3. CHINA, S. KOREA, JAPAN, INDIA AND MALAYSIA
WILL POWER THE OUTBOUND TRAVEL MARKET
IN APAC BY 2020
Country Trip Type 2011 2012 2013 2014 2020 CAGR (2014-20)
China
LPO (ex. Same-day trip to
HK/Macau) 42.6 50.5 61.1 71.2 134 11.1%
China (ex. HK/Macau) LPO (ex. all HK/Macau) 21.7 27.3 34.3 40 84.8 13.3%
S. Korea AP 12.7 13.7 15 15.5 19.2 3.7%
Japan AP 17 18.5 17.1 7.9 18.4 1.1%
India LPO 5.8 6.4 7.2 10.9 16.5 13.0%
Malaysia
AP (ex. Cross-border
overland to SG) 8.9 9.6 10.4 10.6 15.2 5.7%
Taiwan AP 8.8 9.4 10.4 8.7 14.2 5.1%
Singapore
AP (ex. Cross-border
overland to MY) 7.8 8 8.5 8.7 11.9 5.3%
HK
AP (ex. Non-air travel to
China/Macau) 7.1 7.8 8.6 6.8 11.6 4.9%
Indonesia LPO (ex. SG/MY same-day) 4.9 5.4 6.1 8.1 10.6 7.6%
Australia LPO 6.5 6.9 7.4 6.2 10 3.7%
Thailand AP (ex. MY/Laos same-day) 5.4 5.7 6 4.3 8.7 5.9%
Vietnam
AP (ex. Overland crossing to
China) 2.8 3.4 3.9 3.8 6.4 6.7%
Philippines LPO 3 3.2 3.5 1.9 6.2 8.7%
New Zealand LPO 1.7 1.7 1.8 181.7 2.3 3.3%
Total - 14 markets
Using China LPO (ex. Same-
day trip to HK/Macau) 134.9 150.3 166.8 181.7 286.3 7.9%
APAC Developed 61.5 66.1 68.6 70.6 88.7 3.9%
APAC Emerging 73.4 84.1 98.1 111.1 197.5 10.1%
LPO – Leisure purpose trips; AP – All purpose trips
Source: MasterCard Intelligence
Outbound Trips (Mn.)
4. US$10,000 HH INCOME IS THE INFLECTION POINT
FOR INTERNATIONAL OUTBOUND LEISURE
TRAVEL IN DEVELOPING APAC MARKETS
Source: MasterCard Intelligence
The Big Question,
therefore, is “How to
reach and attract the
Households in this
income range”?
5. WHILE INTERNATIONAL TRAVEL CAPTURES
MINDSHARE ACROSS APAC, THERE IS A PENT-
UP DEMAND FOR DOMESTIC TRAVEL IN SOME
MARKETS
1 Paris 8.5% 11 London 1.7%
2 New York 7.0% 12 LA, USA 1.7%
3 London 6.7% 13 Hong Kong 1.7%
4 Japan 4.1% 14 France 1.6%
5 USA 3.1% 15 Sydney 1.6%
6 Rome 3.0% 16 Italy 1.5%
7 Tokyo 2.9% 17 Switzerland 1.5%
8 Australia 2.4% 18 S. Korea 1.5%
9 UK 1.8% 19 Maldives 1.2%
10 Hawaii 1.8% 20 Canada 1.1%
1 Paris 8.4% 11 Seoul 1.8%
2 Singapore 6.0% 12 Rome 1.8%
3 London 5.7% 13 Maldives 1.8%
4 New York 4.3% 14 France 1.6%
5 Tokyo 4.1% 15 Switzerland 1.6%
6 USA 3.3% 16 S. Korea 1.5%
7 Japan 3.1% 17
New
Zealand 1.3%
8 Hong Kong 3.0% 18 Bangkok 1.3%
9 Australia 2.9% 19 Malaysia 1.2%
10 Sydney 2.2% 20 Canada 1.2%
Top 20 Aspirations destinations among
travellers in developed markets in APAC
Top 20 Aspirations destinations among
travellers in emerging markets in APAC
Source: MasterCard Intelligence
Top 20 account for 56.3% of total of which
APAC destinations are 14.1%
Top 20 account for 58.2% of total of which
APAC destinations are 28.5%
Japan and India have the lowest propensity to travel internationally
among the developed and developing Asia/Pacific markets respectively
6. APAC TRAVELLERS IN EMERGING COUNTRIES STILL
RELY ON TRADITIONAL TRAVEL AGENTS, WHILE THE
MOBILE BOOKINGS ARE RISING AT LEAST IN THE
BUSINESS SEGMENT
Proportion of travellers, that use a travel agent,
by country
Proportions of travellers who use Mobile for
travel related bookings
Source: Amadeus, Frost & Sullivan
Leisure Business
Travel agents make booking easier, particularly
for complicated itineraries, is the main reason
that travellers mainly use agents
Ease of payment and lack of local payment
options are the key barriers to enabling mobile
bookings in emerging markets
7. FEMALE TRAVELLERS, WILL EMERGE AS A BIG
SEGMENT, DRIVEN BY THE BUSINESS
TRAVELLERS
Source: Amadeus, Frost & Sullivan
Business travellers by gender International business departures by
women, 2011 – 30
“Women make most travel decisions anyway and are
more likely to make decisions based on social media
reviews. So the social media channel will become
increasingly important for travel”
- Yeoh Siew Hoon, Editor & Founder, Web-in-Travel
9. Urban destinations, such as Hong Kong, Macau and Korea are on the rise;
Business travel to Mainland China is increasing too
JAPAN – SOLO TRAVELLERS RULE, WHILE
GENERATION “S” IS THE KEY CUSTOMER
SEGMENT
Leisure Business
Source: Amadeus, Frost & Sullivan
Typical format of leisure travel by country Proportion of travellers over 65 years of age
Outbound Japanese travellers by destination, 2000 - 2011
10. JAPAN – OUTBOUND TRAVEL IS ON THE
DECLINE WHILE DOMESTIC TRAVEL IS STILL
AN ATTRACTIVE AREA OF GROWTH
1Paris-France
2NY-USA
3Rome-Italy
4Hawaii
Okinawa (#7), Kyoto (#12) and
Hokkaido (#18) are the 3 top
domestic aspirations destinations
Declining and ageing population,
stagnant economy, natural disasters
abroad are the main cited reasons for
low motivation for outbound travel
Source: MasterCard Intelligence
Top Aspirational destinations among Japanese outbound travellers
11. CHINA – MAJORITY OF THE OUTBOUND
TRAVELLERS COME FROM A QUARTER OF
ALL HOUSEHOLDS
Households earning above US$10,000 per annum constitute 93% of all
outbound international leisure trips and make up only 26% of all households
1Paris-France
3NY-USA
2Sydney-Australia
China is the largest source market for Maldives,
the number two ranked city location, and the
number of Chinese tourists to Maldives has grown
by more than five times in the five-year period
between 2007 and 2012
Source: MasterCard Intelligence
Top Aspirational destinations among Chinese outbound travellers
12. CHINA – THE NEXT WAVE OF GROWTH WILL
COME FROM TIER – 2 AND TIER – 3
PROVINCES AND CITIES
13. CHINA – HOME-GROWN TRAVEL SERVICES
ARE MOST POPULAR. SEARCH, GROUP BUY
AND RECOMMENDATIONS ARE THE MOST
COMMON ACTIVITIES ON MOBILE
0% 10% 20% 30% 40% 50% 60%
Baidu Map
Ctrip
Qunar Hotel
Autonavi Hotel
17u
Bong
Mangocity
Kuxun
LvMaMa
trip.taobao
mapbar
Barely used hotel app
Other
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Search Information
Group Buy
Comment and Recommendation
Phone booking
Online booking
Mobile payment
Other
Source: China Internet Watch
Most used travel related Mobile App
Reasons for using travel Mobile App
14. INDIA – IN THE LONG-TERM OUTBOUND
TRAVEL WILL FUEL THE GROWTH,
HOWEVER, DOMESTIC TRAVEL IS THE
SHORT-TERM GROWTH ENGINE
Among the 14 Asia/Pacific markets, India has the lowest ratio of outbound
trips to households. The propensity to travel by household income exhibits a
point of inflection at the US$7,500 household income
Of the top 50 destinations, 21 are domestic and
account for 17% of aspirational mindshare
Source: MasterCard Intelligence
1NY-USA
2Singapore
4 Malaysia
3London-UK
5Australia
6Japan
15. KEY DIFFERENTIATORS IN THE
EVER-CROWDING OTA SPACE –
WINNING THE HEARTS AND
MINDS OF THE CONSUMER
16. LOCALIZATION OF PRODUCTS
AND OFFERINGS WILL BE THE
KEY DIFFERENTIATOR
Language .. check
Customer support .. check
What’s the next frontier in localization?
1. Content
- Integration to Facebook, Weibo, RenRen, Line
- Link to Hotels’ YouTube videos
2. UI/UX
1. Payment options, specially over Mobile
Country
Power
Distance
Individualistic vs.
Collectivist society
Uncertainty
avoidance
Long term vs. Short
term orientation
Masculanity vs.
Femininity Index
UK 35 89 66 35 25
US 40 91 62 46 29
Brazil 69 38 49 76 65
Japan 54 46 95 92 80
Canada 39 80 52 48 23
China 80 20 66 30 118
Australia 36 90 66 51 31
e.g. Geert Hofstede’s “5 dimensions of culture” may reflect how consumers in each
country engage with the product
Social Recommendations,
from family, friends, friends
of friends, trending on
Twitter, Line, WeChat
17. MOBILE IS INDEED BIG IN ASIA
BUT IS ASIA READY FOR MOBILE
PAYMENTS?
Source: TechInAsia, Quartz
Willingness and familiarity with:-
China’s central bank considering placing limits
on how much consumers can spend via their
Mobile. Use of virtual credit cards and QR
codes, used for online shopping was also halted
- Quartz, Mar’14
Credit Card
penetration in SEA
Increase 3rd party payment
and off-line payment
options, e.g. payment
counters in shopping malls,
pre-paid cards …
18. UNDER THE DELUGE OF BIG DATA AND TOOLS,
STARTING AT AVAILABLE DATA WILL CONSTRAINT
THE RESULTS. BIG DATA JOURNEY ANALYSIS
SHOULD BEGIN WITH THE KEY RESULTS
What Results
do we want to
achieve?
What
Decisions each
department needs
to take?
What Insights
are required to
make those
decisions
What data
points need to be
collected to
deliver those
insights
Execute, Measure,
Optimize
e.g. to achiever personalized and enhanced customer experience, a number of
data points are required to be collected and analyzed, such as purchase
history, social media, ancillary sales, which “micro-segment” the customer falls
in, data across all touch points, location, weather forecasts of the destination,
local tourism promotions at the destination
19. IN THE MIDST OF CROWDED ONLINE TRAVEL
INDUSTRY, SEVERAL NIMBLE AND NICHE PLAYERS
ARE EMERGING ACROSS ASIA SUITABLE FOR
PARTNERSHIPS AND ACQUISITIONS
Last minute rooms booking
Activity based
planner
Share travel
experiences
117go.com
20. Demand Supply
Products and
Offerings
Strategy and
Operations
Operations:-
- Customer Experience (POS,
Customer Service and Customer
Management systems)
- Payment mechanisms
- Scalable technology and
Infrastructure
Website and Mobile Apps
- Content
- Ease of Use
- Payment
- Localization
- Search, Discovery and
Recommendations
- Loyalty & Reward
programs
Merchants
Agencies
Strategy (Regional and Per-country)
- Marketing (PPC, Display, SEO,
and Off-line marketing)
- Partnerships and acquisitions
- Competitive analysis
- Analytics (Consumer behavior,
emerging segments)
Inventory fulfillment
and optimization
LOCALIZATION, ANALYTICS AND PARTNERSHIPS
WILL BE THE DETERMINANT OF
DIFFERENTIATION ACROSS THE VALUE CHAIN
Partners
