Phocuswright 2022: COVID Pandemic put kiwi.com on voyage of rediscovery

The OTA's founder Oliver Dlouhý told Travolution that the global health crisis prompted a complete rethink of strategy as it aims for much-loved brand status

The COVID pandemic helped Czech OTA Kiwi.com rediscover its purpose and prompted a refocusing on its flights business. 

Oliver Dlouhý, founder and chief executive of the firm, told Travolution at Phocuswright in Phoenix, Arizona, last week that it took the decision to "scrap everything except for flights".

Prior to the pandemic kiwi.com, the pioneer of virtual interlining in the B2C market, had embarked on a multi-modal strategy in a bid to integrate ground transport with flying. 

Dlouhý said: "In the pandemic we realised who were actually are. We were doing lots of things; packages, internodal, combining flights with trains and buses, city mobility.

"But the pandemic forced us to reconsider who we actually are and what we want to do. So, we scrapped everything except for flights. We believe there are things we do in flights that  others can't. That's our USP. This is how we deliver customer value."

Dlouhý said what he believes differentiates kiwi.com from rivals us that it "works for the consumers, not primarily for the airlines". "We are not paid by the airlines. What we do is we take away the anxiety of flying that they would otherwise have if they booked direct with the airline. 

"We sort out disruption, missed connections, delayed refunds, all the pain that has been experienced by customers forever."

Kiwi.com says it listened to its customers during COVID and built tools to address their complaints which Dlouhý said has seen it start "moving to become a much-loved brand for the consumers".

"Some things are operationally difficult for the airlines. One thing we do is virtual interlining. They cannot interline with everyone - it takes on average two years to make an interlining agreement. 

"When it comes to refunds it's simply convenient to pay later, to withhold the money. That's a business decision not to refund immediately. When it comes to disruption airlines are only able to rebook you within their network or alliance. Because we are airline agnostic we can book you with any airline.

"Many airline models are to try to be as opaque as possible to the consumer. They want to own them end to end and want them to use the services of their choice. Some use every opportunity to blame the OTAs to build negative PR and force consumers to opt for their range of choice."

Kiwi.com remains open to forging partnerships particularly in markets it does not understand well although Dlouhý said it was "picky" about who it works with. 

The firm has a roadmap of products it aims to roll out aimed at further addressing traveller anxiety. "We are going to bundle those products into some fares so many customers are not going to have to pay for them. Becoming a loved brand, this is a fundamental shift in the way we think about our business.

"We built our business on meta, however, when becoming a loved brand it's not about making money out of the transaction. It's about building a lifetime value, not necessarily about being profitable in the first, second or third transaction, it's about making sure customers are satisfied and then they will come back. We want customer to connect the kiwi brand with smooth frictionless travel."

Dlouhý said although there is some panic of the prospects for travel, particularly in Europe, next year kiwi is not seeing any impact of the economic downturn in its numbers.

Revenues have doubled over pre-pandemic 2019, he said, but he did voice concern over the impact of the continuing war in Ukraine. 

"If the war ends, and this is my biggest wish because it's insane, then I'm probably more optimistic than some analysts, as long as the war ends. We are 500 kilometres from the border and we have 50 people from Ukraine in our team, psychologically it's a very important topic for our company."