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The Asian market is so big that there’s enough to go around for everyone, even if Google and Amazon make deeper inroads into travel. AirAsia becomes the Amazon of travel. Airbnb goes mainstream. Agoda offers homes and is distributed on Grab. Travel executives made these declarations as speakers at the first Skift Forum Asia last week.
Who were they trying to reassure?
Instead of simplifying the business, the industry has simply gotten more complex and chaotic. Just look at the crisscrossing of travel players into one another’s turf.
In fact competition in Asia is as bloody as the plot line from hit HBO series Game of Thrones, shot forth John Brown, CEO of Agoda.
Although Brown was referring to the mighty battle among online travel agencies, it’s safe to say that every sector of the industry could relate to that sentiment. You think Singapore Airlines has it easy? CEO Goh Choon Phong, in a rare public appearance, described how, without a domestic market, the world’s best airline company must fight tooth and nail in Southeast Asia, where low-cost carriers take 50 percent market share, the highest in the world.
Similarly, even though Genting Cruise Lines is the Asian cruise pioneer with a 25-year history and experience in the region, that doesn’t mean it can sail away blithely into the blue. It competes with global lines that have made a beeline for Asia and China in particular, some with more success — think Royal Caribbean — than others. Here’s to better luck in Alaska, Norwegian.
Genting has embraced the insatiable Asian demand for new, better products by installing the next biggest theme park and technology aboard its ships. Competition is so fierce that the cruise operator acquired its own shipyards in Germany to construct two Global Class ships for its Dream brand, each of which can accommodate up to 9,000 passengers. As Dream Cruises President Thatcher Brown stressed, “We need all the help” to fill those ships when they join the fleet in early 2021.
So if there’s one takeaway from Skift Forum Asia, it’s that Asia isn’t readily for the taking. The future of travel is being tested in the region in a raw, cutthroat theater, with only the strongest surviving the game.
No, there really isn’t such a thing as enough to go around. At least not in Asia.
Skift Stories and More Expert Insight
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AirAsia’s Expansion Into Online Travel Draws Skepticism From Potential Competitors: While AirAsia says it’s “very doable” for it to become the Amazon of travel, online travel agencies politely disagree. What makes you great at running an airline isn’t necessarily the same thing that makes you great at running an OTA, says Expedia’s Greg Schulze, and in fact could be a risky distraction. Booking’s Marsha Ma says it took the OTA years to build the width and depth of the supply chain. But it’s doubtful whether Tony Fernandes would listen — if anything, it would probably egg him on.
Fosun Exec Does Not Rule Out Buying Thomas Cook: Fosun already owns a bit of Thomas Cook Group, has a joint venture with Cook to tap the China outbound market, and is building two hotels in China that will bear Cook’s flags, Casa Cook and Sunwing. So why wouldn’t it evaluate an acquisition of the beleaguered European tour operator? Fosun is big on creating an ecosystem, and Cook fits the bill. It’s just a question of time and price.
Delta Air Lines CEO Says China Revenues Are Up Despite Trade Rhetoric: Really? Delta and United maintain they have not been affected by the trade war between China and the U.S. But the latest research shows a drop in Chinese travel to the U.S., which means that trade tensions have already hurt tourism. It has hurt airlines, which are seeing cargo freight demand is dropping. If it hasn’t hurt Delta or United’s revenues yet, it’s likely to sooner or later.
Booking Site Ixigo’s Rail-First Strategy Propels Growth in India: An exclusive first look at Ixigo’s fiscal year financials reveals that the travel price-comparison startup is growing rapidly. Its story suggests how business models that originated in Western markets sometimes need to adapt to local needs to succeed in emerging markets.
Asia Editor Raini Hamdi [email@example.com] curates the Skift Asia Weekly newsletter. Skift emails the newsletter every Wednesday.