Agoda is a force in Asia, coming in second to Booking.com as the top booking channel in the region, according to SiteMinder.
In Southeast Asia, it has a particular advantage as a brand grown in the area (the online travel agency was founded in 2003 in Thailand and is currently headquartered in Singapore).
According to Ittai Chorev, chief marketing officer at Agoda, much of its success in Southeast Asia is due to its technology, which it developed to meet the region's unique customer needs. Agoda also has the help of resources from Booking Holdings, which (then as the Priceline Group) acquired the platform in 2007.
Below, Chorev discusses how Agoda tries to deliver on what customers want, how new features like Mix and Save have played out, its partnerships with Priceline and Grab and more.
Can you talk a bit about Agoda’s strategy against other local online travel players in Southeast Asia?
We have a customer‐first approach, which means we are passionate about making sure we deliver what our customers want. And we find our customers want the best prices and widest choice of accommodation or flights to choose from.
So we have used our technology expertise to optimize on price; to develop a frictionless user experience whether on our app, desktop or mobile platforms; and to help personalize our customers’ user journey.
How does Agoda compete against major online travel companies, including those under the umbrella of Booking Holdings, which owns Agoda?
We have to be better than any competitors at delivering what travelers want. That means developing the best technology to ensure our customers can quickly and easily search and book accommodation or flights on our platform.
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How does being under the umbrella of Booking Holdings benefit the platform?
We are brands with independent strategies and business models, but we can share knowledge, inventory and collaborate on projects - such as Agoda and Priceline’s recent flight product partnership - to leverage opportunities and maximize growth for the group.
What are some of the biggest distribution challenges Agoda faces?
Agoda is primarily a B2C company serving as a platform for customers to book their travel online. We do also work with a variety of distribution partners to reach customers that we otherwise might not be able to reach like those booking through offline travel agents.
How successful has Agoda’s Mix and Save feature been, and what are future plan for it?
We introduced Mix and Save to solve a specific customer issue. It’s basically a hacker fare that allows a customer to make savings of around 20% on hotels by getting the best deal on different room types over the duration of their stay.
If we can compete well in Asia, we can compete anywhere in the world.
Ittai Chorev - Agoda
Customers love it, of course not everyone wants to move rooms, but for those that are more price sensitive it’s a great way of saving money on accommodation.
Hoteliers benefit because they fill otherwise empty rooms and are viewed as more competitively priced than other accommodation providers.
Do you think the Mix and Save strategy is one other intermediaries or suppliers will deploy?
Yes, I am sure they are trying to develop the technology now.
Why is Southeast Asia an attractive market for budget brands?
Southeast Asia is attractive to brands across all price points not just budget brands because of the growth opportunities here.
This is Agoda’s our core region, and we have an advantage being headquartered here because we have had to develop our technology much more quickly to meet the demands of customers in this region, be it for mobile bookings, or fast‐adopted alternative payment platforms. If we can compete well in Asia, we can compete anywhere in the world.
There is still a lot of potential in this region. It is a competitive marketplace; new players with fresh injections of venture capital are entering our markets so this competitiveness and focus on price has really helped us to concentrate on what customers really want and develop products to suit their travel needs.
How has interest in alternative accommodations grown?
Alternative accommodations is moving mainstream. It’s not only about a quirky treehouse or igloo, or a room in a shared house. It’s now a family villa or penthouse suite offered by individuals or property companies that have sprung up to meet evolving travelers’ needs.
We are rapidly expanding our Agoda Homes portfolio as well as other feature filters to help make it even easier for travelers to find their preferred accommodation, and now offer more than 1.1 million Agoda Homes properties on our platform.
How has Agoda’s partnership with Grab helped attract customers?
People use Grab every day for transport, food or payments, but may not be loyal to any specific hotel or OTA. Our partnership means these customers get access to Agoda’s accommodation and flights at great prices through their trusted super app, which is a win‐win for all.
What dictates traveler decisions in Southeast Asia ‐ price, amenities, things to do?
All of the above, but price remains a major decision factor for this region, and it is why we are so passionate about making sure we find the best prices for our customers every time.
Has there ever been a consideration to add more to Agoda, such as tours and activities?
Absolutely, but we haven’t maintained growth and profitability by jumping on the "next thing"; we always experiment first to make sure there is a customer demand. We offer hotels and homes, airport transfers, experiences and, most recently, in August, we launched an integrated flights product, which was developed in collaboration between Priceline and Agoda.
Where is there still room for offline channels in travel?
We believe there’s definitely still room for the offline channel, but we’re primarily focused on the fast-growing online segment. We do believe in this segment like our partnership with JTB shows, there is a need for those channels to embrace and improve their technology. There is no advantage to having the biggest and best inventory if customers can’t reach it how and when they want to book.
How important is marketing to Agoda’s customer acquisition strategy? Does Booking give an advantage here, compared to how other local players market their product?
Being a relatively low-frequency business, marketing is very important because even happy and loyal customers might’ve not used our product for relatively long times between their travels and need to be reminded through marketing.