Deep dive into APAC online travel agencies – Part 2

With increasing disposable income and expanding tourism, Asia Pacific has become the fastest-growing regional travel market. According to the World Travel and Tourism Council, five of the world’s ten fastest growing tourism cities are in Asia, making it the hot spot for the travel marketers. Propelled by high penetration of mobile, the region has been witnessing double digit growth in online booking, making it a priority region for global OTAs. However, the market is still dominated by local and regional players, even as global OTAs make strategic investments to make inroads.

In our series on Online Travel Channels in APAC, we have looked into major players shaping the digital travel space. In the first article of the series, we have discussed the giants in the region – Agoda, Ctrip and Make My Trip and their secret sauce to success. In this second part, we will be focussing on local players who are dominating the online travel space in their respective regions.

Fliggy

Fliggy (formerly known as AliTrip) – the travel booking site from Alibaba, is an important player in the China focusing on the upmarket segment – particularly the travel aspiring millennials and international travellers. Of the 10 million daily active users on Fliggy, 80 percent are millennials with college degree living on tier-1 and tier-2 cities – giving the platform a unique exposure and reach. Alibaba has also positioned it as a “premium” travel booking site focusing on outbound travel. The site is designed as youthful, refined, geared toward long-haul, leisure, experiential, as well as luxury trips, rather than the usual to short-term or domestic business travel. From its partnership with Marriot group to getting Booking.com to launch a flagship store on its platform, Fliggy has been making a series of strategic partnerships to create a global brand. Leveraging Alibaba’s ecosystem, which is used by 699 million mobile monthly active users, the platform is positioning itself as a travel marketplace covering the 360 degree of travel to provide consumers with better travel products and service experience. This means a traveller with high purchasing power can plan and book their travel on Fliggy, buy additional items necessary for travel from Alibaba owned e-commerce site Taobao while using Alipay for transactions, ensuring a seamless user experience throughout.

Rakuten Travel

Japan’s online leisure/unmanaged business travel market is the second largest in Asia Pacific region. Founded in 2002, Rakuten Travel is one of Japan’s largest online hotel reservation website with over 3.7 million room nights booked per month. The channel receives 5.34 million unique visitors every month. The firm has access to more than 20,000 domestic and 15,000 international hotels and has a presence in South Korea and China. Rakuten Travel, which is the most popular OTA in Japan, is owned by Rakuten Group, which provides more than 70 e-commerce services beyond travel. The group, often compared with Amazon connects services within its ecosystem enabling users to access all services within the system by using a single login ID, and the same loyalty program for a seamless experience. The company has invested heavily into artificial intelligence and big data for understanding changing consumer behavior and effective personalization.

Traveloka

Traveloka, one of late entrants in the market and founded by three friends in Indonesia, is one of the biggest success stories in the online travel space in South Asia.  The channel which offers flights, hotels, trains, tours & activities, transfers and packages is present in Southeast Asia’s six primary markets — Indonesia, Thailand, Malaysia, Singapore, Vietnam and the Philippines. With the introduction of PayLater, an online credit system without the need for a credit card, Traveloka is poised to make further inroads into the region where relatively low penetration of credit / debit card has remained a hindrance to online payment. The channel is also actively pushing into the lifestyle category and has recently rolled out a discovery platform featuring restaurant and wellness activities. The Traveloka mobile app has been downloaded more than 30 million times, making it the most popular travel booking app in the region. With Expedia’s investment into the channel making it the first billion-dollar start-up in Indonesia, the company has been adding more products and services including bundles to mobile applications to make it a one-stop-shop for customers to book and redeem travel themselves.

As hoteliers, are you ready to tap into the Asia Pacific market? Are you managing these channels well and keeping them automatically updated with rates and availability on a regular basis?

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The Week, That Was – July 2018 Week 1

In five minutes or less, keep track of the most important news of the week, curated just for you. We present to you hand – picked news on latest industry perspectives and some general updates. Read on!!

VHP Announces Connectivity Integration with RateTiger
Manage your online sales channels directly from one of APAC’s largest PMS, via RateTiger HotelChannelManager. Experience 2-way seamless hoteldistributionconnectivity for distributing rates and inventory to channels and getting reservations back into the PMS – all managed from the PMS interface.

https://goo.gl/SXFjEd

China’s travel tech companies make steady progress with AI
Use cases of artificial intelligence are being refined as Chinese technology companies become sophisticated with the handling of massive data volumes, crafting advanced algorithms and embrace improvements in computing power and storage. The application of AI is being used in improving the efficiency of traditional travel agents by working out a customized trip itinerary in a matter of seconds, recommending add-ons based on the traveler’s previous bookings or recent trip planning behaviors and curbing payment-related fraud.

https://www.tnooz.com/article/ai-travel-use-cases-china/

Next generation of travel tech leaders
The current crop of leaders of the industry were brought up on the early days of ecommerce. They created and integrated many of the systems and processes that are second nature today to how the online sector works. The next generation of industry leaders are digital natives, as the phrase goes, potentially giving them a different perspective on it all. Check out this video that discusses current issues and tips from the industry elders.

https://www.phocuswire.com/Video-young-leaders-travel-technology

Who are the biggest innovators in hospitality?
Ecole hôtelière de Lausanne put six innovation scenarios to test and asked hospitality industry executives what scenario(s) were more likely to take place in their organization within the next three to five years. Download the full report to know about the test.

http://hotelmarketing.com/index.php/content/article/who_are_the_biggest_innovators_in_hospitality

Economist: Hoteliers should prepare for a downturn
While the outlook shared by many hoteliers has remained relatively upbeat as the hotel industry has enjoyed a prolonged up-cycle, at least one economist warns that the good times probably won’t last much longer.

http://www.hotelnewsnow.com/Articles/287183/Economist-Hoteliers-should-prepare-for-a-downturn

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The Changing Dynamics of Serviced Apartment Segment in Asia Pacific

First things first! Let’s have a quick look at some statistics from the 5th Global Serviced Apartment Industry Report 2015 – 2016 which shows 14% growth in serviced apartment supply chain globally, exponential corporate, relocation and online demand and increasing investor interest in the sector.
·         748,437 serviced apartments worldwide operating in 9,875 locations
·         Inventory up 14% year-on-year and 80.1% since 2008
·         Apartment usage for assignment/project work growing in 72.73% of companies
·         Distribution widening – 75% of operators now receive bookings from OTAs

Asia Pacific contributes to these global figures in its own way. With strong economic growth in China, India and South-east Asia, improved infrastructure, high use of smartphones and increasing internet penetration, business and leisure travel has seen a huge growth. As business opportunities have increased rapidly in last couple of years, demand for serviced apartments have also doubled. One may ask why? While hotels provide comfortable rooms and good service, the benefits of serviced apartments include the comfort of more space, privacy, option to cook, flexibility, cost of stay as well as the overall environment which is more like a ‘home away from home’.
Outlook for 2016

The business travel market in Asia is growing at a fast pace. According to Global Business Travel Association (GBTA), Asia Pacific gets the largest share of the business travel spend followed by North America and Western Europe. This business travel boom, combined with Asia being a hub of skilled human resource and rapid economic growth is driving demand for serviced apartments across the region. With over 20% on-site assignments now lasting less than 12 months, serviced apartments have emerged as the preferred model due to value and flexibility. Global economic recession notwithstanding, demand for serviced apartments in South East Asia grew by over 25% over the past decade. Global players have taken note of that, and today Oakwood, BridgeSteet and Ascott are growing at the fastest pace in this region.
With economic slowdown in South Asia, the austerity measures will be advantageous for the sector as middle management business professionals, the primary target market, make arrangements for shorter assignments.
A changing landscape

A demographic change is happening across South East Asia – silently, but rapidly. The rising quality of living and increase in volume of foreign talent and tourists has created demand for quality serviced residences. Expats are coming back to their own countries and relocating from within Asia-Pacific. In China, for example, there is a strong demand for serviced apartments amongst the double income families with higher spending power.
With channels like Airbnb and HomeAway catering to demand specifically for serviced apartments, it shows the potential this segment holds. Various operators including BridgeStreet Global Hospitality Group are tapping Airbnb to widen their distribution network. Further, Ascott will have 2,000 units under its new Tujia Somerset brand of serviced residences in China by the end of this year. Tujia.com is China’s largest online apartment sharing platform equivalent to Airbnb and Tujia Somerset is a jointventure between Ascott and Tujia.
Industry experts believe that the serviced apartment industry in Asia is all set to grow in the coming months as the region continues to drive global growth with increased overseas assignments and projects.
Surge of tech-savvy travellers


Over half of the 3.4 billion internet users worldwide are from Asia-Pacific. This is due to the widespread adoption of smartphones in the region. An eMarketerreport shows that in 2015, total smartphone users in APAC was over 1 billion and by the end of 2019 it is expected to be nearly 1.5 billion or 51.5% of total mobile phone users. These new age travellers prefer to choose cost effective accommodation when they are travelling for business or study purposes and many of them prefer serviced apartments for long stays.
Shift from Offline to Online Bookings

Due to the positive economic growth and business prospects, countries like China, Hong Kong, India, Japan, Singapore, Philippines, Taiwan, Vietnam and Thailand have become transit hubs leading to a surge in demand for serviced apartments. Research studies show that almost 80% of corporate bookings are made online and around 27% of these bookings are made directly on the brand.com through the in-built booking option.
Interestingly, a TIN report on Global Serviced Apartment shows that 68% of serviced apartment operators are not represented on online platforms and most of these are unaware of internet booking engine. With more focus on this segment, it is important for serviced apartment providers to be visible on online channels and provide direct booking options for improved business and revenues.

This sector is already witnessing growth and expansion and attracting more operators, thereby increasing competition. Existing providers need to adapt to customer requirements and cater to market needs to stay ahead in the game. They need to install correct technology solutions in order to expand their visibility and market share.
Ram Mohan Dubey is the Regional Sales Manager for APAC at eRevMax. Please contact us at marketing@erevmax.com for any enquiries.

More power to Ctrip as Expedia exits China

With over 1 million transactions everyday makes Ctrip the largest OTA in China and a serious player in the online travel sector.  But with the latest news of Expedia selling its stake in eLong, China’s second largest OTA, shows that even a global giant is no match for the mighty regional online player. 

Last week, Expedia announced that it is selling off its entire stake in Chinese online travel company eLong to rival Ctrip.com International Ltd and other interested parties.  With Expedia’s share in eLong being 64%, this acquisition means Ctrip will have over 37.6% stake in eLong, making it the majority shareholder in the second largest OTA in China after CTrip.



In picture Fan Man (left), Co-founder, Vice Chairman and President of Ctrip; in a discussion with Vincent Lo, Chairman, Shui On Group at Fortune Global Forum 2013
To put things in perspective, Ctrip has a market share more than 6 times the size of eLong. After the acquisition, Ctrip with eLong will control over 60% of the Chinese online travel market, which according to PhoCusWrightestimates is pegged to be over USD 30 billionin 2015 excluding call center bookings. With online travel expected to grow in double digits, and accounting for only a quarter of total travel bookings, the scope of growth, needless to say, is enormous.

With Priceline’s$500m investment into Ctrip, the focus for Ctrip now shifts to newer and fast-growing rivals such as Qunar, Tuniu, and Alitrip, the travel arm of China’s largest e-commerce company Alibaba. Meta-search engines continue to be the greatest lead generator for Chinese OTAs and this causes concern even for Ctrip. Qunar – owned by China’s largest online search engine Baidu Inc – is considered the market leader in meta-search and the fastest growing travel channel and in 2014, Ctrip ended its strategic relationship with Qunar and prompting a price war between them.



For Ctrip, a strategic partnership with both Expedia and Priceline means access to broader inventories, which will help the channel to meet its objective of having wider product coverage. Already Ctrip has seen over 200 million downloads of its mobile application so far. Ctrip’s aim at the broader market has been quite visible for a while now. Earlier this year they entered into an agreement with Amadeus, whereby the GDS will provide content to Ctrip in international markets outside of China. With Chinese outbound travel growing at 20-30% buoyed by an increase in disposable income by the Chinese traveller and more flight routes and hotel inventory in new destinations will all help Ctrip capture the majority of these outbound bookings.

Over 100 million cash rich Chinese travelers are set to travel aboard this year in 2015. As more Chinese travelers travel beyond Asia, with strong branding and being a well-established online and offline channel make Ctrip best poised to benefit from the growing travel demand in China.  For the hotel industry trying to capture a piece this high growth Chinese market makes working with Ctrip a must.

Image Courtesy: FortuneLive Media, Ctrip
John Seaton is VP Sales, EMEA & APAC at eRevMax.  He can be reached at johns@erevmax.com

The Big 5 – a look into top performing channels in the APAC region – Part I

There are total 2.92 billion people in the world having access to internet. Nearly half of them or 1.3 billion are from Asia Pacific. Last year, Asia Pacific became the largest regional ecommerce market and now contributes for more than a third of all business to consumer ecommerce sales in the world. The increase in online penetration has changed the travel behavior which traditionally preferred travel agencies, group bookings and in-person sales. Many are now choosing to travel in smaller groups, or even alone and preferring to self-manage travel by booking online.

PhoCusWright reports that in 2012 APAC region surpassed Europe to become the world’s largest regional travel market with US$326 billion in gross travel bookings. Despite slow economic growth and political turmoil in some countries in the region, an average 8% growth is expected this year taking the online travel market to $126billion, which is pretty mind-blowing. With 46% APAC travelers planning to book online, no wonder global giants like Expedia and Booking.com are eyeing for a share of the pie, where regional OTAs still rule.
Consider this – 69% of Chinese OTA market is controlled by three regional travel agencies Ctrip, eLong & Ly.com. In India MakeMyTrip, Cleartrip and Yatra have 60% of the market share. Japan, one of the largest online markets in the region, is dominated by Rakuten Travel.
In this article we list out five online travel agents who are playing vital role in shaping the online travel industry in Asia Pacific.
MakeMyTrip, the only local site to be amongst the top 10 most popular online booking sites globally has been consistently dominating the Indian online travel market with over 47% market share.  Rising disposable income and the corresponding expansion of the Indian middle class have triggered more cash flow in households, opening up possibilities for spending and leisure. Working on a hybrid model which offers both online and offline travel services, MakeMyTrip now has a customer base of over seven million, and page views crossing 20 million every month. To cash on the smartphone led internet revolution in the country, MakeMyTrip has invested heavily on their mobile application with full booking capabilities for flights, hotels and bus ticketing across all major platforms.  The application which has seen more than 3.2 million downloads, more than 29% of their monthly unique visitors and 25% of total online domestic hotel transactions come from mobile.
With the rise in disposable income levels, and an expanding middle class, China has emerged as the biggest outbound market. China has 632 million Internet users and 46.9% of them are pure mobile. Ctrip which receives over 1 million transactions per day is the largest Chinese online travel agency by revenue and valuation.




Ctrip.com controls 54% of Chinese online travel market and receives 8.6 million monthly visitors to its website of which 73.52% comes from China only. Ctrip has been partnering with local regional travel portals to consolidate its dominance in Greater China. The channel has formed a partnership with Priceline which gives Ctrip access with Priceline’s 500000 inventories and improve the cross-promotion of each other’s hotel inventory and other travel services.

In my next edition I’ll talk about three more online channels who are playing vital role in shaping the online travel industry in Asia Pacific.
NB: Oriental People Image by Stockvault and Chinese Street by Freepik Images


This is a view point by Christy Toh Sales Manager at eRevMax based in Singapore.  She can be reached at christinet@erevmax.com

Channel Connectivity: The Changing Trends, Part 1: Yesterday v/s Today


Heads in beds is the key driver for all hotels – you need good daily occupancy to meet your property’s running costs and thereafter make profits. With thousands of hotels listed online, how can you ensure your property stands out from the rest?

As online travel grows, accommodation owners need to position offerings appropriately, using the right channels. Google’s success is based on page ranking through keywords and relevance, all searchers will type in what they want to see and results will be made of popular channels. In other words, on the internet, the more visible and optimized you are, the more customers you will attract to your hotel!

Just 10 years ago the environment was wholly different. Booking a hotel room over the telephone or through a travel agent was the norm as only less than 5% of all travel was booked online. Today the travel booking landscape has changed significantly:

We used to distribute inventory evenly between tour operators, corporate contracts, telesales and the GDS. Most of our business was stable and regular rate changes and inventory changes were not required. Sales departments were busy but not overloaded.

However in recent years the internet has taken over GDS and telesales; a 2010 eTRAK Reservation Sources for Major Hotel Brands Report shows that major hotel brands experienced 52.3% of all reservations coming from the internet compared to 22.9% from GDS and 24.7% from Voice (2006 figures show Internet: 37.6%, GDS: 31.3% and voice: 31.3%).

In this respect let’s take a peek into the developments of Y2K, a significant period in many ways. The internet has been growing at a fast pace with the likes of Expedia, Travelocity, and Priceline having launched in mid-late 1990s during the dot-com boom.  The bubble burst and many online industries had to rebuild their sales model. Online travel was not greatly affected, on the contrary it started to grow – though it meant the offline hotel industry had to start paying attention and, more importantly, hotels had to realize that something was changing.

By 2000 the total annual online hotel booking rate was around 4% of total bookings. In only 10 years this has reached around 35%, according to a report by PhoCusWright’s Global Online Travel Overview Second Edition, 2011.

This goes to prove the ongoing importance of the internet and the changing consumer buying trends. While it took almost a decade to achieve this level of sales, within the maturing APAC market there has been increasing focus on mobile internet as this is adopted faster than the traditional computer access. This is deemed to grow at a faster rate than the internet over the next decade.

With such changes comes the necessity to adapt. Business has become more volatile and requires adequate planning. Product has to be constantly optimized, prices analyzed and yielding performed. Tasks that do sound natural to hotel operation but are still not honed to perfection.

Staff needs training but not only sale is affected. All departments within a hotel need to brush up as the consumer has options to review services with the general public. From rooms division to management, the hotel has to be organized and prepared.

Another factor, often not recognized enough, is that marketing has changed too. Gone are the expenses for costly brochures. Not that we can spend less now, but the likes of Google, Kayak, trivago, Groupon have taken their place, still marketing but a different caliber with different rule sets. Also, some OTA’s require additional commission for better placement. One could argue that this is not just cost of sales but to a degree brand marketing too. A battle the two departments will need to have in order to best place the house.

Check out Channel Connectivity: The changing trends Part 2 next week.