Decoding White Label Implementation Vs Self Owned Internet Booking Engine for Travel Business

When it comes to the First Steps towards going online, Travel Business are very cautious about the investment, possible ROI and the future strategic plan… i.e. how to grow the business, testing waters and running a Pilot. Established OTAs always are a threat and it becomes a challenge for brick and mortar travel business to take a decision on how to “travel with time”. On the other hand, in this competitive environment, it is becoming a necessity to be able to offer better services to customers/partners while reducing the over heads associated with the business. Online presence if implemented successfully can be one of the major contributors towards improving efficiency and reducing overheads.

During the course of analysis and possible options which can help Travel Business go e-way are numerous and confusing for the simple reason that prices vary from a few hundred dollars to the few hundred thousand dollars, Multiple Business models exists — White Labelled, Fully owned, Licensed or SAAS model etc. and expectations from the Travel Business owners are high.

This quick write up is an attempt to find out the differences in these Business Models, Cost Effectiveness in short and long terms and positive and negative attributes of each of them.

White Label

Going by the dictionary Meaning, A white-label product or service is a product or service produced by one company (the producer) that other companies (the marketers) rebrand to make it appear as if they made it.

The master travel agency owns the Booking Engine Application (Product Owner is Master Agency) who provides option of setting up a the white label site for the Affiliate (you or the Travel Business). The control of the affiliate on the white label is limited to the extent that affiliate can see your own bookings, add your markups on the purchase prices and manage your account which must be done via login on the master agencies’ admin panel to make all the setting etc. using web based access.

Some of the downsides:

  • All the bookings and associated requests are processed by the Master Agency.
  • Suppliers and services which will surface will be based on the master agency application, you can not additional services of choice.
  • Rule Engine is controlled and handled by the master agency.
  • All the data also resides with the master agency including the Switch On/Off of the portal.
  • Can access and sell the inventory only from the White label provider i.e. Master Agency who is offering the white label
  • All the payments are received in the bank account of Master travel agency and not the affiliate partner (B2B) — Some Whitelabel may have support for the Affiliate Payment Gateway but very limited.
  • Your commission on the sales completed accumulates in the Account of the B2B partner in form of deposit but not as cash
  • The Look and feel can be customized only from the Header/Footer but is completely driven by the Master agency and controlled by the master agency only. Almost nil UI control is available with the White Labeled affiliate.
  • Sub Agencies cannot be created and managed — Unless Master agency have any such option.
  • Design limitation i.e. vouchers and ticket prints are predefined, restrictions of the Logo to be used.
  • Data confidentiality is not maintained, all the customers data of your company will be sent to the master agency as the database is owned and managed by the master agency
  • Runs on the infrastructure owned by master agency.

Upsides:

Cost is very less i.e. few thousands which encourages the travel business to take the first step and test waters
 Experience the Online Business and validate the business model
 Low risks
 No recurring costs for Infrastructure, management, maintaining uptime etc.

Cost Effectiveness — Short Term — Yes, Long Term — No

Product/Application ownership: NO

Company’s Self owned Booking Engine (Licenses from a Technology Partner)

In this model the application (Booking Engine) license is owned by your organization, running on your own server and has different predefined sources to fetch the data. In this case you can take API from desired travel content providers and the technology partner integrate the API with the booking engine. In case you work with a third party (consolidator) for issuing your tickets, there are 2 different ways of processing it.

  1. You can take the API from the CRS/GDS directly e.g. Galileo/Amadeus/Sabre/Worldspan etc and technology partner can configure the system so that after the booking (PNR is reserved) Automatically the Ticketing can be done using your own quota or a third party consolidator’s quota.
  2. You can take the API from consolidator itself so automatically the ticketing is processed with them and hence no configuration required.

Ideally in this case where the application license is owned by your organization, the data is fetched using the API and the rendering of the information on the UI would be handled by the booking engine provider/technology partner. API based integration would give you a complete control over the UI, booking flow as well as the other aspects.

Upsides:

Independent System — Supplier Neutral so tomorrow if you wish to add more services to the system, you can add it by taking the API from the respective provider

  • You can opt for 2/3/4 consolidator integration at the same time i.e. Selected Airlines form a selected partners or so
  • Add multiple suppliers for same services i.e. Hotels, Car Rentals, car hires etc.
  • Internal LCC can also be integrated, provided you get the API e.g. customers travelling to India — you can even make bookings on the LCC carriers once they land here.
  • Look and Feel will be controlled by your team and can be made as per the choice.
  • Multiple Payment gateways can be integrated — for accepting payment from clients.
  • You can have business partners/corporate clients directly access your website with a predefined credit limit/Deposit and can make their own bookings.
  • Data is completely safe and secure and is in your hands only [even the tech company does not have any access to it]
  • Permanent License for your company

Downsides:

Need to have own dedicated team/in-house team
 Cost is more i.e. for procuring the system + associated costs (Server, admin, API etc)

Cost Effectiveness — Short Term — No, Long Term — Yes

Product/Application ownership: License to Use.

So if the plan is long term and sustainence is not a threat, it makes more sense to acquire own booking Engine with flexibility and scalability. There are some other model which persist and we will discuss them in next post — Fully Owned Application/SAAS Model for the IBE

Taken from http://ecaretechlabs.com/blog/white-label-implementation-self-owned-booking-engine/