Why the South-east Asian OTA could serve as role model for Japan’s OTAs
Twelve years on, and despite massive competition in the South-east Asian region it calls home, Traveloka remains a formidable force to be reckoned with, with a total of 130+ million downloads across the six markets it operates in and 40m monthly active users accessing its range of more than 2m accommodation in 100+ countries, 300+ airlines and 60,000+ travel activities in 100+ countries.
Caesar Indra: “What keeps us awake at night is really, how we can serve customers better, because travel is a very complex product.”
The key to its success – being king in its home market of Indonesia, deep localisation in the neighbouring markets it operates in, including Thailand, Malaysia, Vietnam, Singapore and the Philippines, and customer service.
Said president Caesar Indra, speaking at WiT Japan & North Asia earlier this month, “Customers love using our app because we provide very localized offerings and complete travel products, from transport, accommodation, bookings, cruises, tours and so on. And they know when they book from us, they will be served well.”
He said that Traveloka continuously invests in ensuring that its promise of localized offerings and exceptional customer service remains true for customers in every market they operate in. “That’s the area that we’ve been continuously investing in, making sure this promise stays true to our customers in every market.”
He added, “What keeps us awake at night is really, how we can serve customers better, because travel is a very complex product. We don’t stop at just selling the product to customer, but we want to make sure that our customers can travel peacefully and seamlessly.”
Indeed, he said that Traveloka embraces the Japanese hospitality philosophy of “omotenashi”. “It represents the level of customer service that’s beyond just serving the customer. It really resonates with our obsession on our customer to make sure that we can serve them without expecting anything in return because they are our customers, and we need to treat them as guests.”
He spoke of localised financial solutions such as “Buy Now, Pay Later” to help users finance their purchases. “Only five percent of Indonesians have credit cards.”
In many ways, Traveloka, founded in February 2012 by three Indonesian software engineers Ferry Unardi, Albert, and Derianto Kusuma, could serve as a good role model for Japanese travel brands which want to go global but fear losing their local identity and uniqueness. Traveloka has shown that a homegrown Indonesian brand can compete against global giants by being king in one market and sticking to a localisation formula as it expands to a few key neighbouring markets.
Like its Japanese counterparts, Traveloka comes from a country with a big domestic market, and so understands what it takes to move domestic travellers. Said Indra, “Interestingly, when we talk about travel, we always talk about international destinations, but domestic travel is very still very important. It’s strongly preferred by many travellers, like in Thailand, Japan or Indonesia.”
It also sits within a region with huge potential for growth, much like Japan sits within North Asia. “South-east Asia presents an interesting investment opportunity for global investors because of the population. It has 680 million population and half of them are below 30 years old. It’s one of the fastest growing economies in the world and is projected to be the number four largest economy by 2030.”
Indra told the audience that the travel market in Asia has not only recovered from recent global disruptions but is also showing substantial growth in flight bookings and leisure demand, outpacing other regions significantly. “In Asia, flight bookings have substantially increased from 2022 to 2023. And we are also seeing that the overall demand for leisure has also substantially increased much faster in Asia Pacific compared to the other regions around the world.”
Japan and South Korea have become top destinations for travelers from South-east Asia, with notable increases in accommodation bookings and flight bookings. “North Asia, particularly Japan and South Korea, is now among the top five destinations from South-east Asia. For accommodation bookings to Japan, we are seeing growth more than five times in 2023 versus the year before.”
To cater to the increasing demand, Traveloka is actively forming partnerships in the region to offer a comprehensive selection of affordable products and experiences to its South-east Asian users.
He also pointed out a new travel trend in South-east Asia – event-driven travel, where concerts and sporting events are becoming significant factors in travel planning.
One trend he’s not that bullish on is that of digital nomads and remote work. Japan is one of the latest countries to issue digital nomad visas, a move that’s been welcomed by many in the inbound industry.
Indra observed that the trend of remote work and long-stay destinations has not significantly changed the length of travel patterns in South-east Asia but has led to new customer needs for alternative accommodation.
On AI, he said that Traveloka has been leveraging the technology to create scalable advertising campaigns, enhancing efficiency and effectiveness in reaching potential customers.
“Almost all our ads on YouTube or anywhere on the Internet today are done by AI. Our creative designers are really focused on making sure it’s aligned with our standards, our guidelines and that the output is correct.”
It has upskilled its staff to work with the new tools. He said, “AI will quickly transform a lot of sectors in Asia, but it will also create a positive socio-economic impact by creating jobs instead of wasting jobs.”
It is also using AI to present personalized travel options to users by matching demand with the most relevant supply, thereby increasing conversion rates. “It’s important to present only a few sets of SKUs that matter to the users, that’s heavily personalized and why this is important – it helps increase the conversion because we find a match between the demand and supply.”
And one area AI is definitely being used is on customer service. “We are doing a lot on helping our agents become smarter, supporting them to serve the customer with AI assistance and all that.
“We are also doing some chatbots, but that’s not really the core capability that we are building. It is really about taking away all the complicated tasks away from customer service so that they can focus on serving our customers, solving the problem for our customers.”
