Fierce competition in the Asia Pacific travel market
Published: 10 Apr 2008: Online travel in Asia Pacific – already a huge market – is growing at an unprecedented rate towards its potential which exceeds any other market on the planet. Asia Pacific already has the highest number of internet users worldwide and this is set to almost double by 2012 – in the same period ecommerce sales will triple.
Willingness to purchase online is high and this is proven by a steady year-on-year increase in online travel bookings of at least 26% over the last three years – sales now total $22bn. Some companies have seen even more impressive results: Scott Ohman, Manager eBusiness Commercial at Cathy Pacific reported a 50-100% increase in online bookings over each of the last 5 years. With such ripe opportunities it’s not surprising more and more brands are shifting their focus to this lucrative region and competition is hotting up.
Supporting this online growth is a robust Asian Pacific travel market which increasing by 5.7% per year in Asia-Pacific, dwarfing the 2.1% growth in the US and 2.3% in Europe. The same is true with air bookings: 12.5% growth in Asia Pacific compared to 7.0% in Europe and 0.4% in the US. The statistics speak volumes, yet as many new entrants are discovering Asia Pacific throws up a whole new set of challenges.
An assault on the Asia Pacific market requires a complete rethink of sales and marketing strategy coupled with superior local knowledge. Oasis Hong Kong Airlines’ liquidation should act as a warning sign: the market is lucrative, but the challenges are vast. Expedia also announced today that it will be expanding its presence in Asia Pacific with a major assault on four new countries.
Arthur Hoffman, Regional MD, Expedia commented on the predicated 30% year on year growth in online travel in Asia Pacific. ‘It’s still small but online is where the growth is.’ He said, ‘Internet penetration is rapidly growing [and Singapore, Hong Kong, Taiwan Malaysia, South Korea and Thailand are] on the radar as having potential. He cited their success in the Australian market: ‘The Australian market was crowded when we came in but we’ve had good traction’ – Expedia is now the fourth biggest online travel company in Australia.
A key trait of all successful travel companies in Asia Pacific is a robust sales and marketing strategy. In a region that has been passed up by many as up to 5 years behind, innovation is rife. This can be seen by the effective penetration of difficult multi-lingual markets, use of Web 2.0 and the harnessing of lucrative new channels.
The message is clear: online travel in Asia Pacific is huge and growing. What might not be so easy is how to capitalise on it.