Traveldaily.cn Exclusive: Interview with Debby Soo, VP, Asia Pacific at KAYAK

In every business, there are decisive moments that eventually signal the beginning of a new era.  

One just can’t stop relating this to what KAYAK is considering, and its repercussion for the entire travel meta-search category.

Yes, it’s about KAYAK’s foray into China. It is something that has been anticipated for long in the travel e-commerce category. The development would be significant considering the way KAYAK has gone about its expansion post its merger with The Priceline Group. For instance, in late 2013, the entity launched its operations in eight new markets in three continents. The list included Hong Kong and Singapore.

But China would definitely be a big test. In fact, this could also be termed as the final frontier for the U. S.-based entity. Or that very decisive moment, one where a global brand would end up leading the traffic generation business on a global, bigger scale.

KAYAK’s VP Asia Pacific, Debby Soo, has a vital role to play. She has launched local KAYAK sites in Australia, New Zealand, Hong Kong, Singapore, Taiwan, India and Japan.

San Francisco-based Soo is quite clear about the strategy KAYAK is considering for China. The first phase wouldn’t be a marketing blitz. Rather it’s about the product first.

“Content and understanding the nuances at the local level are of utmost importance,” said Soo, who is  scheduled to speak at the upcoming  2014 TravelDaily Conference, to be held in Shanghai (September 3-4, 2014).

The team is looking to stick to its proven approach of establishing its presence in markets outside the U. S. “As we have done elsewhere, product quality is preeminent, followed by monetisation. Once a certain threshold is reached, then the next step is worked out. Till then there are no big marketing plans, and possibly no strategic alliances,” shared Soo.

Being ready for China

Soo is clear about why the team is optimistic about China.

“We believe that Chinese users will be compelled to use KAYAK because of our easy, clean, intuitive user interface, and our fast, accurate and comprehensive search results,” said Soo,

So is there any benchmark or analysis that showcases the site’s superiority over others?

“We have consistently invested significant time and resources to innovate to meet customer demands,” said Soo. She adds, “We evaluate our performance (against other meta-search sites and OTAs)If any of our partners’ APIs or data isn’t accurate enough then we fix the problem including at times discontinuing the association.”

KAYAK believes its legacy would serve it well, be it for its global brand recognition or association that it has built over the years..  “What we definitely are upbeat about is our global presence. It certainly offers suppliers, OTAs etc. a chance to reach out to a wider audience,” At the same time, Soo acknowledged: “The long tail end of content would be a challenge. Our team is so lean (70% of 300-odd employees are technologists!) that reaching out to the entire market would demand perseverance.”  

“Fail fast, fail often” mentality

KAYAK’s “fail fast, fail often” mentality drives innovation and entrepreneurial spirit among its tech team. 

“For example, in our technology center in Boston, we stream live customer data — the latest feedback, Twitter feeds, searches per country, etc. – there is a constant sense of urgency and focus on what’s happening right now with customers and how to fix it fast,” said Soo.

The team minutely scrutinizes user behaviour.

“We have so much data on what users are searching for and clicking on and we use that data to drive product decisions.  We have several versions of KAYAK live at any given moment to test user preferences,” said Soo.

Technology supremacy

KAYAK’s technologists are counted as the major backbone.

Soo asserted that KAYAK’s technology benefits from an on-going, cumulative scale advantage with more than 100M user queries per month.

“We obtain data from multiple sources and continually optimize our global flight search technology and data requirements. We currently utilize fare information from Amadeus, ITA, other 3rd-party providers, airlines and online travel agencies,” shared Soo. KAYAK also uses proprietary search algorithms including patent-pending accuracy technology for airline price and availability data. The team, according to Soo, is consistently trying to outperform other flight search sites and online travel agencies in speed, comprehensiveness, best price found and accuracy.

As for mobile, KAYAK believes it has edge over others, in line with its vision of being the best on whatever device people may want to use. 

“KAYAK’s mobile app features full search capabilities, a facilitated booking experience – a user never has to leave our app to book their travel, as well as flight tracking and itinerary management tools. KAYAK’s app features a full set of capabilities as well as an intuitive, fast and accurate UI,” said Soo.

Challenges

Soo believes the market is challenging on a few counts. One of them is handling the issue of multiple price points.  “It isn’t easy to make apples-to-apples comparisons here. What is available online might differ on various channels, and the same is the case with OTA and offline agencies. For us, online-offline discrepancy doesn’t matter, but we can’t afford to slip up in online pricing,” said Soo. So there is going to be a team that would specifically assess the accuracy to pave way for return users.

KAYAK believes its arsenal of tools will enable the company to combat such hurdles.

“A major development that we are seeing in the travel search market is the need for price transparency.  Many OTAs, airlines and hotels charge users booking, taxes and baggage or credit card fees.  These fees are often not included in the price that is shown to the user,” said Soo.

Citing an example, she added that the way the site displays information in Europe is quite different from what’s done the U. S. In fact, it was in response to this issue (price transparency) that paved the way for the creation of the Payment Fee Calculator, a feature that shows users exactly what they will pay for a flight or hotel room.  “This feature was initially rolled out in Europe, where extra fees are the industry norm, and we received such positive user feedback, that we have rolled out this feature across all of our markets,” said Soo.   

Future of meta-search

Is KAYAK open to embracing a hybrid model i. e. transaction-oriented plus traffic generation?

Not for the moment, though nothing can be ruled out, said Soo.

“KAYAK’s value proposition for our partners is that we send extremely qualified, and high-converting traffic to our partners, and that our partners still “own” the customer because the customer books on their site,” said Soo. 

She added, “Our focus for local suppliers and OTAs in China will likely not deviate from our current value proposition for existing global partners.”

No doubt meta-search sites are all about monetising the traffic they generate. So is there any benchmark that KAYAK has set for the traffic that it intends to generate here?

“We have a general sense of the level of traffic and how that traffic will monetize, but until we are live in a market, we really don’t know for sure what the numbers will be.  As for cost per acquisition in our marketing efforts, one way we could determine the appropriate cost is to look at the cost per acquisition in some of our more mature markets that have similar market dynamics to the market in question,” said Soo.  

Expectations from 2014 TravelDaily Conference

Soo said KAYAK is considering launching in China. So the 2014 TravelDaily Conference would be an ideal event. “The TravelDaily event is a widely attended and highly reputable conference.  I am looking forward to sharing KAYAK’s global expansion plansand meeting and learning about new potential partners.  I am also excited to learn more about the complexities of the online travel landscape in China,” said Soo.

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ILTM Asia is the most professionally organized B2B trade show in China at the moment, with a clear focus on luxury travel. It attractsinternational exhibitors, many of which also exhibit at ILTM in Cannes. The vast majority of the exhibitors are hotels. Chain hotels exhibit in an exclusive hall and independent hotels are mostly represented by marketing companies. Tourism boards of several countries were present, namely Britain, Italy, France, Switzerland, USA, New Zealand, Singapore. There was noticeable absence of some destinations that previously attended the show, such as Australia and UAE.

In the experience of our clients that we represented at the event, 80% of the appointments were relevant to their service offering, and a number of the agents requested follow up with specific brands.

On the opening day, a series of talks were arranged for the attendees with the most popular being the workshop run  byHurun Report about the Chinese luxury traveller. The opening forum, while heavily focused on China, provided presentations from speakers that did not shed new light on the fast changing China luxury outbound market. They were either extremely general and high-level or presented dry statistics and numbers about social media that were not helpful in providing practical advice to the visitors on customer engagement. We would hope to see in 2015 a more relevant set of speakers at the forum, that can shed a light on the behaviour of Chinese tourists, how to engage with them and how to win their loyalty.

The exhibition days were quite busy with full schedule of appointments, and the vast majority were targeted (in the case of our clients, the interest was in Chinese buyers, though the event targets all of Asia including Australia, Russia, and India).

The evenings were filled with a large number of hosted parties that were very useful for networking and continuing discussions from the morning sessions, since the scheduled appointments were just 15 minutes long, not enough to discuss actual business.

ChinaContact intends to participate in next year’s ILTM with a larger stand, representing a number of our clients as a way of quickly introducing new entrants to the travel industry in China and cementing relationships for companies present in the market.

ILTM Asia 2014 will take place from the 2nd to the 5^th June in Shanghai. It is an opportunity for suitable businesses to expand their activities to the Asia Pacific region and reach the new wave of High-Net-Worth Chinese tourists.

ChinaContact has been facilitating  market entry to China since 2005, and has carefully designed packages to maximise the benefits of participating at ILTM and wining a share of the luxury outbound travel business from China and Asia. The services offer many potent benefits such as social media marketing  prior to the show, expert pre-qualification of  buyers for one to one meetings, translation services, experienced interpreters, management of all collateral localisation and much more.

Click here to read more about this event and our services.

Following the proven success of its high-profile partnerships with Google’s Hotel Finder and Room Key, hotel central reservation system (CRS) vendor Trust International is looking out for similar opportunities, as it perceives the proliferation of online booking channels a boon to its hotel clients.

Trust’s managing director, Richard Wiegmann, says in an interview with Travel Daily China that it is a CRS’s duty to get in bed with as many channels as possible and extend the reach for hotel clients, even if the channels duplicate each other in functionality.

“From the technical perspective, the business model (of the online booking channels) may be the same, (but) they cover different geographical market segments. They might open new markets for our clients, and this is the key for the hotels,” he says.

The partnership with Google’s Hotel Finder that started a year ago is already paying dividends. Hotel Finder has been generating nearly 50 million page impressions a month for Trust’s portfolio of over 7,000 hotels, most of them are live on the Google platform.

Mr. Wiegmann is impressed with the Google solution’s delivery of availability and rates and its graphic interface showing geographical boundary and points of interest in the neighborhood of the targeted property.

That the Google search takes a customer to the hotel’s website instead of via an online travel agent (OTA) is a major advantage. “(This way) the hotelier owns the booking. The hotelier has the unique chance once the customer has come through the Google link to keep that as a direct customer, through direct mailing or whatever. That is a unique chance not offered by the OTAs today,” he says.

Price guarantee set to change hotel game

He also sees Tingo’s initiative of offering lowest rate guarantee a positive development for online hotel booking. Tingo has offered to rebook customers if a more favorable rate is on offer after bookings are confirmed, to assure customers that they enjoy the lowest rates even if they book early.

“Some of my hotel customers would hate me for making that statement – I like the idea because it gives customers assurance. In the back end it ruins all yield management of hotels,” says Mr Wiegmann, “(but) I think it puts more faith into online booking. People will feel a lot more secure. It will increase the lead time for booking, giving hotels planning security.”

.What remains to be seen is the impact on yield management. “If (the Tingo offer) comes true, it will change the way hoteliers look at distribution and the associated yield management,” he says.

GDS should change business model to face challenges from new channels

While multiple online channels are advancing on the hospitality front, global distribution systems (GDS) are lagging behind, he observes.

“The GDSs have missed the plane on the B2C (business to consumers) side clearly,” he says. “GDSs are on their 1990s business trip. They work with the big corporates at corporate rates. Their interfaces are a little bit 90s.”

On the B2B (business to business) end of the business, it is essentially down to three GDSs controlling the market, but they don’t factor in the B2C business.

“There are better standard than GDSs’. Why is that?” he queries. “Today the OTAs go to 100 places – to the CRS sites and the hotel sites. Why have the GDSs not concentrated on offering better products to make the OTAs go to one place and source their availability and rates? I think the GDSs have lost their unique chance there,” he says, while conceding that the GDSs’ focus is understandably on airlines.

“Certainly, the airline side is still dominating on the GDSs. Hospitality is not making as much money as airlines. But it’s a very good story to have success in hospitality and to not be just one-sided, one focus. They should concentrate a lot more on the hospitality side,” he says.

He would like to work with GDSs on a much bigger scale. At the moment, 30 per cent of the bookings on Trust’s CRS are from GDSs, and 70 per cent from other channels. “When I started, we had 85 per cent from GDSs,” he recalls.

The barrier for working with GDS is cost. “Given the cost of GDS booking, it is simply not worth anymore compared to what I can generate from other channels,” he says.

He urges GDSs to rethink their business model to stay relevant. “They have to understand why consumers go to other channels such as Google, Expedia, you name them… If they don’t change their business model very soon I think the other players in the market have a very good chance of taking them over,” he cautions.

‘They should rethink their business models and their pricing concepts. Just to increase distribution prices every year does not drive additional demand. The question is what does drive additional demand. This is the sort of question they should ask themselves,” he suggests.

“If they want to get some traction on the B2C side then they have to make a huge change in their strategy and say hoteliers are really important to us and we would like to keep up with the fantastic models and ideas that are out there.”

Positioning for a bigger play in China

He believes that the CRS’s knowledge from working with multiple distribution channels will be useful in finding a strategic direction in working together with GDSs in a more cohesive way.

Currently, Trust and Travelsky are in discussion on connecting their systems to drive additional business into China for the 212 hotels in China in Trust’s portfolio.

Acknowledging that China is the fastest growing market worldwide at the moment, Trust is in the hunt for a Chinese counterpart to work in a similar way as per its partnership with Google. “I’m not naming anyone. That will be interesting for us,” he says.

In addition, Trust is also looking to connect to China’s major OTAs to tap the market when individual travel takes off as the market matures. “When that time comes, we would like to be there to ensure that the Chinese travellers, through whatever channels they are choosing, can go to one of our properties,” he says.

He will meet with prospective hotel clients as well as existing clients, and keep tab of the China market when attending the Travel Distribution Summit on September 12-13.

“What is it that a system like ours can contribute to the market? What do the hotels need in the market? There is a new channel. Would you like to work with our customers? Those are the three key components I’m looking forward to (pursue in the summit),” he says. “The important thing for us is to be very much aware of what is going on in the market.”

Mr. Richard Wiegmann, managing director of Trust International will participate in a panel discussion on “The Emerging Asia Pacific Online Travel Market” in the 2012 China Travel Distribution Summit to be held on 12-13 September in Shanghai. For more information about China Travel Distribution Summit, please visit the event website http://summit.traveldaily.cn/18/index.aspx

China Travel Distribution Summit Partners with PhoCusWright

Guangzhou, China, Jun. 4th- TravelDaily (www.traveldaily.cn), China’s leading online publisher and event organizer with emphasis on distribution, marketing and technology in the travel and tourism industries, announced today it will partner with PhoCusWright to host the 2012 China Travel Distribution Summit in Shanghai from Sep. 12 to 13 2012.

The China Travel Distribution Summit 2012 will bring together some of the world’s and China’s most influential travel industry leaders and executives to discuss core issues affecting travel.

“Despite a global downturn that has been impacting the world economy since late 2008, China remains the hotspot of the world’s travel market by achieving 22.4% growth in the number of outbound travelers for 2011,” said Charlie Li, founder and CEO of TravelDaily.

In two days of keynote speeches and panel discussions, industry leaders will explore how travel organizations can partner to improve market share, build customer loyalty and collaborate to revitalize the travel and tourism sectors.

“At this crucial moment, participants in our summit seek solutions that can help transform, drive efficiency and improve bottom-line performance for their business in this extremely complex digital world.,” says TravelDaily’s Li. “By working together with PhoCusWright, the world’s leading research authority and executive event organizer for the travel industry, we are confident we can create a truly interactive and inspiring event for travel decision-makers.”

“In the midst of a global travel, tourism and hospitality industry jolted by advances in technology and ongoing economic uncertainty, China continues to represent an area of significant opportunity for travel companies. As China’s middle class grows, millions of travelers are empowered to venture beyond their borders for the first time,” said Philip C. Wolf, chairman of PhoCusWright. “PhoCusWright’s partnership with TravelDaily underscores our commitment to this key market.”

“High Touch, High Tech” is the main theme of the 2012 China Travel Distribution Summit. TravelDaily conferences are regarded as the most prestigious industry events by Chinese travel professionals and global travel companies interested in investing in China.

Distinguished speakers for this conference include:

Min Fan, CEO, Ctrip
Glenn D. Fogel, Head of Worldwide Strategy, Priceline Group
Bart Tompkin, Managing Director, Amadeus China
Robbie Cooke, Managing Director and Group CEO,Wotif.com
Guangfu Cui, CEO, eLong
Zhiwen Huang, President, Mangocity.com Ltd.
Fritz Demopoulos, Partner, Queen’s Road Capital
Richard Wiegmann, Managing Director, Trust International
Rodney Bao, CEO, Jinjiang International E-commerce Co. Ltd
Sandra Leonhard, Director Web Strategy& Business Development, TUI Travel
RJ Friedlander, Founder&CEO, ReviewPro
Qinghua Hong, CEO, Lvmama.com
Zhixiang Wu, CEO, Tong Cheng Travel Network
Dan Wacksman, Senior Vice President, Outrigger Hotels & Resorts
Justin Luo, CEO and Co-Founder, Tujia
Ron Cao, Managing Director, Lightspeed China Partners
Yu Qian, Principal, Fidelity Growth Partners Asia
Jay Wang, CEO, Aotian Huijin
Yu Wang, Vice President, Spring Airlines
Barry Volinskey, Founder, Evature
Serge Faguet, CEO, Ostrovok.ru
Evans Jia, Co-founder and COO, Zizaike Travel
Sandy Liu, CEO, Zhuna.cn

The 2012 China Travel Distribution Summit will be held at the Wyndham Bund East Shanghai, Sep. 12-13, 2012. The conference is now open for registration and the super early bird rate will be valid through Jul. 1^st. For more information, please visit the event website: http://summit.traveldaily.cn

About TravelDaily
TravelDaily (www.traveldaily.cn) is China’s leading online publisher and event organizer focusing on distribution, marketing and technology developments in the travel and tourism industries.

Our China focus, up-to-the-minute news and feature stories, and in-depth analysis by leading industry experts will keep you up-to-date on the latest industry trends.

About PhoCusWright

PhoCusWright (www.phocuswright.com) is the travel industry research authority on how travelers, suppliers and intermediaries connect. Independent, rigorous and unbiased, PhoCusWright fosters smart strategic planning and tactical decision-making.

PhoCusWright delivers qualitative and quantitative research on the evolving dynamics that influence travel, tourism and hospitality distribution. Our marketplace intelligence is the industry standard for segmentation, sizing, forecasting, trends, analysis and consumer travel planning behavior. Every day around the world, senior executives, marketers, strategists and research professionals from all segments of the industry value chain use PhoCusWright research for competitive advantage.

The company is headquartered in the United States with Asia Pacific operations based in India and local analysts on five continents.

PhoCusWright is a wholly owned subsidiary of Northstar Travel Media LLC.