A pioneer in Asia’s online travel sector, Boh is still standing while most early players have perished. Business has become tougher with more competitors in the market, but he continues to have a game plan, rolling out TAcentre.com last week. Raini Hamdi talks to Boh about it
Boh Tuang Poh
Executive chairman
Asiatravel.com Holdings Singapore
You launched Asiatravel 17 years ago. What has hindsight taught you?
That we should probably have done B2B first before B2C and moved faster into the packaged space (TAcentre wholesales to agencies not just hotels, flights or tours but flight/hotel/tour or any of the three combinations).
Why?
We’re still selling B2C, but we believe B2B will be even bigger and will continue to grow. There is a gap to empower the travel agency business and help them achieve greater profitability.
The traditional agencies in Asia are still doing well; they are in fact growing because Asia is growing. Our study showed in the region alone, Indonesia has more than 3,000 travel agencies; Johor (the closest Malaysian state to Singapore) alone has more than 200 agencies; the Philippines, 3,500 agencies. And all this is just in our backyard, what more the rest of Asia. The mode of operation in a lot of these markets is still not as advanced as the big boys in the developed countries, so this where TAcentre comes in handy.
Why are traditional travel agencies still doing well?
Consumers still prefer to buy packages as these offer real savings. Airlines and hotels still introduce fares and rates that are meant only for package products. The leisure market is still more than 50 per cent of the total travel market, business about 17 per cent and the rest medical, VFR, etc.
The problem is costs are rising for travel agencies and many face manpower difficulties. At the same time, their customers are becoming more knowledgeable and demanding, which means they have to be more efficient and productive. Buying products offline from multiple sources involves a lot of work and communication, which costs money and is inefficient. And as you know, if you’re not able to respond quickly to the customer today, you risk losing the business.
This is why we make the clear distinction that agencies who use TAcentre can book full packages online, not just flights or hotels, and can get instant confirmation. We believe traditional agencies should continue to service the customer but use our platform to service themselves.
But there are other wholesalers, offline and online. Why TAcentre?
Other wholesalers sell flights only or hotels only. We sell flights, hotels, tours – the full range of products – and packaged tours. We give instant confirmation. Other wholesalers claim to be online. The content, yes, is viewable online, but you still need to wait for confirmation. So it is not e-commerce in the true sense.
We have the inventory – we have never deviated from our vision to be a one-stop full service travel player, with a full range of travel products, not a single vertical product.
We have not just the inventory but rates, as a result of us having a strong physical presence in the Asian market from day one and doing direct contracting with suppliers. The extent of our relationship with suppliers is such that if a travel agency wants to buy a ticket to attractions such as Universal Studios in Singapore, Disneyland or Ocean Park Hong Kong, or Sunway Lagoon (Kuala Lumpur) they can click and buy directly on TAcentre and the voucher, which is barcoded, serves as the ticket.
Imagine the communication/logistics involved just for this one attraction if agencies were to buy from another wholesaler.
We’re one of the few independent online travel companies; the others are aligned to other parents. We’re the only and the largest independent public-listed pan-Asia online travel reservation service provider. We have the system to do dynamic management/distribution of the wholesale programme online.
You’re not too different from a GDS.
Yes, or what they now term the ADS (Alternative Distribution System). We hope agencies do what they do best, i.e. engage the customers, while we are their supplier and provide them the system.
Seventeen years ago when you went B2C, did you think travel agencies would die?
I did, but then I did not see myself as a travel player but a technology player. I saw the Internet as a powerful channel which I understood. I didn’t understand the travel industry as much.
You could have gone online into other industries but chose travel. Why?
We did look at a few industries and we did operate an online super mart, as well as help companies create websites. But the travel business is not static – there is always something happening everyday and there is always a new possibility. Plus, you’re dealing with people. Previously I was in aerospace and in measuring instruments.
Travel is also a very sustainable business. Some industries will disappear. Travel – never.
How has the B2C business changed and how are affected by the entry of new players such as Expedia?
When we started B2C, even in those early days we envisioned ourselves as a one-stop service, as travellers don’t want only to buy hotels, but want cross-country travel, some ground transport, tours, etc, and that’s why we called ourselves Asiatravel.com, not just rooms.
We did well in the first 10-15 years on room reservations. But in the last two years, the business dynamics changed. As Europe faced difficulties and growth continued in Asia, more players started coming in here and, to gain a foothold, they are willing to spend massive amounts of marketing dollars. Asia is now their core and they want it fast.
But competition only helps speed up what we intended to do all along – i.e a full-service player – and it made us move faster, so in the last two years, we have been working on our B2B platform. We also got to understand the business more over the years.
Compared to 17 years ago, what’s it like operating this business today?
The pace is faster and more dynamic, unlike before when if you’re successful with what you’ve set up, you can afford to sit back. Today, even how well you do won’t guarantee your future success, so you have to be watchful, reinvent yourself if you have to, be flexible.
What motivates you – profits?
Definitely, after all we must take care of our shareholders (Asiatravel.com is listed on the Singapore Stock Exchange). But it’s not just about money – the money will come in when you’ve defined the end goal and do all to achieve it.
This article was first published in TTG Asia, October 19, 2012 on page 8. To read more, please view our digital edition or click here to subscribe.
