The 3 Ps of Entering Asia’s Travel Market: People, Patience & Persistence

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As with entry into any new markets, you’ve got to develop the right playbook. The fundamentals may be similar – yes, get the product right, define your market, hire the right team – but it’s in 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 last week’s WIT Europe in London, Louise Daley, CFO and executive vice president of AccorHotels Asia Pacific, remembers her early days when she first moved to Bangkok and the Australian-trained accountant was all gung-ho to show her mettle.

She pointed out an irregularity in public “when I later learnt this kind of thing should be done personally because it’s like showing up the other person,” she recalled.

Adrian Currie, senior vice president, corporate development, Priceline Group said nothing beats having the right people. While this may sound counter-intuitive for a group which is admired for its technology, Currie said hiring and retaining the right people are critical to success.

When Booking.com decided to set up a regional headquarters in Singapore, it went all out to find the right leader and found him in Oliver Hua, a former eBay executive who had actually never heard of Booking.com when he was first approached.

“This is one of the challenges we face – many people may book with Booking but they don’t know the brand and young, smart people want to work for brands they have heard about,” said Currie.

Other than building up its brand awareness, Booking also placed its global head of talent, Marnix Mali, in Singapore for two years to help scale the operations.

The acquisition of Thailand-based Agoda also gave the group a good kick-start in the region. “Build the right team and let them run it,” said Currie.

Today, Asia forms a considerable, and growing, share of Priceline’s business – one-seventh of its 950,000+ accommodation with almost a quarter, 50+ APAC countries represented in its global portfolio of 220+ countries. It has 50 offices in APAC (240+ offices globally) and 3,000 staff (out of 16,000 globally).

Priceline in Asia

Priceline Group in Asia

Morris Sim, CEO and co-founder of Circos Brand Karma, said he too had to adapt when he returned to Taipei, having spent most of his childhood and early career in the US.

There is also more “social distance” in Asia – more hierarchical – 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”. “American businesses tend to be very transactional and they expect things to happen right away after the contract is signed. In Asia, often the signing is just the beginning of the negotiations.”

Skyscanner for instance, whose CEO Gareth Williams has said, “to win, we must win in Asia”, runs immersion programmes for its visiting executives where they are “inducted” into local traditions and ceremonies.

“It takes high-level commitment. If you want to engage in Asia, you have to invest the time and resources necessary,” said Sim.

Brand Karma, for instance, started its business in the US, where its three co-founders were based. When it chose to focus its reputation management tool business on hospitality and Asia, Sim based himself in Taipei and co-founder Mario Jobbe spent time living out of suitcases and travelling across the region.

“Face time is very important, you can’t do it by remote control,” said Sim.

You have to pick your battles well. CarTrawler is an example of a company that tried to expand in Asia and then realised it is better off focusing on China where it is seeing good growth. However as CTO Bobby Healy admits, it is not investing enough to truly realise the potential of the market.

Based on both CarTrawler and Skyscanner’s examples, you must get the product and strategy right before you go to market, Otherwise, you burn a lot of money and go nowhere.

Localisation is also key – beyond the technology. Does that mean hiring local people as leaders or is it enough to have expatriates? This is a struggle most international companies have to grapple with. Often, they are run by expatriates who are parachuted in and then leave.

All agreed you have to develop local leaders but that can be challenging. When you compare the number of staff Accor Hotels have versus Priceline Group in APAC (68,000 vs 3,000), you understand the economies of scale advantage tech companies have.

Accor Hotels, which is the largest hotel operator in APAC with 706 hotels, and over 136,000 rooms, is clearly taking a bigger bet on the luxury segment in Asia – its pipeline of hotels is skewed towards the luxury segment in the region, influenced by a huge emerging middle class with the means to travel and aspiration to trade. Already, China is the biggest market for most of its hotels in the region.

AccorHotels' total network

AccorHotels’ total network in Asia Pacific

 

AccorHotels' Asia Pacific network

Asked what startup 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 got started yet, begin with Generation Z – those born in the 1990s – and build your future market.

“If you want to do new things, like immersive communication using Virtual or Augnented Reality, sharing economy startups and around tranportation innovation, Asia’s a good place to experiment,” he said. “There are lots of future customers there.”

His company last year pivoted towards content creation focusing on virtual reality after selling its reputation management tool business to TrustYou.

See original article at http://www.webintravel.com/developing-playbook-asia-nuances-matter-people-critical/

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Founded by two travel and technology professionals with years of experience in Asia, Representasia specialises in sales & marketing representation throughout Southeast Asia for travel/hospitality technology providers and travel-related startups, as well as providing marketing consultancy services for hotels and travel businesses in the region.

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