Asia has taken a prominent step forward in the travel experience sector over the last few years – the segment larger in size and growing faster than its European and US industry counterparts.
South-east Asia, in particular, is a standout. Often the region is referred to in one breath, minimising the regions true size and complexities. We dug deeper and found significant differences between North and South-east Asia, and each country within it. With such diversity comes an evolution of customer behaviour.
Singapore-based BeMyGuest, specialists in technology and distribution for the travel experience industry in Asia, reviewed a sample of FIT transactional data for outbound travellers gathered between 2016 and 2019, and presented their findings at WebInTravel in October 2019.
The analysis reinforced that Asia remains a very traditional market and digitising travel experience products is still in its early stages, and each country has its own unique traveller trends.
Booking Windows in North Asia and South-east Asia
One of the key drivers the global industry has been focused on is bringing operator’s products online with instant confirmation capabilities, assuming that customer behaviour worldwide in general resembles that of developed markets where travellers book activities for the same day that they’re in-destination. However, this is untrue for specific Asian customer segments, who as first-time travellers still appreciate the benefits of booking in advance.
North Asia
Overall, travellers from China have the strongest preference for same-day bookings of travel experiences which our data recorded at over 83 per cent in 2019, predominantly accredited in general to the consumption of attraction products. Similarly, mobile-first travellers from Hong Kong and Taiwan overwhelmingly prefer same day bookings.
In contrast, Japanese and South Korean travellers only recorded 25 per cent same day booking behaviour, and surprisingly over 36 per cent of travellers booked between two and seven days in advance. We noticed too their preference for more unique and experiential products, which also made an impact on the results.
South-east Asia
The data analysed reinforced the fact that the preference to book the same day is not as widespread as once believed, with each country showing a diversity of booking behaviour.
Indonesia, Thai, Vietnamese and Filipino travellers display similar booking window timings to each other with only 32 per cent of travellers from these source markets preferring same day bookings. While there’s been a shift to same-day bookings over the years, there’s still a solid percentage who book in advance ranging from one to four weeks out.
We attribute this behaviour to lower disposable incomes which play a role in motivation to seek great value deals ahead of time.
Conversely, our data showed that more mature and experienced travellers from Singapore and Malaysia are strong same day booking customers, at over 75 per cent and remaining so from early in 2018.
Technology Adoption and Delivery Timeframes
With more frequent adoption of booking systems and e-ticketing solutions and the digitising of travel experience products, the true impact of technology over the years becomes apparent when analysing ticket delivery times to customers. These times also reflect the complexities associated with travel experience categories, and it’s why relevant technology that supports this type of content is so vital to help these businesses scale.
We analysed some of the key trends by South-east Asian operators and found:
Average e-ticket delivery times for attraction operators went from almost 28 minutes in early 2018, to just 0.14 mins in late 2019. Overall, attractions only require a general admission ticket – perhaps differentiated by adult, child or senior, making electronic ticket adoption faster and easier.
For activity operators, average e-voucher delivery times reduced from eight hours to half an hour during the same time period. While half an hour still sounds like a lengthy time compared to attraction tickets, most activity operators face capacity constraints that require more sophisticated booking technology, and hence adoption has been slower-paced.
For day tour operators, where capacity, as well as pick-up options play a significant role in the booking process, e-voucher delivery times reduced from over 16 hours to a little over one hour during the same period.
There has been a distinct progression of technology adoption by operators and innovation by various technology players, but there is still huge room for improvement in particular for operators with products that have the capacity or availability constraints.
The Reality of Dynamic Pricing
Dynamic pricing was not commonplace in the travel experience industry in Asia during the period analysed, and this applies to both small and large companies.
We made a comparison between two similar, and very popular theme parks – one located in Japan, and the other in Singapore.
The Singapore attraction established its rate for the year, and over a 12 month period, their sales were evenly spread, and very flat. The Japanese attraction, who introduced the dynamic pricing model, saw its sales spike during seasonal and promotional periods over the same 12 months resulting in new additional revenue.
While building a strategic advanced pricing calendar can result in increased returns in revenue, only a handful of key operators in Asia have taken a step forward in this direction.
Offline Still Matters
While the spread and adoption of experiences as an ancillary revenue product line for online travel agents continues to progress throughout the region, traditional, offline travel agents remain an important revenue stream for Asian operators, with strong business relationships having been established over long periods of time. The value and importance of offline channels still matter and both online and offline combined, play a role in sales strategies.
Since 2016, with a greater focus placed on this industry segment, along with the visibility and strength of rapidly developing online travel agents, the transition to online from offline channels has had a greater impact on single-day experiences now made more accessible
through the digitising of products.
Looking Forward
The industry is adapting to digitisation, but at its own pace, and as it does in Asia, in its own unique way. Even the large operators of well-known Asian travel activity brands are not yet enabled with API connectivity and only some have shifted to booking systems that can enable further online distribution.
Most of the volume in online bookings for the experiences sector in the region has occurred in the last five years with greater investment in new B2C travel brands that have hit the market such as Klook in Hong Kong, MyRealTrip in South Korea, Traveloka in Indonesia, among others.
More established B2C travel brands, at least in Asia, have shown a much slower pace in integrating and offering experiences products to their travel customers, with the exception of China, where brands such as Ctrip and Meituan Dianping have led the way.
Overall, Asia’s travel experience industry is the most remarkable and unpredictable in the world, going forward, going backwards and maturing through a lifecycle all its own. Ultimately innovation and growth are driving the region forward at an enormous pace.
Future Watch – the way forward for tours and activities/experiences in Asia are insights from a data sample incorporating over 300 companies, two million travellers, more than 15 Asian countries and over 50 Asian destinations for the period 2016-2019.
