Eric Zimmerman, director for Google Travel

As Google expands its ever-increasing suite of travel products, the prospects of the Internet giant encroaching deeper into the online travel space has become a growing area of concern for industry players.

Google already boasts a bevy of travel products including metasearch tools Google Flights and Google Hotels, and most recently launched itinerary planning app Google Trips. It is now rolling out Google Assistant on Allo, its own chat app, and on its Google Pixel smartphones released earlier this week.

Observers think that the rising travel ambitions of Google will put it in direct competition with metasearch engines, which will be forced to transform in order to survive. OTAs, on the other hand, having spent billions of advertising dollars annually with Google and sell travel products, are less likely to have their positions jeopardised.

When asked what the near future holds for travel metasearchers during the WIT 2016 roundtable earlier this week, HotelsCombined CEO Hichame Assi said he would be watching Google closely to decide the next course of action while Qunar co-founder Fritz Demopoulos said he expects more vertical integration to happen until OTAs and metas become indistinguishable from each other.

This echoes the findings from a recent Amadeus-commissioned study by the London School of Economics and Political Science that cites this as the nascent beginning of the “mega meta-OTAs”.

These entities will come into existence as they are allowed greater negotiating power in relation with suppliers even as Google gains greater foothold in the industry.

Already, most major metasearchers are owned by OTA conglomerates such as Kayak under The Priceline Group, Qunar under Ctrip and Trivago under Expedia.

Holger Taubmann, senior vice president distribution at Amadeus, is expecting “rapid and large-scale changes” to take place in the mega meta-OTA scene, as the consumer expectations of a younger tech-savvy generation spill over into the travel distribution space.

This doesn’t mean Google is overtaking the entire travel booking chain. Guillaume de Marcillac, co-CEO of Fastbooking, which provides hotel channel management solutions, is convinced Google will come out a winner but will not become an OTA.

“What Google doesn’t have is the ability to source for suppliers in a highly fragmented market such as with independent hotels, which accounts for two-thirds of all hotel rooms,” he said. “What they love is to work with big OTA partners to simplify the connectivity.”

Fastbooking, which uses Google as one of its distribution partners, is seeing growth of Google Flights and Hotels “exploding” in the past 18 months, added Marcillac. “I can confirm Google is the fastest growing, but they also start from a lower base. Internationally, the biggest metasearcher for hotels in terms of absolute volume is still TripAdvisor.”

Google is currently in full product innovation mode, said Eric Zimmerman, director for Google Travel, during a Q&A session at WIT. He points to artificial intelligence technologies as trends that travel industry stakeholders should keep watch on and that will become a reality in a significant way in the near future.

Speaking to TTG Asia on the sidelines of ITB Asia, Jenn Villalobos, head of travel & hospitality Asia-Pacific at Google, states that it is not Google’s plan to become an online booking portal but a travel search player aimed at “levelling the playing field”.

Zimmerman also assuages worries brought up by OTAs, adding that Google is “very focused on a wide gamut of travel problems (but) we don’t want to be in the OTA business. There are many great OTAs and suppliers out there and we are not the right entity (to do that)”.

He reiterated that Google is only interested in the experience of consumers and will not bother about the backend of travel, the only caveat being “it’s very hard to predict the future”.

Managing director of TTG Travel Trade Publishing, Darren Ng

With just months to ASEAN’s 50^th founding anniversary in 2017, the 10 member states have joined hands to promote South-east Asia as a single yet diverse destination with a year-long campaign to commemorate the bloc’s golden jubilee.

Set to be officially launched at the upcoming ASEAN Tourism Forum in Singapore in January 2017, the Visit ASEAN@50 campaign aims to raise awareness through ASEAN brand building and drive travel multi-destination bookings in South-east Asia and boost tourist arrivals to 121 million and tourism receipts to US$83 billion by end-2017.

Strategic partners including TTG Travel Trade Publishing, AirAsia, Mastercard, Go ASEAN, ASEANTA, and the ASEAN Centres in China, Japan and South Korea have come on board to support the campaign with their own initiatives.

For example, TTG Travel Trade Publishing on its part is backing the campaign through ASEAN 50th Anniversary special editions to inspire and promote tourism business in the region, said managing director Darren Ng.

AirAsia’s head of commercial, Spencer Lee, commented: “We will aggressively promote the ASEAN Pass next year and will come out with special promotions and a livery to promote the campaign.”

Muhamad Daud, culture and tourism unit head at ASEAN-Korea Centre, said the centre will promote ASEAN at the Busan International Tourism Fair next year and introduce digital promotions.

Meanwhile, Go ASEAN, a multi-award winning content provider, will produce promotional videos including a new show showcasing the hidden gems of South-east Asia, to be launched in January 2017, said Zefny Idris, vice president, brand at Go ASEAN.

Managing director of Easy Tours Belgium, Antoine Noens

The constant addition of new players entering into Thailand’s established DMC scene has many questioning if the market is facing saturation, but players in the field are contending that the pie is growing bigger – and has a slice for everyone.

A newcomer is HG Travel Thailand, launched this April as a joint venture led by managing director Andre van der Marck. Thailand forms part of HG Travel’s wider expansion strategy into the region, adding to the Hanoi-based DMC’s presence in Vietnam, Laos, Cambodia and Myanmar.

Van der Marck sees a gap still in the small- to medium-sized grounds for bespoke operators like HG Travel Thailand, whose focus on the high-end, tailor-made sector will put it in a better position to customise “complicated itineraries spanning two to three weeks for demanding customers” than counterparts going after the mass market.

“Established DMCs in Thailand are either the small mom-and-pop variety or the big boys on the other spectrum,” said van der Marck. “We are not going up against the big boys like Diethelm or Destination Asia; we don’t want to fight against Goliath.”

Exo Travel group managing director Hamish Keith perceives it as a “very normal” development for operators that have been successful in neighbouring countries to set up in Thailand, owing to growing interconnectedness and cross-border travel in the region.

“Moreover, a client expects consistent service and usually prefers to deal with one DMC for each file rather than handle several relationships. This leads to more regional DMCs or satellite operations, which of course increases competition and can lead to some saturation in the marketplace,” said Keith.

Noting that competition is inevitable with a more crowded marketplace, Destination Asia (Thailand)’s managing director Pornthip Hirunkate also thinks that new DMCs will keep the incumbents “on their toes” and push them to “think out of the box and engage clients at even more creative levels”.

Keith agreed: “We believe that good operators who develop interesting products and are ready to invest in resources to promote the destination will help attract additional interest and attention to the region, which in turn helps to increase the size of the cake and ultimately benefits everyone, especially the destination.”

While new DMCs in South-east Asia have come knocking on the doors of Easy Tours Belgium with the lure of lower fees, managing director Antoine Noens argues that it’s not a simple price proposition when it comes to partnerships. “We don’t often change DMCs. Good times, bad times, we don’t change DMCs just for five dollars less,” he commented.

But if new players are able to “bring something new to the market” and “add value to relationships”, Karen Sales, senior event producer at Xyhyr Brand Experiences Australia, would consider switching partners in markets where existing ones have become complacent and lack product ingenuity.

It seems like the trade generally thinks the Thai DMC playing field is wide enough to accommodate newcomers.

“Arrivals are always rising in Thailand, with over 20 million real visitors each year. There is still room for niche players (like us),” van der Marck stated.

“Thailand is a stepping stone for anyone visiting South-east Asia, especially for emerging markets like Poland which is starting to explore this region. (More DMCs in Thailand) will (benefit) both buyers and sellers alike,” said Noens.

On the contrary, he suggests that Indochina is seeing a saturated DMC sector as emerging destinations like Laos and Cambodia do not have (sufficient) visitor volume yet to justify an expanding pool of DMC players.