventory.
   - If combining suppliers, which would be the best combination?
   - If starting with one supplier, which offers the best overall rates, inventory size, and global reach?

Differentiation and Value Addition:

- To stand out from competitors, we need to offer unique value. What current problems or gaps in the travel industry could we address?
   - For example, focusing on public transportation to help customers plan their entire trip seamlessly.
   
   Questions:
   - What problems or unmet needs exist in the travel industry that we could solve?
   - How can we differentiate ourselves by offering something unique to our customers?
 
Your professional opinions and tips will greatly help us move forward. We have struggled to find experts to consult, and we would be very grateful for your guidance.
 
Thank you in advance for your assistance!

Answer

Hi Adnan, There’s no simple answer to all of your questions. I’ll try to answer a few those: What are the differences between these companies and consolidators? We know that consolidators buy flights seats in bulk. Other than that then what?We call companies like Duffel or Travelfusion aggregators. Normally, they connect to various providers to enable access to all that content via a single API. In the most basic terms, consolidators traditionally sell private fares, those that you can’t display publicly on a website but you can sell via a phone or as part of a larger tour package. Aggregators, on the other hand, collect all content, both private and public fares. But that’s a very simplified definition because those companies that have traditionally been consolidators can also sell published fares or offer other services. Which would benefit us more in terms of rates, flight inventory, and customization (markups, commissions)?It all depends. Different providers have different strengths. If you want to display flight prices online, you’re dealing with published fares. Agent commissions there are very thin. If you act as a merchant of record and add your own markups, it’s easy to fail because of the fierce competition and travelers' price sensitivity. You have to find a handful of suppliers, negotiate directly and win exclusive deals that will drive sales for you. Are there better options than these companies?Again, it depends. You may also explore host travel agencies besides consolidators, aggregators, and GDSs. If you don’t have IATA accreditation, you can’t ticket flights, so you’ll need somebody to help you with ticketing. Should we combine APIs from different sources? Any tips?It’s definitely harder. Smaller businesses usually connect to a single API. 
Is Hotelbeds the best overall choice for us?They do have a large inventory, so I’d look in that direction. Also, check WebBeds, another large bed bank. If combining suppliers, which would be the best combination?It depends on the specific markets that you target. You can consider some aggregator or large OTA (e.g. Expedia) that works with your target suppliers, integrate their API, and then directly negotiate with those suppliers to get better deals. You may also contact our experts at solutions@altexsoft.com.

Answer

Hello again altexsoft team
So if we've understood everything correctly commissions are very thin for agents selling flights generally. Which we agree with. You won't see suppliers offering more than 10% for each flight sale. This is why we where leaning towards adding markups. We thought if it as a solution to complement the thin commissions. But it is as you mentioned. Prices between OTA's are competitive and customers are price sensitive so having markups isn't a great idea. This means that our only solution should be working on commissions. The thing is, who do we negotiate with. There are hundreds of services out there that offer flight content. Some of them are aggregators and others are consolidators and some just combine multiple sources into one api. Where do we begin. And even better, who would negotiate with a startup that has no selling volume. It seems like we have hit a road end. 
Maybe our thought process for the startup was all wrong. Maybe our goal of having a broad and big inventory wasn't the greatest idea for a startup OTA and we should think more strategically. We've thought a bit and aince we are a startup in Sweden we maybe need to focus on destinations that Scandinavians often travel to. And pick suppliers that will be the best for these destinations. Now we have a more clear audience and researching what those  destinations, countries and cities that Scandinavians often travel to won't be a problem. The problem is who to choose from the big sea of flight suppliers out there.  And if they are even willing to negotiate.
We saw you mention something about travel host agencies and we went up to learn more about them and we stumbled upon an article from you guys. They seem to mainly work with newcomers just like us. We also saw high commissions being brought up but we didn't understand what was high. Is the commission itself per sale that is high or are we just talking about the commission split between you and the supplier with you being the one taking the biggest part of the split?
Another question, how does it look for hotels. Is it the same fierce price competition between ota's that won't make you able to add markups? Doesn't suppliers like hotelbeds give you cheap rates making it possible to add markups since they buy in wholesale? I've heard that commissions on hotel sales are generally higher than flights.
Any opinions and inputs are very appreciated. Thanks in advance

Techtalks: Traveltech

Other topics:

Seeking Expert Guidance on Developing a Comprehensive Bookable Services Platform