As Wego plots significant expansion in Asia, the $36m funded company highlights just how different the Indonesian travel industry is to other markets in the region.
Indonesian travellers prefer to pay via bank transfer, experts say rate parity is a myth among hotels and it's the country where BlackBerry still leads (mobile marketing strategy, anyone?)
In Indonesia, Wego has built local partnerships with travel portals like - Tiket.com, Ticktab.com, PegiPegi.com, Hoterip.com, Tiket2.com, Gonla.com (soon), as well as international hotel chains like Swiss Belhotel, and the country's premium but budget carrier Malindo Air (owned by Lion Air).
Currently, Wego Indonesia's accommodation inventory has more than 10,000 properties. In the last six months, about 800 unique flight route searches were performed, with booking leads valued at $28.5 million, increasing 7.1% on the same period last year.
Graham Hills, managing director of Wego Indonesia says,
“While Wego’s inventory includes diverse travel options globally, the continuing build of local content featuring familiar Indonesian brands resonates very effectively with our market."
Tnooz spoke with Hills to find out more about the Indonesian travel market and Wego Indonesia's experience.
Q&A follows:
Currently, 70% of travel payments are done via bank transfer . What difference do you see in terms of travel payments in Indonesia versus other established markets?
Credit card penetration in Indonesia is still low with only around 15 million cards in the market from a population of 250 million.
Whilst Wego doesn't take payments what we see with local partners is a clear preference to non-credit card payment options with this fairly evenly divided between bank transfer and internet banking options.
Credit card bookings for local partners that offer non credit card options would account for up to 45% of their transactions.
One study says micro-blogging is the most used platform among airlines in Indonesia. Which social medium works the best for you at Wego Indonesia?
In terms of visits to Wego and reach, Facebook is a clear winner for Wego Indonesia. We have more than 600,000 Facebook fans for Wego Indonesia alone with our posts reaching more than 2.5 million users per week.
Ross (Ross Veitch, CEO and co-founder of Wego) once said rate parity is a myth in Indonesia. Do you agree with that? To what extent rate parity is enforced/followed in Indonesia?
Yes, I would definitely agree with that. Rate parity is enforced largely by the bigger/more sophisticated hotel chains, but there are far more non-chain hotels in Indonesia. Even large chain hotels are well known to offer better rates over the phone, often even better than the hotel's own website.
Many Indonesian hotels also offer an Indonesian citizen or visa (KITAS) holder rate.
Have you rolled out Wego Advertising Platform for the Indonesian market?
It was rolled out globally. We are already offering retargeting, re-marketing and audience extension campaigns in the market. We also use the same types of campaigns for our own Wego marketing.
Wego has 17 regional/local websites in APAC. Where do you see Indonesia in this list in terms of current growth, revenue, future growth plans?
Indonesia and India are in a close race to be Wego's biggest market in terms of visits. Revenue in Indonesia is growing at more than 100% year-on-year and we expect this trend to continue.
Only 25% of the population is currently online in Indonesia and the total reach of online travel sites in Indonesia according to comScore is only up to 4.5 million users per month representing significant future growth potential.
The middle class is becoming larger and has the income to travel, we noticed 76% of flight bookings are domestic and international searches were up by 90% in 2012.