Online Travel’s Localization Quandary

Online Travel This Week

Go deep and get more local, or go wide and expand geographically? That’s an interesting quandary for online travel companies of every type in their various stages of development.

It definitely has something to do with Booking.com’s multiyear push to develop its own payments’ platform, and will certainly bear on Traveloka’s quest to gain a stronger foothold in additional countries in Southeast Asia as it attempts to go public through a blank check company merger.

Skift Research’s Varsha Arora took a look at the issue in a new report, Online Travel Agency Landscape 2021: Southeast Asia.

Indonesia’s homegrown Traveloka is the leading player in that country, with Booking Holdings sister companies Agoda, based in Singapore, and Booking.com, headquartered in Amsterdam, ranking number two and three respectively, the report found.

Arora wrote that half of Indonesia’s population does not have a bank account while another 25 percent has one, but may not own a credit card, for example. It’s a totally different story in Singapore.

“On the other hand, no Singaporean national is unbanked,” the report said.

While not the total answer to its market dominance in Indonesia, Traveloka understands how locals want to transact. The online travel agency provides credit facilities to Indonesians who don’t have bank accounts, and has choreographed some 6 million buy now, pay later reservations. It also partners with banks to facilitate bank transfers as a payment option.

One test for Traveloka will be which localization features to trim or discard as it seeks to expand beyond its most fertile markets, according to the report. “Hence, although Traveloka has succeeded in dominating its home country and has grown successfully in Thailand, and Vietnam, it is yet to be seen if they will cut down on the localised features as they expand globally,” Arora wrote.

Getting deeper locally or scaling up globally is a tradeoff, as Agoda CEO John Brown described in an interview for the Skift Research report. Too much localization, Brown said, means you may have to operate “a hundred different versions of your website,” while on the other hand “one-size fits all” becomes inadequate to local populations.

You see a lack of localization from time to time when a European online travel company expands into the U.S. and offers “holidays” instead of vacations, for example, and the reverse happens in different incarnations, as well.

It’s in this context that it is easier to understand Booking.com’s ongoing and protracted effort to expand its payments options. The company already has much global scale in hotels, but broadening its already large array of payment options will help it dig deeper and get more local.

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