TravelTech in Southeast Asia is making moves in the right direction. With around 129.2 million visitors to countries in the Association of Southeast Asian Nations (ASEAN) in 2018 and a forecasted figure of 155.4 million in 2022, travel here is burgeoning. The close proximity between countries, the influx of low-cost carriers and open skies, simplified visa processes, and similar cultures are all making the ASEAN region the hottest ‘destination’ for its own member nations.
According to a Google-Temasek report on Southeast Asia’s digital economy, the online travel sector is one of the most established verticals, with over $30 billion USD in gross booking values in 2018. Also in 2018, the largest and most established segment was online flights, worth $18 billion USD in bookings, followed by online bookings for hotels worth $14 billion USD, and online vacation rentals with over $600 million USD in bookings. Around 41% of bookings were made online that same year, and it is expected to grow to 57% by 2025.
What are the hottest startup industries in 2019
Trending now in TravelTech
According to TTG Asia, a travel trade publication, current TravelTech trends include: using AI, chatbots and voice-enabled digital assistants, travellers looking for activities and experiences, and creating one-stop-shop package bookings.
Consumers can expect to interact with AI chatbots through different mediums like chat and social channels, and use digital assistants to help with travel search and bookings. With the advancement of AI and machine learning, don’t be surprised if these ‘assistants’ start making future recommendations based on previous itineraries.
Travellers are also purchasing package bookings, with 80% of travellers finding it useful to book all trip components together. This allows hoteliers more opportunities for engagement with and to upsell their customers.
Investments are also pouring into the sector. Travelstop, a business travel startup, raised $1.2 million USD in a round of seed funding in August 2018. Funding was led by SeedPlus, a venture capital firm from Singapore, and other investors like founders of Zuzu Hospitality Solutions, Vikram Malhi and Dan Lynn; chief operating officer of Rally Health, David Ko; and Jarrod Howe at Hyper Island Singapore. Indonesia-based Traveloka, an online travel agency, earned its ‘tech unicorn’ status when fundraising efforts in 2017 reportedly valued the tech company at around $2 billion USD. Traveloka is backed by companies like Expedia.
TravelTech startups in Southeast Asia
Let’s have a closer look at some of the emerging TravelTech startups that have popped up in the region:
Founded by Sam Xu in 2016, Travelog is the number one flash-sale site in Malaysia, with exclusive rates of up to 70% off hotels and holidays in Malaysia and beyond. You can gain access to these discounted rates by signing up for a free membership on the site. Every week, the platform runs flash sales lasting around 10 days with limited availability. Users can scan through the website’s listing of travel activities, tour packages, and accommodations for the best travel deals.
Also founded in 2016, the privately held TripDixi is a mobile platform that connects travellers with local vendors in Indonesia and offers travel products and services. Positioning itself as an Indonesian Tourism Marketplace mobile application, vendors can use the app to sell trips, transportation, accommodation, attractions, and local products. The app allows travellers to customise trips, make bookings and payments, and also allows local Indonesian vendors to list their services for free on the platform.
As previously mentioned, Travelstop is a platform that aims to simplify business travel. It is a one-stop shop that features automated expense reporting, travel-booking, and data tracking all in one place, providing a level of convenience and flexibility that appeals to business owners and employees alike. Considering that the Asia-Pacific block is currently the largest area for business-travel and has an anticipated annual growth rate at 10.4% from 2015 to 2023, the potential growth for Travelstop’s services is sure to increase.
ZUZU Hospitality Solutions
ZUZU Hospitality Solutions’ aim is to increase the revenue of its partner hotels through sales and marketing. ZUZU seeks to maximise revenues for hotels by driving higher occupancy rates through effective rate plans, pricing, and promotional strategies. With ZUZU’s technology, hotel rates and inventory are kept up-to-date on all channels, ensuring that overbooking, channel conflicts, and administrative burden are avoided. The platform is staffed by an experienced team with hospitality backgrounds, and is based across Southeast Asia to provide localised and personalised services to its clients. Founded in 2016, ZuZu Hospitality has raised $6.7 million USD in three rounds of funding.
We explore retail trends in Southeast Asia
While these TravelTech startups are just beginning to make a name for themselves in Southeast Asia, they can easily look to tech-unicorn Traveloka as a paradigm of growth in the region. Traveloka has since expanded into Thailand, Malaysia, Singapore, Vietnam, the Philippines, and Australia and has diversified its service offerings. Its mobile app has been downloaded over 30 million times, making it the most popular travel app in Australasia and Southeast Asia. By focusing on disrupting the traditional travel industry and providing valuable services for travellers, these startups have nowhere to go but up, up, up.