The recent introduction by Ryanair of its price checking tool has given another warning shot to online travel agencies (OTAs) selling its fares. Customers can now check the price paid by OTA for their flight directly on Ryanair, allowing them to check for hidden charges or price discrepancies. With many high profile agencies facing a wave of criticism from clients and industry bodies during the pandemic, it is yet another blow to OTAs trying to rebuild their reputations.
OTAs have tough decisions to make
The complexity of today’s travel market is multi-layered, with customers being hypersensitive to booking complications, security and costs. Any PR or potentially negative customer experience is exacerbated and is problematic for the recovery of any agency. According to the GlobalData * Global Covid-19 recovery survey, 84% of customers were either âalwaysâ, âoftenâ or âsomewhatâ influenced by the reliability of a product or service, highlighting the pressure to which OTAs are facing. Cost, financial security, and transparency are critical to the success of agencies lucky enough to survive the pandemic. Unfortunately, many online agencies that use “screen scrapers” (a software program used to extract content and other websites so that they can sell their products) could face negative reactions from customers, which would lengthen recovery times.
Going forward, OTAs will need to make it clear what they charge customers. One potential solution could be the introduction of fixed booking fees for some low cost carriers. Many business travel agencies take a similar approach, ensuring that the service charge is clearly stated to the customer or business account prior to booking. These agencies are allowed to book Ryanair through a Global Distribution System (GDS) such as Travelport or Saber, which is a different method from OTAs.
The alternative is for OTAs to continue trading as usual and attempt to resist customer reaction, risking further negative media exposure. Another option is to boycott Ryanair completely. However, given that Ryanair operates so many routes in Europe, this could be damaging for OTAs, with many selling high volumes of Ryanair flights with their package holidays. Agencies such as On the Beach and LoveHolidays should exercise caution as they are already in a PR whirlwind due to delayed refunds and their decision to leave ABTA.
Ryanair has a long term advantage
A significant portion of Ryanair’s revenue comes from direct bookings on its website through flight content, ancillary services, hotels and car rentals. Ultimately, Ryanair wants to divert traffic from online travel agencies and its own website. This is much more efficient for Ryanair, helping it to maximize revenue and manage changes, cancellations and refunds more efficiently.
Low-cost carriers are no stranger to suing companies (or against each other). The use of words used on the Ryanair website such as “unauthorized”, “false” and “overcharging” are dangerous accusations to make. However, Ryanair has a business model to protect and in a sensitive climate it can be essential for the long term survival of the airline.
* GlobalData Global Recovery survey week 11 conducted December 2-6, 2020.