PATA: Digitalization essential for SME’s survival

Bangkok – Digitalization and innovation are key for SMEs to survive the pandemic as the travel industry emerges from the crisis, according to a report by the PATA, conducted by Twenty31 Consulting and supported by Agoda, revealed at the World Travel Market.

PATA’s research report, titled The role of Online Travel Agencies (OTAs) in supporting Asia-Pacific SMEs in Recovery, aims to provide insights to benefit SMEs in the hospitality and tourism space that make up a large proportion of travel providers, as they pivot and adapt amid Covid-19.

With the pandemic dramatically changing how and where consumers travel, it is essential for hospitality businesses, especially SMEs, to adapt their operations to thrive within a digital global ecosystem. The report highlights key areas where digital travel platforms and governments can support tourism SMEs in the Asia-Pacific region.

SMEs are leveraging OTAs’ digital platforms to accelerate recovery. There is a shift in the dynamic of the relationship between SMEs and OTAs, with the latter being acknowledged and increasingly valued as a technology, data and marketing partner.

It is vital for SME hospitality providers to understand trends and reach new audiences during these times. SMEs leveraging OTAs can reduce their top-down investment, especially around payments features, customer support and marketing efforts. OTAs have also expanded opportunities for destination diversification, helping to drive tourism in second and third tier cities.

“We have seen a real push for OTAs to do more than simply selling rooms. They are helping us with other services, and this is really helping us forecast our needs and drive more sales,” said a hospitality SME in Thailand.

The use of data insights will future proof SMEs as they navigate today’s ever-changing landscape of the travel and tourism industry. OTAs are technology partners that can help provide SMEs with a comprehensive understanding of data insights to enhance their businesses.

Data insights can be used to optimise revenue through meta-search, machine learning, artificial intelligence, product diversification and platform centralisation.

“OTAs are now using AI tech to tailor offers to customers and that is going to be very interesting. This will likely allow SMEs to match our products and services with high-potential consumers and drive better ROI,” said a hospitality SME in Singapore.

SMEs call on governments to work with OTAs to boost post-Covid travel recovery. During this crucial recovery period, more private-public collaboration will boost travel confidence, where the local government can draw on the private sector’s commercial expertise to spot and create new opportunities to improve the industry, businesses and lives impacted by Covid, as well as stay relevant in the transforming economic environment.

The study also looks at the changing landscape of the travel and tourism industry and how OTAs have rapidly accelerated the growth in the region where Asia-Pacific-based OTAs represent more than a third of global gross bookings.

Mario Hardy, PATA CEO, said: “OTAs play a crucial role in the recovery process, where SMEs can leverage their data and digitise in order to adapt and build long-term resiliency. We are optimistic that the industry will eventually recover with governments and private sectors coming together to ensure that no one gets left behind.

“We look forward to working with our partners, such as Agoda, as we continue to hear from SME operators and how we can advance the discussion around the future of travel and tourism in the Asia-Pacific region, one that is sustainable and inclusive for all.” (TTG) Photo: TTG