The next big thing in travel

Asia-Pacific’s fragmented tours and activities market remains predominantly rooted in the offline world, but Blanca Menchaca, CEO and co-founder at BeMyGuest, a Singapore-based distributor of travel activities and tours, believes the sector is now at a technological tipping point. She shares her projections of this fast-growing sector with Xinyi Liang-Pholsena.

BeMyGuest recently secured a Series B funding, so what’s next in the company’s growth trajectory?
I think we have the basis of our business foundation already, so now we are focusing on the B2B distribution and technology side of the travel sector. There has been a lot of investment on the B2C side, and for any sector of travel, especially online, to really bloom, you need to build the pipelines in the back.

What we have been doing since (our inception) is focusing on developing the technology for operators to be able to sell online. Most recently, we rolled out a SaaS (Service as a Software) platform called Xplore, which operators can use for their own business as well.

A little of what we do is (improving) the connectivity of our distribution partners, which are mostly OTAs or online resellers accustomed to having savvy customers booking online. Those same customers are now demanding that travel activities are available for instant booking and at the same level of speed that they are accustomed to for their flight or hotel bookings.

We will continue to build more distribution partnerships. Right now, we have secured around 50 partners in the region that are fully integrated with our API, and we also have hundreds of non-API partners buying products from us and reselling them to their different customers.

In Asia, you cannot forget about the offline travel agents like Chan Brothers, JTB and HIS. They are still prominent in certain markets, and they are the ones helping consumers to buy products, just in a more traditional way. As well, Chan Brothers is also one of our investors.

Are you looking at the next funding round soon?
That’s something we cannot really comment on.

Is BeMyGuest pivoting away from being just an aggregator to focus on growing your tech lead in the B2B space?
Well, you have to have technology to be a player. Period. I would describe our business as having the distribution side as well as the booking system side, and both of them are interconnected through the main engine, which is the platform that we’ve been building. This main platform allows us to distribute to partners and collect products from operators. The aggregation piece is always there, and in terms of securing the right amount of products, we have a fairly large database that can be broken down for different strategies of selling.

What has changed was that we used to have a B2C strategy, but now we always partner with somebody in an advance or sizable market to sell to the customer. In a sense, we are B2B2C – we are not fully B2B or B2C – so this model not only shows how different we are but is also a reflection of the region. We realised very rapidly that one size doesn’t fit all, especially in Asia. We have to find the distribution channels for operators to find the model attractive, so we partner with as many OTAs, travel activity websites or offline agents selling travel products to give wider exposure to operators’ products.

But operators were lacking the technology to give correct information for us to digitise those products and deliver them through instant confirmation to the consumers or our partners, so we built an engine (to collect the information) and then pass it over to our partners upon check-out. The information is then passed back to the operator in milliseconds to confirm the booking. We have removed layers of customer service in a lot of manual processes, and we are able to deliver that instant bookability too.

To sell online, you need to be able to deliver an electronic ticket pricing and fulfil a booking instantly. Nobody likes to fill in a form anymore and wait 48 hours for a confirmation email; you want everything in milliseconds. But when you look at the operators who offer these in-destination experiences, they are behind in terms of technology adoption.

Are Asian operators lagging in the tech race?
In general, operators of travel activities are behind in the adoption of technology but Asia specifically more, because the region is more fragmented due to its cultural, language and currency differences across countries, and payment methods are not as homogeneous as in markets in the US or Europe. And this is just natural because unlike products sold in the hotel or airline spaces – which are pretty standard or can be standardised more easily, and hence, pricing and booking management systems are correspondingly much easier to develop – the travel activities products are so diverse and fragmented and span across so many categories that the sector was the last to be digitised.

If you think about things to do in a destination, even the check-out process for a day tour booking will be more complex than selecting the type of room or seat. In addition, we deal with day tours, activities, attractions, and sometimes events, so the fragmentation and the differences between product types are so big that the engine behind the booking technology needs to be a lot more complex than a hotel or flight booking engine.

But now, with hotels and flights pretty much commoditised and bookable everywhere online, everybody starts looking at the next revenue opportunity. When the industry starts taking the activities sector seriously, you start seeing a lot of changes in terms of the products offered by the big brands.

For example, is offering its customers the possibility to book travel activity products on their own website without having to book hotel rooms. AirAsia is positioning itself as a full travel platform, while Traveloka launched its Xperience products as well, so there is a lot of interest in this new revenue stream.

How about multi-day tours?
Actually, the multi-day tour is something that we tested out very early on back in 2013, but we decided to not focus on them. A multi-day tour requires still a lot of selections, but a majority of the products sold in this sector are activities or things to do for a few hours or half a day.

Now that we have all the products online – not just ours but a lot of companies are investing and bringing all this inventory online – and they are fully instant confirmation and electronic ticket enabled, then we can make amazing strides. I think that (multi-day tours) will be the next phase, although we are still a few years out.

In a fragmented and diverse marketplace as Asia, what challenges lie in rolling out tech solutions for the tours and activities sector?
We try to help operators in Southeast Asia the most because they’re the ones lagging the most behind. Unique activities are often run by local operators, who sometimes might not even speak English, let alone another language like Bahasa Indonesia, which lends to Asia’s complexity.

In the region, Japan is probably the slowest in tech adoption due to its traditional business thinking, not because they are averse to technology, so it’s more of a cultural factor at play. But with the government pushing for increasing international visitation to the country, I hope that will change.

Singapore, despite its small base, is an attractive destination and the operators are a little bit more advanced in tech adoption. Malaysia is a little more difficult to navigate, as the country is a bit more bureaucratic.

Indonesia is kind of split into Bali versus the rest of the country. Bali is much more used to welcoming international travellers, so that is reflected in the (tech readiness of its) tour operators as well. The Indonesian market is still generally very domestic though – as a source of travellers, it is definitely one of the biggest markets but as a source of supply, it doesn’t have that many destinations featured apart from Bali. Vietnam is both a destination and source, while Cambodia is still largely a destination.

For Thailand, travellers tend to stop in the tier one cities, but there is a rising trend of going into second- and third-tier cities, driven by the increase in low-cost carriers connectivity.

Is technology the missing piece in this whole tours & activities space?
Definitely. There’s been a change. When we sign a business, one of the main things that we do is fulfil tickets electronically via the API, but to be able to do that, sometimes we have to buy printed tickets. It was not too long ago that I had to queue up at the ticket counter at a major attraction and wait for 10,000 tickets to be printed in order for us to turn them into e-tickets. Know what? We don’t collect printer tickets anymore.

Operators are adopting technology slowly, but there has definitely been a shift. They are starting to understand that they need to adopt some form of technology, whether it is our system or somebody else’s, to deliver the electronic ticket, because the printing generates costs – staff costs, printing costs, time, and that it’s not very eco-friendly.

It’s astonishing that you still needed to queue up for the tickets.
Remember that the tours and activities sector is not new, but it is very offline. It is a sector worth US$150 billion but a majority of these transactions are still offline, although a transformation is now underway. A lot of traditional travel agents like Chan Brothers are starting to look at alternatives.

The biggest wave is online in Asia-Pacific, which already surpassed Europe and the US in terms of the market size, specifically for travel activities. It is also the fastest growing and that is why nowadays, a lot of tech developments or innovations are coming from Asia, and then being adapted to the US and Europe markets, versus the usual trend of tech innovations originating in the US or Europe before being adapted into Asia.

How has competition in Asia’s tours and activities sector changed for BeMyGuest?
One of our largest competitors is all the B2B resellers in the offline space. They are competitors, but also partners – we try to enable them, to be honest. There are a lot of traditional resellers in the B2B space and some have adopted technology, but not at this scale that we have built because all of our technology is proprietary. We have won multiple awards, including one of the world’s top 50 most innovative companies by American entrepreneurship magazine Fast Company. In terms of technology, we are quite advanced but there is still a lot of volumes in the B2B offline reselling space.

Do you foresee greater competition from consumer-facing sites like Ctrip, who is also your client?
We also understand that the dynamics in the online space is very interconnected and that it is a reflection of the operators as well. Operators always want to hedge and have more than one sales point, so they are going to work with Ctrip, TripAdvisor, GetYourGuide, BeMyGuest, Klook, etc. It will come to a stage where they cannot manage (the many sales points) any more, so they are going to pick and choose those channels that generates more volume for them, and then they will want to stop and aggregate the rest with somebody.

We are really successful in this strategy where we partner with companies. For any player who is focusing in, say, South Korea or Taiwan, we are basically adding value by supplying them with every other destination they are not in. With some partners, we hold a large market share or share of their products that they sell in certain destinations.

You boast a strong background in startups and tech. How is it like being a woman entrepreneur in the travel tech sector?
I don’t know, because I’ve been here forever (laughs). I don’t know how it’s like not being here. But the online space is amazing, super fun and friendly. At conferences, people are peers even if you are competitors. And the travel space is not that big. There are big brand names, but the network of individuals running the corporate companies is not huge. When you get to interact with people around the world running the global companies, that is pretty cool.

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