Expedia made a lot of noise with its AirAsia joint venture. Wotif made the news with its joint venture in Vietnam with Buffalo Tours. Meanwhile, ZUJI/Travelocity’s been rather quiet, leading many to wonder what the OTA’s been up to. Is it losing steam? Is it being tethered by its parent strings of Travelocity and Sabre?
Well, Roshan Mendis, president and CEO of ZUJI/Travelocity Asia Pacific will have you know that it’s enjoyed a strong first half of the year with business up 50% in sales and profitability and it’s been working quietly away at a refreshed branding that will be unveiled year end.
As for all the hype about deal sites, he believes the Groupon model does not work with intermediaries and oh yes, he doesn’t “get” the AirAsia-Expedia joint venture.
Yeoh Siew Hoon catches up with Mendis to find out what he’s been up to and the views he holds on various issues.
Q: What’s the year been like so far?
We have grown volume and share in every single market we operate in. We have leadership in outbound and in hotels in India. Australia’s been a bright spot for us, we were lagging but we are growing well and 60% of our business there is now outbound.
It appears we are riding the online travel wave in APAC, helped by markets seeing robust growth.
Q: Australia’s considered the most competitive online travel market in APAC, yet you have managed to hold your own?
Yes, 18 months ago, there was a question mark – could we compete? Webjet had 60% of the air, Wotif had 60% of hotels. We had to prove capability, brand and strategy and with a new team in place, we have more than doubled our share of the market. It remains a competitive market – but it’s worth A$1.7 billion and growing at 20%, so there’s room for everyone.
Q: What’s your take on deals? Have you experimented with them?
With deal sites mushrooming, we asked ourselves how we should play. We tried Groupon in Singapore and Hong Kong. It’s very difficult to make it work for someone like us – an OTA – because of the economics of the channel. We will be shying away from that type of thing going forward. The general economics of a Groupon-type deal does not work for intermediaries.
What deal sites do is create an impulse market for travel and other products and they seem to be very popular in Singapore and Hong Kong. This is good for the overall market. A lot of our travel is shorter lead time, weekend inclusive and we have our own ability to stimulate demand with great offers, right prices and right messaging.
Q: Yet Expedia and Groupon signed a partnership deal?
On this particular one, it’s not so much a distribution deal. It seems to be a hotel content acquisition effort by Expedia on behalf of Groupon. I am sure the economics are figured out in a way to accommodate this effort.
It confuses me, a few of the Expedia deals.
Q: I assume you’re referring to the AirAsia partnership?
I thought it would get clear in my head over time, it hasn’t. I guess we shall see what it eventuates into.
A whole bunch of players have done deals in the last decade – media swapping, portal, fixed placement fees. We’ve done and tried a lot of things. The concept of aligning with a supplier so intimately that you share 50% is a brand new one. Conceptually, it flies in the face of “unbiased intermediary offering to the consumer” - the implied objective of them working to distribute AirAsia content preferentially and exclusively. Let’s wait and see.
Agoda and Jetstar partnership – that’s a straight white label deal, not that much different to what we have with Virgin Australia.
Q: So what’s on your priority list? I hear you’re stymied because of the lack of attention given to the region by headquarters.
The mantra of our new CEO (Carl Sparks) is to achieve the fullest potential of our brands, wherever we are. We are in a growing market, growth attracts investments and attention and we can expect global to be supportive of our efforts.
We are in the midst of re-energising and re-investing in our brand. We haven’t done that in APAC since ZUJI was started and the look, feel and delivery is thus as old as ZUJI. It’s time to do that.
The new realities of online travel have opened up a whole slew of opportunities and we expect the refreshed branding to be rolled out by year end.
Q: What’s the refreshed branding all about?
The new realities require us to get back to the core of our proposition – to provide a compelling proposition to our customer and put that at the forefront of what we do. You can expect us to deliver around the customer.
Q: The end customer in Asia is changing for sure.
Yes, other than the fact that they are growing in sheer numbers, they access us in a variety of ways, they want to do business with us in a variety of ways, they want to talk to us, about us, among themselves. At the end of the day, they want the choice, trust and flexibility to enable them to book in the way they want that’s most convenient for them and what they wish to experience from the trip.
Q: What kind of trends are you seeing in use of devices?
In the next few years, mobile will account for a quarter of bookings. The iPhone and iPad will account for a large majority of that. They want to talk to us, they want to use phones and see us. Do something on the web and complete it outside the web – all these trends are emerging.
In emerging markets, where strict online penetration is still slow, it is important to follow our customers, understand why it’s low and solve these problems for our customers.
Q: Is it hard to pick out the real trends vs the hype – otherwise you could end up chasing a lot of tails?
Yes, there’s a lot of activity out there. There’s lots of noise and a few things that will actually trigger change. You have to pay attention, listen and pounce on the ones that are game changing.
Q: So what are the qualities needed of a leader at a time of such profound change?
Given all the noise and news, and the fact we all read the same news feeds, follow the same tweets, and we are getting it all and double quick, it is important to be be consistent, persistent and focused. There are hundreds of employees looking to you for direction. It is easy to be reactive, jumpy and change based on the latest news feed. You need to make plans that are of a reasonable time frame, that will get you over the hump, that will last and be dogged about pushing it.
The challenge is to get this focus, to be structured and have the right resources and not be distracted.
Q: Facebook is a distraction, isn’t it? At work especially? Do you ban it?
No, it’s important for staff to see how these things work as they can be helpful in promoting business objectives.
Q: Consistent, persistent, focused – that's the boring stuff, stuff that don’t get you media play.
For me, the most exciting thing you feel is when you have success in business and that’s the excitement I share with the team. Yes, you can talk about what’s cool and sexy and you need to also present results for the last quarter and what role they had in those numbers.
Keeping it real, that’s the excitement I strive to drive.
Q: In Sun Tzu’s “Art of War”, it is said “If you know the enemy and know yourself you need not fear the results of a hundred battles.” What do you do better than anyone else?
We are the pioneer, we have built brand equity and we have the unique opportunity to leverage that. That, combined with understanding our customers better and deeper and being able to serve them uniquely is an advantage we can drive, that’s not easily replicable.
Q: Does your ownership by a GDS handicap you?
I can't point to any practical day to day incidents that have constrained this business because of Travelocity or Sabre ownership. We have the appropriate amount of freedom and flexibility to invest in things that are beneficial.
Q: What do your “enemies” do better than you?
Priceline, more than Expedia, has done a better job on executing in the digital space and in direct response digital space – their ability to aggregate customer demand.
Expedia with its house of brands has amassed fantastic amount of scale at the supplier level that we continue to bridge in quantity and quality.
Q: Let’s talk loyalty – that’s a space none of you have been very good at.
This space is notoriously fickle, part of the blame is on us because we’ve taught customers to deal hunt and price hunt. They rarely go to one place and book travel. Many of us have tried to combat it with loyalty points, coupon driven, etc
The more lasting is if we are able to target the customer in a special way when they do come to us – what we know about them, how we react to that information, how frictionessly we pass them through, and the convenience and aftersales.
Outside of the bells and whistles of loyalty points, the key is to innovate and develop in those dimensions.
I often look to competitors not for the big things but quite often the small things. Google is good at delivering what you want after you have told them what you want. They don’t pretend to know before that. Amazon is good at understanding what you want and seeking to understand your preferences and catering to them.
Travel is peculiar, it is experiental and contextual.
With our rebranding and refreshing, and our pursuit of enabling and embracing travel in a personalized way, I want to stress it’s not a destination we aim to reach on day one, it’s a journey we will begin and a dimension along which we will progress.
Q: Let’s talk reviews and social media.
If you look at how people behave on our site, certainly travel reviews are among the top five criteria for purchase influence. We are building our own and making it possible for travellers to make informed decisions on travel but it’s not the be-all-and-end-all.
With social media, it is important to differentiate the different levels. Of course, what people share on the Internet, that’s an important part of the business. Do we react to what people say in posts and blogs – yes. Do we resolve customer issues – yes. Do we use social media presence to promote and portray the positioning – yes.
It is very important to think of social media as an engagement and marketing tool but we haven’t yet been aggressive in advertiisng in social media, we haven't found the results yet.
Q: Finally, Sun Tzu also said, “Can you imagine what I would do if I could do all I can?” So if you could do all you could, what would it be?
The caveat here is “realistically”. I am doing a lot of what I can do in today's context – investing, growing and developing a lot of people; trying to attract and train the best talent; looking at ways to service customers better, to deliver a more compelling proposition to suppliers; and how we can add back to society and environment, and have fun.
If I answered differently, then I am not working hard enough.