The travel industry is a big umbrella that holds multiple branches beneath it that is ready to be explored by upcoming entrepreneurs. And with the rise of the digital era, online businesses are becoming more prominent which when related to the travel industry, the options could be further multiplied.
Travel Massive, a platform for thousands of travel insiders to meet, learn and collaborate at free events all around the world, recently organised an event at Google Malaysia headquarters for the Kuala Lumpur chapter of the series.
Their goal was to get in touch with local players in the travel industry, particularly startups and travel professionals.
The theme of the night ‘How to embrace online opportunities in SEA travel industry’ and the forum panelists consisted of Jack Tan, COO of Tune Hotels and Nikita Kirgintsev, Managing Director of JetRadar Thailand, moderated by Steven Wong, Co-founder of Tripovo.
Being veterans and well-experienced in handling the travel industry, it was interesting to hear their opinions on how the market is growing in Southeast Asian and how online businesses should take advantage of this to ensure they are able to maximise their profiting.
We learnt a lot about the regional travel industry, local startup strategies and thought to share some of the insights here.
1. Determine the popular payment method used in your specific target countries.
Each country has its own population and demographic, which also means they have their own preferred local payment method when it comes to doing online transactions. Developed countries may prefer the usage of credit cards whereas smaller countries may opt for bank transfers.
“There are some countries out there where traditional wave payment methods are still popular, but there are also places where payments are usually done by card or bank transfer. So it’s highly important for you to understand the difference in order to direct your business the right way,” said Nikita.
“You really need to crack the payment scheme, whichever country you go to. I think Malaysia’s easier but Indonesia for example would be harder. Not everybody has a credit card there and you must be of a certain salary scale before you are even eligible for one.
So if you’re trying to conduct a business that only uses credit card, your market would be really small. Food for thought for you in case you were interested to enter those markets,” said Jack.
2. Understand how consumers handle their research and transactions.
The culture of consumers obviously differs from country to country so it is vital for businesses to strategise the timing of when to put up promotions or news regarding their service. It is also crucial to make sure the websites created are mobile friendly, seeing as how most research about traveling is done through mobile.
“In most cases, mobile users use their device for discovering but not for final purchases. They will continue their purchase on desktop. Almost everywhere, conversion rates on desktop are about 2 to 3 times higher than on mobile. However, we do get some transactions from mobile.
For example, those stuck in airports and looking for flights would buy through mobile. So you have to consider the multiple scenarios in order to plan how your consumers will make their final payment and through which device,” said Nikita.
“We do see that obviously things are shifting over to mobile nowadays but the actual transaction itself is done on desktop. You’ll also see that if you do a timeline, the times people do their research on your website through mobile, it is usually during the commuting time and it differs from country to country.
When I was living in Japan, I saw that during the time of commute, like when they’re stuck in a train, you will see a lot of research happening but then it drops. The purchase will then happen at the end of the day before they leave their work because they use the desktop in the office to make the purchase before going home,” said Jack.
3. Localisation is key when differentiating from other services.
The prominent names within the travel industry such as Expedia and Booking.com are familiar platforms for travelers worldwide. However, they haven’t been able to penetrate through all the markets, especially those who prefer local services so that is another avenue for businesses to tap in. Use local advantages to attract people to your service over your other competitors.
“As big as Expedia and Booking.com are, you will see that they haven’t been able to penetrate China or Japan because there is a local solution that thinks about the local consumers. They also didn’t penetrate Indonesia because Traveloka is the preferred choice by the local crowd. So whatever you create, you need to make sure it’s localised because then you get the local market,” said Jack.
“Localisation and adaption are two different things. It’s not enough to just translate a website and say it’s done. So it’s best to actually enter into the local market and find out what works to entice consumers to your business,” said Nikita.
4. Track the consumers’ pattern
Depending on the market and country, consumers may have different styles and methods when it comes to planning their travel itinerary and accommodation bookings. So following the trend of the targeted market would help businesses expound on the statistics and allow for preparations to be handled ahead to make sure the consumers end up making the right choice for your businesses.
“The China market tends to plan way ahead of time, and we see that through the booking patterns for our hotels. They plan 2 to 3 months ahead because the problem they face is the visa. So they need to make sure they need to settle their visa applications first before anything.
For Malaysians, it’s more impromptu. We do see our booking lead time for hotels between 0 – 7 days while 0 – 14 days is when 9% of our bookings come in. This is not very good for us because we cannot plan and can’t manage our rates that well. So, we create programs to entice them to book 30 days in advance or so to get a higher discount,” shared Jack.
Feature Image Credit: Travel Massive