From opportunity markets to product innovations to new tech, a lot was discussed at this week’s WIT Conference in Singapore. Here are the eight key takeaways.
- The Next Billion Users and it will all be mobile
Most of the major travel brands, from Facebook to Google to Airbnb, are eyeing the next billion users and they will come from emerging markets in Asia, and they will all be middle class, young, mobile and social.
Indonesia and the Philippines factored strongly at WIT with Henry Hendrawan, chief financial officer, Traveloka talking of the Indonesia and South-east Asia opportunity, which is a key reason for Expedia taking a $350m minority stake in the Indonesian leading OTA. Spending time in the US has prepared him and the three founders for their destiny in building up South-east Asia’s first travel unicorn out of this country of 261 million people. “I call South-east Asia the world’s best kept secret and maybe we should keep it that way,” he said. Traveloka will keep its focus on South-east Asia for the immediate future.
Michael Szucs (left), chief executive advisor of Cebu Pacific Air, said the Philippine growth story is middle class, social and mobile. If you are not in social, he said, you don’t have a chance. And beyond marketing, social is big in customer servicing. From call centres, his airline now runs command centres where staff monitors social media channels around the clock.
And of course let’s not forget China which will produce a total of 800m outbound travellers by 2034. The personal story told by Jane Sun, CEO of Ctrip, of her rise from penniless child (her family’s income was US$15 a month) to now chief executive of a travel company valued at approximately $25b, speaks of the phenomenal rise of China. She said she was lucky to have experienced such growth in her lifetime but imagine what could happen in her two children’s lifetime.
As Chinese brands like Ctrip globalise, the influence of China will be felt not only in Asia but around the world.
- Payments is the new frontier
With blockchain and cryptocurrencies being talked about as the new disruption in fintech, travel brands are trying to figure out how they can get into that space with most of them citing payments as the new tech they are watching.
Paytm, India’s mobile wallet, which started out as a service inspired by vegetable vendors in China, is now selling flights, hotels and low cost carriers, and received a payments bank licence this year. Ctrip has its Ctrip wallet. Traveloka has also talked of building a Traveloka wallet.
It was perhaps no surprise that the WIT Startup of the Year 2017 prize went to Troovo, a virtual payments processing system, for travel. David Zimmer of Travelport, which sponsored the competition, said “it is a game changer for the industry if it can truly do what they say”. Troovo (right) wins US$30,000 seed funding anda place in the Travelport Labs Accelerator Programme.
- Software is the new gold
In his presentation on “Asia is eating the world”, Filip Filipov, vice president product management, Skyscanner spoke of how software was changing everything and that most of the software innovation was coming from Asia – from chats to facial recognition and payments and even QR codes (so loved in China) which are coming back in vogue.
In airlines, software is the new alliance. Traditional airline alliances were more at the product and operations level. Cebu Pacific Air’s Szucs, who’s also chairman of the Value Alliance, the world’s first alliance of right regional low cost airlines in Asia, said software is the new glue – one distribution platform, one payment – and Air Black Box, the new software startup, is powering that alliance.
- Data is the pot at the end of the rainbow
Bobby Healy, CTO of CarTrawler, speaking of an autonomous future said investors who were betting on loss-making companies like Uber or Lyft were not investing in the current models but what they could become – giant storehouses of data. Airlines and hotel companies have to figure out how to monetize their data assets so that they can grow revenues beyond their physical assets or better yield revenues.
Whether that’s in selling of ancillaries – Peach Aviation CEO Shinichi Inoue (right) spoke of how the airline managed to sell US$300,000 Volkswagen cars as part of inflight sales – or whether it be in personal pricing or personal productisation, data is at the heart of it. Richard Hatter, general manager of Hotel ICON, Hong Kong spoke of how his hotel was experimenting with personal pricing by targeting a specific set of young, single women in South Korea with bundled packages.
If personal pricing becomes a reality, then what happens to loyalty we know it?
- Corporate travel is the next wave to be disrupted
Data also helped Ctrip contact its customers within less than an hour during the shooting in Las Vegas, said Jane Sun, CEO. It was able to contact and locate its customers within the Ctrip app ecosystem. Duty of care is considered the sacred beast of corporate travel and is the reason why many corporations are reluctant to let their employees book outside their programmes and policies.
Booking.com has launched a corporate travel product for SMEs. Rod Greyber, CEO of Egencia, said consumerization of travel was impacting the $1.3 trillion corporate travel market and would have the biggest impact on the unmanaged business travel segment which forms about half of the total market.
Egencia, with $7b total gross bookings, is expanding into Asia and initial growth in the region would be organic initially although he did not rule out the possibility of acquisitions.
Greyber said no one should feel satisfied with what they’ve done so far in this space because as far as he’s concerned, it’s all just beginning.
- Marketplaces vs specialists
The jury is still out on who will win in the next wave of ecommerce in Asia but perhaps the Asia travel market with so much headroom for growth will have enough room for everyone. Marketplaces offer choice and price comparison – Wego, Trivago and Skyscanner are clearly in this bucket – while specialists like Booking.com and Agoda serve up recommendations for you, arguing, too much choice is confusing.
Agoda has been able to shift its customer acquisition through its app strategy (5.5 million users) while Trivago is working on using AI to provide better matches between its hotels and customers, much like a Tinder-model, which is what Japanese e-commerce giant, Rakuten Travel, is doing with its hotel matching model. The Rakuten group has 1.1 billion members and over 20 years, has created a points ecosystem within the group to foster member loyalty.
Grab has signed a partnership with Singapore Airlines, deepening its reach into travel. Through its core transportation service, it provides 3 million rides a day in the region – imagine the data it is amassing – and has launched GrabPay, marking its move into financial services.
- New tech to watch – voice, AI and Google Pixel Buds
Amazon Alexa, Google Home and now enter Tmall Genie, Alibaba’s answer to voice. It’s come later to the party but it has signed an agreement with Marriott to go into 100,000 Marriott hotel rooms in China, the first to bring the voice assistant into hospitality at scale. While it’s still early days in terms of getting people to book flights via voice, Oliver Heckmann, VP engineering for travel and shopping, Google said voice was more natural and it would happen one day. He’s clearly very excited about the Google Pixel Buds, which will offer real-time translation in more than 40 languages. To be retailed later this year, this could be the game-changer for travel, bringing down language barriers.
Asked if this would take the mystery out of travel, Heckmann said perhaps it would create more mystery because people would be emboldened to venture further.
Melissa Yang (left), co-founder of Tujia, peeling back the skin on AI said if we focused on what AI can do that humans cannot, it would lead to a better world and better travel.
AI can tell the levels of crude oil and predict supply and demand patterns and it can aid crime detection.
In travel, it can make recommendations based on getting to know your profile. Imagine combining that with a human assistant for the final mile, she said.
8. Dare to Dream
One question asked at WIT was what could the industry do together to create “Better Travel”. John Traas, regional director, South Asia Pacific for Booking.com picked the environment and suggested the idea of a sustainable tourism fund, supported by major travel brands. Ross Veitch, CEO, Wego proposed the idea that the industry could work collectively on gathering and using data to remove friction points at immigration and security.
One key conclusion though is that it is clear that as lines are blurred, the walls between online and offline will come down – Airbnb building its own home-hotel hybrid property in Florida, Amazon buying Wholefoods, Ikea buying taskrabbit, AccorHotels buying not only hotel companies but hotel tech solutions – the possibilities are endless and that’s what makes travel so exciting at this stage of the journey.
Here’s to Better Travel.
- by Yeoh Siew Hoon
Published with permission from WIT: Source – http://www.webintravel.com/letter-singapore-8-key-takeaways-creating-better-travel/