It’s an interesting time in
the travel industry in Southeast Asia.
The middle class is growing
very fast, 90% of the region’s 360 million internet users are connecting
through mobile devices, brands already in travel are expanding their offerings
and other e-commerce entities are forging partnerships to sell travel as well.
These were some of the topics
buzzing at WebinTravel’s Singapore conference earlier this month, as industry
leaders gathered to discuss the fast pace of change across the region.
As vice president of online
travel for Amadeus in Asia Pacific, Sebastien Gibergues is closely watching all
of these trends in Southeast Asia.
“This
is probably the last frontier in online travel because it spans from highly developed
countries like Singapore to emerging markets like Myanmar,” he says.
“There are up to 50 million new consumers reaching the
middles class over the next three years – so that brings opportunity in the
market - but there’s also still high growth of inbound tourism. Between the
domestic travel outbound with the middle class and their purchasing power
increasing and the inbound tourism, it’s really a melting pot of trends in
travel.”
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Partnerships
and expansion were two of the most common themes resonating from speakers,
including Grab regional head of business development Shawn Heng who said the app
intends to add flights and activities within the next six to nine months, Agoda
CEO John Wroughton Brown who shared the OTA’s introduction of its own flights
product and its partnership with Grab and AirAsia BIG CEO Spencer Lee who discussed
the low-cost carrier’s interest in selling flights from other airlines.
Gibergues says all of these
developments reflect the fact that “there is space to take for those big
regional brands.”
He also notes that the market’s
diversity and fragmentation – in terms of both economic and cultural terms as well as in currencies,
payment options and supplier content – also give an advantage to local and
regional brands over their global competitors because “it’s difficult for them
to swipe the market and really penetrate Southeast Asia since they have to go
market by market.”
Fragmentation is a particular
challenge in the air sector, where Gibergues says low-cost carriers now account
for about 50% of total seat capacity in Southeast Asia, versus about 30%
globally.
“There were maybe two
low-cost carriers five years ago. Now it’s a long list,” he says.
“You have an amazing
density of routes, which is very hard to combine. It’s a huge opportunity, but
it also explains why it is difficult for some of the global players to come
into Southeast Asia because it’s not content that is easy to manipulate.”
Gibergues says the first challenge is to “re-aggregate this
content for the consumer to make sense of what they are buying” and then
secondly to help them compare options and prices.
“And will it be travel specialist brands who will take the
market or will it be mega-apps or more horizontal platforms? Southeast Asia is probably
the best lab to watch all of the forces of online travel at play,” he says.
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