The news of JTB Corporation acquiring all shares of Kuoni Global Travel Services, making it the world’s largest DMC, is yet another sign of the emergence of Asia travel brands on the global scene.
As the Asia market grows in importance and scale, and their customers fan out across the world in increasing numbers, homegrown brands are having to go beyond their own shores in search of new business streams.
In February this year, the Japanese travel giant took a stake in Indonesia’s leading tour company, Panorama Tours, thereby increasing its influence in the world’s fifth biggest domestic market.
In announcing the Kuoni deal, JTB said, “The acquisition of Kuoni Global Travel Services will offer new business perspectives and opportunity to become the No. 1 global DMC.
“This will increase new opportunities in areas such as group business in growing markets across the world through the expansion of local product offerings.
“It will also support the expansion and strengthening of the global MICE services in Europe and the United States markets, which is complementary to the existing JTB MICE business.”
There is no doubt the stakes are high in this next wave of travel in Asia. Traditional travel companies, which still hold the bulk of the market in their hands, are scaling globally as well as transforming themselves to fend off the tech-driven OTAs and marketplaces that are increasingly encroaching into their space.
In our “Reimagining the Samurai Spirit” session at WIT Japan, we will gather four leading brands – Rakuten, JTB, Ikyu and Recruit – to talk about how they are fending off global competitors and, for the first time, the KDDI/Relux combination will be featured at a travel event. KDDI bought Relux, a niche player in ryokan and private accommodation, and clearly has big ambitions for the startup started by former Recruit employee Takaya Shinozuka.
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Chinese giants such as Ctrip and Tujia are also expanding globally. Built on the back of strong domestic business, both companies are following their customers abroad as Chinese individual travellers fan out across the world in search of vacation rentals and other forms of accommodation and experiences.
Ctrip’s acquisition of Skyscanner is particularly interesting in Japan where Skyscanner had a joint venture with Yahoo. Toshiya Kinuta, who was Yahoo’s man advising in the JV, took on the fulltime reins as Skyscanner’s CEO and will be speaking at WIT – it will be interesting to hear from him how the three cultures – Scottish, Japanese and Chinese – are blending.
Out of South Korea, e-commerce have smelt the scent of money in travel and are waking up to the global opportunity. TMON, which recently raised US$115m this April, and has raised a total of $165.96m in four rounds since set-up in 2010, is the first of the Korean marketplaces to venture out in the travel space.
TMON’s Ryan Kangjoon Lee on South Korea panel
Ryan Kangjoon Lee, in charge of travel, leisure and culture, will be speaking at WIT Japan as part of a South Korea panel that will look at emerging trends in this next North Asian market set to rock the online travel world in Asia. It’s bought Zari, a hotel technology solution to help independent hotels gain more direct sales.
North Asia has long been seen as an impenetrable market for global brands, China clearly the hardest to crack with brands such as eBay, Amazon, Google and Facebook having tried. Japan, as well as South Korea, were seen as difficult and complex markets with unique ecosystems.
But the doors are opening. Japan’s hosting of Olympics 2020 and its quest for 40m tourists by 2020 has put things in a new light. It needs more flights, more accommodation, more infrastructure, more English-speaking citizens to meet the demand, and global brands are gaining foothold on the back of a growing inbound market.
Abroad, not many travellers have heard of the Japanese travel brands – they know Booking, Expedia, Agoda to mention but a few – so unless Japanese brands scale and become known in source markets, if they want a slice of the inbound pie, they will not be able to fend off the competition.
Senior executives of Booking, Expedia and Agoda will also be at WIT to talk about the business trends they’re seeing and the plans they have to scale in North Asia.
This year’s WIT Japan & North Asia is being held at a critical moment in Japan’s travel story – there’s a moment of reckoning coming. For now, local brands still rule in Japan but for how long? The answer lies in who’s fastest to embrace the market changes as well as the new technology that’s bringing down the walls in travel.
We look forward to the debates in Tokyo next Thursday and Friday.
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