Super Apps Aren’t the Future of OTAs, Says Agoda’s CEO
Omri Morgenshtern: Agoda is also working on providing a solution for hotel chains to monitor how their wholesale discounted rates are being distributed
By Raini Hamdi, 14 Nov 2022
Omri Morgenshtern, who rose to the CEO position at Agoda in April, does not want people to buy groceries or a manicure on the travel platform, unless it’s part of their trip experience or an attraction.
While a couple of Asian online travel agencies, notably Traveloka and AirAsia, have brandished travel & lifestyle super apps that sell everything from massages to movies, Morgenshtern believes the future of online travel agencies isn’t about being the best super app.
“Everyone wants to be a super app providing all services — kind of a WeChat. But I don’t necessarily see travel platforms becoming super apps. If anything some super apps have become travel platforms, like Meituan.
“Outside China, I don’t see [the super-app concept] as being successful,” said Morgenshtern in an interview.
Instead, the game-changer will be what he calls the “persistent booking.” This allows travelers to build an itinerary on Agoda, come back to it, and keep adding other trip components when they are ready. Because fundamentally, no one books an entire trip consisting of flight, hotel, transfers, tours and attractions, etc, at one go.
Competitor AirAsia recently launched Air Asia Holidays, enabling customers to package flights, hotels and activities in one booking at one price. But the ease of doing this remains to be seen as Air Asia Holidays trials in Malaysia and the Philippines.
Currently packaging or bundling airline and hotel alone is messy and time-consuming, what more trying to add transfers, attractions, restaurant bookings and other components of a trip.
Morgenshtern admits few travelers in Asia book packages, compared with in the US.
“If you want to bring it to the masses, you need to crack the time component, make the itinerary as something that survives over time and, as time passes, people can keep adding what they need and see the savings in buying a package than individual components. We haven’t cracked this and I can tell you we will give it everything we’ve got. You’ll see a lot of movement on this from us in 2023,” he said.
Agoda has introduced a shopping cart on its platform, which Morgenshtern said it the first step towards his “persistent booking” goal.
Agoda is also working on providing a solution for hotel chains to monitor how their wholesale discounted rates are being distributed.
“We want to provide a platform for chains to distribute to wholesalers, but with us policing the distribution so chains don’t have to play whack a mole. Also important is giving chains the visibility on where the booking goes, to whom, and ask any question that they may have. That open platform doesn’t exist,” said Morgenshtern.
Tech Talent Shortage
While Agoda now has a tech-driven CEO, a lack of tech talent may hobble the progress of innovations.
Agoda has more than 1,000 engineers and staff in the product function and has room for 200 to 300 more of these talent this year, said Morgenshtern.
“Fundamentally if you want to do tech, you need to fight for the best talent,” he said.
The OTA was forced to layoff 1,500 staff in May 2020 due to the pandemic. But most of the cuts were in the customer experience group.
“The retrenchment was not the main reason [for the shortage of tech talent]. We were on the wrong side of the pendulum. Travel wasn’t a lucrative industry unlike, say, crypto, though not [anymore] now. E-commerce boomed during the pandemic, so food delivery was lucrative.
“With Asian countries having reopened borders, if anything, travel is shifting back to being cool and the problem [of talent shortage] is improving,” said Morgenshtern.
But he admits it’s competitive to find the right talent due to changing trends such as acceptance of remote work by companies.
“In the past, if a company wants to, say, recruit an engineer from Agoda, usually the person has to relocate. Today companies are willing to let him/her remain in Thailand. We recruit talent from the US and Europe so they can mingle with the local talent. All of a sudden, many want to work remotely. It hurts the knowledge transfer,” he said.
Thailand is Agoda’s tech base. Its ratio of foreign to local tech talent is 60:40 and Morgenshtern is aiming for a 50:50 mix over time.