Skift Take

Agoda's new CEO appointment highlights the need for online travel agencies to be continually reinventing experiences from a technology point of view. If only the company would now balance it out by bringing in someone who understands the hoteliers’ perspective.

Booking Holdings announced Omri Morgenshtern as the new CEO of its online travel agency division Agoda, effective July 1. John Brown who after 11 years at Agoda — four years as CEO — will become chairperson.

Morgenshtern currently serves as the chief operating officer of Agoda.

“The business will continue to benefit from Brown’s knowledge and expertise … Over the years, Omri has played a critical role in directing Agoda’s product and service offerings,” Glenn Fogel, CEO of Booking Holdings, said in a press statement, while offering no reason for the change in leadership.

Morgenshtern was earlier the co-founder and CEO of Israel-based Qlika, a startup specializing in online marketing optimization, which Booking Holdings acquired in 2014.

After the acquisition, the Qlika team joined Agoda to automate and scale its marketing systems. Morgenshtern joined Agoda as senior product owner, algorithms and learning systems, and was later promoted to vice president of product development, then to chief product officer before taking on the role of chief operating officer in 2018.

Calling it a sensible decision to appoint a tech-heavy founder as CEO, Dan Lynn, co-founder at Zuzu Hospitality, said the pace of innovation is only increasing in online travel agencies.

“These travel companies need to constantly optimize conversion patterns, and reimagine digital marketing strategies. Standing still, will only make them fall behind when it comes to conversion,” Lynn said.

Brown too had been the chief operating officer, before taking charge as CEO in 2018, replacing Rob Rosenstein, a co-founder of Agoda.

A Brief History of Agoda

Co-founded by Rosenstein and Michael Kenny in 2005, Agoda was acquired by global online travel giant Priceline Group (present Booking Holdings) in 2007.

One of the first online travel platforms to build a global business in the Asian landscape, Agoda seemed to be losing its dominance in Asia by late 2000’s. This was mainly attributed to the entry of global players in the Asian market and various market factors, add to that the unstable political environment in Thailand — Agoda had its largest office in Bangkok.

In 2019, Agoda, along with Expedia, Booking.com, Hotels.com, ebookers and trivago formally committed to clean up their sites following charges of pressure selling, misleading discount claims and hidden charges by the Competition and Markets Authority in the United Kingdom.

Agoda has also been accused by some hoteliers of not always honoring rate-parity promises while some have called out the company for allegedly running ‘bait and switch’-style promotions.

In May 2020, Agoda announced that it would lay off 1,500 workers as a result of Covid-19, retrenching around 25 percent of the company’s total workforce

The China Conundrum

In spite of a strong presence in Asia Pacific markets like Singapore and Thailand, Agoda’s presence in China remains relatively small. The Chinese online travel market is dominated by Baidu, Alibaba and Tencent-backed Ctrip renamed Trip.com, Fliggy, Tongcheng-Elong and Meituan.

Also, Agoda seemed to be facing internal competition with sister brand Booking.com, which made significant investments in the Chinese market and had been expanding in Asia. 

With a very similar product profile, Booking.com and Agoda have both been pursuing Chinese consumers, offering flights, accommodations, ground transportation options and other activities.

Agoda added flights and packages to its platform in 2019, while Booking.com is live in 38 countries with its own flights product. Outside of these markets, Booking.com works with a variety of partners to provide a ‘whitelabel’ flights product solution, whereby travelers are redirected to one of the flight partners to complete and manage their reservations.

Booking Holdings has also made strategic investments in Trip.com Group, Meituan — a leading hotel-booking platform and Didi Chuxing — China’s Uber. In many ways Booking Holdings’ investments in China have been with direct competitors of its units.

While Trip.com Group serves as distribution partner for Booking.com, Agoda works with Meituan and Fliggy — the travel service platform of Alibaba Group. 

With Agoda selling accommodations to Meituan app users, the online travel agency has extended its reach among middle to lower-income Chinese travelers.  

What’s Next for Agoda?

Booking Holdings has been eyeing to integrate the booking experience within its major brands into a connected and seamless travel platform for travelers through what CEO Glen Fogel calls the “connected trip.” With Morgenshtern as CEO, a lot of technical innovation is expected at Agoda.

As part of the “connected trip” transition, Agoda has also been looking to aggressively strengthen its product inventory and Brown had earlier mentioned that the online travel company is open to striking partnerships with the likes of Klook and GetYourGuide to augment its platform.

Taking the connected trip theme forward, Agoda would continue to try make the journey experience seamless and easy for travelers, Morgenshtern said recently during an interview to Web in Travel.

There are around four to five online travel agencies in the region that are constantly reinventing their technology experiences and seeking to find ever-more sophisticated customer acquisition approaches, said Zuzu’s Lynn.

“Companies that are not close to technology and working out how to fix the current base or thinking of reinventing more quickly will fall behind,” he said.

Founders and Entrepreneurs

“Founders must be single-minded because they essentially have to will an entire company into existence, against all odds, while those around them are saying it’s going to fail. But once you get to a company which is as big as Agoda, there’s no way the CEO can call all the shots,” Brown had said once during an interview.

Talking about how essential it is for a CEO to be a good listener, he said, “Given we have such great people, my job is really more to say ‘this is an important question. Let me listen to all the people around the company, hear who’s got a good idea’ and decide who we’d want to listen to on each one.”

To be successful at Agoda, one would need be adaptable and have a lot of grit, he mentioned. “What we’re doing one week may not be what we’re doing the next week and it may feel a little bit frustrating.”

Morgenshtern, the CEO-in-waiting prefers to call himself a cross between Brown the entrepreneur and Rosenstein the co-founder.

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Tags: agoda, asia monthly, booking holdings, booking.com, expedia, fliggy, meituan, online travel agencies, trip.com

Photo credit: Agoda has been looking to aggressively strengthen its product inventory. Agoda.com Media Library