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Technology And The Travel Agent - Asia Powers Ahead.
Abacus
Thursday, 2nd June 2011
 
Today the Asia travel industry leads worldwide growth and travel agents are faced with travellers who want the best deal, and the latest information at their fingertips; throughout this ever-evolving industry one core element has remained constant and critical - Technology.

"Since air travel began, technology has provided the solid foundation on which travel agents build and develop their businesses.  It is central to how they operate and communicate; and with today's increasingly tech savvy travellers, it is the number one priority that helps them gain a competitive advantage." stated Mr Robert Bailey, President and CEO of Abacus International. "Globally, the travel industry is spending billions of dollars on technology, and Asia accounts for about a third of this."

Technology's brisk pace has propelled travel agents to constantly reinvent and redefine their role and that of their business. According to a new Abacus poll[1], 96.4 per cent of agents polled were unanimous in their agreement that technology has completely revolutionised the way they conduct their business.

As Abacus International celebrates its 23rd year as the leading provider of travel solutions and services in Asia, it looks at the some of the travel technologies that it has helped pioneer in assisting agents throughout the region gain a competitive foothold in the travel space. Abacus also reveals insights from its travel agent poll on their outlook on recent technologies.

Not surprisingly the Internet was indicated by 87.3 per cent of agents polled as having had the biggest impact on their businesses. Mobile, social networking and location-based services were also highlighted as key factors. Although most agents cited convenience, communication and productivity as key technology benefits, a few agents thought the online travel space had also led to fiercer competition and reduced prices.

"Competition has been intensifying as digitalisation, wireless communication and high bandwidth networks are bringing transparent and ubiquitous access to information across all networks," said Mr Bailey.

"Mobile systems are becoming more portable yet gaining in power, bringing information directly to the individual. Information technology has become indispensable not only in lowering costs for businesses, such as through improved inventory management, better scheduling and better customer service, but also in managing operations and overall distribution for agents."

Agents polled indicated that enhanced communication (74.5%), speed of business (72.7%), convenience (72.7%), productivity (63.6%) and marketing (60%) were the primary ways that technology has enhanced their businesses. Not only do most agents believe that technology in travel has been the driving change for them, they also believe a quick adoption of technology (98.2%) is essential in order to stay competitive.

In an e-commerce environment, technology offers a great deal of change to the traditional agent's role in the provision of content, efficiency and personalisation.

Half of agents felt that technology has actually affected the personal touch of how travel transactions are conducted today.

However, one agent responded by saying that technology has merely changed the meaning of personal relations, as they are now able to keep in touch with their customers at all times.

The respondent wrote, "Now, an email can do what a handshake did in the past, and an SMS serves the function of a smile. The emotional relationship will remain the same whether technology improves or not."

"There is so much technology out there, and whether beneficial or not, these technologies are converging to offer the next wave of how travel will be conducted. Travel agents will need to take advantage of these opportunities and be willing to adopt new innovation," added Mr Bailey.

The Internet

Today, 43 per cent of the world's 2 billion Internet users are in Asia, with online penetration expected to increase +39 per cent by 2015.[2] The Asia Pacific online travel market is valued at US$53 billion or 21 per cent of the total travel market.[3]

The online travel booking market in the region is expected to hit a value of US$51.6 billion in 2011 and will grow by 30-40 per cent per year.[4]

Travel sites in the Asia Pacific region are outpacing growth from the general Internet audience by almost three to one, showing a strong affinity for travel growth, adoption of technology and the Web in travel.[5] More than three-quarters (79.6 per cent) of agents indicated that the Web will continue to influence and drive their agencies through increased speed, efficiency and productivity of Internet travel bookings as well as Internet ticketless reservations/ticketing.
 

Mr Brett Henry, VP Marketing and VP India, Abacus International, said, "Not only in speed and information, the Internet has completely transformed how agents conduct their businesses today and in the future, especially as many of the newer technologies are Internet-based."

"Abacus solutions have historically been developed with the constantly changing technologies in mind, and the Internet has been able to spur on many of the advances we have made, including Abacus WebStart, Abacus WebConnect and other ticketing solutions such as Abacus TicketingExpress. Without the advent of the Internet, travel bookings and trip planning would certainly be much more challenging," added Mr Henry.

Upwardly Mobile

Agents today already understand the potential of mobile phones with the sharp rise in mobile technology and proliferation of mobile-enabled services, delivered primarily through smartphones.

Asia is home to the largest mobile phone market, with the majority of phones now being smartphones. According to data from IDC, smartphones exceeded PC shipments for the first time in the fourth quarter of 2010. Agents are well positioned to take advantage of this opportunity.

With smartphones that allow access to booking content, transactions on-the-go and interaction with customers, many of the agents in the Abacus poll affirmed that mobile technology has made their lives a lot easier and truly changed how they stay competitive in today's travel landscape. 55.6 per cent indicated mobile as a top technology impacting the future.

"Flight and trip changes cause a great deal of stress to thousands of passengers each year. Mobile provides an intelligent platform by which agents can communicate with their customers at crucial times," said Mr Bailey. "New technology and solutions catering to the changing mobile environment are key to our core business, as we want to help the agents effectively resolve any traveller changes or issues they may face, wherever the agent may be."

Abacus has developed a number of mobile solutions to help agents, including Abacus VirtuallyThere Mobile and Abacus Mobile.

THE RISE OF TABLETS

The mobile device has also been evolving, and the launch of the Apple iPad in 2010, heralded tablet devices as the new mobile device of the future. 11 million tablets had been shipped by the end of 2010, and there is a rising interest in tablets. Worldwide shipments of "app-enabled devices" including tablets is predicted to reach 377 million in 2011, and 462 million shipments in 2012, exceeding PCs which are expected to ship 402 million in 2011 and 448 million in 2012.[6]

Asia Pacific is expected to lead the way in global shipments of tablet devices in 2015, ahead of both North America and Europe. Sales of tablet devices are expected to hit 150 million units in 2015, with Asia Pacific accounting for 35 per cent of global shipments – an enormous growth from 2.8 million (20% of global shipments) in 2010 to 52 million in 2015.[7]

Although Apple gets the bulk of publicity, Android devices are forecasted to be the top smartphone and tablet operating system in 2011 and beyond[8]. At least 450 million smartphones are expected to be sold in 2011, about a 50 per cent increase from 2010, and approximately 40 per cent of those phones will be powered by the Android operating system. For tablets, Google's Android OS share is expected to be higher (36%) than Apple's iPad (35%) by 2015.[9]

"Larger displays, touch screen interactive displays, cloud computing and the rising  of apps for tablet devices - whether via Apple App Store, Google Android or Blackberry AppWorld - will all play a part in how the next generation travel agent will be able to leverage these devices in the future," said Mr Henry. "For now, the mobile Internet and existing apps allow agents to utilise key solutions such as Abacus VirtuallyThere and Tripcase as well as Abacus Mobile, so that they can stay connected to their customers and provide full attention to them even when out of the office."

HTML5 WILL ALLOW FOR GREATER NON-APP MOBILE UTILISATION

HTML5 is widely regarded as the next standard for website design and creation, and this new evolution in HTML will allow for greater compatibility with video, audio and other interactive media. With this new code, Android and iPhone operating systems without Flash plug-ins are now capable of watching YouTube videos.

In the App space, Apple still leads the way in number of apps, while Google Android is closing in. In three years, over 300,000 apps have been developed, and in 2010, these apps were downloaded 10.9 billion times[10]. The demand for app stores is expected to peak in 2013 and slowly decline, as subscribers migrate from download apps to mobile Web sites and the more popular ones are preloaded onto the devices[11].

Interestingly, one in four mobile apps once downloaded are usually never used again and discarded[12]. Mr Henry said, "Apps are an interesting area of discussion at the moment, and one that agents will eventually want to incorporate into their operations, especially with the growth of smartphones and tablets. Apps, still a new player in the travel technology space, offer a great opportunity for our agents to leverage upon, similar to what airlines such as AirAsia, American Airlines, Lufthansa and ANA are doing already. However, I hope the industry looks more to a mobile specific site strategy rather than limiting it just to apps.The new HTML5 mobile specific websites, means the user can receive an app experience without having to download any specific app."

"HTML5 is the wave of the future that will help drive technology further. With increasing mobile Internet access speeds and newer mobile devices such as tablets, and larger screen smartphones coming to the market, this new code will allow a reduced need for apps and a higher usage of mobile Internet," added Mr Henry.

Social Media Agents

From the Abacus poll, 57.4 per cent of agents highlighted the importance of social networks in order to remain competitive in the travel landscape.

Today, two billion people are connected in the top 40 networks, with close to 600 million on Facebook alone. By 2020, five billion people are expected to be online and social networks will be their core connective tool to communicate and interact with each other[13].

Social content is becoming an essential part in making travel decisions, whereby three in 10 travellers share travel experiences and 35 per cent interact with travel companies on social networks. Mobile plays a big part in social networks, since sites like Facebook have 100 million mobile users, and one third of tweets sent and read are from smartphones.

Many of the agents indicated that social media sites like Facebook and Twitter have proved highly successful in reaching out to their existing customers as well as attracting new ones. The traveller of today and of tomorrow is well-connected, and it is imperative that agents access this growing channel.

Social media has also been playing an increasing role in transactions, as seen especially with the now transaction-enabled Facebook and its Credits system. The Facebook Credits payment system has a great reach to all Facebook users, and supports payments via several credit cards, 15 currencies, mobile payments and recently, PayPal.

In Asia, Malaysia Airlines was the first airline carrier to utilise the Facebook transaction platform, allowing its customers to book tickets, check-in and see if their friends are headed in the same direction or on the same flight through its MHbuddy Facebook page.

Even travel agents and destination sites such as Bolongo Bay Beach Resort and Mobissiomo have started Facebook pages which enable users to book and pay for their travel via social networks.

SOCIAL MEDIA Rising Stars

Location-based services like Foursquare, Gowalla, Loopt, SCVNGR, Whrrl and Facebook Places are playing increasingly important roles in the travel industry, and travel agents should be aware of the opportunity to connect with visitors and attract them with specific rewards through local business partnerships or tie-ups.

Augmented reality is available via applications such as Word Lens, Foursquare, Layar, Tonchidot, Yelp's Monocle, RTP's RealSki, Intelligent Spatial Technologies, GeoVector's World Surfer and Google Goggles. Foursquare leads in this space with over 1.9 million users, while Layar has 1.8 million users that deliver 1.2 million augmented objects per day.

The Realisation of M-Commerce and NFC

M-commerce and Near Field Communications (NFC) are playing an increased role in improving and enhancing the travel experience for travellers. The ability of the mobile device to pay for goods and services, coupled with the seamless exchange of information electronically, enabling payments, check-in and personalised marketing messages with a simple swipe of the device against a reader, offers not only traveller efficiency but new opportunities for personalised interaction with the travel provider.

The value of goods and services that people will purchase through mobile devices will reach $200 billion globally by 2012[14], much of it via NFC. The number of these NFC-ready devices is expected to rise from 700,000 in 2009 to 247 million in 2015[15].

Through their mobile device, the traveller can then do everything from boarding and check-in to mobile payments and social networking. During the NFC travel experience, there will be specific touch-points for agents to consider, including mobile marketing and ancillary services they can offer to travellers.

Cloud Computing

Although the travel industry is generally 12-18 months behind in technology adoption, many industry players are already exploring cloud services. Especially with the greater uptake of mobile smartphones and tablets, greater efficiencies through cloud-based technologies can be realised at a lower cost.

Mr Henry commented, "Cloud-based services are an emerging area, as cloud travel providers are offering agents more flexibility in scaling their businesses at lower costs through existing cloud-based portals, such as Amazon Web Services. The agents can focus more on improving user experience and will have easy and unlimited access to information and files without the hassle of hardware. Soon we will truly be able to see the agent always while on the go."

References:

[1] Abacus 2011 Travel Agents' Poll
[2] Euromonitor
[3] PhoCusWright May 2011
[4] ComScore.com 2010
[5] ComScore 2010
[6] IDC Dec 2010
[7] Ovum Research 2011
[8] Gartner April 2011; IDC March 2011
[9] Ovum Research 2011
[10] IDC Dec 2010
[11] ABI Research May 2010
[12] Localytics Jan 2010
[13] PhoCusWright 2011
[14] Juniper Research
[15] ABI Research

About Abacus

Marked by a distinct mix of cultures, currencies, languages and business practices, the dynamic nature of Asia's travel industry requires businesses to be armed with a good understanding of the local markets, as well as solutions and services that effectively serve the fast changing needs of the region's travellers.  


Abacus is Asia's leading provider of travel solutions and services since 1988. Staffed by people who ‘grew up' in the airline and travel and leisure industry, we know Asia's business nuances by the heartbeat. This invaluable attribute has helped us in widening the distribution of travel content from hundreds of travel suppliers including airlines, hotels, car rentals and insurance providers.

www.abacus.com.sg
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