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From left, Yeoh Siew Hoon, Northstar Travel Media Asia; Morris Sim, Circos Brand Karma; Louise Daley, Accor Hotels Asia Pacific; and Adrian Currie, Priceline Group at the Web in Travel event in London.
As with the entry into any new market, you’ve got to develop the right playbook for Asia. The fundamentals might be similar — get the product right, define your market and hire the right team — but it’s the execution and understanding the nuances that make all the difference in winning or losing in Asia.
Nothing beats actually being there and making mistakes.
In the opening conversation at the first Web in Travel (WIT) Europe event in London, Louise Daley, CFO and executive vice president of Accor Hotels Asia Pacific, recalled when she first moved to Bangkok, an Australia-trained accountant who was gung-ho to show her mettle.
She pointed out an irregularity in public “when I later learned this kind of thing should be done [privately] because it’s like showing up the other person,” she recalled.
Adrian Currie, senior vice president for corporate development at Priceline Group, said nothing beats having the right people. While this might sound counterintuitive for a group that’s admired for its technology, Currie said hiring and retaining the right people is crucial to success.
When Booking.com execs decided to set up a regional headquarters in Singapore, they went all out to find the right leader and decided on Oliver Hua, a former eBay executive who had never heard of Booking.com when he was approached.
“This is one of the challenges we face,” Currie said. “Many people may book with [Booking.com], but they don’t know the brand, and young, smart people want to work for brands they have heard about.”
Booking.com also placed its global head of talent, Marnix Mali, in Singapore for two years to help scale the operations. Acquiring Thailand-based Agoda.com, an online hotel reservation service, also gave the group a good kick-start in the region.
“Build the right team and let them run it,” Currie said.
Today, Asia forms a considerable and growing share of Priceline’s business: one-seventh of its 950,000-plus accommodations with more than 50 Asia-Pacific countries represented in its global portfolio of more than 220 countries. It has 50 offices in the region, and 3,000 of its staff of 16,000 are based there.
Morris Sim, CEO and co-founder of Circos Brand Karma, said that he, too, had to adapt when he returned to Taipei, having spent most of his childhood and early career in the U.S.
“American businesses tend to be very transactional, and they expect things to happen right away after the contract is signed,” he said. “In Asia, often the contract is just the beginning of the negotiations.”
There is also more hierarchial “social distance” in Asia, and to close that distance between management and staff, you need to be prepared to do things such as “sing and drink a lot” or “get naked in an onsen [bathing facility].”
Travel-search website Skyscanner, for example, whose CEO Gareth Williams has said, “to win, we must win in Asia,” runs immersion programs in which visiting executives are “inducted” into local traditions and ceremonies.
“It takes high-level commitment,” Sim said. “If you want to engage in Asia, you have to invest the time and resources necessary.”
Brand Karma started its business in the U.S., where its three co-founders were based. When it chose to focus its reputation-management business on hospitality and Asia, Sim moved to Taipei, and co-founder Mario Jobbe spent time living out of suitcases and traveling across the region.
“Face time is very important; you can’t run it by remote control,” Sim said.
You have to pick your battles well. Dublin-based CarTrawler, a global distributor of car rental content, is an example of a company that tried to expand in Asia and then realized it was better off focusing on China, where it is seeing good growth. However, its chief technical officer, Bobby Healy, admitted it is not investing enough to truly realize the potential of the market.
CarTrawler’s and Skyscanner’s experiences suggest you must get the product and strategy right before you go to market or burn a lot of money and go nowhere.
Beyond the technology, localization is also key. But does that mean hiring local people as leaders or is it enough to bring on expatriates? This is a question most international companies grapple with. Often, they are run by expatriates who are parachuted in, then leave.
Everyone acknowledges that it is crucial to develop local leaders, but that can be challenging. When you compare the number of Asia-Pacific staff Accor Hotels has vs. Priceline Group’s — 68,000 vs. 3,000 — you understand the economies of scale advantage that tech companies have.
Accor Hotels, which is the largest hotel operator in the region with 706 hotels and more than 136,000 rooms, is clearly taking a bigger bet on the luxury segment in Asia. Its pipeline of hotels is skewed toward the luxury segment in the region, influenced by a huge emerging middle class with the means to travel. Already, China is its biggest market in the region.
Asked what start-up they would do if they were to launch a new business in Asia now, Currie cited mobile, Daley picked social and Sim opted for content.
Asia is the land of the young, with a population that’s hungry and desiring new things, be it technology or experiences, and Sim advised the audience that if you haven’t started yet, begin with Generation Z (generally identified as those born in the mid-1990s and beyond) and build your market.
“If you want to do new things, like immersive communication using virtual or augmented reality, sharing-economy start-ups and around transportation innovation, Asia’s a good place to experiment,” he said. “There are lots of future customers there.”
A good time to seize Asia opportunity
Timing is everything in life, and so it was interesting that our first WIT conference in Europe was held in London a few days after the Brexit vote that shocked the world.
Our intention for this first event outside our home region was to spread the word about opportunities in Asia and how digital was changing consumer behavior in what will be the world’s most significant economic region by 2025, when 20 of the world’s 50 richest cities will be in Asia.
Heck, we don’t even have to wait that long. From Stockholm to Sydney, entire destinations are being transformed by the volume of visitors from Asia.
At our London event, held in partnership with the Singapore Tourism Board, it was interesting to listen to speakers based in the U.K. express dismay at the country’s decision to leave the EU but also agree that there couldn’t be a better time to seize the Asia opportunity.
Short term, the devaluation of the pound is making Britain attractive as an inbound destination for Asians.
Hugo Burge, CEO of the Momondo Group, which operates global flight comparison sites Momondo.com and Cheapflights.com, called on the industry to work together to ensure travel’s interests were heard by those in power.
In another example of good timing, the group had just released its DNA Journey video in June, carrying the message that we are more alike than we think. To date it has gained more than 165 million views in a month, and Burge said it could not have happened at a better time. “Our mission remains to open our world,” he said.
Burge, who has a degree in geography, said he was blown away by the sheer size and scope of the potential Asia market, which his group is entering with its Cheapflights.com brand. “It’s a name that works everywhere,” he said.
CarTrawler’s Healy said its focus has been on China, where it’s seeing 180% growth, and the mainland is now among its top 14 markets.
He admitted China is tough to penetrate, and private equity-funded companies are at a disadvantage since they cannot make the investments necessary to make a dent.
“Create a start-up and get the cash to run,” he advised the audience of close to 100. CarTrawler bought Finland-based Cabforce, a pre-booking platform for flat-rate taxis and transfer services, in 2015 to acquire the necessary technology to enter the China market.
In hindsight, he said, “We should have gotten product and the market right first before we entered Asia. Our other mistake is not investing enough.”
Skyscanner’s Andy Sleigh, who ran the Asia-Pacific operation out of Singapore for two years before returning to Edinburgh, said that from 2013 to 2015, Skyscanner saw rapid growth in average unique monthly visitors and was projecting revenue of around $39 million for this year.
It’s been a hair-raising ride, and Asia today is a total turf war, with Sleigh likening it to “Game of Thrones.” He advised companies against spending money on marketing if they don’t have the right product and user trust.
Japan is one market where it has had success, Sleigh said, and now bookings are estimated to rise to $71 billion. The establishment of Skyscanner Japan provided both partners in the joint venture an opportunity to accelerate their growth and offered millions of consumers comprehensive travel options for free. Visitors to its Japanese site grew 40% in 2014. For China, it bought travel metasearch site Youbibi, and its founder, Steven Pang, now runs Skyscanner’s China operations.
“Getting the right people is key,” Pang said. Healy agreed, asserting “You cannot run a business in China by hiring people who look like me.”
Sleigh advised against “seagull management … where you fly in, [defecate] on everyone and fly out.”
Leading a team in Asia is all in, he said, adding, “It’s a huge commitment that pays you back in spades. It’s personal hypergrowth, long hours, huge amount of travel. But you make great friends and have unbeatable experiences. … We need more European businesses to take the plunge.”
Source: travelweekly.com
