To be a better startup, one has to keep an eye on key trends and a nose on where the money is. At the WIT 2017 Bootcamp in Singapore last October, three experts shared their observations on where the funding is, how to use data for more sales, and the rise of cruises in Asia.
Asia travel startups on the rise
Chetan Kapoor (Research Analyst, Asia Pacific, Phocuswright)
The travel startup industry is growing, with funding for the category going from $9 billion in 2014 to $62 billion in the first half of this year. While there were 950 such startups in 2014, the first half of 2017 saw that number grow to 1,500.
Phocuswright has been tracking travel startups since 2005 and Kapoor shared some insights into where the funding has been going. The funding, he said, has been lopsided.
Only 12 companies account for the 89% of funds raised in the region. If these 12 were taken out, funding for digital travel companies in Asia Pacific then falls from $32.2 billion last year to just $5.2 billion.
Most of the funding goes to Chinese firms. This is followed in startups in India, then in Singapore.
Start-ups that get the most funding are those who deal with ground transportation — such as Didi Chuxing in China, and Grab in South-east Asia — as well as those with mobile based services.
But despite the growth in the region, one in seven travel startups have had to shut down. Those that shuttered tend to “drive towards content and inspiration but may not have a clear-cut model of revenue realisation”, said Kapoor.
Turning trends into action for Chinese and Japanese travellers
Gianluca Armando (Director, Expedia Media Solutions, Asia Pacific)
Understanding what your customers want can help convert to sales, and this information can be gathered through technology, said Gianluca Armando, director at Expedia Media Solutions.
The travel giant themselves have tried using data in their campaigns, one done for tourism in Hawaii, for example, played a video about things that can be done in Hawaii. Technology is used to track at which point in the video did viewers smile, this information is then used to customise the offerings the viewers later then see.
“More than one million times did users smiled at campaign, and there has been a 20% year-on-year increase in passengers for the client,” said Armando.
He also shared some insights into travellers data that Expedia has. Chinese travellers, for example, care about the hotels, the food and shopping. Whereas Japanese travellers care most about their hotels, and if what they are purchasing is a good deal.
“The Japanese really want right value for money, the Chinese pay the most attention to imagery in ads,” he said.
A big wave headed for the cruise market
Arnie Weissmann (Editor in Chief, Travel Weekly; Senior Vice President/Editorial Director, Northstar Travel Group)
Asia will soon be the largest cruise market in the world. Since 2010, the market here has grown by 250%, and passenger capacity up three-fold. “Cruise companies are sending larger and larger ships to Asia to take care of expected demand, they are also beginning to send purpose built ships,” said Arnie Weissmann, Editor in Chief, Travel Weekly.
For cruises to work, there needs to be a large variety of ports that they call at. Contrary to what people may think, Weissmann said customers picked their cruises based on where the ships stop, and not so much about the on-board experience.
But despite the growing demand for cruises, there are few start ups in this space.
Weissmann one opportunity he saw was for a startup to help customers navigate their choices when it comes to the many cabins a ship may have.
“If you were a startup in Asia, probably look at guide routes to picking a cabin. Ask 10 questions, get to their psychological profile — would you rather read a book or take walk in forest — get a demographic and psychographic profile of the traveller and see if what they want is maybe an outside balcony in the spring,” he said.