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Agoda: Corporate Strategy & Sustainability

An analysis of the marketing strategy of Agoda and Sustainable Measures. Booking.com, Expedia.com, Tripadvisor

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Agoda: Corporate Strategy & Sustainability

  1. 1. Date: 24 November 2019 2019 Agoda: A Case of Strategic Management & Sustainability STRATEGIC MANAGEMENT AND CORPORATE SUSTAINABILITY
  2. 2. Executive Summary The report provides a bird’s eye view on Agoda.com as one of the major and high growth players’ in the travel booking industry. Agoda.com may also be named as the Asian Tiger in the industry for its promising and continued growth for more than a decade now and therefore is subject to fierce competition and strategic shifts in the markets by existing and new competitors. The report provides a deep insight on the corporate strategies of Agoda and the way forward to ensuring sustainability in the future. Therefore, to analyze the strategies and successes of Agoda different strategic frameworks have been applied and looked through to find the core competencies, key success factors and the business model to form an idea about its future disposition. The analysis inferred that although Agoda has been thriving over the past years banking on the Asian market, it still needs to find a way to differentiating itself from the competitors to the blue ocean of success in attaining further growth and glory. Internal and external environment analysis through the Five Forces and PESTLE frameworks also provides a wide-angle view of the industry where rivalry and other factors intensifies to squeeze the market shares by the global giants. The report also aimed to look through the lens of the future trends and sustainability issues like environmental protection, climate change and the carbon footprint of Agoda and digital technology companies. The trends also imply both advantages and major limitations faced by Agoda in sustaining the business through socially responsible and sustainable practices. Effect of the advent of disruptive technologies and projections of demographics, energy and other mega trends are significant to be the drivers of growth or decline in the future. Moreover, increased effort of green washing by the mother group, Booking Holdings, have been observed but are not convincing to attract the new generation travelers who are conscious and critical about environment and sustainability issues. This group of people will be writing the future of the digital companies like Agoda in recent times. Based on the weaknesses, trends and expectation of probable threats, the report forms the recommendation for the Agoda for the current situation, predictable and unpredictable trends and the related action plans. However, the only limitation to the report is aligning the recommendations to the principles of the organization as the company did not disclose its mission and vision to the
  3. 3. public. Thus, it makes the company susceptible to mergers with the sister brand and operate under a single name. The assumption may have limitations, but this is another recommendation for Agoda in forming and displaying itself as a robust and strong brand with specific guidelines and the way it portrays itself towards the world at large.
  4. 4. Contents 1.0 Introduction to Agoda.com .................................................................................................5 1.1 Key Success Factors behind Agoda’s growth .................................................................6 1.2 Core Competencies ..........................................................................................................7 2.0 Agoda’s Competitive Position in the Industry ...................................................................9 2.1 Corporate Strategy ........................................................................................................10 2.2 Porter’s five forces.........................................................................................................10 2.3 So what, the industry is competitive?............................................................................12 3.0 Internal Environment .......................................................................................................13 3.1 Business Model Canvas .................................................................................................13 3.2 Value Proposition Canvas .............................................................................................13 3.3 Value Chain....................................................................................................................14 4.0 External Environment.......................................................................................................14 4.1 Political/Legal Environment..........................................................................................14 4.2 Economic Environment .................................................................................................15 4.3 Social Environment........................................................................................................15 4.4 Environment ..................................................................................................................16 4.5 So what?.........................................................................................................................16 5.0 The Online Industry..........................................................................................................18 5.1 Competitors....................................................................................................................18 6. Environment and the carbon footprint of Agoda...............................................................19 6.1 Green washing of Agoda................................................................................................19 6.2 Actions Taken Vs Needed to be taken...........................................................................20 6.3 So what?.........................................................................................................................21 7. Predictable and Unpredictable Trends ..............................................................................22 7.1 Predictable Trends.........................................................................................................23 7.1.1 Changing perception on travel style: ......................................................................23 7.1.2 Internet Users ..........................................................................................................24 7.2 Unpredictable Trends....................................................................................................25 7.2.1 The internet collapse ...............................................................................................25 7.2.2 Virtual reality can entirely change travel behavior ...............................................26
  5. 5. 7.3 So what?.........................................................................................................................26 8. Recommendation.................................................................................................................27 8.1 Current Situation...........................................................................................................28 8.2 Predictable trends..........................................................................................................29 8.3 Unpredictable trends. ....................................................................................................29 9. Conclusion ...........................................................................................................................30 10.0 References........................................................................................................................31 Appendix-I: Competitive Advantage- Stuck in the Middle...................................................36 Appendix-III: Business Model Canvas.....................................................................................0 Appendix-IV: Value Proposition Canvas.................................................................................1 Appendix-V: Value Chain.........................................................................................................2 Appendix-VI: Porter’s Five forces ...........................................................................................5 Appendix-VII: PESTLE ...........................................................................................................6 Appendix-VIII: Predictable & Unpredictable Trends Impact Map .....................................11
  6. 6. 1.0 Introduction to Agoda.com Agoda.com is one of the leading travels’ booking websites in the world. Headquartered in Singapore, Agoda started its official journey as an e-commerce start-up in 2005 and is considered to be the fastest growing company among its competitors. It has listed over two million properties under its umbrella across the entire world and offers accommodation services for over 200 nations. It offers the customers with wide range of choices from budget accommodation facilities to multinational luxury hotel chains. The website and mobile application are available in 38 different languages and its offices cover more than 30 countries worldwide. (Agoda, n.d.) Michael Kenny and Robert Rosenstein co-founded Agoda as part of their love for travel and deep interest in information technology business. (Kaveevivitchai, 2013) They targeted Thailand as their primary market for penetration and soon the website became the most sought choice for booking preference in whole of Asia. This rapid growth and success caught the attention of Priceline group (Currently Booking Holdings), the giant in travel booking industry across the world and consequently Agoda was acquired by Booking Holdings in 2007. (Agoda, n.d.) Becoming a subsidiary of a giant group, Agoda reaped several benefits in expanding its products and services as well as expanding into new markets. The result of Booking Holdings’ acquisition of Qlika, a start-up company in Israel which specialized in pay per click advertising and of Woomoo, another start-up from Taiwan specialized in prototyping mobile applications, gave Agoda the key advantages in optimizing its marketing systems and appearance on Google search with its reviews. (Wikipedia, n.d.) Agoda not only concentrated on booking services with hotels but also realized the need to serve the market of millennials (young travelers looking for adventure)and hence introduced “AgodaHomes” to facilitate both travelers and hosts to rent in and out residential rooms that opened up the opportunity of offering remote and wider choice of destinations to the traveler’s. (TheJakartaPost, 2017) Moreover, partnership extension of Rentalcars.com and Mozio Inc. has facilitated Agoda in providing value added services like airport transfers and hiring vehicles across different destinations. This not only created competitive advantage for Agoda but also formed part of its key competencies in integrating and expanding into different industries through the hands of adept and known players of the industry.
  7. 7. Although Agoda.com operates in a very competitive industry it has its advantage of belonging to the biggest group of companies in the industry. The biggest competitor is the owner and strategies are therefore guided by the most experienced in the management. 1.1 Key Success Factors behind Agoda’s growth Business Model: Unlike its competitors, Agoda is more focused on the merchant model of business where it purchases rooms at wholesale rate and mark them up to gain a profit upon sale. Moreover, it pushes customers to confirm the booking by payment securing funds in advance and also hedging the risks of frauds and fake bookers. Therefore, it can screen out the true travelers ensuring a confirmed revenue stream. Although, it allows customers to book and pay later, the option is limited to specific regions, hotels and areas. (Timbrook, 2018) Inventory: The merchant business model enables Agoda to hold an inventory for rooms and so during peak seasons, it can serve customers with available rooms, thus earning customer loyalty. Horizontal Integration: As part of the Booking Holdings, Agoda enjoys the integration and service expansion into car rentals, airport transfers, deals and travel packages through Rentalcars.com, mozio.com and viator.com respectively. Thus, it provides a strong and holistic service provision to grab more customers. Home sharing (Innovation): Home sharing in the Asia Pacific region is becoming popular in recent times and is growing at a very high rate. To tap the opportunity, Agoda has stepped into this sharing service by opening a platform on its website called Agoda Homes. Competitors are replicating the feature but Agoda enjoys the dominance and confidence of the customers in the region. Technological Development and Marketing Effort: Agoda has recently hired Digitas, one of the leading data analyst and marketing companies to discover and implement marketing efforts based on data derived across the Asian market. “Digitas will utilize digital content powered by “data- fueled hyper-local insights” to raise brand awareness, consideration and conversion for Agoda’s partners and consumers. Content span across offline and online, including social channels, to deliver an integrated and connected experience for consumers.” www.marketing- interactive.com/agoda-appoints-digitas-for-data-driven-content-marketing-across-8-asian- markets/
  8. 8. User-friendly website and real review: Although there had been controversies with Agoda’s reviews on different hotels and locations, in recent times it has gained a positive customer feedback and are considered to be very reliable over other websites. The website and phone application are also very flexible and friendly in terms of making multiple bookings and taking advantage of the discount offers. However, there have been disputes in saving the hotel industry in many countries regarding this method that enables customers to take advantage of the discounts while hotels are facing problems with lower margins on their sales. This has not only affected Agoda but also the entire booking industry that faced with litigations and bans in recent times across many countries. (gtp, 2018) (Calder, 2017) 1.2 Core Competencies Fig. 1: Core competencies High quality services Core Competencies High Quality Services Inventory Growth Innovation of payment method Customer service Strong collaboration
  9. 9. The core competencies of Agoda is the combination of its quality, customer service, and technology innovation. Compared to its competitors, Agoda’s differentiated service includes Homes to customers on its platforms. Agoda homes are suitable for the whole families and the host only helps to check-in and check-out alongside some recommendations for trip. The one-stop service allows consumers to save budget through bundling, like car rental service, flight booking and suggested travel packages. Inventory Growth Agoda built a partnership with a home-sharing platform named Xiaozhu in China and they would share over 100,000 rooms on each platform. (Newport, 2018) Thus, Agoda tries to penetrate the long-awaited hotel and accommodation market in mainland China. Innovation of payment method Most Asia Pacific travelers can use Alipay and Wechat Pay as mobile-first payment. Alibaba- backed Alipay has begun introducing post-stay pay for both hotels and alternative lodgings. Agoda is working to incorporate more of that payment model into all aspects of its business. The forward integration will enable competitive advantage for Agoda as travelers in the Asia Pacific are well accustomed to using Alipay and WeChat as mobile-first payments. (Agoda, 2019) Customer service Customer service is the key to retain customer loyalty for any business and invaluable for Agoda as a leading online travel agency. Agoda built PureEngage to convey information and messages to customers and in order to implement PureEngage, Agoda chose Dimension Data to provide technical support due to its technical capabilities. Agoda differentiates itself by enabling travelers to interact even through other platforms resulting in increased customer loyalty. (Nation, 2019) Strong collaboration Agoda has built collaboration with several travel agencies and travel networks in other countries like JTB Corp. in Japan, HotelPartner in Europe to have greater access to the popular destinations worldwide with customer loyalty programs like reward points. (Newport, 2018) Partnership with HotelPartner has also facilitated Agoda in building Revenue Management System (YCS 3.0) that
  10. 10. can facilitate partner hotels to manage content, room rates and room availability, as well as promotions during the off-season to increase bookings. (Agoda, 2019) 2.0 Agoda’s Competitive Position in the Industry Agoda being one of the leading players’ in the market is aggressively setting targets to compete through both prices and differentiation. Through the web and mobile platforms, it is providing a wide range of services from accommodation booking services including both hotels and homes, to flight ticketing, hiring cars, airport transfers, and holiday packages. (Agoda, n.d.) Agoda currently ranks at 5 (five) among its competitors in terms of website and mobile application visit by customers. (SimilarWeb, 2019) Accordingly the comparison of the website performances of the key competitors of the industry are shown below. Website Category Rank Avg. Monthly visit (M) Monthly Unique visitors (M) Average visit duration (min) Bounce rate (%) Desktop visit (%) Mobile visit (%) Agoda 5 62.26 31.83 5:54 40.16 49.92 50.08 Booking 1 605.4 238.8 8:04 34.28 42.68 57.32 Expedia 2 83.51 45.77 5:47 40.41 43.70 56.30 Trip 33 16.17 10.11 4:38 41.64 50.18 49.82 Hotels 3 74.89 43.5 5:42 38.91 42.12 57.88 Priceline 15 31.58 17.16 5:11 42.32 40.57 59.43 Skyscann er 16 14.81 7.71 6:07 32.16 51.17 48.83 Airbnb 2 92.80 40.19 8:19 35.34 56.54 43.46 Table- 1: Website performance according to www.similarweb.com as of September, 2019 The global online travel booking companies are no more concentrated with just hotel bookings and reservations, rather they are expanding their wings in both related and unrelated sectors. For example, both Expedia group and the Booking holdings have formed strategic partnerships or have
  11. 11. introduced new websites to even book for cruises, sea and ocean liners. It has become very ambiguous to distinguish and relate companies to any particular sector or industry. Since Agoda, is still focused on the accommodation services, this report will consider its core services (accommodation) in analyzing the strategy and way forward. 2.1 Corporate Strategy While analyzing the industry it is evident that Agoda is operating in a very dynamic and competitive industry where it faces high challenges from other online booking sites both from international and domestic competitors. On the other hand, it has expanded its line of services exposing itself to emerging competitions and further risks from diverse sectors across the industry and lowered bargaining power. On the other hand, unlike other companies, Agoda does not share its Mission and Vision making it vulnerable to identifying concrete corporate strategies. And, most importantly when it comes to positioning in the market, it is stuck in the middle (Appendix- I) in making choices between the strategic move towards cost leadership and differentiation. The strategic clock in Appendix-II shows its position as hybrid. Comparison of the industry and its competitors is dependent upon the business model and types of services offered. Agoda provides services alike its competitors namely Expedia, Booking.com, and others, but has taken few steps in differentiating itself by horizontal integration with value added services in the supply chain and also focusing on location centric dominance. Being born in Asia, Agoda has competitive advantage in dispersing the dominance over Asian market while customizing services and deal offerings for different locations around the world. Moreover, apart from location expansion, Agoda has also garnered strategic competencies in ensuring continuous growth over the past years that lead to its success and leadership in the industry. However, based on the trend and recent initiatives of Agoda can be attributed to aggressive strategy in growing market share especially in penetrating the European and Chinese markets. 2.2 Porter’s five forces Five Forces Agoda
  12. 12. Competitive Rivalry High There are strong existing rivals in the industry and most of them are also large and global brands including Booking and Expedia. They account for large market share and provide similar products and services. The intense rivalry among the existing players will drive down prices and decrease the overall profitability of the industry. Bargaining Power of Supplier High The industry is concentrated with many online booking options and therefore suppliers can enlist them with multiple service providers. It is therefore perceived that Agoda faces quite high bargain from its suppliers in terms of the commission rates or service charges. Also, suppliers can directly provide the services to the customers foregoing the need for intermediary portals. Thus, hotels and lodgings can create the service to the end users simply by setting up their own websites and online booking systems. Bargaining Power of Buyer High Buyers have high bargaining powers regarding to the information availability, buyers can easily find the options offered in other online booking websites with low switching cost for the lower-price packages and some buyers tend to use prices to make their final decisions. Moderate
  13. 13. Threat of New Entrance New entrances are difficult to grow into a large and global brand since they need large capital in technological factors including website and application development, marketing especially online marketing, customer services, and operation. Threat of Substitute High As consumers from some regions are not familiar with technology, it is indeed difficult and complex task for them to use online booking system. They prefer to use traditional booking system like phone booking or walk-in inquiry to hotels rather than using Online Booking websites. The traditional booking system significant substitute to play a threatening role. Table-2: Michael Porter’s five forces framework The table above depicts the high competition of the online accommodation booking market. Due to the similarity of core products and services, customers and hotels have strong bargaining power. The threat of substitute is also high as many customers still prefer to book hotel through traditional systems. The only exception is the threat of new entrants as investment in technology and creating global presence is a costly measure where the market competition is already intense. Appendix-VI shows the at a glance view of the Porter’s five forces on Agoda. 2.3 So what, the industry is competitive? Agoda needs to focus on differentiating its products and services so that the actions of competitors will have less effect on its customers that seek its unique products. As the industry is growing, Agoda can focus on new customers rather than winning the ones from existing companies.
  14. 14. 3.0 Internal Environment 3.1 Business Model Canvas The core activities of Agoda.com is aimed at enhancing its indirect network effects as it is a platform business model. The business model canvas (Appendix-III) depicts that • indirect network is being enhanced by agoda.com by aggressively increasing the number and types of bookable accommodations at different locations. It has 1.8 million properties including vacation rentals and bed-and-breakfasts along with hotels. • Agoda also tries to increase and maintain its search engine visibility by retaining top rankings on paid advertising and organic search rankings so that it can target customers and increase its customer base. • With the increasing customer base Agoda focuses on providing best customer support. In a press release it stated that ‘beyond offering the best prices, Agoda aims to create the easiest booking journey possible, reflecting its premise of Less Hassle, More Travel’ which can be attained only through good customer support. (Agoda, n.d.) One of its key partners is Hotels and Property Owners that play a big role in Agoda’s success. The key source of Agoda’s core inventory is rooms and properties which it gets through the Hotels and Property owners. In order to increase its inventory, Agoda needs to increase and widen its network with them. The major channel to promote itself and provide the services are through online platforms and resource partners like Digitas, Qlika, etc. 3.2 Value Proposition Canvas Analyzing, the value proposition canvas (Appendix-VI) it can be inferred that the most important value to the customer provided by Agoda is the cheap accommodation service. Holding a wide variety of inventory gives Agoda the competitive advantage in providing customers’ the value for money. Cheaper accommodation options and wide range of services provide higher satisfaction and value for the customers. Moreover, online payment facilities, pickup-drop, rental, airport transfer and other suggestion helps travelers in pursuing a planned travel by reducing uncertainty and hassle of availing the services sequentially through own effort.
  15. 15. Recently the save and mix model allows travelers to choose between multiple rooms and diverse options within a facility, giving them optimum savings and considered to be a disruptive technology in the industry. (Resco, 2019) Additionally, the online booking services is changing the consumers traditional behavior of looking for accommodation after reaching a destination. The online booking system is creating a sense of relief and certainty about the desired shelter for a traveler. Upgraded technologies are also facilitating to choose between rooms and other add on services. Additional services like the car rental service, airport transfers, lodgings are other value-added services catering to the customized needs and each segment of customers. (Agoda, n.d.) 3.3 Value Chain The primary activities of Agoda include inbound logistics, operation, marketing and sales, outbound logistics and the service provisions where the inbound logistics and operations are related to the heart of their business meaning the maintenance and continuous development of the website and cloud server to provide customer service along with enabling accommodation and hotel partners to upload their necessary information. The marketing and sales are mainly focused on optimizing their search options and advertising over online platforms to increase sales and reaching wide variety of customer segments. A detailed description of the value chain including the primary and secondary activities along with related responsibilities are provided in Appendix- V. 4.0 External Environment To understand the external environment the PESTLE Analysis has been illustrated into the literature and its impact on Agoda. A diagram in Appendix-VII also shows the factors and level of effect on the business of Agoda. 4.1 Political/Legal Environment Impact- High to Medium Due to having the positive political stability in Thailand in recent years, Agoda being headquartered in the region enjoys the bright part of the political influences. Thailand and Japan
  16. 16. were ranked as most-booked destinations in Asia through Agoda while Afghanistan, Iraq, Syria, and Libya are still forbidden to visit by travelers. (Agoda, n.d.) Threat of terrorist attacks and robbery are still big risks in many locations that creates medium risk level for Agoda to operate business in such locations. International payment gateways, government subsidies, on-arrival visas’ and flexibility in visa requirements between countries in many growing nations along with opening the doors to Foreign Direct Investments (FDI) have created new opportunities for global players like Agoda to penetrate into new markets. Although, there are many nations who still have strict regulations but are improving on the governance to open doors for companies like Agoda to directly invest or expand their business worldwide. Finally, governments tend to protect domestic industries and cases of banning online booking websites have already been witnessed and accused of malpractices in sales, tax evasions and other related factors is a great barrier for Agoda to expand its services rapidly. 4.2 Economic Environment Impact- High As a multinational company, the exchange rate exposure cannot be neglected when conducting business. Agoda also being indigenous with the largest market share in the region tends to grow at a higher pace and acquire more profit in the near future. Strengthening of US Dollar favors western travelers to spend more on vacation but the regional travelers may find it vice-versa due to the increased cost of traveling. Since, the trend of affluent middle-class is on the rise, Agoda might face rejection and adversity in gaining customers from the regional band. More likely, people would be prone to avoid such intermediaries to reduce their cost. On a positive note economic development will enhance the spending power of people while resulting in more investment in leisure activities. It is indeed a good opportunity for Agoda to expand business like enlarge the scale of company, hire new employees, carry new business and improve productivity. Moreover, Agoda will be more competitive if the world starts utilizing online payment method widely as many countries still restrict on international transactions to contend their dollar reserves. 4.3 Social & Technological Environment Impact: High
  17. 17. Information technology has prompted people to adopting global cultures and destinations. As Agoda works via online platform and focuses on online users preferring to reserve accommodations through websites and applications, growing number of internet users, smartphone users, and social media will have positive impact on its business. As online marketing is the key to grow market share, Agoda’s vigilance in continuously developing marketing efforts and aligning the features with the trends will provide better advantage in impact creation. Use of social media including Facebook, Instagram, and Youtube etc. are infallible due to their own features and algorithms to analyze the right audiences regarding to their interests and lifestyles. 4.4 Environment Impact: High Rising concerns on global warming, air pollution and carbon emissions can alter the thinking process and behavior of the global travelers to check on traveling to promote sustainability and lesser consumption; thus, leading to declining spending behavior and shrinking tourism industry. As rising of sea levels will submerge coastal regions and islands, tourism depending on that areas are under threat and will affect the online travel businesses (e.g: Maldives). 4.5 So what? Global Economic Power Shift: The world is already experiencing a shift in economic power from the West to the Asia Pacific. According to the Megatrends prediction, the developing economies will account for 57% of the global GDP by 2030 and only China and India will be the home to 35% of the entire population of the world. These 2 mega powers will comprise almost 25% of the global GDP giving rise to completely individualistic society across many major cities of Asia. This growth is expected to promote mass affluence of middle class. Since tourism and its related industries are part of this global economic shift, an influx of global travelers is expected to boom in this region and especially by the middle class as the International Air Transport Association predicts that the demand for air travel will be dominated by the middle class from emerging economies. (KPMG, 2014)
  18. 18. It is also expected that by 2030, 57% of the international tourists will be traveling to emerging economies. However, this is also giving rise to conscientious and environmentally conscious travelers across the world, who are shaping the industry in terms of sustainability issues adopted by the service providers. It is also expected that the winners in the market will be those who will depict sustainable practices in their business operations. (KPMG, 2014) Agoda faces both positive and negative forces from this shift. As a dominant and well-known brand in the region it enjoys the advantage of penetrating and printing its shadow in the economies having better knowledge of the market and the consumers. But, the economies are also conservative in terms of its rules and regulations, protection of domestic industries, high corruption and entry barriers and other political forces influencing business operations. As it faces fierce competition from the local or domestic service providers, Agoda should take advantage of expanding with physical existence into the territories that will give them the advantage to convince governments and creating strategic alliances with domestic players in the industry. As the global economy shifts it will also face intense competition from global competitors and its sister brands. Especially, when it comes to compete independently, either Agoda or Booking.com will face hard time in securing their share market in the same region as the growing demand for travel into the Asian market will simultaneously force Booking and others to step into the region vigorously to ensure their sustainability as the western market, where they mainly concentrate will start to shrink. Agoda as a competing brand under the same group of companies will face the dilemma of sharing business and profit among the sister brands and management collisions may be evidential in the future. Since China and India seems to be the biggest market in the future, Agoda hardly has its footprint in holding significant inventory in the regions as regional competitors like CTRIP in China and “makemytrip” in India are already grabbing and expanding their percolation into the market. Therefore, growing market share into the regions and competing against the local brands would be highly challenging and only innovation can pull them to win over the situation. Agoda needs to take precautionary measures to address the global shift and act accordingly to innovate and win market shares in an aggressive mode.
  19. 19. 5.0 The Online Industry The travel and tourism industry continue to grow at the fastest rate with more than USD 1.6 trillion spending in the sector in 2017. (Deloitte, 2018) Booking.com tops the list among the travel booking websites receiving 443 million visitors as of May 2018. (Charlton, 2019) The industry contributed to 10.4% of the global GDP (Gross Domestic Product) constituting almost 10% of the global employment associated with travel and tourism. USD 882.4 billion investment was witnessed in the sector in 2017 and is expected to rise at a rate of 4.3% and reaching USD 1408.3 billion by the year 2028. (WTTC, 2018; 2019 ) The trend of Solo travel is surging reaching up-to 3 or more trips per year. (Traveler, 2019) The cruise industry in recent years have seen a massive growth and 70% of all the bookings are conducted through travel agents. (Porter, 2015) The competition in the airlines industry have intensified and resulted in cheaper prices of tickets facilitating travelers to trip across the world. It is also expected that 57% of all the international tourists will travel across the emerging countries by 2030. (UNWTO, 2017) The key attributes to the facilitation and growth of the industry are the online travel booking sites and the amount of information that they are generating to impact on peoples’ minds to tantalize them to travel. This has also impacted on consumers’ spending behavior as portion of the expenditure on physical goods and services are shifting to experience related activities like traveling. (WTTC, 2018; 2019 ) 5.1 Competitors The major global players in the industry are Booking.com, Agoda.com, Expedia.com, Priceline.com, Hotels.com, Skyscanner.com, and Airbnb.com. The related search engines are Tripadvisor.com, Trivago.com and Kayak.com. However, the competitors are not independent of each other. They have created a sheer syndication by means of mergers and acquisitions to uphold their coverage and service provision. As stated earlier, Booking Holdings is the mother company and holder of 3 direct competitors like the Booking.com, Agoda.com, and Priceline.com whereas another dominant player, Expedia group is the holder of Expedia.com, Hotels.com, HomeAway.com, Travelocity, Classic Vacations etc. The travel sites are not limited to only these two groups but there are numerous competitors, regionally, domestically, sector wise and service
  20. 20. based. Each competitor has its own market share and differentiation strategy making the industry highly competitive and segmented through specialization and service arenas. 6. Environment and the carbon footprint of Agoda Environmental and sustainability issues are the most concerning topics in current times where technology and digitalization are having profound impact on the atmosphere and significant contribution to global warming. Resent estimates have shown that the internet’s energy consumption and carbon emission is more than that of the airline industry. (climatecare, 2019) Although digital companies like Agoda claims to minimize their carbon footprint, they are actually amplifying day by day and contribution to social activities are mainly the acts of masking the recklessness to attain business objectives. 6.1 Green washing of Agoda Booking Holdings in its annual report mentioned about its impacting on the ecology system and defined them in three ways: Carbon Emissions, Usage of Electricity and Water Resource. In terms of carbon emission, they have offices in more than 70 countries and territories worldwide using 16 major data centers to enhance the information of the website. With a commitment to measure and understand the carbon footprint, the company conducted first enterprise-wide audit of energy usage and the emissions of greenhouse gas. This survey allowed to know the impact of operational practices and identify the priority areas to address in the next years (BookingHolding, 2018). Electricity, another impact on environment, is the primary source for nearly all of the energy usage and cause for emissions in leased office spaces and data centers. In fact, during 2017 the total Scope 1 and Scope 2 GHG emissions were estimated at 51,335 tons of CO2. The use of electricity in leased data centers and office areas contributed to nearly 90% of carbon footprint while data centers were representing almost half, and offices were accounting for 40% of carbon footprint (BookingHolding, 2018). The remaining 12% of GHG emissions are from customer service centers throughout the world.
  21. 21. The last factor is the water consumption of the company. It comes mainly from data centers, but the exact information is not traceable because they lend their data centers. The majority of waste impact is concerned with the standard office operations. However, all the identifiable measures mentioned in the annual report are to portray the group as a whole to be environmentally responsible but in fact other factors are much more crucial in drawing the conclusion. Any internet business is actually contributing to the emission of green house gases in even more direct and indirect ways like the manufacturing and shipping and powering and cooling of all the related devices like the computers, smart phones, servers, etc. that draws energy to power themselves generated from fossil fuels or natural reserves. Key facts about carbon emissions are provided below: • The heart of the business channel are the servers and data centers that are more carbon intensive to produce and run • Each time, using a search engine generates green house gases as they use multiple servers to generate data • Watching picture or video content on a website produces .2 grams of CO2 per second • A search on the Google can emit up to 7 grams of CO2 where this is equivalent to driving a car for 52 feet or boiling a pot of tea • Large attachments on email can emit around 50 grams of CO2 • Big data will promote to the use of more data centers and so as Agoda 6.2 Actions Taken Vs Needed to be taken Initiatives Taken Actual initiatives that can reduce CO2 Powering the data centers through national grids that use renewable sources Considering using data centers of the green cloud provider Took energy efficiency programs across all offices by means of incentive Promote sustainable practices in energy consumption by consumers like turning off and plugging off switches, laptops etc. Attempted to reduce water usage by low flow taps Using smaller devices for quick tasks Partnering with eco-friendly destinations due to the changing behavior of the consumers Change the behavior of email usage like limited reply all, less subscription to newsletter, etc. Investing more on CSR projects
  22. 22. From the above table and analyzing the available information of Agoda and the parent group, hardly any impactful initiatives have been found that promotes green and sustainable practices on user end. Thus, it can be inferred that Agoda still has a long way to embrace sustainable solutions and practices as they are still meant to come at the cost of losing business. 6.3 So what? Depletion of Fossil Fuels. One of the major drivers of tourism is energy. The global agenda to curb global warming by 2050 is changing the energy consumption behavior and energy mix by the world. The main sources of energy are turning to sustainable solutions and renewable sources. However, still the consumptions of fossil fuels are on the rise. The airline industry is one of the greatest consumers of fossil fuels and also contribute to significant carbon emission. (GwynTopham, 2019)The global reserve of oil, gas and other underground resources are on the verge of extinction and expected to last for the next fifty years. (Roser, 2019) The situation when fuels get depleted and the airline industry faces hard time in operating flights between different destinations will play a key role in adversely affecting related industries like travel and tourism and so, Agoda. (ecotricity, 2019)What if, no new technology is discovered to power the said industry and cost of traveling shoots up to the sky. What if, climate actions change the way of peoples’ mode of transport and propensity to travel. Most importantly, what would happen if tourism countries like Maldives, Indonesia and other islands does not exist in the next few years due to sea level rise or natural calamities like Tsunami. Such consequence will actually turn down the business and sustainability of companies like Agoda. Therefore, business ethics towards the preservation of nature and sustainability of the world should be integrated into the business model of companies like Agoda. It must immerse in more climate actions and eco-travel promotion. Moreover, it must also be aware of such unprecedented consequences through means of diversification, loyalty creation and portraying as a responsible business towards the world. It is quite evident that Booking Holding’s is still in the process of finding its way to adopt green practices and compensating for the emission and pollution it is incurring but it is high time to position itself as a responsible and green company to stay in travelers and consumers mind. For Agoda, the key success factor and winning the battle in the industry would mean to portray and
  23. 23. promote green practices both in its business practice and supply chain and by reflecting as an environmental friendly organization to ensure sustainability and customer loyalty. 7. Predictable and Unpredictable Trends The predictable and unpredictable trends are illustrated through the impact map in Appendix- VIII. The predictable and unpredictable trends are crucial factors in judging the future impacts as the chart below shows the considerable trends to be accounted for to act responsibly towards the future. Changing face of the consumer Evolving geopolitical dynamics New patterns of personal consumption Technological advancement Structural industry shifts • Eco-friendly tourism • Solo traveling • One-stop services • Extent of territory • Political conflicts • Inequality gap among countries • Supremacy • Resource contention • World war • Personalized demand • Increased environmental and health consciousness • Demand transparency • Evolution towards enough-ism • Digitalization • Number of global internet users • Robotics and AI • Cyber security • Mega internet collapse • Cryptocurrency and block- chain • Rapid global urbanization • Increased cost of fuel extraction • Labor displacement • Scarcity of highly productive labor • IoT investments by manufacturer Solo traveler will be the dominant consumer of the industry by 2030 Global economy will completely shift and disperse by 2050 Environment friendly and sustainable factors will be key decision in Data will be force of business success in the future Alternative energy sources will power the world
  24. 24. driving customers demand Table – Dominant forces and the underlying trends in the future 7.1 Predictable Trends 7.1.1 Changing perception on travel style: Trends in tourism were influenced heavily by the concerns of the customer base due to the effect of globalization and advancement of technology. As Millennial and Generation Z became progressively growing in the marketplace, the ideals driving their buying decisions created the new tourism trends. Different types of travelling styles emerged and among them, solo traveling and eco travelling are the most influenced styles. People chose to travel alone since they want to increase their confidence level, out from comfort zone, enjoy freedom, and to avoid frustrations of waiting in this stressful world. According to the Klook, solo travelling got ranked 1st place as the most trending activities in 2019 (Madaye, 2019). Among the solo traveler, it is found that 80% were female and 65% of Google search on solo- travel category was occupied by them (condorFerries, 2019) Similar to Solo-Travel, Eco-travel was reflected as a growing concern in travelers due to the increased mindset on sustainable and ethical options of tourism. In Eco-Travel, travelers’ practice to reduce the use of carbon footprint along with their holiday plans. According to the research by Booking Holdings, 87% of sample 12.134 users of 12 different market stated that they intended to go on a sustainable eco trip rather than those ordinary trips. (Bragantini, 2018) Threat to Agoda. The changing trend is likely to influence travel websites portrayal of information and winning features. Travelers would tend to look for eco-friendly options and customized to their need where gender, culture, sect, religion and other social factors will play significant role to decision making factors. Incorporating social factors and embedding eco factors would be highly challenging for online based businesses as display of features and information
  25. 25. would also be subject to testification by informed and conscientious travelers and failure to justify the expectation would lead to dissatisfaction, rejection and business loss. Action Plan. Agoda has to take advantage of women dominance solo travel market. As safety is the most important area for solo travelling, they can create the positive growth of the company by adding new features in their websites not only for solo-travelers and also eco-travelers, creating campaign related to women's safety on solo traveling, and sharing trend related articles. Regarding eco-travelling, they have to find hidden natural areas and make partners with eco-friendly accommodations to attract eco-travelers, celebrate campaign together with Global Sustainable Tourism Council (GSTC public in an effort to entice customers and step up to environmental responsibility) etc. 7.1.2 Internet Users The number of internet users have surged globally. In 2019, the number of people using internet is more than 4.4. Billion (Morgan, 2019) and is predicted to increase to more than 7.5 billion users by 2030 which is 90 percent of the projected world population of 8.5 billion. (Morgan, 2019) Digital technologies indeed are becoming a forceful expression of global ambition, with number of internet users growing at a rate of more than 11 new users per second and a total of one million new users each day. (Kemp, 2019) Internet connection in the South Asian countries has improved over by 10 percent from previous year, reaching 41 percent. Significant contribution to this growth has been made by developing countries, specifically India with a 100 million new users from previous year. (Kemp, 2019) Threat to Agoda. Internet has opened many access points to knowledge and information. Increase in internet user is a blessing for Agoda by increasing its customer reach. It also creates a threat of increased competitors. It can be seen that the trend of internet users is increasing more in India whereas, Agoda has a small market share there which makes its potential customers open to its competitors. Moreover, increased internet users will let the potential customers compare prices amongst various options. Action Plan. Agoda should focus on increasing its customer data. Increased customer data can be used by Agoda for efficient target marketing. Moreover, increased internet user means wider pool
  26. 26. of new target market. Agoda should focus on expanding itself across wider geographical area and increase its touch point via internet for existing and new customers as every new user is a potential customer. 7.2 Unpredictable Trends 7.2.1 The internet collapse Around 2.1 billion people are now connected to the internet all across the globe. Hence, no one has never imagined about the world without the internet connection, surely that the internet affects human’s life either directly or indirectly. Each day people come across various changes since the internet world allows people to make digital communication much more easily and protective. In last one decade, it has grown exponentially and has become the largest community of the world. Nowadays, internet becomes a backbone of human beings to perform a research about any products or services. It is the place where people can get the solution of any objects or issues in no time and location limitations. Internet collapses. Researchers around the world agree that the traditional single-mode fiber which has been used in the last few decades, rolled out in optical transport networks are getting close to their capacity limit. No one has ever known what will it be if humans are not able to use the internet anymore, this would out a dramatic impact to any industries especially who works via online supply including Agoda. Threat to Agoda. If the internet collapses, it would be a disaster for Agoda because it runs the business through online channel and its main targets are online users. It cannot operate without the internet connection, so travelers will have to use the tradition bookings because they cannot rely on online accommodation bookings anymore. To relate with business model canvas, it will completely lose its key channel to serve and reach customers. Action Plan. No one knows whether the internet is going to collapse in the future or not, or if it happens, whether it will be temporary or permanent. So Agoda should prepare its CRM and backup to offline beforehand, if one day the internet collapses, it needs to build and maintain its key partnerships as much as possible and operates offline such as customer services 24/7, and so
  27. 27. customers can still book accommodations via Agoda, meanwhile, it needs to keep its value proposition by providing the best offers for customers. Agoda still has bargaining power upon its partners owing to its reliabilities and brand royalties from existing customers. Moreover, it still has a strong relationship with some joint ventures including airlines, car rental services, and tour companies, so Agoda can take this action plan in the worst case that the internet is not accessible anymore. 7.2.2 Virtual reality can entirely change travel behavior Virtual reality (VR) is now having a profound impact on travelers’ decision-making process. Travelers have the option to explore new or preferred regions without requiring to leave their homes. In other means travelers are trying out the experience before making a travel decision and putting in the investment. This behavior and improbable change might reduce the number of travelers’ propensity to move across the world and therefore negatively impacting the entire travel and tourism industry as well as the booking sites like Agoda. Action Plan. Being a technology company, Agoda must make itself aware of the game-changing disruptions and upcoming technology. It should adequately prepare itself against such unusual phenomenon by further investment in research and technology and also keep the option to changing the business model to adopt to new technologies and experiment innovation by instigating an open culture of idea sharing across the entire organization. 7.3 So what? The world is likely to undergo huge transformation in the next few decades as the economic progression, influence and power shift towards Asia. Besides all the opportunities, technologies are going to threat existence of many global companies along with intense competition. As stated the facts regarding the predictable trends, they tangent both opportunities and challenges for Agoda. Agoda therefore needs to capitalize on the opportunities that lies ahead. The services provided by Agoda are way similar to many of its competitors and only differentiation can lead the path to stand out and find the blue ocean to be the leader. As a means to differentiate, Agoda must focus on new segments of customers and multiple niche markets can provide it an escape route to the immense competition confronting in few years.
  28. 28. From the business model of Agoda, it is evident that its key partners and resources are all based on technology related organizations and service providers. It is high time to vertically integrate to position itself into different businesses. Agoda has already passed a successful history for more than a decade now and so, businesses need to be diversified into other sectors other than technology. Investments into physical product related industries like the IoT (Internet of Things) can provide it a different outlook as the future tends to amplify these trends. On the other hand, climate change and environmental sustainability is becoming highly pressing issue in shaping consumer behavior. Agoda, should critically stand out in addressing the issue to uphold its positive nature of doing business and being ethically responsible to preservation of natural environment and resources while standing out of the crowd in travelers mind. Since, unpredictable trends are really unpredictable, forecasting on something invisible and uncanny is like throwing stones into the bush. Agoda, must also be prepared to embrace such disruptions. First of all, it should develop internally and instigate a culture to embrace changes where diversification of business will help in experimenting the issue. Additionally, innovation is very important to sustain the survival. Disruptive technologies, cannot be predicted but awareness on their advent is important to act wisely and on time. Agoda should also invest in further upgrading technologies and find ways to reduce interdependency on technology-based platforms. If the idea of mobile phone applications or even the use of mobile phones and computers become obsolete suddenly, there will be no channel to create value or dispose services. Therefore, precautionary and alternative steps alongside testing of new methods or advanced technologies needs to be experimented to innovate and minimize the risks of unprecedented events and phenomena. 8. Recommendation Based on the analysis of the business model and other forces affecting the operations and entire business on Agoda we will base the recommendations in three stages namely current situation, predictable and unpredictable trends.
  29. 29. 8.1 Current Situation Agoda currently is enjoying the growth of Asian market and being part of global leader, it enjoys certain core competencies in partnering with sister companies, different line of business and also in terms of financial resources. But as the economy shifts, it will face more and more competition in the future and the key to survive or sustaining the growth is by differentiating itself from the competitors. In differentiating it can actually focus on the following. • New segments. Agoda can target new segment of travelers and stayers. It can start new services like residence solutions. As people are migrating from one place to another, long term residential services like home rentals, student lodgings, etc. can help in serving niche and differentiated market. It can also introduce customized services for the solo travelers, single women to find both short- and long-term accommodation facilities based on their needs. This will not only create the hype in the target markets but also form the basis of differentiating from the competitors. • Diversification and new services. Agoda can diversify its business. As the online platform produces intermediary services between accommodation providers and seekers, they can invest into hotel chains and international brands to claim their own and provide a controlled and ultimate customer experience to the travelers. As stated earlier about the new segments, Agoda can also collaborate with real estate agents and can also invest in the real estate sector to provide accommodation service by diversifying their business and operations ensuring physical footstep and reducing complete dependency on online business. • Vertical integration and new product line. As a technology business, it is very challenging to diversify the business into other sectors but Agoda has the option to step into the business of gadgets and trading on the Internet of Things (IoT). There are many countries across the globe as in Africa who still do not have access to even internet. The trading of IoT by creating strategic partnerships with the producers and technology companies can provide Agoda the competitive advantage expanding its business into new sectors.
  30. 30. 8.2 Predictable trends Agoda must take account of the Mega Trends of 2030 and 2050 where the world will shift in terms of populations, economy, technology, environment and many more. The demographic trend where the rise of middle class and individuals are certainly going to affect the travel and tourism and related industries. Agoda should start preparing for the race and start offering the services addressing the need of the solo travelers both men and women. It is important that Agoda features the safety and security of the adventurers and must adopt and showcase certain materials that accounts for the key concerning issues of the next generation of travelers. • Technology, Demographic and Natural resources. To ensure the competitiveness and success in future, Agoda must follow the trends of the future by increasing 1) global foot print through partnership as well as physical footprint by tapping unexplored markets, papulation and geographic locations, 2) taking advantage of the growing travelers in Asia and aging of the population who would be more prone to traveling and offering services based on their demand, 3) alternative sources to fuel and power its facilities and services. 8.3 Unpredictable trends. The most predictable out of the unpredictable trend is the trend of technology. AI (Artificial intelligence) is taking over the world with changing nature of jobs and expertise requirements of the future human resources. But, what if the technology becomes fully threatening to mankind and the world degenerates to a total restart by destroying all the technologies and left with zero connectivity of the internet and other online connectivity channels. • Offline technology. Agoda can produce offline technology that can rescue travelers being marooned on an unknown island or looking for directions to particular points. Such game changing technology should be inaugurated to create competitive advantage among the competitors. As stated earlier about fossil fuels in the past paragraphs, their depletion and unavailability of alternative technologies to power long distance travel modes can disrupt entire industry while Agoda, needs to prepare itself to embrace to virtual reality technologies that will be equipped to provide the best travel experience without physical displacement.
  31. 31. 9. Conclusion Agoda’s promising innovation and aggressive strategies are quite praiseworthy but the question of business sustainability and growth is susceptible to disruptions and unpredictable trends of the future. Belonging to a highly competitive market, it is susceptible to the giant competitors’ oligopolistic approach which implies to constrained market share in the future. Most importantly when it comes to differentiation, Agoda do not dispose any absolute advantage in formulating a clear path to win the deals. Although, the management deems to create a competitive environment within the group, corporate strategies and business directions seem to be influenced by the holding company, Booking Holdings hence, dissolution and merger under a single brand is not at all unavoidable. From the above analysis, it can be stated that Agoda needs to outperform through differentiation strategies and beat at least its sister brand in emerging markets keeping track of other competitors. Agoda also needs to take advantage of its capital to invest in multiple sectors to diversify the business and mitigate the risk of disruptive technologies by adapting to new business models. Agoda is a reputed brand and have already passed a decade of successful story where it needs to show ethical responsibilities both in business and preservation of the nature. Although it has invested in many social reasons and environmental issues, they all seem to be insignificant compared to its negative impact on the world at large. Therefore, change is inevitable and Agoda needs to act responsibly in shaping the business towards more sustainable acts through customer centric and data driven policies and place itself as unique example to the legacy of the world’s welfare. The recommendation provided in the previous chapter are well thought and pressing issues where it is high time for Agoda to account for new businesses and embracing emerging technologies like AI and IoT to ensure the brands sustainability and existence in the future. It should also strengthen the core competencies and try to be more visible through impactful services and favorable disposition in the minds of the existing and next generation travelers.
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  37. 37. Appendix-I: Competitive Advantage- Stuck in the Middle COMPETITIVE ADVANTAGE SCOPE LOW COST DIFFERENTIATION TOTAL MARKET NICHE MARKET COST LEADERSHIP DIFFERENTIATION COST FOCUS DIFFERENTIATION FOCUS Stuck in the middle
  38. 38. Appendix-II: Bowman’s Strategic Clock
  39. 39. Appendix-III: Business Model Canvas
  40. 40. Appendix-IV: Value Proposition Canvas
  41. 41. Appendix-V: Value Chain Primary Activities SUPPORT ACTIVITIES PRIMARY ACTIVITIES Administration-Finance, Legal, Marketing Procurement- Best offers, Deals, Accommodations Human Resource Management-Call Center, Coders Technology-Meta Search Engines, Cloud Storage Inbound Logistics Operations Outbound Logistics Marketing & Sales Service -Customer Data -Rooms & Properties -Provide information about rooms -Constant Price Tracking -Offer in-destination guidance -Best Deals & Offers -Website -Mobile application -Banners & ads in websites -Staying on top of meta search engines -Customer Support -Call Center
  42. 42. • Inbound Logistics: Agoda inbound logistics is the website and cloud server maintenances, they are the main factors to run its business because it works via online platform, so its webpage is the main channel to serve and reach the customers. Therefore, Agoda need to provide high standards of service through its website. • Operation: Agoda operates through its website by providing services globally, for each country, more than 100 hotels join in its server, so it needs to provide the accommodation’s information, category, destination guidance and so maintains the constant price tracking for the best price guarantee upon its customers’ preferences. • Marketing and Sales: Agoda mainly focuses to promote its services in the online world and social media by conducting banners, advertisements, and search engines. It also uses the email marketing to existing customers to maintain their brand’s loyalty and strong relationship. • Outbound: Agoda does not sell its product directly, it provides the best offer for accommodation for travelling and working. Regarding to the rising demand for one-stop shopping, Agoda provides packages which combine hotel, airfare, car bookings, and tour options in a single booking. • Service: Agoda provides free accommodation reservation through users-friendly website with simple functions and easy display. It also has 24/7 call center team to support customers’ enquiries promptly. Online payment method is one of the key services for travelers to secure booking confirmation. Support Activities • Administration and Management: The administration of Agoda is including finance, legal, management and so on. Each department tends to work together efficiently for the strongest performance of the web service to serve the users around the world and maintain its own leadership in the market. • Human Resource Management: Productivity is always done by productive worker, Agoda truly pays attention to human resource management to always ensure that the right person will be hired and fitted in with the position given by the company. To have strong
  43. 43. team is a key for Agoda to run the business. The offline team (Back-end) provides a good support for the Online team to serve the best service to the customers on the website (Front-end). • Technology Development: Technology can affect dismantle the price structure and competitive landscape of Agoda and the industry in a very short time. It becomes extremely important to constantly and consistently innovate, not only for the sake of maximizing possible profits and becoming a market leader, but also to prevent obsolescence in the near future. There are multiple instances of innovative products completely redesigning the norm for an entire industry. Agoda has to keep updated its system to be accessible and convenient for its customers. • Procurement: Agoda’s procurement is the accommodations offered in the website, to combine the hotels from various destinations, styles, and features to match with customer’s preferences. Agoda needs to select and gather the best offers from hotels by negotiating with them in terms of sales and pricing agreement in order to give customers the best deals.
  44. 44. Appendix-VI: Porter’s Five forces
  45. 45. Appendix-VII: PESTLE
  46. 46. Political/Legal Environment Stability of the country: Favorable political environment and robust governance leverage into the success of a business. Tensions and conflicts within countries and internal associations would be the negative barriers to maintain the political stability of the country. (Radu, 2019) Thailand has experienced many political transitions but they managed to overcome these chronic situations after 2014, and so the travel and tourism sector has grown over the years that pose positive impact on the business environment of the industry. (Bloomberg, 2019) Bilateral relationships except for few like Israel and Palestine, have improved in the past decade. Improvement in political relationship between ASEAN and SAARC countries in recent years are extraordinary example of positive political environment among the countries that are leading to business growth and tourism drive across the world. Crime Rate: Crime rate is another major factor that can deter the growth of the tourism sector of a nation. High travel prone destinations like Thailand, Singapore, South Korea and other western countries are much more prone to ensuring safety and rights of the travelers. For example, the rape case of two Russians in Pattaya affected the Thailand Tourism significantly in 2013 since travelers declined to travel that destination. (Haupt, 2013) However, some countries in Africa are still facing high crime rate and limitations in ensuring the security of the travelers. (Macdonald, 2019) Rules and Regulations: The world has currently become a global village. Borders are opening between many countries and rules and regulations are becoming much more relaxed. As ASEAN countries became the popular part of the world to visit, governmental associations are trying to release a new visa policy which will eliminate tourists to enter all ASEAN countries by using a single visa in coming 2020. (VISA, 2019) Economic Environment Currency Fluctuation: After US election on 2016, currency fluctuation was affected in almost every country around the world as US Dollar is assumed as the world reserve currency along with the election victory of Donald Trump. (OFX, 2019) Although the increased
  47. 47. value of US Dollar was positive impact for Europe, it is still under pressure for Asian countries. (Chew, 2019) So, the fluctuation of currency will have a strong effect on travel and tourism industry. Increasing in GDP: The increase of GDP indicates a significant trend of economic development while the decrease of GDP means the country is downsizing in economics. Especially in the Asian region have witnessed significant economic growth in the past region and many nations are considered to be the dominant global players in the next few decades. (Economics, 2019) According to the GDP chart in 2019, USA, China and Japan were ranked as the top three countries in the world with the increase of production output, investment from government or FDI, and employment rate which were leading to economic growth. (Review, 2019) Digital Currency: The advancement of information technology and increased in usage of mobile changed the culture of financial transaction. People started shopping from home and paying the bill through application lately by using digital currency which eliminate for borderless transfer-of-ownership and instantaneous transactions. (Vigna, 2019) Facebook is going to release their digital currency, Libra in 2020 and even the central banks are trying to issue their very own digital currency in the near future, too and these will bring significant impact in the economy of the country. (Statt, 2019) Social & Technological Environment Demographic Trends: The global population today stands at approximately 7.7 billion. According to United Nations-World Population Prospect Report, it is expected to increase 8.6 billion by 2030 and 9.7 billion by 2050. (UN, 2019) The project indicated that Chre in 2025. (Dod, 2019) People rely on their everything on online: shop from online for beauty and consumer goods to technology gadgets, arrange their travelling via booking websites, and even date from the online. Technology development: Technology is the fastest growing industry in a very short amount of time. There are some related technological developments which affects Agoda both directly and indirectly.
  48. 48. The generation of mobile application: To response smartphone users in term of providing convenience and real-time service, also to create customer’s loyalty because the application has to be downloaded on purpose, different from browser which can randomly found in search engine. Ecommerce and Online Shopping summit: Give the positive impact by encouraging customers to purchase via online platform. The widespread of Secured Online Payment: To build customer’s trust in online payment. Environment Global Warming: The significant result of climate change in today's global warming which was caused by the emission of greenhouse effect. Global warming is leading to increase in temperature and sea level, disease outbreak, enlargement of subtropical deserts, extreme weather conditions like heavy snowfall, flooding and heat waves. Scientists estimated that there will be only 12 years for global warming to be reached to a maximum of 1.5C, beyond which even the half degree will considerably degrade the risk of flood, drought and extreme heat. (Watts, 2018) Carbon Emissions: Carbon emission aroused from burning materials, natural resources, motor cars, utility, electric devices, and now even because of Google search engine. Although CO2 is critical in maintaining the earth at a comfortable temperature, but the excessive CO2 emissions disrupt the earth’s carbon cycle and bring global warming. Carbon emission was raised to 1.7% in 2017, followed by 2.7% in 2018 and 3.1% in 2019, which was the highest. (Mulvaney, 2019) Air Pollution: The case of air pollution is increasing rapidly in recent years due to the increasing use of fuels in industries, power plants, and construction sectors. So, the atmosphere becomes concentrated and leads to destroy the health of living beings and natural environmental circle. This is happening a lot in some of the major cities around the world. For Example, in January 2019, Bangkok City
  49. 49. was overwhelmed by the hazardous dust particles and trapped in stagnant air situation. (Post, 2019) Singapore suffered from haze pollution on almost every year by the increasing rate of fuel burning in neighboring countries, Indonesia and Malaysia. (Tan, 2018)
  50. 50. Appendix-VIII: Predictable & Unpredictable Trends Impact Map

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