Is 2014 a tipping point for online travel distribution in Asia-Pacific?

As the travel industry starts to mature and new disruptive forces enter the fray, are travel brands ready to pivot?

NB: This is a report by Pamela Whitby, editor for EyeforTravel.

Picture this scene. You’ve got Google, Expedia, Kayak, Skyscanner, and Groupon – all, if they aren’t already, potential business partners – in a room full of travel suppliers.

In a world where many travel brands want to drive more direct business, why should you partner with them?

How are these companies – all in competition with each other – going to assist or hinder your efforts?

What are they focusing their energy right now? Can they help you win the next billion Asian customers and propel you into the next phase of online travel?

These are pressing questions for brands operating in, or looking to gain a foothold in Asia Pacific.

By 2030, tourists from Asia will lead all regions of the world in total departures and travel expenditures. It’s a booming market and there are huge opportunities – as well as some significant challenges.

So, who is ready, what do they bring to the table and what exactly does this mean?

Now, take a closer look at some of the key emerging trends in APAC and what many players are, or should be thinking about right now.

Ready to pivot? Are peer-to-peer and villa rentals the next big thing?  Is this a tipping point in online travel?

Sean Seah, MD of Groupon Travel thinks so. “I think we’re at a pivot point. What I call travel 1.0 – the OTAs, search engines and pretty much metasearch too, which has been around for ages, have matured,” he says.

In APAC, specifically, this is a whole new segment, which could seriously shake up and disrupt the distribution model.

“In 2014 and 2015, the whole peer-to-peer model, like Airbnb and vacation rental space, like HomeAway, will be huge and that is going to make it even harder for travel suppliers like hotels to play the game, as these other guys are going to be just as good,” says Seah.

In Asia, there are still huge opportunities to run villas – especially for groups and families – in, say, Phuket and Bali.

“The OTAs have brought transparency to the hotel space, but there is absolutely no transparency in the market for villas,” explains Seah.

In other words, they are hard to find, very few are doing it and nobody has – as yet – gained critical mass. Things are changing, though, this represents one of the greatest opportunities in APAC.

Mobile: It’s massive and it’s mainstream

For Skyscanner’s Andy Sleigh, general manager, APAC, you simply can’t succeed in APAC unless you understand mobile and are prepared to take advantage of mobile growth in a region, where around a third of the four billion strong population have access to the mobile internet.

“We take a mobile first approach – it’s a no-brainer when your mobile traffic more than tripled as ours did last year.”

Expedia could not agree more.

Says Traci Mercer, vice president, Market Management – Asia Pacific at Expedia Lodging Partner Services: “Mobile is massive, mainstream and the marketplace for travel is – Now!”

With mobile as the mainstream medium, Mercer says Expedia will be considering what the next “well” is for new customer acquisitions. Watch this space.

Where next for wearables…and the smart TV?

For Mercer the big question is: “As we play this forward [the fact that mobile is now mainstream], what do wearables and smart TVs do to online commerce?”

In APAC, Mercer points to a leapfrogging of the PC in favour of smartphones and tablets or ‘phablets’ and this, along with the emergence of low cost carriers, is creating a larger middle class and creating an abundance of new travel consumers.

Of course, when it comes to wearables, we aren’t just talking Google Glass, and there is plenty of room for innovation on this front.

Keep it clean, simple and transparent

What Kayak has seen through continued growth in 2013 is that there are similar user preferences across its various regions, and if we are speaking of integrity, it’s important to be transparent too.

“Consumers across all regions prefer a simple, intuitive and clean user interface, comprehensive search results, a fast response time, transparency in pricing, and a seamless multi-platform experience,” says Debby Soo, vice president – APAC.

Kayak believes it is able to take its widespread and deep experience with consumer preferences in the US and apply those lessons to markets like Europe and Asia.

Customise, localise, be where your customer is in the best possible way

In the hyper-competitive travel sector, brands cannot afford not to compete on local, customised content.  A priority for Kayak in 2014 is to customise and localise its travel search technology (that powers flights, hotels, cars, holiday packages), and also the content to fit the needs of the Asian traveller, says Soo.

Of course, this means various things in various markets. As Seah points out, there is a clear dividing line between South Asia and North Asia.

“In South Asia, which takes in Singapore, Australia and New Zealand, for example, independent travel is commonplace,” he says. “But in North Asia, people typically have bought packages and a lot of OTAs have struggled to bring these packages online in a meaningful way.”

So yes, there is plenty of opportunity in North Asia, but, Seah warns that “it’s a harder game to play”.

Is social coming of age?

Most brands today use social for brand marketing rather than performance marketing. But if you’re a smart outfit – like a hotel chain – working with a smart agency, then the short answer is yes.

Starwood, an American hotel and leisure company that owns the likes of Westin, Sheraton and The Luxury Collection is one.  For years, it’s been active across a number of social networks including Twitter and Facebook.

As far back as 2011, it claimed that around 36% who follow a hotel on Facebook and Twitter will buy more from that particular hotel or chain. This was a percentage it wanted to see increase. In October 2013, Starwood reportedly made $2 million net in additional room sales from one fan page alone.

Go big, go international

While each domestic market needs its own special focus it is important to have a strong international perspective. After all, the huge and growing numbers of Chinese independent travellers – all 100 million of them – are outward bound.

And on top of this, low cost carriers in regions like Southeast Asia could give rise to more international travel by independent travellers.

Says Sleigh: “International travel is dear to Skyscanner. We pride ourselves on our international coverage – 80% of our business is outside our home market.”

In a recent interview with Sion Rapson, director of Global Business for the World Travel Awards, sums it up nicely: “Think big, think global, don’t be afraid to take risks and always act with integrity”.

NB: This is a report by Pamela Whitby, editor for EyeforTravel. It appears here as part of Tnooz’s sponsored content initiative.

NB2: EyeforTravel’s  Travel Distribution Summit, Asia takes place in Singapore from May 27-28

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NB3: Trend image via Shutterstock.

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Pamela Whitby

About the Writer :: Pamela Whitby

Pamela Whitby is an independent writer, editor and researcher. She currently edits and writes for EyeforTravel.com on a part-time basis.

Her work has appeared in media outlets that include the BBC, Economist Intelligence Unit, Investor’s Chronicle, the Daily Telegraph, the Observer and News Desk Media. 

She has also consulted to various organisations, including the European Commission, has co-authored a book on South African’s renewable energy sector, and is the author of Is Your Child Safe Online?, a guide for parents.

Pamela grew up in Africa where she retains strong connections both personally and professionally. www.pamelawhitby.com

 

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