Japanese Online Travel Agency (OTA) giant Rakuten Travel has significantly expanded its international hotel inventory, now offering over 400,000 properties worldwide. This strategic move signals a major push by the domestic market leader to capture a larger share of the global travel industry, challenging established international players.
Background: A Japanese Titan Looks Abroad
Rakuten Travel, a core service of the Japanese e-commerce and tech conglomerate Rakuten Group, has long been the dominant force in Japan’s domestic online travel market. Leveraging the powerful Rakuten ecosystem, which includes e-commerce, banking, and a massively popular loyalty points program (“Rakuten Points”), the platform has built a loyal user base for booking hotels, ryokans, and travel packages within Japan.
While Rakuten Travel has had an international presence for years, its overseas inventory was limited compared to global behemoths like Booking.com and Expedia. This latest expansion is not merely an incremental increase but a clear statement of intent to become a serious contender in the global OTA landscape.
The Strategy Behind the Expansion
This move is driven by several key factors in the post-pandemic travel era:
Capitalizing on Inbound Tourism
With the Japanese yen at a multi-decade low, Japan has become an exceptionally attractive destination for international tourists. By significantly boosting its global hotel offerings, Rakuten can capture these travelers at their point of origin. The strategy is to introduce the Rakuten Travel brand to inbound visitors, who may then continue to use the platform for future travels outside of Japan, creating a virtuous cycle of customer acquisition.
Serving Outbound Japanese Travelers
As Japanese citizens resume international travel, Rakuten is positioning itself to be their platform of choice. Previously, Japanese travelers often had to turn to international OTAs for a comprehensive selection of overseas hotels. By offering over 400,000 properties, Rakuten can now keep its loyal domestic customers within its ecosystem, allowing them to book global travel while still earning and using their valuable Rakuten Points. In 2019, before the pandemic, approximately 20 million Japanese travelers went abroad, representing a significant market that Rakuten aims to fully service.
Leveraging a Powerful Ecosystem
The key differentiator for Rakuten is its integrated points program. Users can earn points from shopping on Rakuten Ichiba, using their Rakuten Card, or from any of the 70+ services under the Rakuten umbrella, and then redeem those points for discounts on hotel bookings. This creates a powerful incentive for the over 100 million Rakuten members in Japan to stay loyal to the brand, even when traveling internationally.
Future Outlook and Industry Impact
Rakuten Travel’s aggressive global expansion is poised to send ripples through the competitive OTA market.
Increased Competition for Global OTAs
While 400,000 properties is still a fraction of the millions listed by Booking Holdings and Expedia Group, it marks a critical mass that makes Rakuten a viable alternative, particularly for travelers in the Asia-Pacific region. This new competition could lead to more competitive pricing and promotional offers for consumers.
A New Distribution Channel for Hotels
For hotel operators worldwide, Rakuten’s expansion provides another major distribution channel. It offers a direct line to the lucrative Japanese outbound market and the wider Asian market where the Rakuten brand holds significant recognition. This reduces reliance on the existing duopoly of major OTAs.
The Rise of Ecosystem-Based Travel
This move highlights a growing trend of “ecosystem” competition. Rakuten is not just selling travel; it is selling a lifestyle integrated with finance, e-commerce, and loyalty. Its success will depend on its ability to convince international users of the value of its all-encompassing points program.
In conclusion, Rakuten Travel’s expansion beyond 400,000 global properties is a calculated and formidable move. By leveraging its immense domestic strength, a weak yen driving inbound interest, and a unique loyalty ecosystem, the Japanese giant is making a serious bid for a seat at the global travel industry’s top table.
