Top 5 trends emerging in APAC travel landscape

APAC online travel landscape

Webinar 2 September 2015

Your hosts

Kevin May Senior Editor & Moderator Tnooz

Gene Quinn CEO & Producer Tnooz

Your presenters

Tai Parata Director, Online Business Sabre

Mirza Juddani CEO & Founder Skiddoo

Poll no. 1 Where are you located?

Poll no. 2 What industry segment do you represent?

Poll no. 3 What percentage of your business

comes from APAC?

7 ©2015 Sabre GLBL Inc. All rights reserved.

APAC Online Travel Landscape Tai Parata, Director, Online Business, Sabre Mirza Juddani, CEO & Founder, Skiddoo Kevin May, Senior Editor & Moderator, Tnooz Gene Quinn, CEO & Producer, Tnooz


Agenda

Introduction 1

APAC OTA Trends Tai Parata 2

APAC Travel & Technology Trends Tai Parata/ Mirza Juddani 3

Roundtable Discussion Group

4

Audience Q&A 5

9 ©2015 Sabre GLBL Inc. All rights reserved. 9

APAC OTA Trends Tai Parata, Director Online Business APAC


The numbers

APAC OTA Gross bookings and share of the online and total travel market (2013-2017)

OTAs growing to 16% of total market

44% of all online bookings


India 41%

Korea 26%

Australia 15%

Taiwan 6%

HK 5%

SG 3%

NZ 2%

PH 2% ID

1%

GDS channel online country share YTM June 2015

Data: GDS numbers only. Does not include supplier direct sales by Legacy carriers or LCCs

Source: MIDT

India driving the volume with big players like Makemytrip, Yatra, Cleartrip

Markets like SG/HK which attract a lot of interest are relatively small markets


50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

AU KR TW HK SG IN

YTM Jun 2014 vs YTM Jun 2015

33%

12%

36%

50%

30%

14%

1%

24%

12%

1%

2013 vs 2014

10%

23%

Source: MIDT

GDS channel – stronger growth in 2015


•  Content –  Fragmented content sources

–  High net fare usage

–  Differential fare distribution

•  Ecommerce infrastructure –  Payment gateways and options

–  Response times

•  LCC penetration •  Mobile penetration

Unique aspects of APAC for OTAs

14 ©2015 Sabre GLBL Inc. All rights reserved. 14

APAC Travel and Technology Trends Tai Parata, Director Online Business APAC


SKIDDOO Launched in 2011, Skiddoo now operates in 3 markets that include Australia, Singapore and Philippines

Through Technology developments, Skiddoo are able to offer the widest range of flights in APAC markets

Skiddoo focus is to expand to the wider APAC markets by using technology to competre against the

traditional model


Online Business Model

01 / Be the ‘Lowest Cost to Ticket’ provider in the market 02 / Rely on low cost highly scalable API led services platform 03 / Focus on Millennial & Gen X who are high adopters of ecommerce & social platforms

Minimal technology

infrastructure risk

Ability to deliver customer

experience @ lowest cost

Strong cash generation


Travel and Technology Trends

1 Mobility

2 Expansion

3 Low-cost Carriers (LCC)

4 Morphing business models

5 Beyond flights


Mobility

9% 18%

28% 38%

48%

17%

25% 32%

39% 46%

25%

52% 58%

66% 73%

2013 2014 2015 2016 2017

Mobile Share of OTA gross bookings India Japan China

China mobile penetration > laptop

Averages hide peaks


Mobility

China and India require strong mobile strategies Qunar.com Q2 2015 report excerpt: Mobile revenues for the second quarter of 2015 were RMB600.1 million (US$96.8 million), an increase of 321.7% year-on-year, representing 68.1% of total revenues.

Ctrip.com Q1 2015 comments from CEO: Cumulative mobile app downloads reached approximately 800 million by the end of first quarter, an increase of over 550% from a year ago. Mobile channels accounted for around 70% of total online transactions this quarter.

Makemytrip Q1 earnings call: “…growth in India standalone online hotels fueled by over 200% growth on transactions coming from mobile channel during this quarter," said Deep Kalra, Group Chairman and Group CEO.

Cleartrip Press release April 2015: 53% of the total traffic emanates from the mobile channels…. over 70% of our mobile customers are now using mobile as their only channel for transactions. Also, this quarter, Cleartrip’s transactions grew by a whopping 214% YOY where mobile now accounts for 40% of overall transactions.


Mobility – UI adaptions

•  Mobile marketing is different by culture

Makemytrip Ctrip Building depth in •  Product range

•  Search options

•  Integration

•  Payment methods

•  Pricing differential


Expansion and growth

•  Larger APAC player –  Getting deeper because market is huge

–  Some diversifying

–  Strategic alliances

•  New gen players –  Nimble, fast and meta driven expanding quickly

•  Global OTAs had to work hard –  Hotels specialist done well

–  Full service OTAs found it difficult due to content acquisition

•  Meta entry –  European OTAs enter via meta


LCC penetration is very high

Source: Capa 2014

LCC % SHARE OF SEAT CAPACITY – 2014

26% 11%

22% 7% 8% 9%

14% 20%

29% 31%

35% 42%

47% 54%

57%

0% 10% 20% 30% 40% 50% 60% 70%

USA NZ

Australia Taiwan

Hong Kong China Japan

Sth Korea Vietnam

Singapore Thailand

Philippines India

Malaysia Indonesia


LCC pushing out legacy carriers on domestic routes

Source: Capa 2014

LCC SEAT CAPACITY BY DOM & INT – 2014

30.7% 15.9%

25.1%

9.3% 16.9%

37.3% 40.9%

60.8% 57.2%

64.5% 61.6%

63.1%

11.6% 6.8%

16.8% 7.2% 8.3% 8.3% 9.0%

13.3% 17.0%

31.3% 23.3%

25.8% 17.9%

50.3% 42.2%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

USA NZ

Australia Taiwan

Hong Kong China Japan

Sth Korea Vietnam

Singapore Thailand

Philippines India

Malaysia Indonesia

InternaMonal DomesMc


•  Is a core business requirement for OTAs •  Fragmented content •  Cash flow management •  Technical/operational complications

•  Point of sale pricing •  Compete with direct pricing

Impact of LCC


New business models and business drivers

•  B2B online only players –  fastest growing models

•  Meta/ Marketplace/OTA players – Customers choice

•  Meta going OTA – Controlling the quality

•  Seamless OTAs –  Point of sale: (Online/ offline) + Sale device


Beyond flights - changing content mix

•  Accommodation-based product –  Race to get product depth in China and India

–  Large diversification of revenue base with leading OTA

–  Slow pick up in dynamic packaging

–  Deals sites helped drive villas sales and highlighting ancillary revenue

•  Content diversification through acquisition and investment –  Expedia

–  Priceline

–  Ctrip

–  Makemytrip


•  APAC OTAs are experiencing high growth •  Net fare/LCC/mobile penetration are key differentiators for APAC •  A strong, locally tailored mobile strategy is vital in region •  Content fragmentation, especially with LCC provide challenges •  OTAs are moving and morphing quickly to the environment

Summary and Roundtable Discussion

Q & A

Thank you!

Send your questions and comments to [email protected]

Replay and presentation will be available on www.tnooz.com


APAC Online Travel Landscape Tai Parata, Director, Online Business, Sabre Mirza Juddani, CEO & Founder, Skiddoo Kevin May, Senior Editor & Moderator, Tnooz Gene Quinn, CO & Producer, Tnooz