Experts in Asian travel say distribution to diversify
Experts in Asian travel say distribution to diversify
27 OCTOBER 2020 8:40 AM

The COVID-19-era legacy might be the democratization of travel booking channels, as loyalty programs take advantage by evolving subscription models.

HONG KONG—The pipes are now democratized, said panelists representing an airline and other aspects of travel, including hotels, at the online Hotel Investment Conference Asia-Pacific.

Speaking during a panel titled ‘”Leaders in travel: Where are we heading?”, Campbell Wilson, CEO of Singaporean low-fare airline Scoot Tigerair, said “the move pre-COVID was actually to democratize access to the product.”

“Previously, it was constrained by (global distribution systems) or travel agents for the most part, especially for full-service airlines, and I think the rise of technological platforms, (such as) advanced passenger information systems, does mean we will diversify the distribution base,” he said.

Choe Peng Sum, CEO of Pan Pacific Hotels Group, said “with the new technology, the monopoly of the big boys (referring to online travel agencies) will start to open up, and we will see a lot of different platforms coming up.”

“With that so-called loss of monopoly, I think we will stop the demands for rate parity, and I think we will start to go after loyal customers with different pricing models,” he said.

Wilson said while the airlines are “not quite in the same position as hotels with respect to rate-parity obligations … I agree that such restraints as there were are certainly going to weaken.”

Choe said the demand for rebalancing booking channels comes from guests and travelers, too. He added he expects a new push by state anti-monopoly commissions to spread that business out.

He said the buying public has become more conscious of what is right and fair.

Screen tests
The CEOs, while predicting a dent in OTA fortunes, did not say the same for business trips and events.

Wilson said online meetings or seminars are not as valuable as those held in person.

“On one hand, that is reassuring for the industry that the substitutes are imperfect, but we do have to acknowledge that they are somewhat acceptable and they will take a slice out of typical business travel and convention travel,” he said.

Moderator Yeoh Siew Hoon, founder and managing director of Web in Travel, said at one hybrid industry event she recently attended in Singapore, it was possible for bubbles of 20 attendees to mingle, a rule vastly different than that of many other markets.

Employing guestrooms as work spaces is another trend gradually seeping across the industry, panelists said.

Panelists frequently used the word “workation,” to go along with the now-accepted leisure term of “staycation.”

Choe said millennials especially are trading up guestrooms to those in club levels to receive extra perks as they work.

“They are enjoying it. It is natural. This flow of recreating ‘third places’ in hotels, I think it will be the new lifeline,” he said.

He said a lot of his hotels have been repurposed to provide more of such space, and he also is inviting loyalty members to try brands’ restaurants and training restaurants at discounted prices.

“The ingredient of all these things is strong Wi-Fi,” he added.

Choe also said a growing trend will be a subscription model for hotels, as has already been implemented by such brands as CitizenM.

“Hoteliers have not fully tapped into (this model), but it is the way forward. People want value, value-adds, and they want to belong,” he said, adding that if those looking for workations take advantage stays can be packaged with food and beverage, too.

But maybe not with airlines, Wilson said.

“It is does not eliminate the fundamental challenge of a perishable product and revenue management. When flights are empty, you are going to discount those seats, and if you blow the value of those coupons, then of course those coupons have no value,” he said.

“But if you price those coupons at a point where they will never be discounted, when flights are good, you will either not give people inventory or you will have no incentive to take it,” he said.

Choe said he looked at subscription models as one excellent way of building community.

“Slowly the loyalty programs, the whole move, will be towards this model,” he added.

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