Technology continues to be the key driver in boosting both travel agents' business capabilities and user end-travel experience – a trend that looks set to grow well into 2012.

Asia's travel market is growing steadily despite facing tougher market conditions and a global economic slowdown. 

Wireless convergence and mobile innovation have played a pivotal role in this growth, as both travellers and travel managers are increasingly utilising this rising channel as a means to deliver and experience end-to-end solutions. This year, the number of mobile workers worldwide will exceed one billion and more than 50 per cent of Fortune 500 companies will interact with their customers via mobile devices^[1].

The Abacus' Asia Travel Insights Survey 2011 supports this observation, showing how mobile technology has contributed to Asia's strong rise in the global travel landscape. Asian economic growth, coupled with a surge in emerging markets and an uptake of online services, were also flagged as key growth contributors. The survey offers compelling insights into key drivers, new players, emerging channels and market outlook for the travel industry from 2011 to 2012, with inputs from travel agents, airlines, corporate travel agent and online travel agents and hotels across Asia Pacific.

Market growth, anticipated early in the year to be on a 4 – 8 per cent pace, has been revised now to 2 – 4 per cent, in spite of a turbulent year for travel, including the Japan tsunami and earthquake that disrupted Asia travel very significantly.

"Despite challenges earlier in the year, Asian travel industry growth and confidence remain high as it proves its resilience in mitigating any outstanding factors," said Mr Robert Bailey, President and CEO of Abacus International. "Businesses are continuing to invest into core areas of travel growth and this signifies high performance expectations over the next 12 months."

The survey, conducted at a pre-European economic crisis period, found that 75 per cent of those surveyed anticipate their business will experience growth of greater than 10 per cent in the next 12 months, with 25.8 per cent of respondents seeing a growth of greater than 20 per cent.

Although these figures may not be as strong currently, the emerging economic engines of Asia continue to power travel growth across the region, with key markets China and India bucking global recessionary trends and increases in GDP, translating to higher disposable income and growing middle class – increasing demand for travel services.

Mobile technology was the most heavily highlighted area from the survey, with travel players scrambling to firmly establish a foothold in the mobile and online space in order to offer greater value as well as establish a firm technological foundation. They indicated mobile transactions, social media, mobile apps and mobile-specific websites as the key areas of investment for 2012.

"In this value-driven economy with the enormous growth of LCCs and lowering of prices, the travel industry is becoming increasingly competitive. Travel businesses have become more savvy in adopting the newer technologies in order to retain a competitive edge, especially now in the areas of mobile and electronic transactions," said Mr Bailey.

In a region that holds 56 per cent of worldwide mobile users, Asia Pacific has proven to be a heavy hitter in mobile uptake. Over 2.1 billion people will use a mobile phone at least monthly this year, representing over half the population of the entire region, and growth will be steady, with penetration reaching 72.6 per cent by 2015, reaching a mobile population of nearly 2.9 billion in Asia Pacific.^[2]

MOBILE TECHNOLOGY

Mobile is on the rise, and stakeholders in the travel space find it imperative to utilise this platform in order to remain competitive. Mobile apps, great mobile specific .

"Mobile continues to play a leading role in everyone's daily lives, as well as in travel evolution, especially in Asia. While 3G, 4G and wireless broadband access surge ahead and more is invested in mobile payment gateways, the mobile device will play an even greater role for travel transactions in the coming year," said Mr Brett Henry, VP Marketing, VP India, Abacus International.

Mobile Internet penetration is expected to rise to 42.1 per cent of mobile users in the region by 2015, and for many of these users, mobile is the first screen for Internet access. 50 per cent of all new Internet connections worldwide are coming from mobile devices, and with powerful networks, greater device choices, robust mobile platforms and widespread adoption, there is a sharp increase also in mobile transactions.

By 2015, global shoppers will spend about $119 billion on goods and services bought via mobile phones.^[3] The number of mobile bookings in the travel space has also accelerated from $20 million in 2008 to over $200 million in 2010 – 8 per cent of mobile users are expected to book travel from their smartphones by 2012^[4].

In terms of transactions, 69 percent of Asian consumers prefer using their mobile device for most payments. Chinese consumers were most favourable (76%), followed by India, (75%), South Korea (56%) and Japan (47%).^[5] Mobile commerce, which includes mobile payments, coupons, promotions, redeemable gifts cards, loyalty points and more, is poised to drive huge changes in the way travellers undertake travel transactions.

Much of this will rely on Near Field Communication (NFC) technology, which is available in most of the newer smartphones. Some 457 million devices with NFC will be in use in 2015, up from about 10 million today.^[6]

Worldwide mobile device sales to end-users amounted to 428 million units in the first quarter of this year, representing a 19 per cent growth over the same period in 2010. Comparatively, smartphones experienced an 85 per cent growth year-on-year and contributed 24 per cent of the overall sales figure.^[7]

"Mobile devices are indispensable and are essential for anyone in Asia. It provides an easy channel whereby travel providers can make bookings, provide on-demand service, manage loyalty programmes and conduct transactions for revenue generation," said Mr Henry. "Mobile technology has really helped to make travel businesses more cost-efficient, and to revolutionise the end traveller experience."

"Abacus recognises the importance of this, and with successful solutions like Abacus Mobile, agents have the power to enable effortless travel within the palm of their hands. We have had great pick-up and feedback on how easy and convenient this has proved to them," he added.

Mobile Apps/Websites

In the four years since the first iPhone launched in mid-2007, the apps market has exploded with now 425,000 individual apps available in the Apple App store and 200,000 for Android devices. With mobile web traffic poised to exceed wired web traffic by 2013^[8], both apps and mobile web sites are now a necessity for agents.

"In the early years of the iPhone generation, apps were a novelty yet the infrastructure was not completely in place," Mr Henry said. "In just a few years, both apps and mobile websites have become a necessity, especially with the explosion of wireless access speeds and few device formats."

There are now billions of apps downloaded per year and in parallel, access speeds to the mobile web have increased. Mobile web browsers also have become more sophisticated. Travel companies are leveraging on this trend, both as a source of productivity and efficiency as well as revenue. For example, the amount of queries coming from mobile devices now makes up 19.5 per cent of all hotel queries^[9]. Hotels.com is a very recent example that has launched an iPad application along with two mobile apps and well over 1.5 million have already been downloaded worldwide.

Many of the OTAs including Expedia, Hotels.com and Priceline have added the features of end-to-end mobile booking functionality via an app or a mobile-optimised website to their offering. Other services, included location-based services and transactions through the phone's technology of GPS and near field communications (NFC), offer greater value to those leveraging or utilising them.

ASIA TRAVEL

Asia has continued its upward climb in the travel industry, as evidenced over the past two years. International tourist arrivals in Asia Pacific reached a historic high of 204 million in 2010 with a $7.7 billion profit, the largest worldwide,^[10] accounting for 22 per cent of the global share, ahead of the Americas and with a sharp increase of almost 13 per cent from 2009 to 2010. However, the outlook for travel industry is closely linked with global economic health, and with the current economy in a precarious situation, airline profits are expected to weaken for the rest of 2011 as well as into 2012^[11].

Up through July of this year, Abacus booking data shows a 2 per cent increase in Asia bookings over the previous year. The crisis in Japan among other challenges has slowed growth, but passenger air travel demand remains strong.

Mr Bailey said, "Asian economies are continuing to grow, and this is a boost for the travel industry in Asia. However, all eyes are now on the global economic outlook, and how this will affect local economies as well as consumer and business confidence."

From The Abacus Asia Travel Insights Survey, the top travel markets now and in 2012 are China, Singapore and Hong Kong. This is in line with recent findings from Accor showing Singapore and Hong Kong as the top business destinations in Asia Pacific.^[12]

"Singapore and Hong Kong remain as the top Asian destinations, on par with China and well ahead of such growing economies and markets like India, South Korea, Japan and Malaysia, and even the U.S. and European nations. We are seeing more intra-Asian travel, and more foreign visitors to Asia – a testament to a great market environment and travel infrastructure, matched with strong tourism efforts that allow for a continued positive outlook for these markets. This shift is simply another indication of Asian leadership in travel," said Mr Bailey.

The growth in Asia travel also aligns itself with the rise of low cost carriers (LCCs). LCCs continue to transform the region's air market and lure more and more passengers online. Consolidation in the LCC market adds additional fuel to this sharp growth, with three major carriers in Asia announcing plans recently to set up budget airlines. Singapore Airlines in medium and long-haul routes next year, Peach Airlines and Thai Airways' Smile Air will all be up and running in 2012.

As LCCs continue to grow and lead travel segments in 2012, travellers and travel businesses will continue to drive change, especially as efficiency and value increasingly become the determining factors in making travel decisions. The Abacus Insights Survey 2011 shows that 35.9 per cent of travel businesses found LCCs as experiencing the greatest growth, followed by online travel (25.8%).

LCCs were also indicated as having the biggest impact as new entrants into the travel chain. Travel search sites (44.5%), online travel discounters (37.5%), content aggregators (28.9%) and airline alliance portals (18.8%) followed.

LCCs have demonstrated significant growth. Malaysian LCC AirAsia added 1.2 million visitors to its website in the past year in its continued leadership as the top-visited LCC site in Asia Pacific. Tiger Airways posted the strongest growth, tripling its online traffic to reach 1.8 million visitors, while Malaysia's Firefly and India's Indigo posted growth of 89 per cent and 70 per cent, respectively.^[13]

Online Travel and Transactions

Online travel growth (60.9%) was indicated in the survey as the biggest driver affecting the Asia travel industry in 2012, greater than both fuel price fluctuation (46.1%) and the Asian economy (44.5%). Online channels are expected to grow dramatically through 2012 to reach US$19.7 billion globally by 2012.

In Asia, online travel growth is largely fuelled by first-time travellers, many of whom have their initial travel booking experience online, as opposed to the U.S. and Europe, where the rise of online travel growth was accounted for by their the shift from offline bookings.

For example, in China, 5.2 billion trips are expected by 2015. Although only two per cent of its tickets are booked online currently, 30 per cent of air tickets are expected to be sold through this channel by 2013,^[14] further demonstrating the newer generation of travellers.

"New travellers, especially those with rising disposable incomes and a strong desire to travel have embraced online bookings in Asia," said Mr Henry. "From 2000 to 2010, there has been a spike of 621.8 per cent of Internet users^[15] in Asia, and we are now coming into an age where the preferred, convenient and most cost-effective medium is online."

On top of simply online, more than 85 per cent of the world's online population has used the Internet to make a purchase^.[16] This is a 40 per cent increase from two years ago, and led by South Korea and Japan in Asia. Air tickets and travel items were among the top items purchased.

"Payment modes via online and mobile are a key focus for travel businesses, along with the growing importance of M-commerce," said Mr Henry. "Although the infrastructure is still not entirely in place, we should see a shift from barcode swiping technology to the much more encompassing NFC utilisation."

Google Wallet and PayPal Mobile both expect a boom in this technology with greater worldwide adoption. Google Offers, integrated with Google Wallet, will look to serve as a hook for travellers to sign up to first, similar to what is being offered through other discount coupon suppliers such as Groupon.

From the Abacus Asia Travel Insights Survey 2011, more than half of travel businesses look to incur marketing expenditure in the areas of online, social media, mobile apps and coupons. About a quarter of respondents said they would increase their marketing spend in the online channel by 25 per cent, with 78.1 per cent looking to tap into the mobile channel over the next year.

In addition, social media continues to play a large part in the travel space, with two billion people connected globally in the top 40 networks, and more than 750 million people 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.^[17]

Social network site (SNS) users are increasingly utilising mobile devices such as smartphones and tablets. In countries such as China, India, Korea and Thailand, over 50 per cent of users access SNSs weekly.^[18] Also, SNSs like Facebook have launched services such as Facebook Credits and partnered with PayPal enabling transactions for travel services and products. Malaysia Airlines was the first in the industry to conduct bookings and ticket sales via social networking platforms.

"Travel is a very social experience both as a purchase as well as an activity. User generated content, conversations, connections and community help to drive more travel providers to provide information, gain feedback and conduct transactions through social media. The question now is not whether you should have a social media strategy, but to what extent," added Mr Henry.

SUMMARY

The Asia travel landscape still remains robust and dynamic, fuelled especially by the growth of mobile growth. Wireless technology continues to be integral to the constant change that travel agents and businesses experience, and has helped to transform the travel landscape to one of value and efficiency.

"It is an exciting time in Asia now. As an industry we have faced a great deal of adversity, yet we still continue to grow and evolve. Abacus is proud to be at the forefront of these changes, communicating with our suppliers, partner and customers, to develop new solutions to best address their needs." stated Mr Bailey. "The speed of change amazes me, as technology is outpacing every industry – adoption and experimentation will be the keys to see how, who and what emerge successfully."

[1] IDC 2010
[2] eMarketer July 2011
[3] ABI Research 2011
[4] Google 2011
[5] Penn-Olsen 2011
[6] Juniper 2011
[7] Gartner May 2011
[8] Gartner 2011
[9] Google 2011
[10] UNWTO Tourism Highlights 2011 Edition
[11] IATA September 2011
[12] Accor Asia-Pacific Business Traveller Survey 2011
[13] comScore PATA April 2011
[14] PhoCusWright 2011
[15] Internet World Stats
[16] Nielsen Global Online Survey 2011
[17] PhoCusWright 2011 
[18] www.mediatrendwatch.com 2011

About Abacus International
Singapore-based Abacus International is the Asia-Pacific's leading provider of travel solutions and services with more than 20,000 travel agency locations in 24 markets. With over 23 years of experience in fusing international best practices and local expertise with global and local partnerships, Abacus provides travel information and reservations specifically tailored to the Asia-Pacific region. Abacus International is owned by Sabre and a consortium of Asia's leading airlines including All Nippon Airways, Cathay Pacific, China Airlines, EVA Airways, Garuda Indonesia, Dragonair, Philippine Airlines, Malaysia Airlines, Royal Brunei Airlines, SilkAir and Singapore Airlines. Sabre is the global leader in the electronic distribution of travel and travel related services.

More information on Abacus can be found at www.abacus.com.sg