What Airbnb and Uber Are Missing Out
While Uber and Airbnb are leading the market in the Travel Tech space in the West, they may fall short in addressing Asian customers to utilize their growth playbooks in Asian markets.
Asia Was There Before It Was Cool
Among the big banner of Travel Tech, the Tours & Activities subcategory has been emerging from omnipresent sharing economy and marketplaces. While this subcategory has only just started to catch the attention of the rest of the world, Asia has long been its global driving force.
According to the World Tourism Barometer by UNWTO, the APAC region recorded 343m international tourist arrivals in 2018, with a 6% growth rate. Arrivals in SEA grew 7%. Additionally, tourist spending in the APAC region outpaces other regions globally.
Although the Travel Tech giants are leading the markets in the West and market themselves are trying to consolidate the once isolated geographic markets, integrate technological infrastructures, and to take a more general approach in building global brands with mass appeal and quickly scaling them beyond their home market, there remain blindspots to the trend versus their approach.
Trend #1: The Rise of Domestic Travel in Asia
China’s middle and upper-class have increasing purchasing power and demonstrates a growing willingness to spend their income on travel. A group of Asian Travel Tech startups like Yaochufa, a Chinese OTA specializing in customized travel packages like weekend getaways, have been riding the waves of a growing WTP and trend of going on weekend getaways domestically.
The “new average” customer segment has seen significant growth of at least 10% in China alone, signaling a clear future trajectory of dynamic growth in APAC.
Trend #2: Asian’s Unmet demands overseas
Over the last few years, the number of Chinese outbound travelers has grown consistently by 5%. Around 80% of these Chinese outbound travelers book some sort of travel package, with a similar development pattern in other Asian countries. A lot of Asian startups are sprouting among the region, focusing on local travelers traveling abroad.
Western Travel Tech leaders, on the other hand, seem to be unable to address the unique needs of this type of Asian traveler.
With Asian travel companies like China’s travel powerhouse Ctrip focusing on this segment, and a growing number of startups targeted at Asian outbound travelers overseas, these ventures truly understand their consumers, thus providing services tailored to their needs and turning them into soaring profits.
The Other Side Of The Coin
Like many things in life, the story goes both ways.
Although dominating platforms in Asia and specifically China, like Tencent, Alibaba, Xiaomi, Huawei, etc. continue to increase their global footprint, whether Asian travel companies can convince consumers from the West to adopt their products, we still waiting to see how the story unfolds.
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