Stunning landscapes and cultural spectacles coupled with rising incomes and a growing propensity to travel has seen Asia-Pacific fire the imagination of the online travel industry. Today APAC represents 25% of the global travel market and IATA, the international air transport association, predicts that almost half of global air travel will touch the region by 2034.

Even with, or perhaps because of, the complexities of multiple languages, religions, currencies and payment platforms, opportunities abound. Here are five reasons why:

1. From West to East household names in travel are making significant moves

From established players to the fastest growing newcomers, 2014 has seen plenty of activity in APAC. For many players, and for many reasons, China was top priority. A range of research houses agree that by 2030 Chinese tourists account for around 40% of outbound Asian travellers and they will splash out an estimated $1.8 trillion on travel and tourism.

As such, there were the expected announcements from the big Western players. Priceline, for one, cemented its relationship with local online travel firm C-Trip with $500 million investment the summer, and then a further $135 million in September. Competitor Expedia also continued its APAC mission with the $612m acquisition of Australian-based Wotif Group in November. The major hotel chains too were unstoppable with data from AT Kearney pointing to a pipeline of 400 new hotels in China for Marriott, Starwood and Accor.

But it wasn’t just a tale of China.  IHG, which has established markets in Australia, the Middle East and Japan, looked southwest to countries including India, Nepal, Sri Lanka and Indonesia. Of particular interest are Asia’s mid-tier cities which are showing the biggest signs of growth. While Western names may dominate global media, Asian players are starting to look increasingly comfortable in the driving seat. Chinese Internet Baidu’s announcement that will be taking an undisclosed stake in UBER is one example. Meanwhile, Qunar, China’s biggest travel search engine (also owned by Baidu) recently announced a partnership with online chauffeur-booking service BlackLane. Jens Wohltorf, BlackLane’s founder, says the move reflects growing demand for an end-to-end travel experience.

2. Even governments are seeing the light

Although visa restrictions in many places make it difficult, some governments are making positive noises. The Chinese government, for one, has moved to liberalise curbs on overseas trips, making it easier for citizens to travel. Most recently, the US and China agreed to issue visas to each other’s citizens that would be valid for up to a decade.

Meanwhile the government of India, another fast growing online travel travel, recently moved to implement ‘visa on arrival’. According to Peter Kerkar, director of the luxury tour and tailor-made holiday firm, Cox & Kings this is a positive move and the “decision will lead to rapid growth in inbound tourism numbers and generate double digit growth in arrivals”. Good news for providers of accommodations, tours and services within the country!

3. Budget conscious sharing is the new staying

Earlier this year, Sean Seah, MD of Groupon Travel told EyeforTravel that in 2014 and 2015, “the whole peer-to-peer model will be huge” and that this “is going to make it even harder for travel suppliers like hotels to play the game”. It seems his prediction could come true.

In 2014, Airbnb embarked on aggressive hiring and marketing spree in Asia and is now the biggest provider of vacation rentals in the region. Another notable player is Travelmob, a two-year old start up focused on the value and budget segment that in 2013 was snapped up HomeAway. That was clearly a bid to tap Travelmob’s local customer base, 80% of which are Asian. As local player Travelmob founder Turochas Fuad has real insight into consumer behaviour and argues that big drivers of this sharing trend include:

  • Many Asians still like to travel in a pack, and as a family, and they want accommodation that fits that bill without breaking the bank.
  • Asia’s millennial demographic, in particular, is budget and not brand conscious when it comes to travel. “Of course, there will always be people who only want luxury, so there will always be a place for those high-end chains but in general the Asian consumer is far more value conscious,” says Fuad.
  • The experience matters more than the accommodation so they want to save on the latter to spend on meals, tours, activities and shopping. These millennials may not be travel brand aware but they still want designer label consumer goods.

4. Consumers are mobile and internet savvy but internet penetration is anything but saturated

You can’t mention APAC, a region of close to 4 billion people, without a mention of mobile. By 2016, market research outfit ETC-Global predicts that the region will account for 57.7% of the world’s mobile phone users, and as much as 40% of global mobile data traffic by 2015. However, it’s also worth noting that just 30% of the population has internet access today and that varies widely from country to country.

India, for example, at just over 17% has the lowest penetration but it’s the fastest growing. Returning to budget sweet spot consider this: of the 50,000 room nights booked daily in the value category in India, the top three online travel players in India currently represent just 0.5% of bookings. One of those is Stayzilla, an accommodation provider of value driven budget accommodation. Vedanarayanan Vedantham, the company’s head of marketing, says if you start to consider online penetration in other parts of India’s travel ecosystem, a strong story starts to emerge; 70% of flight bookings are made online, for trains it’s 60%, four to five star hotels 60% and bus bookings 90%!

In South Korea, on the other hand, while eight in ten people have internet access, interestingly consumers still prefer to use offline agencies. So even where internet penetration is high there are opportunities.

5. Payments and the leapfrog factor

In Asia, the fact that mobile is the default device for accessing the internet means that consumers are less concerned about issues like payment security than Western counterparts. The bigger challenge, however, is the large number of payment options and currencies – especially for those dealing with homeowners or small providers.

If somebody wants to pay in Japanese Yen, for example, but the host wants US dollars that’s a role that middlemen can fill. It’s certainly been a strong focus Travelmob which supports 17 different currencies and a range of payment mechanisms. That said, in places like India and Indonesia, solid international payment solutions remain elusive – a challenge and opportunity.

A fitting way to end is a look a Amsterdam born cloud-based payment platform Ayden, which serves the likes of Facebook and Airbnb. It recently hit the billion-dollar valuation mark in its latest round of investment. The company is quoted saying that it expected to process roughly $25 billion in global payments this year, a 78% rise compared with 2013. Talking about the firms’ future moves, founder Pieter Van der Does talked of his plans to “bulk up its Asia market with a special focus on Alibaba’s Alipay”.

Original article source: eHotelier