Why did we invest in OnArrival?
Imagine you need to plan a trip to Italy. You will book your flights with one seller, and hotels with another. For additional services like insurance, visa, restaurant reservations, cabs, etc., one might choose to go with previously used sellers or start with a Google search. Your email continues to be the only app with all these bookings in one place.
All critical components (besides flights and hotels) that make your trip possible such as visa, forex exchange, on-ground tours and activities amongst others are referred to as travel ancillaries. Understanding this market requires an understanding of 3 critical components:
Traveler 🙋♂️: The end consumer who is actually taking the trip for leisure or business purposes.
Travel ancillary supplier 🧳: Anyone who sells travel-related ancillary services. E.g. insurance providers, visa service providers, airport lounges, flight information services, cab services, etc.
Travel Seller 🗺️: Anyone who sells travel but is not the owner of the end service. E.g. Online Travel Agents(OTAs), travel agents, B2B aggregators, corporate travel management companies, etc.
A traveler today has limited ancillary choices available for her trip from existing travel sellers as these sellers often work with just one partner, and often with pricing disadvantages. For example, you can find only 1 option for flight insurance on India’s largest online travel agent, MakeMyTrip. However, selection and pricing play an essential role in travelers opting in for ancillaries.
Travel ancillaries is a large, fast-growing and high-margin market. Collectively, in-trip ancillaries represent $330bn in TAM, growing in double digits in the post-pandemic world. However, travel sellers haven’t been able to scale this opportunity primarily due to technology constraints but also the lack of innovation with respect to user experience of the end consumer. Currently, ancillaries are very tough for travel sellers to onboard and integrate, since the current ancillary integration process requires a substantial amount of investment, time and technology bandwidth.
This is where OnArrival comes in.
OnArrival recognizes this latent opportunity and aims to revolutionize the travel ancillary market. By providing a single stack for ancillary integration to travel sellers, OnArrival aims to unlock the revenue potential of this lucrative market.
The solution to achieve this is three-pronged:
For Travel Sellers - One API for the ancillary stack
Travel ancillaries can be divided into 22 verticals including but not limited to visas, on-ground transportation, insurance etc. Travel sellers have been unable to expand into more ancillary categories due to the complexity and tech prowess needed in managing each category.
The current ancillary integration process typically takes 9-15 months of a travel seller’s time, including (very precious) technology bandwidth. A partnership team within a travel seller starts with researching sellers, then engaging in a pre-partnership journey and requesting proposals. After the final selection, one partner emerges. This partner then moves into the legal, IT compliance, & finally, integration phase. This entire process today takes anywhere between 6-9 months. Another 3-6 months are required to fine-tune the product journey for the end consumer.
Creating a single API for travel ancillaries will be the foundation on which more things can be built.
2. For Suppliers - Mid-office SAAS platform and Supplier APIs
Ancillary suppliers today depend on a mix of email & WhatsApp to do business. While this approach works to a particular scale, order management becomes an issue.
OnArrival’s mid-office platform is a platform built on top of supplier APIs to allow for easier integration and order management. The mid-office platform also enables travel sellers to create orders and send them to the supplier of their choice without an API integration.
On the other hand, travel ancillary suppliers can process the orders based on their internal workflows. These suppliers use the mid-office platform as an origination point for a confirmed booking and are able to use it to provide timely updates, send confirmations and process orders within their system. The mid-office platform not only assists them with their workflows but also enables distribution.
For instance, think of a mid-market supplier who doesn’t have any tech stack. As a consequence, they are unable to sell travel ancillaries to any enterprise. As they start using the OnArrival Mid-office SaaS platform, they can then go and start distributing the OnArrival API as their own.
3. Financial settlement
Each ancillary product line that travel sellers can access through OnArrival will be facilitated by multiple different suppliers across multiple different geographies, thus complicating the reconciliation and settlement process. Most ancillary suppliers have complicated cash flow and working capital requirements as they work on credit with travel sellers.
Collectively, Onarrival’s solution will enable any travel seller to stitch a traveller's broken experience into a seamless booking flow. It will be a paradigm shift in how travel will be sold & bought in the future. Their innovative approach, robust technology infrastructure, and strategic partnerships with travel sellers and ancillary suppliers will propel them to the forefront of the industry and power a billion trips in the next few years.
The idea of enabling connected trips powers this company.
A traveler should have all information about her trip synced in one place. A simple example of this is to imagine if you have booked an airport transfer for a flight landing at 10:30 pm in Bangalore. If your flights get delayed for whatever reason, it's a task to coordinate with the cab driver. In a connected trip experience, the driver is updated in real-time about the potential delay in flight so that you don't have to worry about it.
This is only possible by having the end customer, travel seller, supplier, & trip data on the same platform. A future product manager will then build this journey on OnArrival to create a delightful customer experience.
Travel sellers historically have a problem with retention as the average frequency to travel is 1.8 trips per year. This low frequency, coupled with pricing being the deciding factor, puts a lot of pressure on customer acquisition costs. With virtually no other differentiation than the quality of service, these folks are looking at how better to help a traveler during his trip.
Working with OnArrival, a travel seller can ensure that they have many more touchpoints with a user during their trip. This will not only provide a more significant share of their travel budgets but also increase the LTV of that customer significantly.
OnArrival will add more verticals & provide a global Travel-As-A-Service (TAAS) platform built on the latest travel technologies to ensure that their customers can focus on what they do best - create beautiful travel experiences.
We are excited to be part of OnArrival's journey and look forward to witnessing their meteoric rise in the travel industry.
