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Well, the snake is about to slither away and the horse about to gallop in as Chinese all over the world celebrates the lunar new year this Friday and no one is more excited about the page-turner than Kathleen Tan, CEO of AirAsia Expedia (left).
On February 1, she will celebrate a year since she took up the reins of the joint venture between AirAsia and Expedia. And there’s no doubt it’s been a disruptive 12 months for the company as the woman, who is known to take no prisoners, came in, some say, like a whirlwind to set it on course for 2014.
Tan is the first to admit that the first six months was not easy. “People were apprehensive, my reputation preceded me, I didn’t know the OTA business – 70% of the staff came from that world and I guess they were fearful that I could muck up their careers.”
But in true Tan style, she reconstructed and refocused the business – she killed kickback.com and focused on the two core brands, Expedia andAirAsia Go, moved people around and some out, and gave it a stronger Asian focus.
“The second half was more enjoyable, I started getting into my groove. There’s a new spirit in the company now, it’s fast paced and there’s mutual learning on both sides.”
In so doing, she’s beat profit forecasts – indeed, her old boss at AirAsia, Tony Fernandes, took to Twitter to announce the milestone and to predict that AirAsia Expedia would one day be as big as the airline.
Which of course puts pressure on Tan to deliver – but then she is no stranger to pressure. In fact, those who know her well says she responds best when she is challenged.
“In AirAsia, I dealt with crisis all the time. In that business, you need EQ, IQ and AQ (Airline) – and I learnt all I could about airlines when I came into the business. With Expedia, I need TQ – Technology Quotient – and I am learning all about technology and I am excited because they are so ahead in this curve.
“This business has the opportunity to do well because Asia is starting to pivot more to online and mobile. We don’t have expensive planes to finance and jet fuel that takes up 50% of costs. We have people and technology. Expedia’s technology is way ahead and I have joined at the right time – they need someone to unlock the technology to take travel to the next level in Asia.”
Having beat profit forecasts, she says AirAsia Expedia is on a positive footing to take on 2014.
“All our 11 markets have shown double or triple digit growth. The biggest upside was AirAsia Go which saw a tripling in revenues. AirAsia has five million seat capacity a month – we are only scratching the surface.”
AirAsia Go and Expedia serve different customers with the former feeding on AirAsia’s route network. “That’s the power of the joint venture, AirAsia is now among the top 25 carriers out of 400 airlines for Expedia. We know in advance where AirAsia is going to launch routes, this helps us plan ahead.”
One area she focused on was building up the right supply for both brands. “Before the joint venture, Expedia’s hotel supply was meant to serve European or American customers, now it’s more focused on Asian customers.
“When we decided to “Go Big in Thailand”, we built content there and all the destinations where we have acquired hotels have shown growth. This really proves that content is king.
“Japan is challenging, the yen is down but it’s seen a 48% increase in transactions. North Asia excites me on a personal level. As a South-east Asian, it’s new to me and AirAsia didn’t manage to crack it in Japan. But tough markets always excite me.
“It is the world’s second largest travel market. There are lots of local start-ups and strong local brands so the question is, how does a foreign brand compete?
“We launched Hong Kong last July and it’s growing fast. Yes, it’s true it’s a big offline market because it’s controlled by traditional travel agents and everyone is scared of them. But consumers are hungry for choice. Our timing is good, Cathay Pacific is rocking the boat with full page ads to sell air fares every week and it is moving people online.”
Tan said the new year is about bringing to life all the points of sale for Expedia. “We have localized, done lots of product tests, have close integration with our supply team and we are in a strong position to push transactions.”
Mobile is another key area Tan is betting on. “In December, we had the highest transactions on mobile. I believe we have one of the best offerings in the market and I am looking forward to the new tablet app which will be launched soon.”
The key is product localization of course and she says that Asia is getting a lot more priority from Expedia. “You need a lot of engagement to get that message across and you need to sell the future.”
Another area it’s seeing growth is in packages and this is where Expedia can build its USP to become a one-stop shopping portal. “The packages market is huge in Asia, most of it is offline but there’s great potential to bring it online,” says Tan.
Above all, it’s about hiring the right talent. “We want to build a top notch team. We are a middleman, you need people. Asia is so big, just waiting to be harvested; the young love to travel, low cost airlines are huge. So if you are bored and you want excitement and challenge, and build a career, come join us.”
Currently, 40% of AirAsia Expedia’s staff are new blood Tan’s taken on in the 12 months she’s been boss.