Getting Started in Travel: The B2C Edition

by Tessa Schoenhals

Looking to craft the next disruptive travel app for the modern day traveler? Have a travel idea that you want to turn into a working product? Leveraging Sabre Dev Studio’s best in class travel APIs, you can transform your travel dreams into a reality.

The Sabre team is here to help as you venture into the ever-changing and complex industry of travel. From a business to consumer (B2C) perspective, we offer a diverse suite of REST and SOAP enabled APIs that can help take your new business to the next level.

For new entrants in the B2C travel space, we typically see two types of business models:

  1. Option 1: you can develop a non-booking application, or in other words, operate as a meta search engine. We see many startups enter the industry following this business model since it’s quicker to get ramped up and does not require certain industry certifications.If you choose to be a meta, you can generate revenue through advertising. Additionally, metas commonly employ the CPC (cost per click) model where travel suppliers or online travel agencies pay every time a consumer clicks on a link that redirects them to the travel supplier or online travel agency site to complete a booking.

    When a traveler using a meta search engine shops in your app and selects an itinerary they wish to purchase, your referral strategy will determine where the user goes next. How you choose to handle this step will define a key piece of your user’s overall experience in your app or website.

Some meta search applications you may know include:

  1. Option 2: you can build an application with the intention of generating your own bookings. The basic rule of thumb is that if you ticket air and/or make reservations, you are considered by industry standards to be a travel agency. This applies even if your business is only a mobile app or website! As an online travel agency (OTA), you can make money through charging travelers a service fee, through “mark ups” added to the special fares you negotiate with airlines, or through commissions.

Becoming an OTA also comes with its own set of requirements. The most critical component you’ll need is official ticketing authority. Airlines need to be able to identify you when you generate bookings on behalf of your travelers. The Airlines Reporting Corporation (ARC) in the U.S. or the International Air Travel Association (IATA) elsewhere in the world have programs through which you can obtain this accreditation. Once approved, you’ll be assigned a number unique to your agency.

If you’re not ready to apply for your own accreditation yet, you can alternatively partner with an existing travel agency to handle fulfillment for you. Keep in mind that the typical wait time for application approval is several months, so make sure to get this process started early!

Depending on where you’re located, your agency may need to adhere to other legal requirements. For example in California, you must register as a “Seller of Travel” at least 10 days prior to doing business in the state. It’s important to research the local requirements in your state or country before launching operations.

The last set of factors you’ll want to consider if you want to become an OTA lies on the operational side. This includes decisions like whether or not you want to operate your own call center to process post booking needs i.e. refunds and exchanges. Some customers choose to outsource the servicing of bookings to a third party, while others prefer to keep all operations in house and under a consistent company brand.

Besides the big players like Expedia and Priceline, many startups have entered the booking space in the past few years like Hopper, Upside, Options Away, and Lola.

Stay tuned for next week, where we’ll dive into Sabre’s offerings for travel application providers in the B2B space!

If you’re interested in learning more about your options as a Sabre customer, please submit a Contact Form here.

 

About Tessa Schoenhals

Tessa Schoenhals is a management consultant on Sabre's Global Consulting team. She's also contributed to the New Business Ventures, Contract & Sales Management, and Product Marketing divisions at Sabre. She graduated from The University of Texas at Austin with a BBA in International Business.

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