As we enter the next generation of travel in Asia Pacific, here are the key trends to watch. It’s a summary of the thoughts and ideas I have collected across the various events I’ve hosted or attended in the first half of the year. Call it a connecting of the dots as we enter the second half of 2024, and as we prepare to convene this October 14-16 at WiT Singapore, where we will usher in “The Next Generation”.
The Revolution in B2B: Now Everyone Can Sell Travel
Anticipate a revolution in B2B travel technology, aiming to address 85% of the super fragmented market in Asia, with the giant OTAs leading the charge. “You still have a full 85% of the market that’s out there super fragmented, and that’s really what that B2B space can help you to address,” said Michael Dykes, vice president, market management, Asia Pacific of Expedia Group, speaking at WiT Japan & North Asia.
Expect lots of partnerships between travel tech companies and other brands, travel and non-travel, as the move to power everyone to sell travel gains momentum.
Last week, Expedia announced its partnership with Cathay Pacific to power Cathay Holidays with a new booking site, initially available in Hong Kong, Japan, and Singapore. Customers can explore 900,000 properties and 200,000 travel activities in 250,000 destinations worldwide.
Hopper also announced a partnership with South Korea’s major credit card issuer, Lotte Card, to develop a travel loyalty portal for its 9.35m cardholders, as well as 3.13m affiliated merchants. This new feature, integrated into the ‘Digi-LOCA’ app, will offer services such as flights, accommodations, and car rentals.
Timothy Hughes: “We’re in an age now where we’re almost a step away from everyone being able to be a travel company because the technology that’s available in the B2B space is extraordinary.”
This observation was also made by Timothy Hughes, vice president of corporate development, Agoda in another panel at WiT Japan & North Asia. Calling it “the democratisation of travel”, he said that advancements in B2B travel technology, including full-stack white-label API technology and affiliate platforms, are enabling virtually anyone to become a travel company and leverage cutting-edge technology to offer innovative services.
“We’re in an age now where we’re almost a step away from everyone being able to be a travel company because the technology that’s available in the B2B space is extraordinary. AI is a big part of that, but all good B2B companies,, us and others have full stack white label API technology, affiliate technology, great supply, price and so forth.”
This applies also to content creators – while the idea of empowering content creators to become travel sellers is not new to the social-heavy markets of Asia, the announcement by Expedia that it is launching Travel Shops is noteworthy.
This is a new storefront that allows content creators to share and save their travel recommendations in one central place on the Expedia app. Travel Shops enables content creators to earn commissions, increase visibility, and customise their own personalised space for travel content. This idea could do particularly well in Asia where brands such as Klook and Trip are already heavily invested in.
Middle Class, Richer Asians: Driving Travel Tech Forwards
Much has been written about the size of the Asia Pacific market but behind those numbers are shifting demographics and changing behaviours, some subtle, some not so, that marketers and travel technologists should pay attention to.
Expedia’s Dykes said that the expansion of the middle class in Asia Pacific is reshaping the global economic landscape, with the region expected to account for two-thirds of the global middle class by 2030. “The middle class population in Asia Pacific, just far and away, is bigger than anywhere else. By 2030, I think two out of every three consumers will actually be in Asia Pacific.”
Omri Morgenshtern: “2024 promises to be a watershed year.”
Within that, the rising wealth in ASEAN countries, which comprise Brunei Darussalam, Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, and Vietnam, will play a key role in driving growth in the premium segment. “By 2030, the number of people with well above US$250,000 in Japan is the same as you would see in ASEAN, is the same as you would see in India,” added Dykes.
The growth of Indonesia-born Traveloka, across six ASEAN markets, is proof of the power of the region to build a formidable digital travel business over time. Over 12 years, Traveloka has achieved a total of 130+ million downloads 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.
At WiT Japan & North Asia, president Caesar Indra said, “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.”
And he pointed out the growing trend of event-driven travel, where concerts and sporting events are becoming significant factors in travel planning.
Agoda, out of Thailand, has also been built on the bedrock of Asia Pacific with CEO Omri Morgensthern, at the start of the year, calling out five trends he believes will drive continued growth – visa-free travel, more impetus for connected travel bookings – 3 out 4 travellers booking tours, activities and attractions within a week for arrival, greater assistance from AI, further rise of B2B loyalty programmes and travel fintech making its mark.
“Fuelled by more frictionless visa experiences, travel continues to gain pace. With technology playing an even bigger role in how people choose, book and pay for travel, 2024 promises to be a watershed year,” he said.
Then there’s the rise of India as an outbound force to be reckoned with. At the Singapore Tourism Industry conference earlier this year, James Cheo, Managing Director, Chief Investment Officer, Southeast Asia and India, Global Private Banking and Wealth, HSBC, called out India as an “immensely exciting” market. “It’s worth paying attention to how India is emerging, it’s not just Bollywood. Companies are layering different strategies. Air India is taking delivery of one new aircraft every six days.”
The New Luxury: Return on Time & Experience; A More Deliberate Approach to Destination Marketing
Asia/Pacific is already home to more billionaires than any other region on Earth. Of the 500 richest individuals profiled by the Bloomberg Billionaires Index, one-third are in Asia-Pacific. The region’s population of ultra-high-net-worth individuals (UHNWIs) with assets of more than US$30 million is forecast to grow 33% by 2025, the fastest pace in the world, according to a report from HSBC.
This explains why major travel brands such as Expedia are investing in markets to cater to premium demand, focusing on travellers who appreciate customer service and longer stays, indicating a shift from volume to value-based customer segmentation. “What we really want to focus on are premium travelers who appreciate customer service, who travel a lot, who want to stay longer,” said Dykes.
Melissa Ow: “They want to make sure that every moment spent brings enormous joy and deep encounters.”
Singapore is an example of a destination that is going for premium travellers – in many ways, it has to, given the rising costs of goods and services in the country. At the recent Tourism Industry Conference, organised by Singapore Tourism Board, its CEO, Melissa Ow responded to a question on how she sees Singapore competing with its neighbours given its high price tag.
She said that “return on time” was more important for a certain segment of travellers, who are “taking time and staying longer”.
“They want to make sure that every moment spent brings enormous joy and deep encounters,” she said. “Singapore has a great proposition for this segment, who do not want to spend time in traffic. We recognise we are not a low cost destination, it is about what people are prepared to pay for what they buy.”
And as more popular tourist spots get over-crowded, these travellers will increasingly seek out newer, alternative, more remote destinations that promise unique experiences – that return on experience. For example, AIUla, positioned as a boutique luxury destination in Saudi Arabia, currently commands an average spend of 1,600-1,700 SAR per day. Said Melanie De Souza, Executive Director Destination Marketing, at the Royal Commission of AlUla, “It’s about the quality of the experience. Our resorts, events and festivals support that positioning.”
You’ll also see destinations taking a more deliberate approach to targeting the kind of travellers they want, in response to the backlash overtourism in certain places is getting. At Phocuswright WiT Middle East in March, the president of the European Travel Commission, Miguel Sanz Castedo, who is also Director General, Spanish Tourism Institute (TURESPAÑA), said destinations are increasingly evaluating tourism’s contribution to residents’ quality of life, shifting from visitor-centric models to community-focused approaches. “The Netherlands has a 2030 strategy that says every visitor has to contribute to the well-being of citizens. It’s about asking what you really want from tourism.”
He added, “It’s not just about the money. It’s about the impact on the local community. A visitor who spends less but engages with local experiences can have higher added value.”
Silver Nomads & Gen Alpha: Treat Them Right and Catch Them Young
Travel industry leaders must balance the needs of an aging population with disposable income and the digital-first Gen Alpha. Observed Dykes at the conference in Japan, “We’re going to have to straddle two very different demographics. One, the aged who have special needs but also have a lot of disposable income and then we have this huge group of Generation Alpha.”
These two ends of the spectrum have led to different OTA models emerging. In Japan, Yuko Yuko Holdings is specialised in the senior demographic, with CEO Wakako Tokuda saying, “Our business model is offering special weekday and off-peak accommodation plans to senior customers, the fastest growing demographic in Japan, the Super Age society. We have nine million senior members with the financial capability to travel at any time.”
Then there’s KabuK Style, that’s pioneering a subscription model for travel, allowing unlimited access to travel services and creating a new market segment. “Our subscription model allows us to create a new market for younger travellers,” said founder and CEO, Kenji Sunada. “Our AI algorithm allows us to understand the price risks, fluctuation risks, and user behaviour, and then we can take the risks. Thus, we are changing the OTA business model and making a new market.”
Kenji Sunada: “Our subscription model allows us to create a new market for younger travellers.”
But the big changes in travel patterns will come from the giant OTAs – at its Envision 2024 Global Conference in Shanghai late May, Trip.com Group showed numbers that clearly indicated its growth was being fueled by its premium high-tier members and younger travellers,
Boon Sian Chai, Managing Director and VP International Markets, said, “This younger generation needs a new approach,” he said, and the group will use tech to build a travel ecosystem around AI and user generated content, will make it effortless to ensure an experience that is seamless and carefree, and will focus on sustainability.
It will be interesting to watch OTAs evolve their products and offerings, their marketing channels and their use of tech amid this polarising shift in demographics in Asia Pacific.
Gen Alpha: Virtual is Reality and Social is Truth
Specific to Generation Alpha, at the Trip.com Airline Global Conference in Shanghai, Karen Chan, commercial group head for AirAsia, said that generational changes, particularly the rise of Gen Alpha, are influencing travel preferences towards technology-driven, environmentally conscious and experience-rich options.
“My son’s screen time for an 11-year-old is about four hours daily – to him, virtual is reality and social is truth.
Karen Chan: “They love playing with new stuff and very open to new technologies.”
“The first thing about Gen Alpha is that they are so technologically empowered and digitally savvy, so it has an impact about how we are even reaching out to them. Push marketing doesn’t work, you need to go and catch them where they are, in Discord, Fortnite – gamification of the content so that you need to make them come back and earn their points.”
What it also means is more room for experimentation and innovation. “They love playing with new stuff and very open to new technologies,” said Chan.
Chan also noted that they are also well-travelled from a young age and understand the differences between airline services from a young age. “My son knows that Mummy works for a low cost carrier so he better bring his neck pillow and his own entertainment because he is well trained, and yes, they may not even get any service. So, they are not afraid to travel and they understand the differences.”
Next Generation Retailing: Effortless, Engaged & Satisfying, Tailored Recommendations
Amid these changes in demographics and technology, there will need to be a new approach to travel retailing.
In the Trip.com Airline Global Conference 2024 panel on “Next Generation Retailing”, the five key pillars of a “personal and intuitive” customer journey were discussed – tailored recommendations, seamless browsing, augmented reality experiences, convenient, with virtual assistants and curated product selections and effortless delivery and returns.
While CT Ooi, associate vice president, Global Flight Business, Trip.com Group, said the industry still needed to work on the fundamentals – effortless delivery and returns meaning instant refunds and cancellations – he said next gen retailing also means “an enhanced way to significantly increase customer engagement and satisfaction”.
“Example (a) live-streaming, whereby audience can interact with the host to have that engagement during the sales process, (b) Interactive and Real-Time AI bot to enhance the ease of use in holiday research, provide useful and relevant inspiration to answer where, when, how to book.”
CT Ooi: “An enhanced way to significantly increase customer engagement and satisfaction”.
It also means moving away from traditional search methods towards allowing customers to ask more open-ended questions. Bryan Koh, divisional vice president, ecommerce and distribution, Singapore Airlines said the airline had launched an AI tool “so you no longer need to enter a search for a flight from Shanghai to Singapore, but you can say, I would like to go to Shanghai for five days in August and find me the cheapest flight.”
A key challenge though is striking a balance between offering a wide range of choices and ensuring the choices are relevant and personalised for each individual customer. Which is why Sam Abdou, EVP, Global Sales Airline IT, Distribution and Global OTAs, Amadeus said “tailored recommendations” was critical in next gen retailing.
“There is a strong belief at Amadeus that it will not be so much a game of volumes moving forward but of the weight of the basket.”
Next Generation Leadership: More Confident, More Distributed and More Human
Amid these rapid changes in tech and consumer behaviours, travel companies too have to transform.
First, more confident – Dykes believes that with the demographics hugely in favour of the Asia Pacific region, “we should just have real, real confidence that this is an amazing product that we’re offering our customers”.
In other words, don’t undervalue and don’t devalue the product.
Michael Dykes: “We should just have real, real confidence that this is an amazing product that we’re offering our customers”.
Second, more distributed. “A distributed leadership model, where the faces of leaders are visible across various markets, is crucial for connecting with diverse Asian markets and enhancing business operations,” said Dykes.
Third, more human. We have to become more human as leaders for our teams as well as for our travellers. It’s a common theme that’s come up since Gen AI came on the scene just over a year ago to show us what machines are now capable of and humans are having to ask, what’s our value add? At WiT Japan & North Asia, travel leaders spoke about wanting to have more “emotional intelligence” and “empathy”.
At Expedia’s EXPLORE 24, author Simon Sinek said, “We are now living in a world where interacting with a human being has become a luxury. We know how special human interaction is. Because it’s not the problems that they’re solving, but that I get to talk to a person who has been trained well and cares about me.”
So even as we go high tech, we need to go higher touch, enabled by tech.
Next Generation Tech Leadership: Curiosity, Lifelong Learning and Diversity
Speaking at the Trip.com Airline Global Conference, Amy Wei, senior product manager at Trip,com, who’s responsible for building Trip Genie, its personalised AI travel planner, said “the key characteristics for building successful teams are curiousity about the world and human needs, as well as a continuous commitment to continuous learning, because knowledge is no longer a barrier with the accessibility of intelligence.
Amy Wei: “The human needs to be free to be curious while machines do the work, so we can ask such open-ended questions.”
“Human beings excel in open-ended questions. I don’t think AI is able to reach that level of extraordinary creativity,” she said, citing the example of Isaac Newton who, when watching an apple fall from a tree, asked why.
“The human needs to be free to be curious while machines do the work, so we can ask such open-ended questions.”
Indeed, it was by asking such an open-ended question that led Dr Fei-Fei Li, known as the godmother of AI, to develop ImageNet, the dataset that enabled rapid advances in computer vision in the 2010s. Her question was, “What is visual intelligence?” and she and her team proceeded to analyse 1b images, distilled them into 15m across 22,000 categories so we can tell a golden retriever from a spaniel.
In 2017, she co-founded AI4ALL, a nonprofit organization working to increase diversity and inclusion in the field of artificial intelligence. “I believe in the future of AI changing the world. The question is, who is changing AI? It is really important to bring diverse groups of students and future leaders into the development of AI,” said the author of “The Worlds I See”.
When asked how she was bringing more women into her team and Trip.com’s overall engineering team, Wei cited Dr Fei-Fei Li as an example and said the power of role models cannot be underestimated. “We must share and promote the accomplishments of women in AI and use the power of role models to give more women the confidence to pursue AI.”
Secondly, she said, “Connect AI to everyday life”.
“The best thing about the AI-driven era is that knowledge is widely available and intelligence is industrially affordable. Previously, many ideas were constrained by technical feasibility. Now, there is a higher chance that we can bring products to life that were once only dreams. So we can popularize and introduce more interesting AI products and tools, and inspire women to connect AI with work and life, thereby inspiring more possibilities of AI and exploring the use of AI to create more products.”
Note: All these trends, and more, will be debated at WiT Singapore, Oct 14-16.