Four markets, four approaches – lessons on how to unlock opportunities in Africa, North Asia, ASEAN and Middle East
Four markets with growth promise and opportunities – how do you choose between them? Well, during the WiT Europe track at Phocuswright, the audience was taken on a tour of Africa, North Asia, South-east Asia, Middle East and Africa by four specialists, who shared what they were each working on to unlock the potential as well as their dream scenarios for the future.
Stephan Ekbergh: “African women and men who have nothing to lose are building the new Silicon Savannah.”
First, for Stephan Ekbergh, CEO of Travelstart, Africa is a love story. “I fell in love with the raw nature, the energy and the people on a vacation 35 years ago. Africa for me is a calling – changing an industry, changing the workplace, changing how business is done. How can I say no to that?”
Beyond the love, there’s the demographics. “Africa is a story about the next generation. In 10 years, the working age population will be over a billion people – more than in China or India,” said Ekbergh.
Abounding with opportunities, he said, Africa has the world’s highest entrepreneurship rate (22%) with most fields up for grabs and “maybe best of all a lot is still unregulated”.
As such, “Africa is a story about leapfrogging. We skipped landlines straight to cellphone. We skipped traditional banking and went straight to mobile money. Most of Zimbabwe’s economy runs on crypto. Roads are bad and distances wide so people fly.”
It is also a growth and innovation story. “Developers from Africa created 50% more open source repositories on Githublast year,” said Ekbergh. “African women and men who have nothing to lose are building the new Silicon Savannah.”
So what is Travelstart doing about it? Post-Covid, it had to rewire the business. “We took a hard look at what could be done,” he said. It settled on “subscription bundled with loyalty”.
In April, it launched Travelstart+, a subscription service that promises users exclusive benefits and offers. Subscribers pay R195 per month in their annual subscription and that allows them to plan travel using nothing more than a mobile device while affording them benefits, such exclusive discounts, travel vouchers, complimentary upgrades, cashbacks, a 24/7 concierge service and R5 000 travel credit upon sign-up.
It has also built “a robust payments business” both in acquiring and soon in issuing, with a full bank license. “The obvious next step is to tie that in with the world’s best travel loyalty programme.”
Blanca Menchaca: “The future of our travel sector excites me.”
For Blanca Menchaca, CEO and co-founder of BeMyGuest, a B2B tours and activities platform, North Asia is a market of tremendous opportunity.
“China was the country with the highest outbound tourism expenditure worldwide – close to $200b in outbound travel spend 2023, and is forecasted to continue growing in 2024 and surpass US and German travel spend.”
However, she noted, “they will give preference to destinations that are perceived as safe, and they will prefer shorter duration trips due to shorted holiday periods, so Europe did fall amongst the ranks in their destination preferences.”
Another outbound powerhouse is South Korea. “The total outbound spend in 2023 was over $20b, they love to visit Europe – Spain was the top European destination in 2023 – as well as the US.”
Riding on this growth, BeMyGuest has continued to focus in developing connectivity between its B2B distribution network of predominantly OTAs based in APAC and reservation systems globally, including its own booking system Xplore, for operators who want to increase their exposure to Asian travellers.
“Most recently we started to release deeper integrations with full Channel Manager features, allowing operators full control of their direct accounts with specific OTAs, including the likes of Ctrip,” she said.
“The future of our travel sector excites me, I believe travel activities has reached a stage of maturity where enough supply has been digitised and databases are rich enough for new tech (AI, machine learning) to be able to disrupt the way travellers consume experiences. I hope BeMyGuest will be part of the backbone of that next transformation.”
Chan Chee Chong: “Gen Alpha is the group of people that places more importance on travel experiences over material goods.”
Chan Chee Chong, CEO of Singapore-based Globatix, a travel technology platform for tours, activities and attractions, drew the attention of the audience to the South-east Asian or ASEAN market, especially its rising wealth and Generation Alpha demographic.
The number of people with over US$250,000 in ASEAN is rising and will exceed Japan by 2035, he said. “I can also tell you theirtheir cost of living is so low that probably all their houses are fully paid for. In five years’ time, it will be the same size as Japan. In 10 years, it will be 70 million potential travellers.”
The region’s youth is also a factor in influencing the future and “Gen Alpha is the group of people that places more importance on travel experiences over material goods, and there are 667 million of Gen Alpha in ASEAN. It’s a huge market that not so many people are focusing on at the moment.”
And Chan had a tip for destination marketers in Europe, “The quirky thing about us living in ASEAN is that we love the cold weather. We tend not to travel to places in summer. Our common love is that we love to walk the streets in cool weather and eat street food.”
As for what GlobalTix is focused on currently, he called out dynamic pricing. “The top tier attractions are looking into implementing dynamic pricing and yet many of the OTAs are not ready for it. They can only accept tiered pricing, so we are putting in effort to bridge the gap between the two.
“We will continue to improve our ticketing technology to fulfil today’s need of the attractions as well as helping them to distribute to as many agents as possible, regardless of their capabilities.”
Ross Veitch: The biggest bet – building a “pre-computed cube of all full service and low cost carrier content, to beat Google in terms of speed, pricing and comprehensiveness.”
Ross Veitch, CEO and co-founder of Wego, which made its bet on the Middle East years ago and now reaping the rewards, described the region as a “collection of countries, unified by a common language, Arabic”.
At the core, the six GCC countries – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates – with 60m population and “spending power comparable to Western Europe, and they travel a lot and spend a lot”.
Then there’s the Levant countries – modern Syria, Lebanon, Palestine, Israel, Jordan, and Cyprus – and extending into North Africa, and that’s another region of 450m people. Add Pakistan and Turkey to the basket and you have a market comparable in size to South-east Asia, said Veitch.
“The core of it is growing as long as oil prices stay high,” he said. “It’s boomtown and governments are diversifying from oil with tourism as a pillar. They are investing in tourism, unlike Europe which seems to be in two minds as to whether it wants tourism or not.”
Based on the promise of the region, Wego is making several big bets. It’s started contracting hotels and wants to build the biggest bed bank in the Middle East with Wegobeds. It’s building out Wegopro as the next generation business travel and expense management system, focused on Middle East and APAC.
And the biggest bet – making its searchable flight products bookable and investing in a flight search engine “inspired by ITA and Google”, to offer a “pre-computed cube of all full service and low cost carrier content, to beat Google in terms of speed, pricing and comprehensiveness.”
Peggy Guggenheim’s house museum in Venice.
As for their vision of where they want to be with their businesses, Menchaca spoke about the “manipulation of technology by human intelligence” to build a better tours and activities industry. “We have done the aggregation, we have databases big enough now to build intelligence on top of it – we are not there yet – but I’d like to see us control tech to build better travel.”
Veitch said the man-machine interface is going to get dramatically better and there will be less friction in the interaction. “Instead of us learning the machine language, machines are learning our language and they can be tasked, and get stuff done for us,” he said.
For Chan, he said it is good to be reminded of the ultimate goal of travel which is to “promote understanding and spread the love”.
“To fly to a new place, and to be invited into someone’s home for a meal, is the best experience. The moment you have a friend from afar, the connection to the country is made, and I like to think our company is facilitating those connections.”
For Ekbergh, his inspiration comes from Peggy Guggenheim, whose art collection, estimated to be worth between $500m and $b, can be seen in her house museum, Palazzo Venier dei Leoni, in Venice.
“She had a keen eye, and built a great network amongst artists, dealers and agents. She nurtured talent like Jackson Pollock, Max Ernst, and Mark Rothko who all had innovative techniques, emotional depth, and revolutionary approaches. It is fair to say that without her the contemporary art scene would not have become what it did become.”
His dream exit scenario is building his own “Peggy’s House” in Innovation City, Cape Town, his Covid project “where we get the most prominents VCs and corporates to meet and interact with next generation talent to create the future for Africa”
The full session can be watched here:
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Publish date : 2024-07-05 02:54:40
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