Rakuten discusses the bold concepts of its platform and maximising revenue

With vaccine roll outs and travel lanes opening, demand has started to pick up and Online Travel Agents (OTAs) have been a commanding force in improving customer experince and taking digital innovation forward. Currently, the playing field in driving travel bookings has drastically become more complex with OTAs gaining popularity due to better rates, ability to compare multiple products easily (based on availability, reviews, price), make several travel bookings on one platform and earning loyalty/rewards points.

In this exclusive interview, we speak with Jeremy Bek, the Global Head, General Manager at Rakuten Travel, one of the largest and pioneering OTAs in Japan with more than 20 years of experience. In his role, he is responsible for the global expansion of Rakuten Travel’s business and growth of the international customer base across the world.

With more than 80% of Japan’s population using Rakuten, we identity the 3 key characteristics that led to its path of eCommerce success and credibility among travellers and partners namely

1. Japan’s largest-scale share of hotels – Rakuten Travel has more than 20% of market share in its domestic bookings and more than 40,000 registered hotels under its platform giving travellers a variety of choices to meet their needs.
   
   
2. Strong relations with hotels – With hundreds of hotel consultants both domestically and internationally, they have deep knowledge and expertise in both online sales and local market conditions, working closely with hotels to create and offer attractive and competitive packages for travelers.
   
   
3. A unique ecosystem – Rakuten Travel is part of the Rakuten Group which has 70+ businesses spanning across a range of online and offline services, including e-commerce, travel, digital content, fintech, payment apps, mobile carrier, and professional sports. Linking these diverse services through a common membership and loyalty program, Rakuten has created one of the world’s most unique and robust ecosystems.
   
   

As told by Jeremy, OTAs were becoming more and more commoditized in the years leading up to the pandemic, focusing on providing standardised content and cheapest prices. However, the pandemic changed the way travelers were shopping and booking their travel, moving online from offline, and looking for more information before making their decision as they became more cautios and prioritised cleaniness and cancellation flexibility as their travel plans become less certain.

“At Rakuten Travel, we have always been focused on providing a platform for our partners to showcase their content with their own expression and customised pages. Furthermore, we provided additional support to our hotel partners and customers to ease their travel issues such as early settlement of payments to hotels and changing of reservations for our customers when their travel plans changed due to Covid-19.”

This “omotenashi” – Japanese hospitality - is the core of Rakuten Travel’s spirit which is a key differentiator from other OTAs which is especially important to customers in a post pandemic world.

Image Source: https://bit.ly/3dNuoNN

Without a doubt Covid-19 had sped up digital transformation and became an essential part of businesses to adapt. A technology company like Rakuten Travel which has been a pioneer in digital for the past 20 years not only transformed their operation methods, but also supported hotel partners to transform to meet the changing needs of travelers while growing their business.

“The pandemic saw a further need to transform operations digitally, from bookings, modifications and cancellations which had a been traditionally been through phone or fax, to call centre operations and on-ground operations of check-in with antivirus measures at each hotel.”

In this new landscape, OTAs are focused on remaining agile, pivoting their strategy, anticipating and capturing demand which will ultimately drive conversions and maximise revenue. At Rakuten Travel, they have developed several programs and new revenue streams including;

• Furusato Nouzei (Hometown Tax) - A unique Japanese tax system that enables taxpayers to donate their tax money to support local communities in a manner they desire in exchange for a credit on their income tax. In addition, as a token of appreciation Rakuten rewards them with gifts such as travel discount coupons. These coupons not only benefits travelers, but also destinations in getting support from travelers to recover from the damages of COVID.

                          

Image Source: https://bit.ly/3T836Sw

• Insurance – Providing customers the confidence to travel with an insurance service in case of mishaps and ‘what-ifs’ such as covering cancellation fees if they are COVID positive or having medical emmergecnies during their travel.
  
  
• Luxury App - Following the increase in demand for luxury during the pandemic, a members only smartphone app was launched, dedicated to booking luxury hotels. Only selected Rakuten members are qualified to join this group based on their engagement with the Rakuten Group.
  
  
• Rakuten Car Share - A new car sharing service in collaboration with domestic car sharing operators. After the pandemic, people tend to make short trips rather than long distance travels using cars instead of public transportation. Considered an eco-friendly service as a part of the sharing economy, this proved useful for those who do not own a car and is available 24/7 for any use. It also offers flexible price settings based on booking time and travel distance with no monthly charge, gas charge and insurance fee.

Image Source: https://global.rakuten.com/corp/news/press/2022/0301_02.html

Apart from these initiative, Rakuten’s social media influence on travellers’ decisions on destinations, hotels, restaurants and activities have been expanding in the recent years according to Jeremy. Engaging with customers on social platforms allows them to establish brand identity, especially with the advent of new channels including TikTok, amongst the younger generation.

“At Rakuten Travel, our customer base encompasses a large demographic spectrum and as such, other digital channels and traditional media such as broadcasting and magazines are still important as some of those still have big influence on consumers in Japan and other key markets, hence we continue to invest in these channels to ensure continued brand preference.”

Jeremy is all set to join the stage at Digital Travel APAC 2022, that is back in person after 2 years. He will be sharing on how Rakuten Travel has managed to overcome the pandemic by innovating their systems and programme flexibility in line with the fast changing conditions in his panel discussion.

“The travel industry is one of the most dynamic industries with lots of innovation and changes on a daily basis and Digital Travel APAC is THE event to share and learn about the key travel industry developments that can drive our recovery and further growth, which is highly valuable. I’m looking forward to reconnecting with industry partners.”

Join Jeremy on the 25th August, 11am to hear him on the OTA/Meta Panel “As Google and Amazon increase their presence in the online travel space, what’s next for OTAs and how can they stay relevant amidst increasing competition whilst ensuring better profit margins?"

For more info download the agenda