Tour operators

Web in Travel: OTAs in prime position to benefit from rising APAC internet penetration

Posted by Lee Hayhurst on
Web in Travel: OTAs in prime position to benefit from rising APAC internet penetration

Internet penetration in APAC is expected to breach the 50% mark and continue growing as it overtakes the US, the Web in Travel annual conference in Singapore was told this week.

Results of joint research from travel data co-operative Sojern and Phocuswright involving a survey of 5,782 online travel customers from seven countries was presented at the event.

Maggie Rauch, senior director and head analyst at Phocuswright, said she expected internet penetration in APAC to rise for its current level of 47% to above 50% “and keep going”.

APAC is currently just behind the US on 50% and the continued rise is expected to be driven by mobile phone adoption as consumers in emerging markets leapfrog desktop.

Rauch said this puts OTAs in prime position to take advantage of this shift online whereas in the US and Europe markets appear to have reach a ceiling for online penetration.

The Phocuswright research found not only are customers in APAC researching and searching for travel products on their mobiles, they are also booking.

This contrasts with markets in Europe and the US where there is a sharp drop off in mobile use at the booking stage.

However, differences between markets in APAC – Japanese travellers exhibit similar behaviour to US – means device ownership does not explain the trends, said Rauch.

The Chinese and Indonesians are using their smartphones more, she said. “They also book travel online more often.

“This is one of the big reasons that mobile travel is going to drive higher online penetration in this part of the world.”

Rauch said in China 32% of travellers begin their journey by going to an OTA rather than a search engine like Google was seen in most of the world.

And she said social in most of the world has an “ambient effect” to travel planning in that is influences but does not necessarily determine the final buying decision.

While in the US customers have a high dependency on reviews, in Japan YouTube videos play a significant roles while in Indonesia videos created by friends are highly influential.

When it comes to buying on social, only one in five US customers say they go to social to choose a destination, whereas in China that figure is almost half.

Globally one in four people say they would buy on social, but in Indonesia seven in 10 would and in China the same proportion say they have already made travel purchases on a social channel.

The Chinese customer is also making bookings via “super-apps” like WeChat and Meituan-Dianping.

Rauch said “OATs are right now in a great position in China and Indonesia, but there is a lot of other activity going on”.

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