“The revolution of travel itself lies in how we connect people”
Anyone who thinks that the great days of innovation for Online Travel Agents (OTAs) are behind us, clearly has not been to a Web In Travel event recently. At WiT Singapore 2023, we met three perfect examples of how in the right hands, the rich diversity of Asia and the Middle East is providing fertile ground for those with an eye of doing things differently.
While WiT labelled their session ‘Meet The Different Generations of OTAs, Part 2’, the speakers assembled from Saudi Arabia, Japan and Korea could well have been called ‘The New Model Warriors’ – such is their ability to find unique ways of innovating their business models in a manner that is to the ultimate benefit of their prospects.
In a conference celebrating the power of humanness in the face of disruptive technologies like AI, talks of innovation rather than survival were a perfect example of the fact that as people, we have always succeeded by returning to and enriching our tribes.
In this way, whether the X-factor is the adoption of a unique business model, the mining of an untapped demographic, or becoming a local hero for a young, isolated yet fast-growing market, it seems clear that with tribal smarts and innovative executions, the OTA world has plenty of scope for human-driven growth.
“We’re in a revolution”
For Jiha Jung, CEO & Founder of Tripbtoz, daring greatly was a big motivation for entering the travel space in the first place. “If I was scared seven years ago, I wouldn’t have started a business. To be honest with you, I’m not. Back in 2013, when I pitched in front of many people at Cornell University, I said, ‘Expedia, Booking, Agoda, are boring products: we’ve something much more exciting,” he asserts.
That excitement factor is part of the TripBtoz team’s determination to create a new market specifically targeted to Koreans aged in their 20’s: “It’s a young generation,” says Jung. “They create and share their own travel experiences through travel videos. And whenever they gain more reputation, they collect ‘cash’, which they can then use for travel. This is how we engage them into our platform: by sharing the compensations, and letting them be the driver of destination, accommodation and marketing.”
Despite big players like Booking.com also exploring turning a community into a salesforce, thanks to its ‘My Moments’ feature, Jung not only believes that the market remains ripe for innovation, but he also remains confident in his company’s ability to hold onto their tribe and find likeminded people to join.
“To be very honest with you, Trip.com, Booking.com and Expedia are in a huge revolution: and are turning to the young generation at a fast pace, especially Trip.com. So, they might be a threat to us as well,” he notes.
“But I still strongly believe that the industry itself is in a huge revolution. And that the travel industry is not just stuck in travel itself. We are in the ‘blurry area’ with finance, and mobility everywhere. So, I certainly believe that we have a tonne of opportunity in this market.”
Backing the powerhouse
For Tarique Khatri, Chief Commercial Officer of Almosafer, the key to a successful business model has been to position the company as a champion for the growing powerhouse economy that is Saudi Arabia.
“We want to be a part of the ecosystem in the region: we want to be able to provide our customers with the most value propositions that we can provide in all aspects of travel,” he notes. Indeed, with goals like [the ones] Saudi Arabia has already set for visitors, keeping pace with these should be more than sufficient to continue a rapid growth path.
“More importantly, we want to make sure that we are participating in the Vision 2030 approach towards the vision of getting 100 million visitors into the country,” Khatri explains. “We see ourselves as a regional champion – more focused on our Saudi culture and bringing that across to the region.”
From an OTA point of view, attention to the needs of the tribe is once again in the fore for Almosafer. Budgets notwithstanding, the company plans on a “dream innovation” in the form of an AI-powered ‘travel buddy’ product that could help cater to the unique travel needs of the growing Saudi travel market: “From a Middle East region point of view, one very important aspect is a travel companion kind of product, which would essentially work with customers right from the inspiration portion, up to the post booking part,” he explains.
“Specifically, what we’ve seen is that the nature of the traveller is slightly different. The requirements are slightly different when it comes to food and activity preferences, and in terms of destinations they want to go to,” he notes. “And the kind of requirements they need are slightly different. So, if we could build without any limits, I would definitely want to look at something in the lines of a travel companion that we could have, right from the inspiration level, right up to post booking.”
The power of subscription
KabuK Style Inc has been recognised as one of Japan’s fastest growing startups, having raised US$30 million since launching in 2019. Such excitement is in many ways down to an innovative blockchain powered subscription-based travel service model, which seasoned digital travel chronicler Yeoh Siew Hoon, founder of WiT, describes as “a pretty new concept”.
“We’re creating a new market that’s larger than the current one,” describes CEO & founder Kenji Sunada of the service that charges its users around US$70 per month for membership.
“A travel subscriptions service eliminates the users’ time: because booking itself is not the purpose – the purpose is starting the journey.”
According to reports, in the four years since launch, KabuK has sold over 300,000 room nights. Subscribers lock in a price for three months and then travel when they want. As WiT noted: ‘In other words, KabuK is acting like a bank, and Sunada acknowledges that it’s a very cash-friendly business’.
“Nobody checks the prices before booking, right? Some do, but only geeks,” says Sunada. “From a figure perspective, we started back in 2019, and we have four years’ experience, almost all under the pandemic situation. But we grew up: acquiring around 85,000 members. So, they are paying.”
In May, KabuK released its airline flat price service with Japan Airlines. “The amazing thing is, we directly connected with their system without any GDS,” he noted. “I was amazed as well.”
“The user can book all of the flights [domestically],” says Kenji. “The difficult point is the estimated price. Because we are developing algorithms that estimate price and volume; then they’re taking risks and managing risks. But the fluctuation with airlines is much higher than with hotel prices. That’s why we exchanged a lot of data directory with Japan Airlines.”
The next step for the company’s growing tribe of travel subscribers is to explore similar deals on international flights. As he notes, dealing with risk would be difficult, were it not for his previous work experience.
“We’re starting to negotiate with many airlines about international travel. It means we need to manage currency risks, oil risks… very big risks. But my background is financial engineering, working in investment banking, and designing their financial options. So at least it’s much easier to estimate the price in this industry, compared to capital markets.”
Stretching the model
For Jung of Tripbtoz, the biggest current risk, from his perspective, would be standing still. “I would say 10 years ago, especially before COVID, staying in one country was much safer. But now I’d say if we stay in one country, we’re going to disappear,” he notes.
He believes that his 20-something target market model will play well in other markets beyond Korea. “These days, it’s more about what age you’re targeting: for instance, we’re targeting South Koreans in their 20s: and I was quite convinced that if our product worked and we could create a community within Korea with this young generation, we’d be able to go anywhere outside too.
“Those in their 20s have their own common sense of sharing. For instance, they’re not hesitant about sharing their daily lives, what they eat what they wear, on Instagram. By contrast, my mother always used to tell me, ‘Don’t load it on Facebook,” he recalls.
His community can also travel, and potentially interact with one another on the road – the perfect tool for any nomadic tribe member. “The product that we have recently released is the English community application, and also the chat, whereby you can communicate – for instance, if you booked the Marina Bay Sands in Singapore, within our community right now, we have 60 Koreans who are travelling around Singapore. They can chat together to share the information, to find fans, and to find the right people within our community.”
Jung believes that the golden ticket for customer engagement, is how connected they can be to the experience, and to one another. “I strongly believe that the revolution of travel itself lies in how we connect people. That’s the genome. And when we connect people within a destination, they’re going to have greater access to happiness within that community.”
