The OTA segment is developing into an exciting and dynamic growth driver in the Asia Pacific region. Travelport’s MING FOONG encourages us to all “Think Borderless” if we really want OTAs to take off in this region.
For a large part of Asia Pacific, the online space is still very much in development. Most regions are dominated by one or two leading home grown OTA brands, with one or two more international players in the mix.
However we are now seeing price comparison engines (also known as travel metasearch engines) growing their presence, establishing themselves as the first point of contact for travel booking and as a mandatory channel for B2C online agencies to acquire customers. The price comparison function provided by metasearch engines also attracts customers who are already further down the purchase funnel, potentially lifting conversion.
The shift towards metasearch can also help to reduce market entry costs, because a new OTA can effectively target traffic from another region. Consumers are now less concerned whether the OTA they purchased from is a known brand within their local market. In the past 18 months, we have observed a number of global OTAs appearing on metasearch engines in Australia, Singapore and Hong Kong, outside of their home country and region.
However the growth of metasearch is stlll somewhat hampered by a limited supplier and seller base. To participate in metasearch, agents need to have an API (application programming interface) connection as well as transaction capabilities. Travelport is assisting agencies with limited technical resources to participate and acquire customers through metasearch engines by being the conduit between all parties.
Another key trend is fulfillment with O2O – Online to Offline. We have seen many success stories from pure online businesses in the travel industry across the Pacific, such as Webjet. However, in regions such as Japan and South Korea, the larger online players are successful subsidiaries of diversifying traditional offline agencies.
Large players like Flight Centre and Helloworld already have their own O2O strategy and focus. “helloworld.com.au’s clear focus from the beginning has been on capturing a share of the rapidly growing online market in the Asia-Pacific region, driving online customers offline to helloworld agents’ businesses,” says Jeremy Reitman, CEO of Helloworld.com.au.
In the past, online operators were seen as competition, disrupting traditional models. This will change. Outside of travel, there are some interesting success stories, particularly in retail. In Japan, bricks-and-mortar retailers are focused on providing product experience to consumers, who then complete the purchase online or on a mobile device.
This is perhaps a model that would work in high involvement purchases like cruise or tour packages.
