Although many established metasearch markets exist in the region, there is real opportunity for differentiation and innovation in Southeast Asia
In Asian markets like China, India and Japan online travel – and that includes flight and hotels metasearch – is established, flourishing and mirrors global trends.
China’s Qunar, for example, launched in 2004 as a flight and hotel metasearch but quickly emerged into a more hybrid travel play with a strong focus on the higher margin hotels booking segment. According to analysts at the Yale School of Management, in the fourth quarter of 2014 there were “66% more direct sales than platform sales in terms of volume”. And in the longer term, analysts expect this to reach 80%, which explains the expansion of Qunar’s workforce from 2,500 to 7,500 employees in 2014.
In India, the country’s biggest online travel firm MakemyTrip has been around since 2000, first serving the travel needs of US-based Indians returning home to visit family. By 2005 the firm had established a local base and after bedding down set to expanding its armoury of travel related products and services in the region. Holding up a mirror to global diversification trends, in 2011 it acquired Gurgaon-based metasearch play iXigo.
Meanwhile in Japan, one of the world’s most innovative and established travel markets,15-year-old Venture Republic operates the largest domestic metasearch engine with domains Travel.jp and Hotel.jp. In 2012, it experienced 50% user growth versus just 15% from players in the OTA space.
Unsurprisingly all these markets have proved attractive for global metasearch firms. UK-based Skyscanner is just one and by 2012 it had established a presence in China through a partnership with search engine Baidu. Later, in 2014, it acquired another – Youbibi, proving that local partnerships are an essential ingredient. Last year, just to tick off another country, Skyscanner linked up with Yahoo Japan in a 51%-49% JV.
Southeast Asia: the addressable market?
In Southeast Asia, where many travel bookings here are still made through traditional travel agents there is plenty of opportunity and room for growth. Here there were over 100-million tourist arrivals in 2015, according to ASEAN, the association of Southeast Asian nations, and nearly 50 million of these came from within the region – most notably from China.
Max Kraynov, CEO and founder of metasearch firm JetRadar, which has headquarters in Thailand, has an interesting view. While he sees huge and growing potential for hotels metasearch in Southeast Asia, he is not convinced of the potential for flights, because “there are no real OTAs to metasearch on”.
“For a meta with flights, the addressable market is small as there’s enormous brand recognition of low-cost carriers and a meta needs to do lots of educational work to capture this brand-loyal audience,” he says.
So, although flight metasearch is JetRadar’s game elsewhere in the world, from its regional headquarters in Thailand, today it operates as an OTA.