Three questions for Kei Shibata about Asia travel tech

My thought would be: Do whatever Google cannot do or is not good at. Strong original content is obviously the key for metasearch to survive. That means I would probably put much stronger focus on content generation for users to be able to pick the right hotel, not just compare rates. In other words, I would position the site more in the space to compete with Tripadvisor, but I would take a fresh approach to user-generated content. A pure technology play like Google's becomes less sustainable in the face of TripAdvisor's depth of filtering and social content. For example, TripAdvisor's algorithm ranks hotels according to many different measurements, such as location, restaurant, bar, breakfast, gym, age of property, swimming pool, etc. But TripAdvisor's approach to user-generated content isn't the only approach, and non-English-speaking markets it hasn't yet dominated are still open to lots of experimentation. Mobile usage should accelerate the growth of reviews of accommodation. An integration of content between an app that encourages instant reviews and a meta search site that makes uses of the information might make sense.

I am tempted to agree in principle, but I am guessing that a few will survive. Those who will survive are the ones that will curate their hotel content well enough to differentiate themselves in the market. For example, if the HotelTonight can successfully build a brand known for "great hotels only. no crap" rather than for "best deal for tonight," they can surely survive and differentiate from large, general OTAs. Look at the example of Ikyu.com in Japan, a luxury hotel focused OTA. It has been able to build a sustainable business and strong brand while local giants (Rakuten Travel, Jalan and JTB) directly compete with them in the same space.

Call-to-book is a great example. Most of Asian accommodations and users are still very much accustomed to booking by phone. In one of our experiments in mobile at Travel.jp for call-to-book, one OTA experienced an amazing 25% conversion rate. This characteristic behavior may become even more pronounced as mobile increasingly replaces desktop in travel search. Local payment option is another factor. In Indonesia where credit card penetration is still very low, people make a payment to online merchants by using an fully featured ATM. In Japan, payment at a convenience store -- a store you can find on every street corner -- is one of the popular consumer behaviors in online shopping. Foreign giants sometimes overlook how industry practice differs, country by country. For example, in Japan, the standard practice for quoting a rate on a hotel room is price per person, not price per room. No credit card guarantee is required in Japan in most cases. And it's almost always payable at check-out -- as in Booking.com's model in Europe. Each accommodation (mirroring the practice of local OTAs) offers dozens of different room rates based upon different package of products (i.e., with or without breakfast, lunch, dinner by grade, spa, sightseeing, early check-in, late check-out etc. etc.) These practices tend to give meta search a tough time when it comes to create a simple search product that satisfies its users. And lastly, in Asia, it is also often difficult for meta search to aggregate the data comprehensively enough for users to search and compare at a satisfying level. China and Japan are good examples. Local OTAs dominate these market by covering large and very fragmented market, while international OTAs and GDSs still only cover a fraction. The API access to those local OTAs is also often limited.