Abacus: It is expected that one-third of global flight traffic will come from Asia in 2025

Although the growth rate of air passenger traffic has slowed down in the second half of this year, Asia still has the greatest growth potential compared with other regions in the world.

The comments were made at Abacus International's global conference held in Seoul last week.

"The airline industry is still maintaining solid growth, with this year's growth rate increasing compared to last year," said Robert Bailey, president and CEO of Abacus. "There is still a lot of room for profit in the travel industry. We expect to see growth in the airline industry between 3% and 5%."

But what is most exciting is that compared to other regions, Asia, where Abacus is located, is not only booming, but its technology application areas are also undergoing tremendous changes, and customer behavior is also changing rapidly.

Capitalizing on Asia’s growth potential

By 2025, one-third of the world's flight passenger traffic is expected to come from Asia; it is predicted that by 2020, Asia's GDP will account for 43% of global GDP, greater than the combined GDP of the United States and the European Union.

In the not-too-distant future, there will come what Abacus calls the Web 3.0 era, which refers to a wave of innovation based on consumer mobile technology that allows users to access the Internet at any time.

Asia already has the largest mobile user base in the world, with most consumers using smartphones. Malaysia and Singapore have a smartphone penetration rate of 88%, the highest in Southeast Asia. In addition, in just three months (January-March 2012), the total smartphone sales in Southeast Asia reached US$2.4 billion.

Sales of devices using operating systems such as Android and Apple reached a total of 2.4 billion US dollars!

Citing data from various sources, Abacus also noted that in Australia and Japan, 74% and 78% of smartphone owners, respectively, would definitely take their phones with them when they go out, while in China, more than 50% of smartphone users would rather give up their TV than their smartphone.

With new changes constantly emerging, in today's world, technology is becoming more personal and consumers are becoming more social. How should traditional travel agencies respond to remain competitive in such an environment?

With online bookings in Asia Pacific expected to reach $90.8 billion in 2013, 32% of which will come from OTAs, the region’s fastest growing distribution channel, offline travel agents are inevitably worried.

Of course, the overall tourism market is huge, and the main development is concentrated in the Asian market - Abacus said that we are confident in the market potential in Asia, although its growth has slowed down to some extent. But the situation in the region is changing greatly, and if tourism companies do not adapt to these changes, they will gradually lose their advantages.

Power transfer

Brett Henry, vice president of business and marketing at Abacus, believes that mobile devices will shift power from direct suppliers to middlemen, “because no one is going to download every supplier’s app.”

The question is which middlemen will power shift to: those that use technology to increase scale and offer lower prices and more choices to customers, or those that use technology to maximize productivity and efficiency and offer personalized service to customers, smarter middlemen?

Of course, if what Henry said is correct, all of these intermediaries will be using Abacus products, and he made it clear that Abacus is at the forefront of innovation in intermediary products.

He declared:

“We take our products very seriously. Abacus’ products are always 12-24 months ahead of our competitors in the same product category. In addition, our mobile solutions for travel agencies are the world’s leading.”

He added: "Mobile is disrupting Facebook and we need to make sure Abacus is well positioned to respond to mobile trends as well."

Abacus is "pinning" its future development in the mobile field on HTML5, Henry said, "If you can develop an effective solution for HTML5, it will be applicable to all platforms." He added that Facebook and Google also value HTML5 applications.

The Abacus Mobility Suite includes Abacus Mobile, Virtually There, WebStart and TripPlan, all of which have high usage rates. Abacus Mobile contributes more than 78,000 visits to the Abacus platform, and the number of active subscribers grew 50% in the first half of 2012. The company claims that Virtually There attracts more than 40 million unique visitors per year.

Agency effectiveness and unique selling proposition

Many solutions aim to improve productivity and save costs, such as Automation Hub (unveiled at the conference in Seoul), which aims to automate business processes and reduce time-consuming manual operations.

But what else should travel agents do besides become more efficient?

During a panel session at the conference, Dan Lynn, CEO of AirAsia Expedia (a joint venture between AirAsia and Expedia), suggested that instead of trying to compete on price and selection like the OTAs, travel agents could focus on the reasons why customers choose to use a travel agent.

"You can create a low-cost website in any way you can, but you have to ask yourself why your customers use your service. Then you can improve on that."

He said one area where OTAs cannot match travel agents is in providing personalized services, and although the era of big data will come, which will allow OTAs to achieve a certain degree of personalization, "OTAs will not be able to solve the problem of personalized services."

Dan Lynn further added, “You’re selling the entire journey and itinerary and making the consumer happy.”

Lynn pointed to Flight Centre Australia as an example of an Australian travel agency that does a great job of reassuring consumers that they are getting complete itinerary information. But that obviously doesn't stop Abacus from looking to make agents more competitive in terms of product selection and price, and Abacus' RoomDeal product is aimed at keeping agents competitive in the highly competitive hotel industry.

Developed in partnership between Abacus and Indonesia’s RajaKamar Group, RoomDeal aims to unlock the best hotel deals from the region’s major hotel aggregators and offer them to agents at net prices, allowing them to compete with OTAs such as Expedia, Agoda or Booking.com on price.

Abacus has signed cooperation agreements with product aggregators such as Asian Trails, Hotelbeds, AOT Group and HS Travel International. The GDS is aimed at small agencies that provide leisure travel products and business travel products. Its system currently has 140,000 hotels, and agencies can combine passenger reservation records (PNR) and air tickets. It also has its own payment platform, and agencies can provide tickets.

Abacus president and CEO Bailey is aware of the shift in travel agents' mindset, which is now more focused on the application of technology.

“When the internet came along, travel agents saw it as a threat to their business. But with the mobile space and all the changes, travel agents are now excited about the changes and want to try new applications.”

“But in a sense, we want to stop them from doing that because the question is how are you going to apply these solutions to get business outcomes, not just praise emerging technologies.”

via: traveldaily