Naver readying business trip arrangement platform on signs of recovery in travel

[Photo by MK DB]

South Korea’s internet giant Naver is readying to introduce a platform for business trip arrangements at the beginning of next year, a move that is expected to invite strong protest from travel agencies and smaller booking sites.

According to Naver on Thursday, it has invited various domestic agencies to join its new business trip platform that is targeted towards small and medium-sized companies as well as smaller travel agencies.

Naver’s business trip platform would present a list of available flights and accommodations for business trips. The platform will be equipped with optical character recognition (OCR) technology that will automatically process payments.

These functions will greatly streamline the booking process for small and medium-sized companies that do not have travel agencies to plan their business trips for them.

The platform also has a customer satisfaction (CS) service to respond to complaints.

Naver expects the platform to help small and medium-sized travel agencies attract more customers, but its move could be protested by agencies as means for more commission revenue.

“Naver has set commission fees at around 1 percent of total sales but because only a small percentage of travel agencies’ profits are from flight tickets, 1 percent is a large amount,” said an official from a travel agency.

There are also concerns that there will be more large travel agencies than small and medium-sized travel agencies on the platform which may lead to a price war. Customers will naturally be able to compare prices on the platform and smaller travel agencies may struggle to keep up in a race to lower prices in order to remain competitive.

Business travel expenses are expected to surge to $1.4 trillion by 2026, reaching levels last seen in 2019 while full recovery to pre-pandemic levels is expected sometime in 2025 due to soaring inflation and supply chain disruptions, according to a recent report by Global Business Travel Association (GBTA),

Shares of Naver traded up 1.83 percent at 167,000 won ($119.40) at 1:51 p.m. on Thursday.

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