According to Paul Whiteway, Sales & Commercial Director (APAC), Skyscanner, India with its growing internet penetration and young work force is going to emerge as a major turf for the growth of meta-search platforms. In an exclusive conversation with TourismFirst, Paul also emphasised on the next big offering from the meta engines quarters – product comparison in addition to price comparison. Edited excerpts:
Do you think meta-search engines will bring the next big wave in the sphere of online booking of travel and tourism products?
They have already begun doing it. PhocusWright research in 2014 showed that 54% of Chinese, 36% of Americans and 35% of British travelers use meta-search to compare rates and those numbers would be even higher today. Online travel booking remains a highly fragmented space, meta-search engines like Skyscanner addresses a pain point by allowing travellers to perform their search on one site in order to get results from all the different sites.
Its catching up fast in Asia because of the macro-economic trends in the region. There is a burgeoning middle class, increasing internet and smartphone penetration rates, the rise of LCCs that make travel more affordable and finally the pervasiveness of social media to inform and inspire people to travel more – all point towards a bright future for meta, and we will see the same common use of metasearch in Asia as we see across the world.
For the success of meta-search engines, it is imperative that OTAs become your associates and partners. Is it happening readily across the world or there is some resistance from OTAs quarters?
Skyscanner operates in what is referred as a two-sided market. For any two-sided market to be successful you need to deliver value to both the supply side (OTAs and airlines) and demand side (travellers). A major advantage of Skyscanner’s global footprint is that we can instantly deliver value to our OTA and airline partners by exposing them to our global audience of over 50 million consumers, thereby blurring for them geographic borders and other barriers to entry.
The 1200 OTA and airline partners who already work with us see this as tremendous value. Not only from the standpoint of high conversion rates we are delivering to them, but also the rich data and insights that we are able to provide around traveller preferences and booking behaviour because of our global footprint.
How have you fared in the larger Asia-Pacific region vis-à-vis travel and tourism related bookings?
Skyscanner has witnessed healthy growth in the APAC region, with growth in UMVs averaging over 50% in the last two years. Growth in mobile visitors in the region is even higher; averaging over 70% in the last two years.
Part of our success is from our belief that we need to think and act locally; as such we think about every country uniquely. To this end, our first step in APAC was to invest in learning and understanding each market rather than making any assumptions based on a European heritage. It is important for us to be global but also very local in our approach. Asia is made up of so many different cultures and languages that we have to ensure that we develop our product with the different needs of travellers in each of these countries, at the front of our minds
What about India? Is it a nascent stage for meta platforms like Skyscanner?
Broadly speaking, yes. Travel metasearch is relatively nascent in India for the mainstream user. We are however seeing strong growth in India; as of February 2016, we have seen revenue growth of 72.8%, average UMVs have increased 91.5% and average Mobile UMVs by over 200%,
What we have found is that even at this nascent stage, there are several customer segments that use metasearch extensively. These include: those who have lived overseas and been exposed to services such as Skyscanner, or frequent business travellers who understand its tremendous value or families who have students studying overseas and want to find the best deal to see their loved ones. The number of segments who use metasearch continues to grow all the time.
As Skyscanner began 13 years ago in Europe, we have witnessed this trend; markets evolve with meta-search moving from nascent to mainstream, and this change can happen dramatically as user behaviour enters an inflection point.
After price comparison and booking functionality, what could be the possible big innovations which meta-engines can offer to the travel and tourism consumers?
The internet industry never slows down and is constantly innovating. Skyscanner is a product and engineering led organization and we constantly invest in product evolution and innovation – over 50% of our employees are engineers, signaling our commitment to these aspects of the business.
We believe sky is the limit; but several things we are focused on right now include: the evolution from price comparison to product comparison where our functionality will surface additional information (baggage fees, seat configuration, meals. etc) that are important to a traveller when they search and book travel. Price will always be a major factor in users search criteria but they also want additional information, personalized or filtered to what’s important to them when travelling. We are also innovating the payment process with facilitated booking that reduces friction for our users while delivering higher conversion rates for our partners. There is a lot of talk about bots and semantic search currently, I have no doubt you will see innovations here.
The other areas will be continued innovations around leveraging powerful technologies such as hyper personalization and hyper connectivity – ensuring our product is delivered across multiple devices and embedded in platforms and apps that someone interacts with daily, or habitually.
How would you explain your global scale and what projections you have for the next two years?
As I mentioned, we have a global outlook, but local approach. To allow us to react at speed and deliver a world class product to travellers, we have implemented a ‘squads’ model – where each country team is essentially its own start up. The model allows for our global product to be tailored to individual markets or product strands, approaching from a local stance, using local knowledge.
We are already seeing positive results, and I foresee that we will continue to reap many benefits from this including greater speed, greater ability to react to change, and real efficiencies as we work in this manner. For the consumer, this translates to being able to deliver relevant and market-specific product enhancements and features, as well as relevant and targeted marketing that he or she can identify with.
Has India become a strategically important market for you given the growing internet penetration and a GDP growth trajectory which is much better than most of the other promising pockets in the world?
Yes. India has the potential to be one of the world’s largest markets in terms of domestic and outbound tourism. Consider as well that India has over 300 million millennials who will be entering their prime earning years over the coming decade and in general they love to travel. This points to a sizeable opportunity. Smartphone penetration will also be a critical driver of growth in travel; low priced smartphones and 2G/3G/4G networks, enabling internet access anytime and anywhere, has contributed to the boom of travel industry.
Becoming embedded in this ecosystem with the right partners – be they airlines, new travel providers, publishers, handset companies – is key for us.
How would you explain your India strategy and what are the near run milestones you have set for this market?
We will continue to leverage our strengths in the near term. These include our industry leading global flights coverage and our award winning mobile apps. India being the second largest smartphone market in the world, together with an increasing number of Indians choosing to travel overseas, these two strengths in particular are extremely relevant for the Indian traveller.
As well as leveraging our global strengths, we will continue to focus on enhancing the local product, as well as drive marketing and partnership programmes that is tailored and customised to the local market. We already have a team dedicated to India who have developed and forged marketing partnerships around prominent events such as IPL and Sunburn Goa 2015, exposing Skyscanner to our target audiences.
We also believe that our Skyscanner for business products will be a significant component of our India strategy given the number of start-ups and established companies who have a large footprint here. With our API and whitelabel, local companies can leverage our amazing technology and content to build their own solution from the ground up or supplement their existing product by adding flight, hotel and car hire functionality to it.