FROM fintech to e-commerce, fuel prices and open-ness to weed, much has fast forwarded in the time travel stood still in Asia, a region that accounts for close to 60% of the world’s population, and where the biggest market, China, remains close and another major market, Japan, is still not fully open.
Around Asia In One Hour with, from right, Mary Li, Atlas, Ross Veitch, Wego and Omri Morgenshtern, Agoda. Phocuswright Europe, Amsterdam 2022 | © Robert Tjalondo | www.rockinpictures.com | @Beurs van Berlage
For one hour, the audience at Phocuswright Europe, which had the theme, “Fast Forward, A Sustainable Future” was taken on a whirlwind tour of Asia as well as the Middle East by Omri Morgenshten, CEO, Agoda, Ross Veitch, CEO and co-founder, Wego, Mary Li, CEO and founder, Atlas and Chan Chee Chong, CEO and co-founder, GlobalTix.
Chan picked fintech adoption as one key trend on fast forward, citing a study by Ernst Young which states that in just two years, “consumer usage rates of FinTech-powered services have doubled, and in some cases tripled, across key Asia-Pacific markets”. “Hong Kong, Singapore, and South Korea have 67% FinTech adoption, while Australia now stands at 58%. For now, most markets still lag far behind China’s 87% penetration, except for India, which is now nearly tied with Asia’s leading digital power.”
Said Chan, “Attractions and tour operators have to ensure that their websites accept digital wallets or else they will alienate the billions of users in Asia who only exclusively use digital wallets and not credit cards. It also presents opportunities to operators to upsell other fintech services like insurance or Buy Now Pay Later on top of their offerings.”
Chan also highlighted the rise of mobile videos, saying that “mobile is replacing TV as first screen for video”. He cited the example of videos such as this featuring Waterbom Park in Bali, appealing to the new generation of travellers in Asia.
Omri Morgenshtern: “Imagine a Travel coin accepted by all vendors.” Phocuswright Europe, Amsterdam 2022 | © Robert Tjalondo | www.rockinpictures.com | @Beurs van Berlage
Morgenshtern, who stepped into the CEO role at Agoda on July 1, singled out “open-ness to weed” as the trend to watch. “Since the announcement in Thailand to legalise weed, we’ve seen over 500% increase in Google searches for ‘weed’ in Thailand. Another thing is when Malaysia recently announced that it was removing the death penalty overnight, we saw an uptake in conversations around that. Even though it’s not direct topics within the tourism sector, I think these movements may have a massive impact on tourism and think it’s one of the things moving trends across.”
Li said on fast forward is also inflation and that, compounded by the fact that China is still not open, means the market in Asia is not fully recovered. “APAC is badly hit by inflation and even worse, we are hit by the big gap left behind by the China travel market. Across Asia, individual markets may seem like we are recovering, but the fact of the matter is that there is only a tiny percentage of middle-class/affluent travellers in Asia. In Cambodia and Thailand,
“Chinese visitors made up about 60% of their inbound traffic. Without China, the travel market in APAC will struggle to come back to pre-pandemic levels. In the meantime, APAC, should be looking out to other markets, like Europe, to support their growth and combat the significant inflation we are seeing in the region.”
For Veitch, fuel prices are on fast forward. “US$120/barrel price of oil (as at 15/6/2022) compared to US$40/barrel roughly two years ago. In the MENA region the oil price influences everything including travel,” he said.
So while it’s bad news for the rest of the world, it’s good news for oil-producing countries, he added. Business in the region is back to higher than 2019 levels and the investments taking place in the region, including a GCC-wide rail project as well as major developments in Saudi Arabia, will position it for strong growth, he noted.
E-tickets, connecting multi-travel itineraries seeing high adoption
For Mary Li, growth elsewhere is sustaining Atlas while major markets in Asia remain closed while Chan’s GlobalTix has seen massive adoption in e-tickets among attractions. Phocuswright Europe, Amsterdam 2022 | © Robert Tjalondo | www.rockinpictures.com | @Beurs van Berlage
As for what went fast forward within their organisations, Chan cited adoption of e-tickets. “While travel in the last two years slowed down, the adoption of e-ticketing in GlobalTix grew by more than 150%.”
Li saw transaction volumes significantly increasing over the past six months, especially in Europe, North America and South America. “For us, understanding these traveller behaviours is key to providing better insights so that airlines and travel sellers can make smarter business decisions. We believe having a strong data infrastructure is key to building sustainable business growth.”
For Veitch, after a very tough start when the pandemic hit and it had to cut costs and offered stock options to staff to stay on, things have turned around with the recovery of business in the Middle East. Its headcount has gone from 175 (June 2020) to 370 (June 2022) and its acquisition of Cleartrip and Flyin in the Middle East, still awaiting final approval, now makes it the largest OTA in the region by flight production, he said.
At Agoda, Morgenshtern said, “Connecting multi-travel itineraries or connecting the many components of your trip” had gone fast forward. “Taking into account the fact that a travel itinerary is not a package but it happens at different times at different locations … our flight product has been growing by high two digits by the quarter in a steady manner. Our attachment rates are also growing steadily.”
Chat from operations to commerce, a Travel Coin and eVTOL
Ross Veitch sees eVTOL as “particularly useful at transporting people from airport to downtown avoiding car clogged roads.” Phocuswright Europe, Amsterdam 2022 | © Robert Tjalondo | www.rockinpictures.com | @Beurs van Berlage
Picking the tech that will go fast forward in the next three to five years in Asia, Chan picked “chat commerce technology – that people will get comfortable buying while chatting with brands.” Currently, he said, chat was being used more in operations but he forsees a swing towards transactions.
Li said, “We have seen marketing ad-tech in the e-commerce industry using such smart AI applications to achieve great results, so why not in travel too? Quick and efficient data processing will be key to supporting travel recovery. It helps with better cost management, ROI-driven decision making and scalable growth. Understanding the market can help businesses predict changes faster and react more efficiently.”
Veitch’s choice was “eVTOL– electric vertical take-off and landing aircraft will enter service and will be particularly useful at transporting people from airport to downtown avoiding car clogged roads.”
Morgenshtern picked “crypto/fintech in travel, especially around loyalty schemes, cross border transactions, insurance tech that will become more accessible to customers. The ease/speed in which money can cross border using Crypto infrastructure? This may have a massive impact on travel if used correctly… imagine a Travel coin accepted by all vendors. No need for the exchange of money anymore… ”
As for things they wished would go fast forward, Chan said, “I wish that system connectivity and standardisation will fast-forward, it makes it easier for us to connect to everyone. I also wish that airports operation can be simplified – from check-in to clearing of immigration, using Facial technology.”
Li wished for “global recovery and collaboration within the travel eco-system. All players and markets to understand that one region cannot survive on its own, grow on its own or even grow at the expense of others.”
Veitch wished for “carbon capture technology to efficiently remove large amounts of carbon from the atmosphere to reverse global warming trends before we have to start pursuing more radical geo-engineering strategies”.
Morgenshtern cited “metaverse. I’d love to imagine the booking experience there. I think we need more than five years.” And if he were to listen to his kids, the new UX would look like Epic Games’ Fortnite, the free-to-play Battle Royale game.
With everything on fast forward, what would they like to slow down, the panellists were asked.
Li: “Complications and gap between airlines and distributors and consumers.”
Chan: “I know it’s not possible, but I wish the numbers of new influential platforms/websites will slow down. The market is fragmented enough. Even as a tech distribution provider, I am finding it hard to keep up with the number of new sites that consumers are engaging on.”
Veitch: “Government bureaucrats responsible for adding friction to international travel. I worry that a lot of the new forms, tracing apps and health requirements will be kept in place permanently similar to what happened with enhanced security processes after 9-11.”
Morgenshtern: “Salary inflation, and talent hiring wars. We’re spending more and more time getting the right people in and putting off all the impact we want to make in the world as we need to build our team first to help get us there.”
