Enterprise
SMEs in tourism fast adopting technology
Calyn Yap 
Softinn provides Cloud-based reservation systems for small hotels and vacation rentals
advertisement[x]

TECHNOLOGY adoption is fast becoming the norm among SMEs involved in the tourism business.

In recent years, there has been many new products and services offered by new start-ups via innovative platforms to SMEs looking to adopt technology. These include Lagisatu Travel Sdn Bhd (Tripfez), Tripviss Technology Sdn Bhd (Tripviss), Softinn Solutions Sdn Bhd (Softinn) and Expedia Inc.

These products and services cater to tourism businesses, which are increasingly reaching out to travellers through online platforms as a norm. As a result, most are conversant with up-and-coming technologies and as a whole, are receptive once they understand the value proposition.

For example, since Tripfez’s inception, it has been well-received by industry players, especially smaller hotels owing to the simpler structure of their decision chains.

“They’re aware of technology. Everyone wants to target new segments, new revenue streams. They want to find out how to bring in more customers and the Muslim segment is increasing, so naturally they’re interested in attracting them to bring in more revenue,” says Tripfez CEO Faeez Fadhlillah.

“Everyone wants to target new segments, new revenue streams. They want to find out how to bring in more customers and the Muslim segment is increasing,” says Faeez

For Cloud-based hotel reservation system Softinn, its founder Jason Lee Jee Shen says the platform started with slightly more than 100 properties but now lists over 900, with the majority of its hotels operating less than 100 rooms.

He observes that close to 80% of bookings now come from online platforms as the industry shifts towards the automation of pre-booking and prepayments, through online travel agencies (OTA) or marketplaces such as Booking or Agoda. This is because of increasing cost concerns leading to tighter profit margins and speeding up adoption in the industry.

Tripviss’ business development head Jacky Chan concurs. “For the past decade, it’s been the travel industry providing the product [tour packages] to travellers, who then decide to accept or decline. What we’re trying to do is the reverse, since there’s an increase of people doing self-planning for trips.

“Hotels have to extend their services and do more value-added activities to provide unique experiences,” says Lee

“They will die out if they don’t adopt the new way of doing business and catering to consumers, since they’ll lose relevance,” Chong opines.

An example of the shift towards technology, Sun Inns Hotel Group director Ng Hong Keat – whose group runs a chain of one to two-star hotels – shares that about 10,000 room nights are sold online.

“We have aggressive sales and marketing for e-commerce platforms, with more than 10 marketers working 24 hours a day to lock in sales. Ten years ago, we used to book in around less than 500 room nights per month online. Now, it’s about 50% OTA sales, with internet and e-commerce sales outnumbering corporate sales and walk-ins,” he adds.

 

Personalising travel

In recent years, there has also been a move towards the personalisation of travel, say the industry players.

“It’s now about fulfilling the needs of the traveller, with travel moving towards personalisation,” says Faeez.

Tripviss’ design vice-president Edmond Chua and Chan points out that Tripviss received 400 to 500 requests from local and international travellers for customised trip planning in July. Monthly, it sees an average of about 150 travellers booking through its platform.

Expedia’s Southeast Asia and India general manager Simon Fiquet says there’s a big trend towards personalisation, especially when it comes to services that would recommend trips based on budget.

“There’s a huge appetite for that, which our report reveals. Many respondents say they’re ready to share personal data for these services. There’s strong appetite for us [Expedia] to innovate more in this space,” he adds.

He points to examples of creative travel services such as wearable devices that can adjust hotel room temperatures based on current body temperatures as well as luggage with WiFi tags for tracking purposes.

Apart from that, discussions among tourism businesses have shifted to providing personalised and unique travel experiences, notes Softinn’s Lee.

“For hotels, going beyond just offering room and board, they’ll have to extend their services and do more value-added activities to provide unique experiences,” he adds.

Resilient travel industry

GLOBAL tourism has grown by 37% in inflation-adjusted terms since the 2009 downturn, which outpaces the world GDP that grew at 21%.

Tourism businesses are defined as those receiving money spent by tourists, which include travel agents, hotels, restaurants, airlines, cultural activity providers, foreign exchange and travel insurers among others.

Current forecasts suggest that world tourism will generate some US$1.5 tril (RM6.36 tril) in revenues by 2025 and industry analysts predict the Asian travel market will be worth US$155 bil this year.

Asia is presently the largest travel opportunity in the world due to rising disposable incomes, mobile internet penetration and a desire among travellers to explore, says Expedia Group Southeast Asia and India GM Simon Fiquet.

Travel in general is very resilient even when there’s a crisis, people still want to travel, says Fiquet

“Travel in general is very resilient even when there’s a crisis, people still want to travel. There are ups and downs but the travel market is growing, especially in Asia. Travellers today are dedicating a much higher share of disposable income to travel,” he says.

While competition is stiff in the industry and consumers are spoilt for choice, he believes that giving the right value to travellers and focusing on enabling better travel experiences will ensure competitiveness.

“Even if there’s competition, all of us are benefitting from it. The Asia-Pacific travel market is bigger than Europe or America and it’s going to be the biggest travel market,” says Fiquet.

The growth is attributed to the increase in online travel bookings and travel among the younger generation, as well as the rising number of Muslim travellers in recent years.

The Millennial Traveller Report released by Expedia earlier this year shows that the millennial generation see value in investing in travel experiences to enrich their lives and demand for personalisation from their travel brands of choice. Social media engagement also plays a vital role in an enjoyable travel experience.

The next big thing, he notes, would be to make better use of information to ensure travel can become more personal and predictive.

Tripviss Technology Sdn Bhd (Tripviss) business development head Jacky Chan and design vice-president Edmond Chua, both co-founders of the Tripviss platform, also note a significant increase in travel frequencies beginning five years ago.

“People usually travel once or twice a year, but we’ve seen the younger travellers increase the frequency to two to three times,” says Chan.

 

Growing Muslim travellers

According to The Global Economic Impact of Muslim Tourism 2015/2016, more than 10% of global tourism spending is generated by international Muslim travellers, with the Muslim travel market growing at 4.8% per annum and accounting for US$145 bil of international tourism spend in 2015.

Travel and tourism has been identified as one of the Islamic economy’s key growth sectors, contributing more than 11% of total global travel spend with a projected value of US$233 bil by 2020. In terms of the number of travellers, Muslim international travellers were estimated at 117 million in 2015, but are expected to grow to 168 million by 2020.

It adds that tourism businesses serving Muslim tourist demands generated more than US$50 bil in GDP in the same period, directly supporting 1.8 million jobs among the tourist businesses in countries across Asia, America, Europe, the Middle East and the Oceania.

Of the figure, Malaysia received an estimated five million Muslim tourists in 2015, due to the conducive environment and facilities that the country provides to the segment. This includes the availability of prayer facilities, Muslim-friendly accommodations, accessibility to halal food and air connectivity to this segment of travellers.

Even so, the report points out that Muslim travellers remain relatively underserved due to factors such as the lack of awareness among tourism authorities and service providers on the market’s significant growth potential, as well as poor understanding of the demographic’s specific needs and preferences.

This has manifested in a lack of facilities and experiences that meet the needs of Muslim travellers, as well as scarce or inconsistent information on existing Muslim-friendly amenities.

 

Innovative platforms

IN recent years, there are a number of innovative players offering platforms to SMEs looking to boost their tourism business via technology. Here are some of the new startups which cater to these SMEs.

 

Tripfez

Tripfez, founded by its CEO Faeez Fadhlillah, was established in 2015. It also introduced Salam Standard, a hospitality information tool for the unique faith-based requirements of Muslim travellers.

Promoting Muslim-friendly travel, Tripfez via Salam Standard wants to enable the availability of information for various aspects of travel and tourism ecosystem for the segment of travellers. This ranges from transportation to accommodation, food and beverage choices as well as facilities available at tourist attractions.

“We want to provide various options for Muslim travellers through making available necessary information in such areas. It [Salam Standard and Tripfez] is a new concept to hotels, but it’s a huge market for us both, a revenue channel or a new set of demographics that hotels can actually target.

“The definition of halal varies in different countries and it always will, but we think it’s about choices and this ties back to personalisation,” he says.

Tripfez is looking to launch Muslim-friendly tours this month for Malaysia as a start by working with a large travel supplier, but will create packages for both domestic and international packages soon.

Within the six months to one year, it wants to increase its presence and integration with global travel sites, increase its inventory within the tour space, as well as conduct branding and marketing initiatives. This is in order to be the single source of information on Muslim-friendly travel, as well as unify and create a standard for Muslim travel, while at the same time providing options.

 

Tripviss

Commercialised in January, travel platform Tripviss combines local travel and tour operators with travellers to customise a suitable itinerary that meets the latter’s needs. With 12 full-time employees, it works with more than 300 local licensed tour operators providing 6,000 tours across 50 countries.

“We position ourselves as a trip-planning site instead of a travel marketplace. We help plan trips because we see the need for professional trip-planning for travellers, since these professionals have the local expertise that travellers lack,” says Tripviss Technology Sdn Bhd (Tripviss) design vice-president Edmond Chua.

We position ourselves as a trip-planning site instead of a travel marketplace, says Chua

In Malaysia, a key challenge is in encouraging local travellers to book tours with bigger ticket sizes online, which they are still hesitant to do.

Its business development head Jacky Chan adds, “We want to attract more travellers to book through us, so we’ll spend more on marketing to promote the platform.

“The thing people relate to is travel agencies, package tours with shopping stops. That’s the consumer mindset right now, but we’re unlike traditional travelling agencies that have set dates for departures.”

Tripviss wants to focus on more destinations across Asian countries and Europe, as well as improve its product offerings, says Chan

It wants to focus on more destinations across Asian countries and Europe, as well as improve its product offerings. Tripviss recently launched Tripshare, using the concept of cost-sharing, travellers get to travel at lower prices because costs are split among everyone on the trip.

 

Softinn

Softinn was established in 2013 with its Malaysian operations, but has gradually grown into markets such as Indonesia and Vietnam. It has grown from five to six staff to around 13.

Softinn provides Cloud-based reservation systems for small hotels and vacation rentals, with the vision of empowering small lodge business owners to provide personalised customer experience and to create a collaborative working environment.

Its founder Jason Lee Jee Shen says it wants to increase the market share in Indonesia in the next one year as it is seeing a good pick-up rate there since its March entry earlier this year.

Softinn wants to be more aggressive in merchant acquisition by focusing on helping to bring good quality merchants onboard.

He says, “We’re looking to increase our merchants by another 30% to 40% here, but we’re focusing on those with good products that need help to be discovered in the digital space, such as those running eco-tourism.”

Moreover, it is eyeing to launch a new software-as-a-service model product this year, instead of a transaction-based model.

“We want to commercialise property management system on the Cloud to handle guest check-in and check-out, in order to strengthen operations and fulfilment with hotels,” he shares.

 

Expedia

Expedia, which started in 1996, has been a forerunner in travel marketplaces since its inception. That said, its Southeast Asia and India general manager Simon Fiquet wants to define Expedia as a technology company instead of a travel company.

Since its joint venture with AirAsia in 2011, Expedia has seen “tremendous growth” as a growing brand, with Asia contributing to a large share of its growth.

“Malaysia and many markets here are starting to have very competitive products, airlines and hotels that people want to travel with, so we really want to continue investing in this region,” he comments.

As such, it wants to ensure that it innovates and builds globally to make it relevant for Malaysian travellers via technologies such as artificial intelligence and Big Data, in line with the rapid adoption of mobile and social networks.

Expedia wants to focus on localisation, as he says, “A big focus is to ensure that we really embrace the local nuances and make it locally relevant. We’ve spent 20 years to build pipes to connect to hotels and airlines globally; that’s a massive achievement.

“A lot of technology we’re building is to bring back personal interaction we had in the past – we’ve lost the personalised touch of a travel agent – and that level of service. Sophisticated, simplified personalisation with technology. What we do will revolve around that.”



This article first appeared in Focus Malaysia Issue 254.