I’ve always felt at home in Spain, almost a sense of déjà vu each time I visit, and it thus felt fitting that I should be bringing the flavours of Asia, as well as the emerging markets of Middle East and Africa into the first Phocuswright Europe in Barcelona. Consider the similarities in our food – tapas and dim sum, paella and “nasi goreng” – and culture – Chinese opera, Balinese dance and flamenco – the flavours, colours and drama.
The Catalonian region of Spain, with Barcelona, the star attraction, received 20m international visitors in 2022, 1.5m of whom are from Asia Pacific, with Japan and Korea the top two markets this first quarter, an indication of the recovery being seen from the North Asian markets.
South-east Asia travel is also in full recovery, as is seen in the performance of Traveloka in the past months, and what has also accelerated in the region is mobile adoption – 90% of Traveloka’s bookings come via mobile direct, according to Traveloka’s president Caesar Indra.
Traveloka’s Caesar Indra shares his childhood story in Bengkulu, a small mountain village in the Indonesian island of Sumatra, an important area during the British and Dutch colonial era. Photo is of Fort Marlborough, built in the early 18th century.
Traveloka sees surge in mobile adoption in South-east Asia
“When international borders reopened in April 2022, we saw record levels of mobile penetration indicating that travelers are more connected than ever and are expecting more from the tourism industry. The pandemic accelerated SEA’s digital adoption, bringing 20 million new Internet users in the region online in 2022 – most of them via smartphones. There are now 460 million internet users in SEA. These tech-savvy travellers expected clean virtual touchpoints on vacations, be it via easy-to-use apps or automated check-in on-premises.
“In addition, domestic tourism continues to be a shining pillar for South-east Asia. According to our internal data, Vietnam’s domestic flight capacity has exceeded pre-pandemic levels. As of March 2023, bookings show a 120% increase as compared to the same period in 2019. Travelers are also increasingly incorporating sustainable travel considerations for their upcoming trips. This mirrors trends observed in Europe, and travel platforms in both regions could glean valuable insights from each other.”
Commenting on one of the most misunderstood things about the fragmented nature of South-east Asia, he said, “We have both emerging and developed markets that require different approaches to business. As such, localization of services is crucial, especially in a market dominated by domestic tourism. At the same time, South-east Asia is home to many small businesses which bring uniqueness to destinations. People don’t travel to visit the same places they could visit at home; they prefer unique experiences that are only offered by specific businesses. This makes SMEs and MSMEs a vital part of the travel industry.”
The Indonesia-born travel tech titan is keeping its eye on Artificial Intelligence – including generative AI like ChatGPT and GPT-4 – Web 3.0, fintech, which Indra said will continue to move quickly into the future. E
“Even the tourism industry, which has traditionally not been the most tech-connected industry, has stepped up to embrace digitalization. Sustainability and the demand for convenience will only increase and be a key consideration for travellers. AI will revolutionize many industries, not just travel. It will dramatically improve productivity and efficiency in many areas within the industry. As a result, travellers will enjoy a much more seamless experience. For example, they have a quicker way to get general information about certain destinations or gain faster access to reschedule trips in emergencies.
“Apart from using AI-powered chatbots to handle customer inquiries and reservations, travel companies are testing ChatGPT’s ability to develop itineraries. Investing in these technologies helps companies to bridge the manpower crunch as generative AI goes beyond what normal chatbots can do – think conversational replies in place of template ones.
Having raised US$1.5b over eight rounds, the latest round being $300m in September 2022, Traveloka is focused on profitability and travel remains a stable and rewarding sector for investors. Indra said Traveloka’s hot on alternative accommodation, tours and activities and sustainability but not on digital nomads and subscription models when asked to rate the importance of these categories.
The “new world” panel at Phocuswright Europe – from left, Nancy Zhou, Flightroutes24; Jongyoon Kim, Yanolja Cloud; Philip Akesson, Travelstart, Nigeria; Muzzamil Ahussain, Almosafer.
Yanolja Cloud steps on the gas on globalisation and AI
South Korean travel tech titan, Yanolja Cloud, meanwhile is continuing its quest for globalisation, following its latest and biggest acquisition of Israel’s Go Global Travel. CEO of Yanolja Cloud, Jongyoon Kim, said the Israeli acquisition gives it a good beach-head from which to penetrate Europe with its hospitality solutions.
Yanolja Cloud came out of the Yanolja superapp, which blazed the trail in aggregating small, independent hotels. It has 18m monthly users and over 50m downloads in what is the second largest outbound market in Asia Pacific, with 28m trips in 2019. Jongyoon said the market hasn’t fully recovered. “The overseas travel planning rate of Korean travellers has only recovered to 75% of the pre-coronavirus level.”.
He cited two other trends. “Demand of Korean travellers for long-term travel has also declined. Those who go on a trip for ‘5 nights and 6 days to less than 15 nights’ reached 42.2% as of October last year, but in March of this year, it decreased to 31.3% for six months in a row.
“There was also a great gap between the places where people actually travel abroad and the places where they want to go. Respondents answered that they were planning a trip to Asia (68.6%), including Japan, Vietnam, and Thailand within six months, but the South Pacific (52.7%), Europe (44.3%), and the Americas (28.8%) were interested in overseas travel, due to cost issue.”
Jongyoon said the South Korean hospitality market will see acceleration in “digital transformation including self-serving operation like kiosk and IoT (Internet of Things) across overall travel journey”.
As he spoke in Barcelona, the company launched in Seoul its ‘Y KIOSK’, its flagship collaborative product with Samsung Electronics. The kiosk optimises according to the individual characteristics and operational environment of each property. It also supports real-time synchronization of reservation statuses from online and offline booking channels and walk-in customers will have access to contactless check-in/check-out.
Jongyoon was excited about the acceleration in AI, saying this was the golden time for B2B technology that would fix legacy problems in the industry, which would then enable the industry to keep up with consumer demands and expectations.
And one of these consumer trends was the desire to purchase “new packaged travel product combined with entertainment like musical, concerts and sports”.
Solo travellers on rise in Saudi, hungry for experiences
Muzzammil Ahussain, CEO, Almosafer, said one clear trend coming out of the Saudi Arabian outbound market was the emergence of solo travellers and the appetite to spend on experiences.
Saudi is the Middle East’s biggest outbound market – an estimated 12.5 million outbound trips taken by Saudi Arabians in 2021, expected to grow to 17.5 million by 2027.
Said Muzzammil, “There is an incredibly strong appetite for travel amongst Saudi travellers who are now are choosing to spend more and travel longer, seeking out meaningful experiences. Our recent travel trends report revealed that the average trip length for Saudi travellers has increased by 12% from 2019 to 2023 and the average order value has increased by 15% for the same period. We are also seeing that domestic leisure trips are becoming increasing popular, even with the resumption of international travel. This trend illustrates that Saudis are beginning to discover the wealth of attractions at their own doorstep; Saudi Arabia.”
Inbound tourism is also on a fast track in Saudi, he said. “Saudi Arabia ranked first among Arab nations for inbound visitors in 2022, welcoming more than 18 million inbound visits in the first three quarters of 2022. This is an incredible achievement given that the Kingdom only began welcoming tourists in 2019 and the challenges of the pandemic.”
He said that Almosafer was the first travel company from the region to integrate ChatGPT with its online platforms. “Our joint venture with Klook for a digital one-stop shop for activities will soon come into fruition; and we have partnered with Emkan to provide digital financing for customers of our consumer segment.
“Artificial intelligence will play a significant role in all industries, including the travel and tourism sector. There is a huge opportunity to utilise AI to automate certain tasks and provide real-time insights. It can help organisations and customers to make faster and more informed decisions. We have recognised this huge potential and are currently piloting the integration of ChatGPT on the mobile application of our consumer segment which will serve to enhance the customer booking experience.”
China recovery still lagging, consumer shift towards mini progams
Nancy Zhou, vice president, FlightRoutes24, said air capacity on international flights out of China had recovered to 40-50% of capacity but load factors remain depressed due to constraints such as visa and passport issues, and high air fares. “The travel demand is there, but there are obstacles towards full recovery,” she said. “Chinese travellers still have negative attitudes towards Covid and lack of confidence in travel. Actually, the markets shave seen a surge in travel demand since the travel restrictions were removed and mandatory mask-wearing and Covid-testing requirements were no longer conducted.”
Zhou said one accelerated change in the digital travel landscape is the shift of consumers to “mini programs, embedded in payment platforms like Alipay and messaging and social media app WeChat”.
“There’s a big shift in how consumers are shopping for travel,” she said, adding, “I expect more functions and features, system automation, and machine learning will be added to the system to adapt to the requirements of online customers and improve efficiency.”
She also said that it was challenging for Chinese travellers to contend with cash payments when they travel abroad. “I myself haven’t used cash for two years and it takes a while getting used to using credit cards again. I hope we in travel can develop a global solution for payments to make it easy for all travellers to pay digitally, anywhere,” she said, to laughter from the audience.
Thus, her wish for the tech to be accelerated – “mobile payments to be supported by more offline merchants worldwide”.
