1. Low cost continues to drive change

The low cost effect is already in full swing in South East Asia and competition will be intense this year as Scoot gets up to speed, players consolidate and take position in Indonesia and India (Tiger buys into Mandala; Etihad scoops up an ailing Kingfisher) and AirAsia and Jetstar battle it out for market share.

Already the AirAsia group flies more passengers (18 million) than Singapore Airlines (16-17 million) and, this week, put in a purchase order for 100 more A320 aircraft, pushing its total fleet size to 475 narrow-bodies.

Watch the space in North Asia in particular – Japan gets into full stride; China’s Spring Airlines expands internationally; and Korea’s Jin Air and Jeju Air start exploring overseas points.

Jetstar Hong Kong (a partnership between Qantas and China Eastern) takes a go at the former British territory and Cathay Pacific may respond with its own low cost venture.

Better action promised on this front than in Peter Jackson’s Hobbit: The Unexpected Journey.

2. The rise of China’s affluent

This is a market everyone selling anything from luxury handbags to premium beds to wild dreams is going after.

In its Age of the Affluent report, Boston Consulting Group says that “at 120 million strong and with $590 billion of buying power, the affluent class is not yet as large as the emerging and current middle class combined, nor does it have the same spending muscle. But it is growing fast”.

By 2020, it projects that this segment will grow to 280 million, which will account for more than 30% of its urban population.

The report says that the spending of the affluent will grow fivefold to $3.1 trillion, about 35% China’s total consumption and more than 5% of global consumption.

It will also be nearly as much as Japan’s total consumption, 28% greater than that of Germany, and three times more than South Korea’s total consumption.

These numbers will seduce, and burn, many, just as in Zhang Yimou’s House of Flying Daggers.

3. OTAs get set for battle

MakeMyTrip buys Hoteltravel; Webjet buys Zuji; and Priceline buys Kayak – all harbingers of a big battle that will be fought on Asia’s shores.

Webjet will go head-on against Wotif as the two Australian-based businesses make their move in “The Asian Century”, as declared by the Australian government.

Wotif has the first mover advantage and has appointed Scott Blume, the guy who launched Zuji all those years ago, to take them further.

But Webjet will come in all guns blazing – this is a company used to fighting hard. MakeMyTrip has to move beyond “the India story” and will make further acquisitions to buy growth. Priceline Group will step up activity in Asia and use its two brands, Booking.com and Agoda, to scale across and dig deeper into markets.

AirAsia Expedia, the joint venture that was supposed to be a game-changer at the time it was signed has not scaled to the extent dreamt of by its chiefs but don’t write it off just yet.

The hero may yet make a strong comeback despite being weakened.

4. The fun will be in the emerging markets

Beyond the Chindia story, the juicy narratives (all with special local flavours) will be told in markets such as Indonesia, the Philippines, Vietnam, Thailand, Myanmar, Laos and Cambodia.

Mobile and social will lead change in Indonesia, and local players will hold strongly to their domain, but competition from outside is coming in as global players jostle for position.

Competition will also be intense in Vietnam – so look to global brands setting up local language websites. Phuong Tran Ming, CEO of Chudu24, predicts the “big guys – Agoda, Expedia, Hotels.com, Booking.com – will have Vietnamese sites and start doing marketing in Vietnam” and that “new local sites will launch every month” and “Groupon-like models will take a piece of the cake”.

Thailand is starting to see some digital startup activity – a new fund just launched this month M8VC Co which plans to invest at least THB 300 million (about US$9.4 million) in tech startups in the country – a small but significant step.

And while all the attention’s focused on Myanmar right now, Laos and Cambodia will also make progress in their own inimitable way.

5. Make local friends

The best travels are when you have friends in local places to show you around. The same with doing business in Asia. If you’ve invested in friendships over the years, then they will do you well in 2013.

If not, the going will be tougher. The good news is, more and more players are getting into the digital travel space which means more friends to be made. Build and INVEST in your networks not only for 2013 but the years beyond because Asia’s on the rise.

“The Social Network” must go from virtual to real.

Happy 2013 from WIT and our friends in Asia.

NB: Asia tech image via Shutterstock.

This, at least, is the opinion of Abacus International at its International Conference in Seoul last week.

“The industry is still healthy, growth is still ahead that of last year and the money is still there for travel,” says president and CEO, Robert Bailey. “We’re still looking at an industry growth of 3-5%.”

But most exciting of all is that Abacus is sitting in a region that’s not only prospering relative to others but is also seeing dynamic changes in technology adoption and rapid changes in customer behaviour.

Lap it up

By 2025, a third of the world’s airline traffic is expected to originate from Asia, which will represent 43% of the world’s GDP by 2020, larger than the United States and European Union combined.

More immediate is the advent of what Abacus calls Web 3.0 – a new wave of innovation based on the always-connected vision offered by consumer mobile technology.

The region already has the largest mobile subscriber base in the world with aggressive smartphone adoption. Both Malaysia and Singapore lead the region in smartphone penetration rates at 88% within a South East Asian region that sold $2.4 billion worth of smartphones in just the first three months of 2012.

Read that again: $2.4 billion worth of devices using Android, Apple et al operating systems.

In Australia and Japan, smartphone users (74% and 78% respectively) never leave home without their phone, and in China, more than half of smartphone owners would rather give up their television over their smartphone, claims Abacus, citing various research sources.

So with all the changes going on, what’s the traditional travel agent to do to compete in a world where technology is getting so personal and people are getting so social?

With web bookings in Asia-Pacific set to reach $90.8 billion in 2013, out of which 32% are being driven by online travel agencies, the fastest growing distribution channel in the region, there is reason for brick and mortar agents to be concerned.

Sure, the total travel market is huge and Asia is the place to be right now – with confidence still remaining strong although growth has slowed down somewhat, according to Abacus – but the ground is shifting mightily under their feet and those who do not keep up with change might fall into the abyss of irrelevance.

Power shift

Brett Henry, vice president commercial and marketing of Abacus, believes that mobile will shift power to the intermediaries away from supplier direct “because who wants to download every supplier app?”.

The question, therefore, is which intermediaries? The ones who leverage technology to achieve scale, price and choice for their customers, or the ones who get smart about using technology to maximize productivity and efficiency and deliver personal service to their customers?

If Henry has his way of course, all these intermediaries would use Abacus products and he is very clear in claiming leadership in innovation in agency product.

He claims:

“We are serious about product, we are 12-24 months ahead of competitors in every product category and we are the global leader in mobile solutions for travel agencies.”

“Mobile is disrupting Facebook and we have to make sure we are [also] not disrupted,” he adds.

Abacus is betting its mobile future on HTML5. “You get it right once and it works across all platforms,” Henry says, adding that Facebook and Google, too, work well and like HTML5.

The Abacus Mobility Suite comprising Abacus Mobile, Virtually There, WebStart and TripPlan, is seeing good adoption. Abacus Mobile now accounts for over 78,000 visits to the platforms, with a 50% increase in active subscribers as well as visits in the first half of 2012. VirtuallyThere gets more than 40 million unique visitors a year, the company claims.

Agency efficiency and USP

Quite a few of the solutions are aimed at improving productivity and saving costs, such as the Automation Hub (unveiled in Seoul) which is aimed at automating business process and eliminating time-consuming manual tasks.

But other than becoming more efficient and productive, what else can travel agents do?

Well, Dan Lynn, CEO of AirAsia Expedia, has this advice – do not try what OTAs do and attempt to compete on price and selection, but instead focus on why your customers use you, he says during a panel discussion at the event.

“By all means do a website, do a low cost website, but ask yourself ‘what do your customers use for you’, and focus on making that better.”

The one area OTAs cannot do as well as travel agents is personalization, he says, and although big data is coming and that will help OTAs personalize to some extent, “it will never solve personalization”.

“You sell the complete trip, you sell the itinerary and you make people feel comfortable with that.”

Lynn cites the example of Flight Centre Australia, which is doing a good job helping customers feel assured about the complete itinerary. But obviously that doesn’t stop Abacus from wanting to help its agents compete in the area of choice and price and its RoomDeal product is aimed at doing precisely that in the competitive hotel segment.

Developed in partnership with Indonesia’s RajaKamar group, RoomDeal is aimed at unlocking the best hotel deals from key hotel content aggregators across the region and offering them at net rates to agents, thus allowing agents thereotically to compete on price with the likes of Expedia, Agoda or Booking.com.

It has signed partnerships with aggregators such as Asian Trails, Hotelbeds, the AOT Group and HS Travel International. Aimed at the leisure and smaller corporate travel agents, it has 140,000 hotels in the system, allows agents to merge PNR with flight tickets and has its own payment gateway so agents can issue their own vouchers.

Now Bailey detects a shift in the mindset of travel agents to technology adoption.

“When the Internet came in, they saw it as a threat to their business. With mobile and how things are changing, people are now excited by it and are trying it out.

“In a sense, we have to hold them back because the key question is, how are you going to apply these solutions to get a business result, rather than a quick gee whiz kind of thing.”

NB: Asia selection image via Shutterstock.

It seems all the forces are converging and, in some way, uniting a very diverse part of the world through technology and globalization, and yet splintering them into distinct, disparate pieces that make up a puzzle both intriguing and exciting for smart companies to solve.

Technology adoption by customers is happening at an accelerated pace – you don’t need statistics to tell you that people in Asia are adopting smartphones and tablets faster than their counterparts in Europe and the US.

Let’s not talk only about urban Asia, where most of the world’s mega-cities are located – huge populations constantly on-the-go and online – but it’s rural Asia that could have the most impact on how travel will change in the region.

Here are huge communities that have suddenly had the world open up to them, their appetite for discovery whetted by the images and messages from outside, now in the palm of their hand.

What”s happening?

Kathleen Tan, group commercial head for AirAsia, was telling me the other day that she got a message on her Weibo account from someone who thanked her:

“Because of you, I can now see my family after 44 years.”

An airline like AirAsia is flying new routes traditional carriers can’t or don’t wish to operate and, in the process, enabling people from remote Asia to connect with each other in profound and meaningful ways.

And while some in the West might lament at the slow speed of regulatory change in China, the recent partial deregulation of GDS structure which allows airlines from outside the country to sell their tickets through foreign GDSs from October 1 is a big step in the history of its evolution of tourism.

As Chinese philosopher Lao Tse said:

“A journey of a thousand miles begins with one small step.”

As a country, China is used to taking small steps. But its people are outpacing the state – with the vibrancy and intense competition of the Chinese online travel market in evidence at the recent Travel Distribution Summit in Shanghai in September.

Everyone appears to have a travel startup and the two big OTAs – Ctrip and eLong – are engaged in a price war that can only mean the death of those caught in the middle.

But, interestingly, North Asia is where I believe most of the action’s going to take place next year.

• Japan with its low cost airlines promising to revive a stagnant market
• Korea, whose pop culture is sweeping the world Gangnam-style and its incumbent low cost carriers, Jeju Air and Air Busan, facing competition from outside
• Hong Kong about to get its first locally-based low cost airline
• Macau with its larger-than-life hotels and casinos surely needing increased access to fill up the rooms and tables.

China’s Spring Airlines, after laying an impressive foundation at home – its successes in using social media to build a brand are worth studying – is expanding overseas and is laying out a social media strategy to stretch its brand outside its traditional shores.

I just returned from Taiwan this week, possibly the last market (outside China) where low cost airlines have yet to make a big impact. It remains a pretty traditional market – airlines and consolidators have complex relationships that are hard to unravel – but foreign low cost airlines are flying in and once customer behaviour starts to shift, we will see the trade follow… as we’ve seen elsewhere.

(South) Eastern Promise

That’s not saying South East Asia will lag behind in the action – ASEAN, after, all, is where 300 million people live. There’s the promise of ASEAN Open Skies by 2015, although no one’s holding their breath on that.

But low cost airlines continue to drive change, with AirAsia leading the transformation. Its regional headquarters is now in Jakarta, the hottest ecommerce market right now. There’s a reason for that.

I had lunch with T Fuad, the co-founder of Travelmob, the social stay marketplace, just to find out how the Airbnb of Asia was doing since its launch in July this year. It’s raised $1 million in seed funding, small but good for a start, especially in a risk-averse market where investors are still not sure how the regulatory environment will adapt to this new disruptive model of accommodation.

It’s seeing good traction – from savvy customers in Asia who can smell value and a change coming and from property owners who want to earn income from their investments.

This is where Travelmob may hit the jackpot – plenty of content out there from owners with second or third or fourth homes in an increasingly affluent Asia and where property play is as second nature as the roll of a dice.

At the recent inaugural Singapore Summit, Prime Minister Lee Hsien Loong said Singapore’s survival depends on how its people connect with Asia and the world.

“Global and Asian forces are constantly at play here, and the country’s survival depends on the Global Asia story.”

I think his words are also applicable to travel and tourism. Asia’s travel and tourism industry needs to plug into the so-called Global Asia message just as the world outside needs to plug into that same story as it unfolds.

A previously one-way flow of information and knowledge has become two-way and the balance of power is now, well, balanced.

It’s no longer enough that Asia’s travel and tourism industry just remains relevant, but it must now also lead. No more, let’s watch what happens over there and see what happens over here. It’s time to say, let’s make something happen over here first and connect with the world.

It’s going to be hard for us to unplug the Global Asia story in three days at the WIT Conference but we will give it our best shot. With Tnooz, we are running THack@WIT and we hope to see some creativity from developers who will be given a platform to showcase their work in front of our audience.

We have nine start-ups pitching at our Startup Competition and we’ve never had such a global spread of companies – from US, Europe, Japan, India, Indonesia, Singapore, China and Australia – showcasing their idea to a very diverse panel of investors.

At the WIT Conference, we are blending voices of experience with new ones, global with Asia, Asia with local, scientists with creators, marketers with money men. We hope the end result will be a magical combustion of all that’s intriguing and exciting about the Global Asia story.

See you in Singapore.

NB: WebInTravel 2012 programme.

NB2: Asia child technology image via Shutterstock.

Which probably explained the general upbeat mood of an online travel agency panel at WIT Japan which featured three foreign brands – Agoda, Hotels.com, AirAsia Expedia – and four of the top local names – Rakuten Travel, Jalan, Ikyu and iJTB.

In Japan, amid a declining travel market which has seen traditional travel agency total gross bookings drop from Yen 6,281 billion in 1996 to Yen 5,930 billion in 2010, online travel continues to grow and all four Japanese OTAs reported a pick-up in customer demand and a shift from offline to online.

Rakuten Travel, Jalan and Ikyu are taking market share from the traditional travel agencies – five of whom account for 60% of the market – which explains why Japan Travel Bureau has set up an online arm, iJTB, to defend its estimated 30% market share.

Old versus new guard

From the panel discussion, it was clear that iJTB is finding it a struggle competing against the more established trio. Toshiyuku Imai of iJTB claims the others have an advantage due to their early start while his company was just getting into the space.

At Jalan, which is part of the Recruit company, CEO Suguru Tomizuka is being given wider responsibilities following a restructure – he will now lead up to six verticals including restaurants and fashion.

Tomizuka says with domestic travel accounting for 85% of the market, Jalan would continue to focus on offering domestic content for local travellers.

Following its failed expansion into China last year, Ikyu’s Masabumi Mori says he will remain focused on the luxury hotel segment. It also launched an English language website which has since been taken down, citing “site renewal”.

The company has expanded into restaurants. According to a news report, Ikyu saw a 40% jump in revenue from restaurant reservations in the year ending March, with 30 and 40-somethings now making up more than 60% of registered users.

Mori says “restaurant reservations have led to more young women using the site” and Ikyu is also now using social media to help bring back dormant members.

Rakuten Travel remains focused on expanding overseas and its biggest play is in South Korea – following its largest Japanese customer base – but CEO Masashi Okatake says it continues to face challenges of scale and finding the right model for the right market.

Wilfred Fan, North Asia director for Agoda, says it is interesting that while everyone’s business is different, the common challenge to all brands is wanting to expand: “Finding one way of operating that is scalable.”

His advice to his Japanese counterparts:

“Do it one market at a time. Get one market right first and then move to the next.”

When Japanese OTAs were asked what advice they’d give to their overseas friends wishing to expand to their shores, Ikyu’s Mori sat next to AirAsia Expedia’s Lynn says: “Buy me.”

Jalan’s Tomizuka believes brand is important. It took him five years to build up the Jalan name by successfully leveraging on the Recruit platform. “We have first mover advantage,” he claims.

Product challenges

Imai says local content is a challenge, and foreign OTAs struggle with getting product such as ryokans into the inventory. iJTB says it has 1,500 ryokans now listed.

Rakuten’s Okatake agrees that the international OTA model worked with the business hotel market but not with more Japanese offerings such as ryokans.

Culture, language and offering a Japanese customer experience were also cited as obstacles facing foreign brands.

Johan Svanstrom, managing director, Asia Pacific of Hotels.com, believes these issues can be addressed with time but that is the challenge facing global brands – having the resources to go into local markets and spending time in-market. He adds: “That’s the best way of growing any business, but that’s not scalable.”

Lynn, managing director of AirAsia Expedia, wants to know how different Japanese consumers were and therefore how different the user interface has to be.

“My belief is that yes, there is a secret sauce that big data can unearth but there are more commonalities than differences.”

One thing is clear: smartphones and tablets are emerging as the next important play – and WAP is on the way out. Jalan’s Tomizuka says that he was seeing up to 55% of transactions taking place on the smartphone and the move to mobile had helped him cut customer acquisition costs in half.

In a later presentation, Google’s Katzuki Oshiden, director of travel industry sales for Japan, shares April 2012 data that shows smartphones accounted for 34% of travel query volume compared with 12% for WAP and 54% for PCs. And during the recent Golden Week, mobile search queries surpassed that of PCs for the first time.

Jalan and Rakuten see mobile as a big area of growth and an opportunity to drive down customer acquisition costs.

Lynn comes back to the opportunities around the evolution of technology, especially Big Data where it can be used “to tease out those customer insights”. And he believes the area of social recommendation has yet to be addressed well by anyone.

“This is something to watch – no one has the answer yet.”

Overall, the mood is upbeat among Japanese OTAs. Indeed, despite than the dark clouds continuing to gather over Europe, the outlook remains positive for online travel in Asia.

According to PhoCusWright, of the projected APAC online travel market of $70.6 billion in 2012, Japan accounts for 45%, followed by Australia/New Zealand 17%, China 11%, India 10%, South Korea 7% and the rest of APAC, 10%.

As Svanstrom observes, growth is assured as “we sit in a region of growth”. He adds:

“More Asians are saying, I want to travel, and most will book an airline, hotel or ship online.”

OTAs are also looking forward to the entry of low cost airlines into Japan which will spur demand and further migrate customers from offline to online. They claim that low cost customers would take savings on air and spend it on high-end accommodation.

Imai of iJTB cites dynamic packaging as one area his company will be aggressive in, with it already seeing quadruple growth in its particular area of the business.

Packaged tours also remain popular in Japan. According to PhoCusWright, domestic packages account for 24% of total domestic market in 2011 while overseas packages form 32% of total overseas market.

And is there any bad news? There are, of course, worry lines in any market, but compared to other regions around the world, online travel brands in Japan and the wider Asian are enjoying the good times rather than worrying about any bad ones.

NB: Mount Fuji imge via Shutterstock.

I suppose it’s because Asia is now seen as the land of opportunity in terms of jobs, especially in Europe, where there’s a crisis of unemployment among youths.

In Madrid, for instance, local friends told me that their kids, just out of university, are not even bothering to look at home for jobs but are casting their net wider, and mostly to Asia.

It’s a no-brainer that at the rate global travel brands are expanding in the region they’re going to need a lot of people. Accor, for instance, will need 20,000 new members of staff by the end of 2015 to fulfil its development pipeline in the region.

It’s not only hotels that will need people but every piece of the travel supply chain – from the numerous low cost airlines that have been launched to the cruise companies that are sending in new, bigger ships to thousands of startups across the region hoping to grab a bite of the booming online travel market.

Then you also have the so-called non-travel brands such as Facebook, Google and Skype that are increasingly looking towards the industry to hire talent as they expand into the travel space.

What all this means is a serious people crunch that could choke growth and that could also adversely impact the quality of service that Asia is known for.

Already, Singapore is showing the strains of a tight labour market with restaurants and hotels unable to keep up with customer expectations which are also rising in line with prices. Even the Singapore Girl is now being allowed to fly past the age of 50.

Despite the boom in travel and tourism, and official attempts to “sexify” the industry, the perception that the industry is about long hours and low pay persists and it’s not the first career choice for youths.

This, I’ve found out first hand from working with students at WIT and our Inspiring Young Minds initative, WITNext.

Yet when you speak to youths about working in travel, you see stars in their eyes because, yes, everyone loves to travel.

Their problem is a lack of awareness of the diversity of jobs available, and really once you get into it, how rewarding it can be – perhaps not financially but emotionally and intellectually.

One problem too is the lack of industry mentors and contacts during “the moment of truth” – that moment when you are about to leave school and get a real job.

At WITX-Women In Travel, held in Bangkok in late April, I asked Blanca Menchaca, one of the bright young sparks working at Wego in digital marketing, the one thing she would have liked to have at that moment of truth and she said:

“A mentor, someone to speak to.”

Just this morning, I received an email from a Singapore Management University student, about to graduate, how she can get into the industry and who she could talk to.

The biggest lack of awareness is in the travel technology field which is rapidly expanding in Asia but faces a people crunch in terms of developers and marketers.

The industry as a whole needs to understand how this might play out and what to do about it.

It would be a shame, after all, with all the growth the region is experiencing that the one element at the beating heart of the sector – its people – could be adversely affected.

NB: We created a WITNext Summercamp for this year, in June 21-22 in Singapore. The 1.5 day programme takes students, job seekers and school leavers through three phases: personal coaching; sessions to understand the industry at a strategic level; and bootcamps around specific job areas and career opportunities. This initiative also includes the The Dream Job Pitch.

NB2: Child blackboard image via Shutterstock.

One, tourism is a great industry for women. It offers jobs at all levels for all stratas of women. This is particularly powerful in developing regions.

Two, women are almost twice as likely to be employers in tourism as compared to other sectors. Tourism also offers leadership possibilities, with women accounting for one in five tourism ministers worldwide; more than in any other branch of government.

This is according to a UNWTO/UN Global Report on Women in Tourism 2011, which says:

“Women make up an important percentage of the tourism workforce, but more work must be done to close the wealth and skills gap between men and women employed in tourism.”

Three, women form the backbone of travel organisations but they are few and far between in management positions of major global brands and in the technology field, they are even fewer and far between.

Four, I’ve also learnt a lot about women as customers in Asia.

Did you know for example, she’s very rich? In the Forbes list of 50 richest women, women in Asia make a strong showing – China fielded 21, India eight, Singapore five, South Korea and Indonesia, four each, Japan three and Australia two. But of course, the world’s richest woman next year is expected to be from Australia – the mining tycoon Gina Rhinehart.

Across Asia, a growing swathe of affluent women consumers is emerging. From singles – more women are staying single, longer – to what has been termed “the silver tsunami”, this is a huge market to be tapped.

Of course, there’s also the lucrative weddings market particularly in India where no expense is spared at events such as these.

And given the fact that the majority of leisure travel decisions are made by women, then this becomes an increasingly important market to influence. Throw into this mix the fact that women fuel e-commerce, contributing up to 70% of revenues to retail sites from fashion to fiction.

At a Google Thinktravel event last month in Singapore, Loren Schuster, managing director for Google Singapore, said “a happy wife is a happy life”, when talking about how he and his wife planned one particular vacation.

I was talking to a general manager of a resort recently and he told me too that women were also the first to complain:

“You please the wife and everyone’s happy.”

At a time when technology is changing customer behaviour, it is even more important for us to understand how that’s changing women as travellers.

For instance, Ross Veitch, CEO of Wego, says that 50% of users on his Singapore site are women and they are active searchers.

Dan Lynn, managing director of Expedia AirAsia, adds:

“When booking a hotel, women are more likely to seek recommendations from a friend or her family, as well as leverage UGC reviews.

“Similarly, women business travellers are also likely to leverage recommendations from their organisation as well as UGC reviews. Men, on the other hand, are more likely to use search engines and other travel sites for information.”

This is backed by data from Experian Hitwise. Comparing travel websites visited by men vs women in Australia and China, there’s a clear trend of men going straight to search while women prefer wandering around the more social sites. Probably the same behaviour that is reflected in the real world in terms of how women and men shop.

Women also use social media differently from men – the growth of Pinterest into the world’s third largest social network is driven by women – up to 80% of active users.

I sense something big happening in Asia’s travel and tourism – the intersection between the rise of women in the workplace and that of technology which frees women up as entrepreneurs and travellers will create opportunities we’ve only been dreaming about.

Perhaps it’s now time to talk about it.

NB: Woman mobile image via Shuttertock.

Well, the advice from Brett Henry, vice president of marketing and India operations for Abacus International, is “conquer the post-booking space first”.

The value to travel agents is in this area, he says – delivering information after a client buys a ticket, such as late flight changes, and a mobile itinerary.

“Conquer this space first, then think of transactions,” says Henry.

Nevertheless, mobile travel bookings are becoming a significant part of the consumer journey ecosystem and Asia is leading the way.

The largest OTAs in Asia are ahead in mobile transactions than their global counterparts, Henry says, citing Cleartrip and Ctrip as companies to benchmark.

Among the airlines, AirAsia is ahead of the other main contenders in the region and was expecting to take US$200 million in sales through the mobile channel during 2010.

Abacus, of course, is getting in on the act, producing products such as Abacus Mobile and Abacus WebStart for Mobile.

But on the question of whether a company should go for a mobile website or app (a common question these days), Henry says: “Have a great mobile website first, then go for the App.”

The ground is certainly ripe for travel to go mobile in a big way in Asia, the world’s largest mobile phone market. Asia-Pacific accounts for 30% penetration of smartphones worldwide, and 54% of all devices sold in Asia are expected to be smartphones by 2015, up from 5% in 2009, most of it driven by social networking.

Seven out of ten mobile users are members of online social networks and a third of them are influenced by comments by people in their online social network when making travel purchase decisions.

In 2012, it is expected there will be around 123 million mobile payment users in APAC.

The number of apps has also taken off recently, with all the major app providers including Apple, Android, Blackberry and Nokia Ovi Store, increasing by triple digit percentages from just a year ago.

When pressed by WIT to pick which would be the dominant platform over the long term, Henry opts for Android.

“Airlines and travel providers see the value in mobile. They are setting up mobile websites and developing apps.

“With its vast population and mobile usage, Asians will pave the way in determining the future face of travel through mobile, especially with the dominance of smartphones in the region, serving as a one-stop repository and access to all the touchpoints travellers need when on the go.”

Prime Minister Julia Gillard (a dead ringer for Jodie Foster, by the way) has cleared the first political hurdle to make her government’s AUS $35 billion National Broadband Network (NBN) a reality.

I have been watching the political debate unfold with fascination. Australian politics is so feisty compared to back hone in Singapore – think Africa’s game parks versus the night safari.

Gillard calls it “a win” for everyone and she’s now able to take the bill for a final vote. “This is a reform literally 30 years in the making,” Gillard told reporters earlier this week.

The NBN business plan is simple – it expects to deliver a fibre network to 8.3 million of Australia’s 10.9 million homes, with 12 million business and residential properties to have access to wireless or satellite when the network is completed.

As a regular leisure and business traveller to Australia, this is good news. I am staying at the Grand Hyatt, where the internet is provided by DOCOMO interTouch.

If you are not part of the inner circle, you have a choice of paying AUS 55 cents per minute, or up to a maximum of AUS $29 per day, per computer – no multiple devices allowed.

Which doesn’t give you much choice really. Plus, connection is slow compared to either Singapore or Luang Prabang, Laos.

I recall a session at the Hong Kong Hotel Investment Conference Asia Pacific (HICAP) last month. The subject of internet and hotels was brought up and a hotel owner from Australia said it was difficult for hotels to offer guests free internet access because it was a cost to them. “You pay for internet at home, don’t you?” he asked.

Michael Issenberg, chairman and chief operating officer of Accor Asia-Pacific, offered a similar argument when I asked him the same question at ITB Asia in October this year.

This argument no longers holds much water I’m afraid. At home, I also pay for my utilities – electricity, water, etc. In a hotel, these utilities are part of the room rate and I don’t expect to be charged by usage (although perhaps this could be a new business model).

And that is the fundamental question: are hotels in the utilities sector or the hospitality business? In the old days, hotels charged for gym use – now a gym is standard in a business hotel room rate.

Hospitality is sometimes defined as “kindness in welcoming guests or strangers”, although my personal favourite is “hospitality is the art of making guests feel at home when you wish they were”.

Nevertheless, also at HICAP, Shangri-La Hotels and Resorts was cited as a hotel group that had decided to invest in making internet available throughout all its hotels to all its guests, a decision it made during the global financial crisis. It cost the company about $20 million, we were told.

Taking the hospitality argument further and since we supposedly live in the age of customisation, imagine if Grand Hyatt had recognised me as a media person and had said, because we know what you do, we are happy to offer you free connectivity throughout your stay? Imagine what I’d have tweeted.

Incidentally, I also checked out the new AUS $350 million Melbourne Exhibition & Convention Centre. It’s a great looking venue, in a fabulous location, and it’s touted to be environmentally-friendly and super high-tech. The rooms are well designed – minimalist, with great use of space.

Internet access? There’s also a payment wall.

Now, I am not asking for free wi-fi everywhere (although that’d be nice), but there needs to be a fresh approach to how hotels and venues package the entire customer experience, which happens to include all the utilities needed for a comfortable stay or a successful event.

Anyway, this morning, I had to wake up at 8am to have a hot shower because, since the hotel is undergoing maintenance, the hot water utility will be unavailable between 9am and 7pm.

Glenn Fogel, executive vice president of corporate development of Priceline, is here for coffee.

We look at each other and laugh at the surreality of it. It’s what I love about travel – moments like this that make you chuckle and store away in the hard disk that’s your brain.

I take out my iPad to take notes. “Have you tried Evernote?” Fogel asks, before going on about how great it is.

Fogel has an almost evangelical air about him when he speaks about something he is passionate about.

But equally, he’s highly cautious when speaking about matters related to Priceline because it’s publicly traded.

“Do you make it a point to keep up with everything new on the web?” I ask.

“It’s hard to do that, there’s so much stuff, a flood of information coming down. Can you imagine our customers also managing that information?”

So how important is it to be at the leading edge doing what you do?

“I call it bleeding edge. We stay away from that. We are rarely the first to anything. There’s a great cartoon of the American West a long time ago – a man face down in the dust with an arrow in his back. He was the first mover. We look at what we think are the best opportunities for us.”

“There was a time in the industry when everyone said dynamic packaging was the way to go. We discussed that but we didn’t invest a lot of time in it – we stuck to hotels. It’s good to stick to your knitting.

“People talk about the fox and the hedgehog – the fox knows many things, the hedgehog knows one thing. We know one thing – hotels – and that’s not changing in the foreseeable future.”

It’s an obsession that has obviously worked. Priceline sold almost 80 million room nights for the four quarters that ended in June 2010, and has a market capitalization of US$15 billion.

For Fogel, price is paramount, then comes content, speed and ease of use.

“Price is everything from beginning to end.”

And while others may talk about how search is going beyond price to information and how social networks will change the way people search, Fogel says: “After they decide where to do and where to stay, they look for the cheapest price, right?”

Ask Fogel about Priceline’s plans for the Asia region though and you literally feel his spine bristle and he curls into a ball like a hedgehog.

“Never talk about what you’re going to do next,” he says.

So I move the conversation back to more comfortable territory. What is he proudest of?

“There was a time when people said Priceline was going to disappear, it was going to be a dot-bomb. Today we are the leader and I am proud of the people that we have, to have achieved what they’ve done.

“What we did correctly was to let local people decide what is the best thing to do and not bring or have an American-centric viewpoint and push it downwards. We have seen the failures when a headquarters of anything tries to dominate a local organization thousands of kilometers away.”

Thus, for him, identifying the teams rather than the business models is often more important.

“We met with many, many companies but the reason we acquired what we did was for the people.”

Getting to know people versus just looking at the numbers may be a longer process but, as Fogel says: “Love at first sight happens but I think chances are a longer engagement ends up as the more successful marriage.”

With Booking.com, he knew the team less than a year before acquisition. “That’s shorter than usual for us.”

With Agoda, it took a longer courtship. He bought the Thailand-based company at the end of 2007 but he met the team leadership in 2002-2003.

“The company was in an earlier stage and we weren’t ready,” he says.

Of all his acquisitions, including Active Hotels and car rental firm, Travel Jigsaw, which one has paid off the best?

Fogel tells a story.

“When Dr Henry Kissinger first met Premier Chou En Lai, and knowing the Chinese head of state was a great scholar of French history, he asked the question: what do you think of the impact of the French Revolution on the world? The premier’s answer was, too soon to know.”

Enough said.

When evaluating teams or individuals, Fogel says the questions he asks are, has the person achieved things in the past and has he executed well? Past successes, he says, are the best evidence of how someone will act in the future.

How about people who’ve had failures – do we write them off?

“There have been instances of people who’ve previously failed but went on to succeed, like Abraham Lincoln,” he says. “But it’s a longer shot than someone who’s got a track record of success.”

Have you made any mistakes?

“Many,” he says. “One of the good things about failures and mistakes is you do learn from them.

And, finally, he quotes George Santayana: “Those who do not remember the past are condemned to repeat it.”

Representing a range of business ideas in the digital travel space, they comprise start-ups such as ComeSingapore, Forget Boundaries, Yoplr, Tourz and Eco Travel.

Each company will have the opportunity to be mentored by a panel of experts and advisors before pitching for the right to present their ideas at the Grand Final during the WIT Conference the following day on October 19.

The WITovation Entrepreneur Bootcamp, aimed at driving innovation and inspiring entrepreneurs in the digital travel space, will be held at the Singapore Tourism Board Auditorium, Level 2 of the STB’s head office located at Orchard Spring Lane.

All WIT delegates are entitled to attend the Bootcamp.

Non-WIT delegates pay an entrance fee of S$180 to attend the day’s programme, which features a keynote talk by archangel investor and serial entrepreneur Morten Lund, one of the first investors in Skype as well as 50 other start-ups including flight data startup Everbead.

Other sessions will discuss entrepreneurship from successful travel startups across the region and innovation to come within the online travel industry.

Following the Bootcamp, Tnooz will hold #tcamp6 at a nearby venue between 6 and 8pm, free entry for all Bootcampers and WIT delegates.

From one day to the next, when I was there last week, a hot, humid summer day gave way to cool, blustery autumn winds.

I feel the same change in wind direction taking place in China’s travel market.

Perhaps it all started two years ago with the hosting of the world’s largest sporting event which it did with spectacular style.

Perhaps it’s to do with hosting the world’s largest World Expo which it is doing with spectacular scale.

Or perhaps it’s just the fact that it’s now the world’s second largest economy in the world and is driving the global economic recovery and what it does with its currency matters so much to the rest of the world.

I sense a new-found confidence in its people. In one generation, I have seen the change from a nation that was looking to learn all it could from the outside world to one that now knows it has much to offer the outside world and that it can pick and choose from those who would teach it.

Within my own family, I see it. My relatives in Haikou, Hainan, no longer depend on their overseas brethren for handouts; they have more – and beyond materialistic goods, they have a deep sense of rootedness which my father gave up in search of a better life abroad.

This shift in sentiment was clear at the China Travel Distribution Summit in Beijing last week.

The unscheduled “nuclear” remarks made by Larry Liang, general manager, airline solutions of TravelSky, prompted by the opening comments of PhoCuswright’s Ram Badrinathan, whose presentation was by the way immediately followed by that of David Jones, CEO of Amadeus, was a case in point.

Okay, the comparison to nuclear weapons was unfortunate at a travel conference but there’s a younger generation of Chinese who are more vocal and prepared to speak up and defend their own interests.

Liang’s comments were picked up again by Michael Chen, vice president of Jinling Hotels & Resorts Corporation, during a panel discussion on channel distribution versus direct sales, a session which happened to be moderated by Liang.

Talking about the entry of foreign companies into China, Chen said many found it hard to make it.

China, he says, should have “nuclear weapons”. It’s a big market, bigger than Europe, and if you want to cooperate with the China market, you have to recognize that this is the trend, he said.

He notes that while China’s hotels were weak in the past when it came to direct distribution – which explains why Ctrip is so successful in online hotel sales – this was changing.

Chinese hotel groups such as Jinling were getting bigger and more advanced, he says. And, he adds, do not apply the foreign model to China – we will not play with you.

Listening to a foreign view, however, was what got Min Fan, CEO of Ctrip, started on his road to success.

At a market cap of approximately US$5 billion, Ctrip is now the world’s third largest online travel agency, after Expedia and Priceline.

In an interview session at the conference, Fan recalls his first job working as a management trainee in a hotel. He asked the foreign general manager how he would differentiate the hotel.

The answer was, location, location, location.

At that time, he thought it was too simple an answer but now he sees the sense of it and applies a similar concept to what he does at Ctrip – service, service, service.

“If you can guarantee your service level, the customer will look for you and book from you,” he says, adding his key preoccupation was how to improve service.

It sounds like an empty idea, he says, but when you sell on the Internet, service is even more crucial. From the moment the customer books to the time of delivery, there are roughly 20 touch points and the company applies 61 assessment targets to identify areas for improvement.

Even as he works on service improvements internally, Fan is also looking to expand Ctrip’s business outside China.

Last year, it acquired ezTravel in Taiwan and Wing On Travel in Hong Kong.

In choosing companies to acquire, he says it was about “how you can transfer your experience and interface your technology”.

He uses three criteria to evaluate acquisitions – will it effectively expand its product line, will it add value to its core product line and growth potential is not limited to China but Asia and worldwide, and value. “If it’s too expensive, we cannot afford it.”

He says he had a lot to learn from Glenn Fogel, executive vice president, corporate development, of Priceline (who had presented earlier) who he says had been very successful in his acquisitions.

For Chinese companies, going abroad is a challenge, he said, citing limited international experience. This explains why his first acquisitions have been in greater China because of the culture and language.

He says he has also learnt a lot from Japan, although the country’s travel companies tend to invest more in local sites rather than acquire foreign companies.

It thus appears the wind blows both directions – even as foreign companies are still scrambling to enter China, Chinese companies are now venturing abroad. And both have much to learn from each other.

And it seems that what we should do is bury the “nuclear weapons” talk and smoke the peace pipe – that is, after all, what tourism is all about.

Indeed, a good blend of globalization and localization is just what the Lady of the Moon would approve of – my favourite mooncake, for example, is snow skin mooncake with champagne truffle and ganache.

In fact, the opening session of the Travel Distribution Summit in China held in Beijing this week saw comparisons being drawn between GDSs and nuclear weapons and the contrasts between the philosophy of Mahatma Gandhi and Confucius.

It all started with the opening keynote by Ram Badrinathan, general manager in Asia-Pacific for PhoCusWright, who in calling for a freeing of the travel market to allow technological innovation particularly in travel retailing, quoted Gandhi:

“I do not want my house to be walled on all sides and my windows to be stuffed, I want the cultures of all the lands to be blown about my house as freely as possible but to refuse to be blown off my feet by any.”

Badrinathan says that while travel and tourism in China had grown by leaps and bounds in all aspects, there was still one aspect where it lagged behind other markets, in particular, India – innovation in travel retailing – and he attributed this to the closed GDS market which was restricting travel agents’ ability to meet changing customer needs.

He adds that the GDS environment had evolved considerably globally to meet the changing needs of customers such as airlines and travel agents.

In a benchmarking survey conducted by PhoCusWright in China, the company found that gaps such as efficiency tools, fare transparency and integrity, reporting tools, merchandising capabilities and relationships tools and attributes existed in the current GDS environment in China.

The Chinese GDS lacked certain functionalities for example service fee management module, automated ticket refunds and reissuing, PNR quality checks and unused ticket reports.

“Fare guarantee policy is not available for international fares in China – 40% of agents said they have to check with global GDS – and in terms of integrity of fare quote engine, agents said they have to check with individual airlines,” says Badrinathan.

This, he says, created a lack of trust in agents.

Drawing comparisons between India and China, he said that while China outstripped India in terms of physical infrastructure, it lagged behind in terms of soft infrastructure.

In India, global GDSs are allowed to operate, there is private ownership of airlines, the travel retailing chain is deregulated and low cost airlines have a 50% penetration. All this encourages invesments and innovations by entrepreneurs.

In the online travel agency markets, touchless bookings dominate – close to 90% of MakeMyTrip bookings are totally automated in contrast to 80% of Ctrip’s transactions that are done offline.

While he says that not all globalization is good – for example, McDonald’s – Badrinathan says that China is sitting on the sidelines as the world of travel retailing passes by. It is time, he believes, for key stakeholders in China’s retail travel industry to take their place alongside other global players.

His remarks prompts an unscheduled response from Larry Liang, general manager for airline solutions of TravelSky.

First, he explains that there were two types of GDSs – one was run by investors and shareholders who set profitability targets and the other was run by airline shareholders whose aim was to provide services to customers. “Both are different business models and have different performance criteria and cannot be compared in the same breath.”

He then compares GDSs to nuclear weapons, saying there were some countries that chose to have GDS or nuclear weapons and those that did not.

“China is a big country; we have to choose what we want to do.” He says that while the situation was not ideal – and no one wants to sell their core technology (ie nuclear weapon) – “we are ready to learn”.

“Are we going to become competitive or go into war without nuclear weapons?”

The China travel transactions market, in any case, is huge with figures scaling from $800 million to $1.5 billion to $3.5 billion. Global transactions by GDSs worldwide only come up to $1 billion.

“Who will be capable of handling the huge travel market in China. I don’t think any system in Europe or US can handle it.”

He says a different solution was needed to solve the Chinese problem and concluded that perhaps instead of turning to a philosopher who believed in starving himself, we should look to Confucius for the answer.

I was curious to find out if all the competition for our leisure time had affected attendance at the many live performances that are held in his venue, a leading tourist and local attraction in Singapore.

After all, there’s never been such a grab for our leisure time and never has our leisure time been as fragmented as it is now.

I read an article last week that said we were even trying to fill our downtime with “micro-moments”.

In gyms, as we cycle away, we play Scrabble on the iPad. Or as we run, we listen to music and watch television. We use our gadgets as tools to stave off boredom so that every little bit of downtime we have, we look for something to do.

“Mobile phones … let people relieve the tedium of exercising the grocery store line, stoplights or dulls in the telephone conversation,” says Matt Richtel, author of the article.

“The technology makes the tiniest windows of time entertaining and potentially productive.”

So these days we don’t only multi-task… we hyper-task. And Attention Deficit Disorder is no longer a condition but the order of the day.

I find myself doing just that with the iPad. I’ve found it very difficult to read any article or book at length on the device because my mind is constantly wandering and wondering if someone has just emailed me, if I should update my Facebook or if I should check out this word or that or, how about a game of Scrabble?

“But don’t you do that anyway even with a real book?” asks a friend.

“Yes, but with the iPad because everything is in one place, it’s so easy to be distracted,” I reply.

So with all these weapons of mass distraction before us, it is very easy to be, well, distracted.

So where was I? Oh yes, Benson Puah and the Esplanade.

The good news is, attendance for live events at his venue has been rising. Since its opening in October 2002, he tells me, more than 10 million people have attended concerts and performances in the centre.

About 3,000 performances will be held this year, out of which 85% are presented by Esplanade. The annual Mosaic Music Festival in March, started by Esplanade in 2005, has grown from 65,000 attendees to 100,000 this year. A 2010 survey estimates that 14% of the attendees were tourists.

Benson sees digital media as an ally of the performing arts, rather than a competitor for our leisure time. He cites a survey by the National Endowment of the Arts in the US which debunks the myth that new media will replace live performances.

“In fact, if you are into new media, you are more likely to go to a live performance and the more active you are in all forms of media, the more experimental you are with discovering and trying new acts. Humans are social beings. There is no replacement for engagement in a social setting.”

There is also no replacement, I think, for real downtime.

The article mentioned earlier points to one side effect of constantly filling our time with “micro-moments”.

“When people keep their brains busy with digital input, they are forfeiting downtime that could allow them to better learn and remember information, or come up with new ideas,” Richtel says.

It contihnues that scientists at the University of California found that “when rats have a new experience, like exploring an unfamiliar area, their brains show new patterns of activity. But only when the rats take a break from their exploration, do they process those patterns in a way that seems to create a persistent memory of the experience”.

They suspect these findings may also apply to how humans learn.

So next time you get some downtime, remember – go out and do something new, catch a live act or something, and not be like a hamster in a cage… with an iPad.

Or so says Kathleen Tan, group head of commercial for leading low-cost airline in the region, AirAsia.

“There’s the empowerment to fly and there’s the empowerment to buy. Low cost airlines and the internet have changed buying behaviour in Asia. There’s more virtual planning – people can do a lot more search – and they book instantly.

For example, Tan says: “When we put Yangon on sale recently (the airline launched Kuala Lumpur-Yangon flights in July), we sold 50,000 seats.”

At the same time, there’s a generational shift happening with travellers in Asia.

“As they are empowered to fly and buy, they have also become more empowered as travellers and the smarter travellers now do not need tour guides or buy package tours – they search for information on the web, and they share information with each other on social networks.

“People are more experimental now and are seeking new kinds of travel experiences.”

This is why she believes vendors and operators have to change not only the way they market but also the way they serve these new travellers.

“I urge the industry not to always look to the West, the spending power is in Asia, and we have to change the way we engage with the new Asian customer.”

“Younger people are more savvy now, do you still sell them the same packages? Do you still take them to gems stores and get commissions? People know where they want to eat. They can find the best places to get a tattoo in Bali,” says Tan.

“For me, the romance in travel is in the exchange that’s happening between students and young people, something that’s been facilitated by low cost airlines. Mainland Chinese are now coming to Malaysia to study; before it was only Singapore, but the less wealthy Chinese are opting for Malaysia.

“We have Malaysians going abroad to study and search for jobs. There’s labour mobility, medical mobility. In Malaysia, nurses are hard to come by and so we have lots of nurses from south India working in the country. And Malaysians are going to India for beach surfing at half the price they’d pay in Bali.

“In Bandung, Indonesia, there are 20 universities – imagine the opportunities for youth travel from that market.”

As a marketer, Tan is proudest of the airline’s annual “one million free seats” promotion. Having run it for the last five to six years though, the customer is getting smarter at it.

“It’s become a game to some now. They know it’s hard to get, and so if they get it, they feel good and tell their friends about it.

“They have become marketers for us. There’s a Chinese customer who managed to book 30 free tickets and, apparently, he studied our route map and our website for a month and when the day came, he did it with such speed, got 30 and told all his friends about it.”

Sometimes, promotions can bomb. “Every route has different characteristics – Yangon is different from Taipei for instance. India is what I call a “marathon” market. The purchasing process is much longer, they discuss a lot before they buy. They also like to travel in groups, so they talk a lot among themselves first.

“With Taipei, it explodes but in India, it’s a slow burn – you can’t take your budget and spend it in one go.”

The travel agency channel is not something that excites Tan. “I refuse to pay commissions to travel agents in Singapore; I don’t want to get into legacy business. To service agents, you also need manpower.

“When we first entered China, we depended on travel agents but now our brand is more established, and people know how to book us online. We are also seeing more FIT travel from China.

“India is challenging – people are still reliant on travel agents – but I see a tipping point taking place this year as our brand gets more established.”

Consumers however need a physical presence from time to time to reassure them that the airline is actually run by people and not computers.

“We held an AirAsia travel fair in Jakarta recently and we had people coming up to us who thought we were run by computers, so you need to be present physically for people to feel your brand.

“We have a long way to go still in some markets,” says Tan.

Community marketing is a personal passion of Tan. She watches with interest how Zouk Club of Singapore has managed to stay relevant to its customers despite it being probably the oldest club in the city.

“They are constantly revamping to stay relevant and has held on to their customers,” she says.

Another company she watches is Apple – “they way it upsells and cross-sells”. She said, “They think out of the box and they keep everything within the community.”

One market that has surprised her is the luxury market and how people are still paying a lot of money for luxury products.

“LV has remained so relevant that a mother and her teenage daughter can carry the same brand. It’s an old brand but has engaged hot new designers like Marc Jacobs, brought out limited editions and clearly beaten the pirates.

“There’s a new generation of kids too who don’t buy pirated stuff and get a kick out of it.”

AirAsia recently released its second quarter results, ending June 30 2010, which showed a profit after tax of RM199 million.

Revenue rose 26% year-on-year from RM748 million to RM941 million. Passenger growth was 11%, rising to 3.9 million passengers. Load factor rose to 77% in 2Q2010 from 75% in 2Q2009.

See, the biggest lament in the Asian travel space is the slow adoption of technology by traditional travel agents.

Most of these family-run businesses are quite content to run their agencies the way they have always done – after all, “if the wheel ain’t broken, why fix it” would be the old Chinese saying.

Talk to any of the major GDSs in the region and they will tell you their biggest headache – they can’t get agents to adopt as fast as they can come up with tools and solutions.

So the problem is not the lack of tools, products and services, the hurdle is the mindset.

And as we know, that which we cannot see takes longer to be fixed – another old Chinese saying.

The times, they may be changing though – although Bob Dylan sang that in 1963 and the times, they still are a-changing – but ever so slowly, and all the while advancement in technology is outpacing even those who make it or create it.

Reading an interview by Don Tapscott, the author of Macrowikinomics: Rebooting Business And The World, he says: “It’s not that we have information overload; it’s that we have an under-capacity to filter information better.”

Over the past few years, some travel agents have been coming round to the idea that technology may benefit them – it could cut costs, improve productivity and improve revenues – but where do you begin? Could it become a money pit?

I remember an argument surfacing around this time that perhaps to get travel agents to adopt, you not only have to produce a solution, you also have to implement it for them.

After all, in Asia, we do not have a DIY culture like in the US or Europe.

Here we have maids to look after our kids, walk our dogs and feed our elderly, and so we don’t know how to do things for ourselves.

So for adoption to occur, implementation had to happen first – but we all know how hard it is to implement on behalf of others because eventually we have to remove ourselves from the situation and then what happens? Who carries on?

I was talking to a distribution system provider and the challenges her staff are facing to help a client implement a project.

The staff turnover was just so high that by the time she finished training someone, that person was off to another agency.

In Singapore, to encourage innovation and/or adoption, the government has all sorts of carrots.

There’s the Media Development Authority with its iJAMS, giving digital media companies S$50,000 to start up.

There’s the Singapore Tourism Board with its S$10 million Tourism Technology Fund and the recently-launched S$5 million iDigital scheme.

The former is more aimed at automation and the latter, at enabling ecommerce because the STB, given its new branding and digital strategy, needs to get its travel industry partners onboard the digital train.

The TTF’s been there for a while but I understand few grants have been handed out, although I am told there have been more enquiries of late.

Thing is, if you are a small travel company, you can’t afford the staff or the time to submit the kind of paperwork that’s needed to access such a grant. And if you are a big company, well, you don’t need the grant.

And so iDigital was set up and that’s supposed to be easier to access. But again, I’ve had lots of questions about it from budding entrepreneurs who are keen to “innovate”.

Thing is, most of them don’t come from within the travel space and because of that, they don’t qualify for the fund because that scheme is only meant for travel and tourism companies.

To qualify, they have to get a travel agency licence. This limits the possibility of innovation because, as Kevin noted, true innovation, defined as disruption, in any industry has rarely come from within.

Next month, the STB, together with the National Association of Travel Agents and a few government agencies keen to push the “adoption” agenda, are holding an IT Solution Fair for travel agents.

To be held September 4, the fair will showcase selected IT solutions vendors to the travel agency community.

The idea behind this is to try “take the pain out of the evaluation process for travel agents and to aggregate customer demand for the vendors” so that it will facilitate adoption.

In other words, if the vendors manage to find customers who like them enough, the travel agents can apply for the grants and the vendors can then “innovate” so that travel agents can adopt.

Still with me?

Point is, all these schemes have good intentions but I fear they have too many limitations for them to truly encourage innovation, let alone adoption.

Innovation cannot happen within silos, it requires the oxygen of collaboration.

As another old Chinese saying goes, you can lead the horse to water but you can’t make it drink it, no matter how many carrots you dangle in front it.

Or is it apples? I get my cultures so mixed up in this global world we live in.

But when it comes to sales, it still relies on the human touch of the traditional travel agent.

Nicholas Lim, director of sales and marketing in Asia for the 18 to 35-focused tour operator, says: “Our customers are very fickle in where they are on the internet so we reach out to them at every point – YouTube, Facebook, Twitter. Then when they’re ready to buy, we direct them to the travel agent.”

“We are not built to be a travel agent – it’s a lot of work, airline booking, insurance, special services and requests. Travel agents are convenient and add value to us.”

In Asia, almost 100% of Contiki’s sales are fulfilled by travel agents. In the US the mix has changed, says Lim.

After September 11 2001, when a lot of travel agents in the US went out of business, the company went direct-to-consumer to sell its tours.

Currently around 80% of its sales are made directly through the web or call centres. Will the business model move this way too in Asia as mobile and broadband penetration increases in the region?

Lim says: “At some point in time, perhaps yes. In certain markets where we don’t get the travel agent support, we will embark on direct sales. In China, for example, we are poorly represented, but that’s a market we need to be in.”

For now, its three biggest markets in Asia are Singapore, Korea and Japan, and the most popular destination is Europe, its core product, even though Contiki Asia also offers Australia and Asia package holidays.

“We get a mix of customers – the first half of the year is mainly student traffic and the second half are professionals and honeymooners,” says Lim.

Globally, about 80% of its customers are single and 60% are females, although Lim says that in Asia, women form a bigger chunk of the market, with 70%.

Travellers from Asia are also getting more confident. They are no longer buying the see-all-of-Europe in one trip. Rather, they are buying shorter trips in more focused areas – Italy, Greece and Spain are popular spots, for example.

“People now want more time to do their own thing,” says Lim, noting that Greece is the current bestseller. “People are also more informed. They actually realise that to do Europe as a do-it-yourself costs more than doing it with us. What they tell us is, don’t include us in your activities, we will do our own thing.”

And while its young customers may be fickle in where they are on the web, they are surprisingly loyal.

“If they buy something they like, they will champion it. They will tell their friends. This is where social media works well for us – they put their videos on YouTube or they share it with their friends on Facebook.”

Thus far, the company hasn’t come across negative reviews of their Contiki Asia experiences. “Usually they complain about the hotel and the food and we give feedback to the hotel,” says Lim.

Lim is also eyeing other new markets in Asia, such as Vietnam, Philippines and Indonesia. Contiki handles around 120,000 passengers a year worldwide, of which Asia forms less than 10%, a figure Lim admits needs boosting.

But the key to Contiki Asia’s success remains the human touch – particularly that of its tour leaders. “It doesn’t matter how we sell or promote, if they don’t deliver, that whole trip has gone.

Out of 100 tour managers that we train, only five will make it. We invest Euro 1.2 million a year to train our 200 tour managers.

“The human touch is very important. In today’s society, we are over-communicating and sometimes, we need to switch off.”

Nevertheless, by 2011 and 2012, Contiki’s coaches in Australia and New Zealand will all be equipped with wifi.

As happened with the Hong Kong tour guide who got caught red-handed when she blew off steam at a group of mainland Chinese tourists for not spending enough and calling them “cheapskates”.

Her rant, captured in a video, has been making the rounds and the YouTube version has had over 96,000 views.

[Full English transcript of her rant]

It’s nothing new really – tour guides taking tourists for shopping and getting commissions. They’ve been doing it since, I am sure, the times of Marco Polo.

I remember my trip to Istanbul this March when I decided to do a day tour with a guide and, despite my insistence that I didn’t want the usual tourist trap experience, I was still taken to antique and carpet shops where he said “there were no obligations, just look”.

You could easily sense the pressure to buy.

I find such experiences distasteful for the customer – it puts me in an awkward situation and for someone who finds it hard to say no, it’s practically like being held hostage.

The tour guide, meanwhile, hangs around the shop and pretends he doesn’t care, but you know he’s watching your every move and hoping the next one will be for your wallet.

It was only after I requested that he changed his itinerary and that I really didn’t want to shop that he then proceeded to show me the non-tourist side of Istanbul.

The business of commissions though has been taken to a whole new level with mainland Chinese groups – perhaps it’s the sheer volume combined with the infancy of the market, and I am sure it happens with other markets as well.

The practice is called “zero-based” tourism – which is a euphemism for “you pay zero for everything but you pay back in some form or other”. Everybody knows it’s done, everyone “winks, winks, nods, nods” and everyone looks the other way.

Except this time it’s quite difficult for the Hong Kong travel industry officials to look the other way when something is as public as this. The guide has apologized and the Travel Industry Council of Hong Kong has berated her.

But will it mean the practice going away? No, sadly. And let’s face it, it happens not only in Hong Kong, but also Singapore, Malaysia, Thailand and Taiwan.

Coincidentally, I was recently having a discussion with a tour operator in Taiwan on how the China market was going to impact the destination. With direct cross-Straits flights, China now accounts for a quarter of all arrivals to Taiwan and tour operators are scrambling for a slice of the market.

What he said were the most candid and realistic words I’ve ever heard uttered about the China market.

Calling it a “fatal attraction” for most foreigners, he recalled a joke somebody made about the difference between Japan and China. “In Japan we speak different languages but think similarly. In China, we speak same language but think differently.”

While he said that nobody could afford to neglect China, “everybody understands China just like the blind touches the single part of the elephant. It is not the full elephant”.

Guess the tour guide ended with the full elephant in her face.

It shows the importance of food in our culture. Even as we are eating, we are discussing the next meal.

And everything revolves around food – weddings, funerals and temple ceremonies. We eat when we are happy, we eat when we are sad and we eat when we hope to be happy.

Now a new obsession has taken over in the region: gadgets.

Ever since the iPad hit Asian shores this month, the greeting has changed to: “Have you got your iPad yet?”

I was at a private sale of jewellery and watches last week at the Singapore Recreation Club – you can’t get more status-conscious than that, my friends – when I whipped out my iPad.

• “Wow, so sexy.”
• “Do they make Louis Vuitton covers for it?”
• “Are you getting the iPhone 4? I want mine with bling-bling.”
• “It’s so light. Can it replace my laptop? So I can carry it in my handbag?”

Hate to say it – but my accessory attracted more attention than the Chopard watches and Cartier jewellery on display. And even the food was ignored for a while.

In Singapore, queues formed early at Apple stores on the day of the launch. A week after the launch, I was at my telco provider to get my micro SIM card and already, there was a queue of people wanting exactly the same thing.

It’s no surprise really that Asians are mad about our gadgets. We make them here, we might as well consume them here.

I read that the huge demand for the iPad and other devices is causing problems for a company in Taichung, Taiwan, maker high-tech components.

“The strong demand exceeds our expectations,” says an official from touchscreen maker, Wintek. “Our clients keep pushing us to increase supplies.”

The numbers tell the story. Apple is expecting to sell 8.13 million iPad units worldwide by the end of this year with Asia expected to account for a high percentage of sales. Its outlet in Shanghai opened earlier this month.

According to Apple, Mac sales in Asia Pacific have grown year on year by 73%.

Chief operating officer Tim Cook, announcing Apple’s third quarter results this month, said growth in China was 144%, Korea 184% and in Hong Kong, it doubled.

More gadgets also mean more time being spent online. The region is already home to nearly half of the world’s online population and according to ComScore, the average Internet user in Asia Pacific spends nearly 17 hours a month online.

And increasingly, in less developed markets, the first exposure to the web is not through the laptop anymore but through smartphones.

So next time when you visit me in Singapore, don’t be surprised if I ask you first to show off your gadgets and after that, of course, I will treat you to the best meal ever.

Just be careful though, chilli crabs can get a bit messy and you wouldn’t want it on your iPad.

But perhaps when you run a classic Long Tail product like Temple Safari, the most powerful tool of distribution is inspiration and people you know. Or so says Nick Ray of Hanuman Tourism, Cambodia.

“If you can inspire travel companies and travel journalists to believe in your ideas, then the product will take off.”

As such, Ray has been cultivating contacts and connections that can help them spread the word.

“Hanuman has been very fortunate in this respect. We partner a number of market leaders in the UK, US and France and their growth has helped fuel our growth over the years. We also have a very good relationship with journalists and travel writers in general as we are used to VIP hosting through our work with Hanuman Films.”

One of its most recent guests was the feisty celebrity chef Gordon Ramsay.

According to the Hanuman blog, executive director Kulikar Sotho, whose family is behind Hanuman Tourism, was the Cambodian Fixer for Ramsey’s television series Gordon’s Great Escape – in which he travels all over the world learning about and cooking local cuisines.

Other celebrities it’s hosted include Angelina Jolie, Daniel Craig and Jeremy Clarkson, “so we get the word out through our partner travel agents and international journalists who are inspired by the original concepts we are promoting”, reckons Ray.

In its Temple Safaris, it takes visitors out to the jungle temples of Northern Cambodia where luxury tents are pitched close to ancient cultural sites and guests can enjoy the quiet of the wilderness away from mass tourism. The product is the company’s signature trip was conceived on a trip to Uganda and Rwanda by Kulikar.

Currently, most of its customers come from the UK with some from the US. One of its strongest promoters has been Audley Travel, in the UK. Other supporters include Cox & Kings, Indochina Travel and Bamboo Travel.

In a good year, the company takes about 250-500 people a year on safari. Ray estimates the price to be about US$300 per day per person, covering four-wheel drives, tour guide and all meals. “It is not a budget product due to the mobile nature of the camps and the support team this requires.”

Because it works through partners, it does limited direct marketing other than the public relations work it does with journalists and celebrities. However it is giving its website a massive overhaul. Currently, 70% of its business come through its partners and 30% through the website.

I wish I had more time to travel to experience all the wonderful things I learnt about and how does one, as a traveller, find all these products in the crowded, cluttered, confusing web?

From zip lining, tiger spotting and communing with gibbons in Laos, to temple safaris in Cambodia and sleeping in Tibetan-style tents in Yunnan, these are the products that make the Mekong region such a tourism jewel – but unless you are a traveller with very specific interests, and you go searching for them, how do you find these products?

Often, they are created by people who are passionate about authenticity and committed to conservation but don’t have the budgets to stand out in the crowded marketplace and they also don’t have the ability to scale – nor do they necessarily want to.

As Jef Reumaux who founded The Gibbon Experience in Bokeo, Northern Laos, says proudly: “We have no potential to be replicated.”

[In The Gibbon Experience, customers sleep in tree houses 40 metres high and there’s a network of cable bridges to help scout the canopy for the gibbons whose distinct calls are heard throughout the forest every morning]

The theory is that the internet is able to help guys in the Long Tail reach customers they wouldn’t normally be able to – but what if the Long Tail is extremely long and awesomely big as it is in tourism, where the heartbeat and lifeblood of the industry is often not in the big brands in the big cities but in the small parts that make the whole?

Talking to the more experienced operators in the Mekong, there is the acknowledgement that they know how to create authentic experiences to delight customers – the missing piece of the puzzle is often how to get these customers in the first place.

In a region where the mix of travellers is also changing – the share of arrivals from the ASEAN region to the Greater Mekong Subregion has grown from 24% to 56% in the last eight years – it’s become even more critical for these operators to seek out new segments of customers that will continue to want to pay for these experiences.

Social media is cited as one of the new tools that could help these small operators.

Passionate travellers tend to be passionate about sharing as well although there may be some customers who don’t wish to share because it’s getting harder and harder to find places where you can get away from the mainstream.

Jia Liming of Wild China, acknowledged as China’s leading cultural and sustainable tour operator, says her company is directing more efforts towards its website and social media to spread the company’s message.

The website has a TripAdvisor recommendation and tools by which customers can connect with through Facebook, YouTube, Flickr and Twitter.

At Green Discovery Laos, managing director Vianney Catteau says walk-in sales through its seven offices in Laos account for 70% of its business but 15% comes through the internet, an increasingly important channel for the company.

It’s a channel small operators know is their future. But for as long as they are reliant on tour operators, their margins will always be restricted.

At the other end of the value chain are the traditional tour operators whose margins are being squeezed on all fronts and who may see the potential to own such Long Tail supply in destinations.

The challenge is in aggregration, physically and virtually. Several Asian operators have tried to combine forces under alliances and marketing partnerships – they have had limited success. The intent may be noble but the challenge is always human – often these companies are run by independent-minded entrepreneurs who find it hard to see a greater purpose beyond their own ego.

Then there are companies who have tried to do it on their own – Asian Oasis in Thailand, for example, builds, owns and operates its own products under one brand. But again, hard to scale and difficult to bring in like-minded players who may not want to go under another company’s brand, especially if they see it as a competitor.

Then there’s the thought that perhaps they could all band together and come under an Expedia-like umbrella and then I say, perish the thought.

Unlike books that can all be bought under Amazon, the idea somehow doesn’t work as well in tourism – surely, unique, authentic experiences cannot be commoditised?

And then I wonder if a Worldhotels-like organisation can exist for unique, independent hotels, why not for these small adventure and ecotourism operators?

And again, I abandon the thought because as Reumaux of The Gibbon Experience says, when asked to share the secrets of his project’s success:

“Stay free-minded and passionate. Postpone marketing when possible. Respect local culture. Renounce excessive conformism. Question the industry’s mainstreams. Enforce your dreams.”

Yes, perhaps the answer to finding the Long Tail in travel is allowing it to swing free and wild as with the gibbons, and only those who seek shall find.

NB: The Bokeo Nature Reserve consists of 123,000 hectares of mix-deciduous forest in a mountainous terrain ranging from 500m to 1500m in elevation.

It was established by the Lao Forestry Authorities and Animo, the company that runs The Gibbon Experience, with a practical approach and no external funds.

In 2004, Animo was given a government mandate to protect this rich asset of Northern Laos that borders the Nam Ha Protected Area.