Spotnana founder & CEO Sarosh Waghmar
We’ve all heard of Software-as-a-Service, a cloud-based method of
licensing and delivering software that revolutionized the traditional
on-premises software model. Similarly, Travel-as-a-Service offers a cloud-based
solution for travel bookings that can be embedded within third-party offerings
like software products or websites.
Mirroring how SaaS upended the software industry within a few short years,
TaaS is poised to become a household term in the travel sector in 2024 as many
companies embrace the model for delivering travel to their customers.
Traditionally, companies seeking to launch their own travel solutions
faced limited options: purchasing an established online booking tool provider,
forming a loose integration with a partner, or building a booking solution from
the ground up. Examples of recent acquisitions include Coupa's acquisition of
Pana and Yapta, US Bank's purchase of TravelBank and Certify's acquisition of
assets from NuTravel.
Given the high cost of acquisitions, many software companies prefer to
form loose partnerships with online booking tool providers. Meanwhile, most
suppliers have developed their own websites for booking management. Both
approaches, however, have significant drawbacks. Loosely integrated solutions
often result in a disjointed user experience for travelers, while custom-built
booking sites can be expensive to develop and maintain.
Recently, Travel-as-a-Service has emerged as a compelling alternative in
the market. In 2021, Capital One initiated a partnership with Hopper. Last
year, Walmart unveiled a unique travel platform for its shopping club members,
powered by Expedia Group’s white-label template. Brex, Center, and Qantas
launched travel solutions powered by my company Spotnana last year.
Why 2024 Is the Crucial
Year for TaaS
TaaS’s emergence is a direct result of recent advancements in cloud
computing, microservices-based software architectures, NoSQL databases,
composable user experiences, and progressive development of open APIs with
sub-second latency. The convergence of these technological strides has enabled
the creation of embeddable travel solutions that are customizable, deeply
integrated, and can be seamlessly incorporated into existing systems. The
acceleration in TaaS adoption is driven by several key trends in the travel
industry:
Intense Competition for
SMB Customers—Post-pandemic, small- and medium-sized businesses have resumed business
travel more quickly than larger enterprises. As a result, suppliers are
increasingly focused on driving direct bookings from SMBs. Concurrently, more
software companies targeting SMBs want to include travel in their service
offerings. Financial services companies with loyalty-based credit card
offerings and a growing number of travel management companies are similarly
inclined, each seeking a competitive edge.
Content Fragmentation and
NDC Adoption—An increasing number of content sources are emerging, offering optimal
content, pricing and customer experience through direct API integrations. The
growth of New Distribution Capability has contributed significantly to this
fragmentation. As airlines increase prices in EDIFACT distribution channels and
offer attractive benefits through NDC, such as continuous pricing, enhanced
fares, and custom negotiated bundles, more corporations are considering
transitioning to NDC-ready solutions.
Rising Traveler
Expectations—Advances in online shopping experiences in other sectors, including
personalization, one-click purchasing, and self-service returns, are shaping traveler
expectations. Companies aiming to start selling travel or enhance their current
offerings want partners to help meet these evolving expectations and provide
continuous innovation to their customers.
Watch for more early adopters to announce partnerships, launch solutions and
share their results in 2024. Their work will mark the beginning of a
transformative wave in the travel industry.