by Yeoh Siew Hoon.
I’ve always seen Europe as more similar to Asia than any other region – it is multi-lingual, multi-cultural and steeped in history and traditions. Yes, it has a more formalised form of union – the EU versus, say, ASEAN which has struggled to unite with common, cohesive policies – but it is still a fragmented market with different levels of development, nuances and textures.
There is no doubt that travel in Europe is being transformed by travellers from Asia. Customers bring with them their own set of needs, desires and experiences and go anywhere in Europe now, and you see groups of travellers from different parts of Asia.
Think about it – China is already such a huge force in travel and only 9% of them have passports. So people may talk about a slowdown in China but just think about the upside of growth, not from the main cities but from the secondary cities, not only in China but across South-east Asia.
Fraser Thompson, director of AlphaBeta, speaking at HICAP Update in Singapore, pointed out that ASEAN, comprising 10 countries in South-east Asia, is the fifth largest economy in the world. “The shortterm always disappoints, the longterm will deliver,” he said. “Korea, Japan and Australia have a vested interest in making ASEAN work.”
Want to understand the rise of the middle class economy in ASEAN – study the demand in instant noodles, which is off the charts in Ho Chi Minh City and Jakarta.
Having now run WIT events in Hong Kong, Seoul and Malaysia this year, there is a clear pattern emerging. Travel continues to grow, fueled by low cost airlines, and Europe provides a good model for learning for us in Asia on this front.
In South-east Asia, low cost forms 51.9% of domestic capacity and 23.2% of capacity, according to CAPA (Centre for Aviation). An emerging market like the Philippines now has low cost accounting for 52.4% of domestic capacity and 26.8% of international. India’s share of low cost domestic is at 66.6% while international is 21.2%.
We know domestic travel whets appetites for overseas travel so the future is clear on that front.
The aviation trend that’s of most interest to destinations in Europe is the rise of low cost longhaul airlines – a 900% increase in seats in the last 10 years globally and a lot of that happening from airlines based in Asia. Norwegian Airlines flying to Singapore, Scoot to Berlin and Athens – all these make longhaul travel more accessible and affordable.
Just as travel brands in Europe can learn more about how to engage with travellers from Asia as well as how to expand their interests in the fastest growing market in the world, companies in Asia can also take lessons from Europe.
The rise of private accommodation which changed how we could have holidays in Europe is also happening in Asia. In Japan, 12% of inbound visitors now use some form of alternative accommodation versus traditional hotels. In 2017, South Koreans formed 66% of the 1.8m travellers who made use of some 37,000 Airbnb listings in the country, according to data released by Airbnb.
It will be interesting to see if the backlash being seen against short term rentals in certain places in Europe such as Amsterdam and Barcelona will also happen in Asia over time.
This week, the Spanish resort city of Palma, on the island of Majorca, announced it would ban flat owners from renting their apartments to travellers, becoming the first place in Spain to introduce such a measure. Singapore has also banned short term rentals.
The Philippine government took it one step further, shutting down the island resort of Boracay for a six-month cleanup ordered by President Duterte.
But the most interesting lessons for Asia will come in the area of data privacy and security. On May 25, General Data Protection Regulation (GDPR) rules come into effect across the EU and this will have major implications for any company who does business in the region.
Twitter says its new policy will have “more clarity about we share your data to prevent harm, comply with law, serve the public interest, and keep Twitter safe and welcoming for everyone”.
With the continuing fallout over the Facebook and Cambridge Analytica data scandal, every organisation is working hard to tighten up their data controls, and it is expected that similar regulations will come to Asia sooner rather than later.
In Asia, we’ve had a more lackadaisical attitude to data and there’s a tendency to delegate that responsibility to governments. There’s a lower awareness of individual rights in general but the Facebook incident has definitely set off alarm bells and raised awareness.
It will be interesting to hear at Phocuswright Europe how European companies are dealing with GDPR and how this will affect the whole area of data privacy and marketing.
See you in Amsterdam. And oh yes, I am also looking forward to staying in the same haunted hotel I stayed in last year.