“TW0 roads diverged in a wood, and I—
I took the one less travelled by,
And that has made all the difference.”
So penned Robert Frost in “The Road Not Taken”.
Well, it seems that on the long, long road to recovery AC (After Covid), more than two roads have diverged in travel and all are thus far, “not taken” as different companies blaze different trails to the future.
During Episode 2 of the WiT Travel Roadshow, whose theme was “BC Global, DC Local, AC Which Way Forward”, the discussions were around the different strategies being adopted by both global and local brands.
So let’s take an inventory of the different roads being taken – this is by no means comprehensive, just a cursory wrap of recent developments that have caught our attention.
1. Airbnb takes the public road paved with gold
Airbnb was first out of the gate with an IPO last December, the success of which left even its co-founder and CEO Brian Chesky reportedly speechless. The first day of trading cemented Airbnb’s place as one of the world’s biggest travel businesses, with its valuation soaring past $100b at one point. Its back-to-focus on accommodation is clearly being rewarded, and it remains the one to watch, given alternative accommodation is leading recovery, wherever there are green shoots.
2. Trip.com Group goes for double listing
Trip.com Group, whose home base in China gives it a decidedly strong advantage in a world gone local, has gone for a dual listing on both the Hong Kong Stock Exchange on top of its NASDAQ listing. And it plans to use funds raised to expand its one-stop travel offering and invest in technology. With Chinese outbound travel not expected to fully recover until mid-2023 (according to this study), Trip.com will have to dig even more deeply into its home market and compete fiercely against other e-commerce juggernauts in China.
3. Traveloka shoots for superapp, SPAC listing on the horizon?
Traveloka is reported to be considering an IPO via SPAC for a valuation of $5 billion.
During the WiT roadshow, Nelly Nurmasalari, vice president of accommodation, Traveloka said the Indonesia-based travel brand would continue to grow its three core pillars of travel, financial and local services. “Actually we see ourselves as South-east Asia’s lifestyle superapp, so our mission will be more in empowering people to enjoy new experiences around the world.
“We will work on enhancing our services to make sure we give everything the customer needs to explore the world on a single platform – from transportation like flights and trains, to accommodation, attractions, eateries, insurance, financial services.”
As one of the five appointed distributors of the SingapoRediscover Vouchers, which this week was extended for another six months to December 2021, Traveloka has also used the DC (During Covid) moment to deepen its play in Singapore. It has also signed a joint venture to launch digital financial services in Thailand.
4. OYO, a local business wherever it is
Speaking from Delhi, Rohit Kapoor, CEO, India & South East Asia (INSEA), OYO, told the WiT audience that during a storm, “the best fishermen repair the nets. They don’t wait for the storm to be over and do nothing”.
At OYO, it built product and tech, “more than we had built in the last four years, which is impacting every part of the consumer and partner experience”. The second blessing is because 90% of its demand is local in markets such as India, Malaysia and Indonesia, the lack of international travel has not impacted it that much.
“Any kind of external crisis puts enormous focus on, what are you really good at? What do you really want to do?” At OYO, the answer is sticking to its domestic playbook as well as staying focused on South-east Asia which contributes about 15% to its business.
Even after it raised funds and operated in different markets, “our business has been local from the very beginning, except in Europe, where there are some inter-country movements – in all our markets, there’s a very deep local business … the funds that we have on the balance sheet actually, probably gives us a lot more strength to see this through”, said Kapoor.
5. Tripadvisor banks on subscriptions
Tripadvisor has taken the subscriptions route. Speaking at the PATA Summit, founder and CEO Steve Kaufer said the subscription product, at $99 a year, is in beta launch in the US and will expand globally shortly. “To be clear, we haven’t left our old business behind but we did take a big pause … and we have an opportunity to reinvent ourselves – how we want to be perceived and what we want to be doing …”
It believes that its ability to get “tremendous hotel discounts on thousands of properties around the globe”, along with other perks such as 10% off on experiences, and more benefits to be added, makes for a strong travel subscription product. “We feel like it’s a really convenient way for travellers to up their game to experience an amazing trip in a better way.”
Addressing the challenge that travel is an infrequent purchase unlike streaming movies, Kaufer said, “Obviously, the product is targeted at folks who takes more than just one trip a year. And that’s most people in our audience. We look at the average saving of upwards of $300 and that very first purchase pays for the subscription and then you get the benefits throughout the rest of the year. So even though travel is episodic, the sheer amount of savings and the sheer amount of better things you’ll be able to get, make it a very obvious choice for folks who are frankly already on Tripadvisor.”
6. Agoda plants deeper local roots, new ASQ products lead the way
While global remains limited, Agoda is digging deeper roots into markets in Asia and working with governments in markets like Japan, Thailand and Hong Kong to help recovery. It has developed ASQ (Alternative State Quarantine) products for both the Thai and Hong Kong governments.
Speaking at the PATA Summit, John Brown, CEO of Agoda, said that while it does not make much money off these products, “it’s been a good example of that partnership between tech companies and governments in the region to help get things going.
“In the case of ASQ, even as travel begins to come back, there’s still going to be a need for it in some form or another, whether it’s a 14-day stay or two-day stay, proof of vaccination, or some combination of the above. So we believe that they’ll still be a need for those products, really, in the coming months and quarters.”
7. Brand Expedia banks on trust as future currency
Brand Expedia meanwhile is banking on trust as the future currency of travel, rolling out its new brand promise around “it matters who you travel with” and promising to be the ultimate traveller’s companion, around a new app experience.
While Catherine So, managing director Asia Pacific, Expedia Group, acknowledged the challenge Expedia has faced with the near-stoppage of cross-border travel in the region, she said, “Those who booked with us pre Covid for outbound travel actually continues to book with us during Covid to travel domestically, and one of the factors we learned that because these are high quality customers, they actually travel a lot more than anyone else. So our focus has been on addressing customers’ needs which have changed a lot – they want someone to talk with, someone who can help them through the complexity.
“They want someone to be able to help them and support them through the entire travel with confidence so that they can actually enjoy the traveling itself,” she said at the roadshow.
(Expedia Group’s decision to sell Egencia to American Express Global Travel this week is also indicative of a further focusing of its strategy. Under the terms of the sale, Expedia Group will become a shareholder in Amex GBT and part of the agreement will see the pair enter a long-term strategic partnership.)
8. Wego builds second leg in e-commerce and works on loyalty
Travel search/marketplace Wego is building another leg in e-commerce by launching Shopcash, a cash back model, the first of its kind to be rolled out in the Middle East. Said Ross Veitch, CEO and co-founder, during the PATA Summit, “We’ve really doubled down on product development. We definitely haven’t pivoted out of travel. Travel is still our first business. What we’ve done is augmented our model with a cashback shopping platform. It also serves double duty as the loyalty programme for Wego users who are transacting with us.”
It has also accelerated the move to have more transactions happen on the Wego platform, “so an increasing amount of the GMV is actually going through Wego”, he said.
9. KKday goes curated marketplace, launches luxury segment
Most jostling is being seen in the tours and activities space. KK Day is going for a curated marketplace model and has launched a new luxury brand, New Day, as well as a standalone B2B business called Rezio to digitise the industry.
Co-founder and executive vice president, South-east Asia, Weichun Liu, said during the Roadshow that KKday, said the pandemic has accelerated the move towards digitisation. “I think this is actually the first time we have suppliers coming to us directly and asking us for solutions. So we have acquired a ridiculous amount of suppliers through this period of time, we have expanded into various new verticals that we didn’t think of before.
“So in a way, when you can truly control your work with your suppliers on a local level, that’s when you can go global. So for example, all the local products that we develop now, we expect to sell it to travellers around the world. Whatever I develop for a Singaporean family now, I can sell it to a family from Hong Kong, family from Taiwan. So I’m actually quite excited about the future.”
Commenting on GetYourGuide’s acquisition of Versailles tour operator, Guidatours, Liu said a similar move by KK Day would not be inconceivable given that tour operating was actually one of its main focus BC. “Before Covid, we actually realised that a lot of small and medium suppliers couldn’t meet the modern traveller’s demand … which is why we collect all the data, design our own itinerary and give it to our suppliers for them to run. So in a way, it’s almost like rolling out McDonald’s across the world. So we are actually quite aligned on that strategy.”
10. Globaltix bets big on tech
Singapore-based tours and activities brand, Globaltix is also taking a big bet on tech. It recently raised $3 million to strengthen its enterprise tech solution to digitise the vertical. Said COO Chan Chee Kong, “Inevitably travel will come back but if you have financial strength, this is the best time to build up tech. All those without financial capabilities will be hunkering down. We want to pick up the talent we need to build up our tech capabilities.”
So which road are you taking? One thing’s for sure, it will be interesting to see where the different roads take each player.