Why OTAs Should Sell Currency Exchange as an Ancillary
The travel industry has been rapidly changing by consumers shifting towards “one-stop shops” that provide a simple and reliable booking experience online. Consumers expect their booking journey to be all-inclusive meaning that they can book all the travel services and products they would potentially desire and need for their vacation all at once.
Due to this ongoing change in the travel industry, ancillaries have now become much more crucial for the success of both travel supplies such as, airlines and hotels, and travel retailers such as, online travel agents (OTAs). Ancillary revenue has grown from being a $2-billion-dollar market ten years ago to now being a $50-billion-dollar market. The growing importance of ancillaries, has resulted in OTAs such as Priceline and Expedia beginning to dominate the travel industry by stealing a significant amount of direct travel bookings and margin from travel suppliers. OTAs meet travel consumers’ expectations and capture ancillary sales by inspiring ideas for trips and promoting ancillary products between the booking and travelling journey.
Travel suppliers now strive to partner with highly rated brands so that they can provide a wide range of ancillary products to their customers. Some examples of ancillary products that are currently being offered are insurance, car rentals, tickets to amusement parks, etc. It is crucial for travel suppliers to continue innovating the wide range of products, experiences, and services they offer so they can ensure lasting loyal customer relationships.
An ancillary that is not currently being offered by any OTAs is one that allows consumers to exchange their money online prior to their trip. Travelers often inconveniently exchange their money at airports or at the first money exchange shop they find and end up receiving poor rates in comparison to the spot exchange rates available online. This results in them losing their money’s worth. Offering an ancillary such as, Cambiu, that allows consumers to purchase currency online prior to their travels at a reasonable rate would alleviate the inconvenience travelers currently have with exchanging their money. It would also enable OTAs to continue on their path of dominating the travel industry by providing consumers with a simple booking experience where they can purchase all products and services they possibly could need or desire for their trip all at once before their trip. Further, Cambiu’s product can also be integrated with many things such as, API, Widgits and iFrames providing both OTAs and their customers with greater benefits.
Travelers on average often exchange $600-$800 per transaction when travelling. The profits for the exchange service providers can vary greatly per every deal depending on their rate and commission. Additionally, the OTA which actually generates the deal can earn as little as less than a dollar in a CPC model or go into a re-share agreement.