That’s the question I found myself asking after yesterday’s first Thailand Startup Summit, a superb event organised by Bangkok Entrepreneurs and attended by around 600 people from the region’s tech startup community.
E-commerce startups – particularly in the food and fashion sectors – dominated the event, with the travel sector barely present. Only Amadeus and Hotel Quickly were on stage, and only Amadeus and our partners USay had booths. Worse, when the ever-entertaining Bart Bellers from Amadeus Next delivered his speech – the last of the day – many attendees had already left. “Travel accounts for 1 dollar in every 3 spent online” he told those of us who were still there. “Which makes you wonder why this room is half-empty!”
And so it is at other such events in Thailand. Last month we exhibited at Digi.travel, and I pitched our forthcoming B2B travel app Tineri in the startup competition. None of the other entrants were in the travel tech field – two were examples of the ubiquitous “travel with locals” genre, one was an event management solution, and the other was incomprehensible, though we think it was a tour booking website. It was hard to tell.
I also occasionally attend Travel Massive events, and again, the travel startups I meet there are all in the tour booking space, mostly trying to connect travellers with locals. Noone seems to be interested in developing travel tech, and I have a few theories as to why this is:
After the porn industry (consistently the earliest adopter of new technology!), travel was one of the first sectors to realise the potential of doing business online. People have been buying and selling hotel rooms and air tickets virtually since the dawn of the internet, so there is a perception that the space is full. The success of companies such as FrontDeskAnywhere and the continuing growth of GDS proves otherwise – that it’s still possible to put a fresh spin on an old concept and succeed.
Despite riots, bombs, floods, protests and military coups, Thailand’s travel industry remains extraordinarily resilient, with 2015 seeing over 28m arrivals in another record year. It often feels like the industry metaphorically (or in some cases maybe literally) has its feet up on the desk watching the tourists roll in, and so there seems little need to innovate. Many hotels we talk to are happy with the status quo and see no need to buy new tech solutions or upgrade their existing ones, when they’re running 80% occupancy YOY. But the numbers mask a drop in numbers from traditional markets such as Europe and Russia, and an increasing reliance on the low-spending and security-sensitive Chinese market.
To anyone outside the industry – and many inside it for that matter – travel is a complicated business, an incredibly intricate network of hotels, tour operators/DMCs, travel agents, GDSs, OTAs, airlines, car rental supplies, insurance companies, and of course hundreds of different types of traveller. Where do you even start looking for your niche? Easier (and probably more fun) just to set up a beer delivery website or an online fashion shop. But our industry’s complexity means there are thousands of problems to be solved and big money waiting for anyone who can solve them.
So come on Thailand startups – the world is already awash with local travel and trip planning sites. Start talking to tour operators, travel agents and hoteliers, find out what their pain points are, and start coming up with the medicine. Venture capital in travel tech startups increased by 125% in 2015, and will almost certainly show similar growth in 2016. Let’s bring some of it to the Land of Smiles!