Localization key to online travel success in Asia

Local accessibility remains important for online travel agents to see success, as customization and local knowledge are key to capturing greater market share and building trust, industry experts say.

Customers prefer to use Web sites that are written in the local language, offer products that are developed specially for them and have unique payment options, said Henry Harteveldt, principal analyst of airline and travel research at Forrester.

"You can't simply translate [Web content]. You have to write it so that it's optimized for search engine indexing, and you also have to have the right type of photography, relevant information, functionalities, and so on," Harteveldt commented.

He added that travel is a product that lends itself to online research because of the availability of content online, so such brands and service providers--whether local or foreign companies looking at doing business in the country--have to work extra hard to get consumers to spend money with them.

Flight Centre, an Australian travel company which recently set up shop in Singapore, agreed with Harteveldt's observation. Lee Suyin, general manager for its Singapore and Asia network, explained in an e-mail interview: "[Customers] want to work with a business that not only understands the travelers in those markets, but also someone who can offer products tailored to specific needs and tastes."

Hotels.com, an Expedia-subsidiary that has had presence in Asia for nine years, added that providing local accessibility is an avenue for trust building. This, said managing director Abhiram Chowdhry, can be achieved by giving consumers a site that has "familiar local look-and-feel", the ability to comfortably transact online, as well as callcenter support with local language capabilities.

Harteveldt reiterated that language is an important element, as "you can't simply take a template and put it into Asia". He quoted China as an example, where local market sensitivities require a different way of doing business.

He explained that travel agents in China provide unique payment options, for instance, allowing customers to make bookings over the phone, after which a representative from the agency will collect payment.

"I think that's the reason why Expedia invested in [Chinese travel booking site], eLong, several years ago because they recognize the unique nature of China, in particular, as a market," he said.

"Our research shows that 84 percent of travelers in countries where English is native prefer to have Web sites written in their local language. Booking processes, availability of fares and hotel rates also have to be tweaked to suit local consumer habits," the Forrester analyst explained.

Local IT support
To support efforts in localization, travel companies require heavy investment in IT infrastructure and manpower. Flight Centre's Lee said the company employs a scalable and replicable business model and infrastructure, supported by in-house IT staff and technology partners.

"Our standard operating environment, systems and processes are relatively easy to roll out to new stores and maintain. This is core to our operating model as we continue to be a high growth company," she said. She added that the company anticipates employing more support staff in finance and IT to cope with the expansion, but will continue to maintain the same ratio of support to frontline staff.

Flight Centre operates brick-and-mortar retail stores as their Web sites do not allow for online bookings. Lee said the company will be developing this capability "in the future".

According to Hotels.com's Chowdhry, localization requires a multilingual call center, reliable backend payment system relevant to the local market, and manpower to look after each local site to ensure the right language and content are supported.

"We have a backend structure and customer management system, along with a modularized frontend, that allow us to quickly set up in a new local market," he said.

Harteveldt said content and service localization initiatives typically involve millions of dollars as companies want to develop the right products for the market.

"The investment for a travel agent like Expedia could be several million dollars when you think about design services, technology, functionality and of course, marketing costs," he noted. "It could be much more if you factor in the marketing budget, including advertising, search engine marketing and e-mail campaigns."

With investment running into the millions, the Forrester analyst said travel companies setting up local sites in Asia would not simply do so to "test the market" as the region is "too important". "Our research shows that by 2014, we expect 44 percent of the world's online population to be in Asia-Pacific countries," Harteveldt said.

Like Flight Centre, he added that fellow Australian travel company Webjet and Expedia Asia--a joint venture between Expedia US and AirAsia--also opened local portals recently to compete for a slice of the region's booming corporate and leisure travel market.

Understand social media as tool
When asked if social media can boost demand for travel services, Harteveldt replied that in this part of the world, travel lends itself naturally to social media as pictures and reviews of products are easily available.

However, he cautioned companies not to be blinded by numbers.

While market stats estimated three in four Asian consumers were active users of social networks, travel service providers should dwell deeper to understand how consumers were participating in the medium, whether they were simply observing or engaging in active conversations, Harteveldt noted.

"By understanding the conversations, companies can then be increasingly active in creating the right relationships with consumers, and eventually turn them into revenue-generating transactions," he said.