The timing of the first WIT Europe in London held last week could not have happened at a more poignant time in the city’s history and travel industry leaders, while grappling with uncertainty, agreed there couldn’t be a better time than now to seize the Asia opportunity.
Every speaker expressed their dismay at the UK decision to leave the EU, with the consensus that the implications will be felt globally, including Asia.
Kenny Jacobs, chief marketing officer of Ryanair, who had to cancel his appearance at the event citing “having to deal with the fallout of Brexit”, sent this message, “Ryanair, as with all airlines, are disappointed with the referendum result. For the next few months it’s business as usual as Europe and Britain will go on their holidays. After the summer we could be facing a long period of uncertainty as UK politics is in turmoil and the new UK government will have to negotiate the exit with the EU, the single biggest issue for the entire travel business will be maintaining the single market. “If the UK stays in the single market then things should continue as normal and the UK will stay part of open skies, if the UK leaves the single market then we have a lot of complications”.
“We are hopeful and we expect both sides will find a way to maintain the free movement of people. But while the is uncertainty and currency fluctuations businesses including ourselves will be slow to make additional investments in the UK. We have 50 new aircraft joining our fleet next year and we now don’t expect to deploy any of these in the UK market at this stage, instead we will focus on markets that are part of the single market like Italy, Spain and Germany.
“This is not the end of the world but it is a period of unprecedented uncertainty. The UK will be in recession and the UK consumer will travel less and spend less, that is a certainty. On the flip side, a weaker pound will mean Europeans travel to the UK more as their euro goes further and they may want to say goodbye to a wonderful country and fantastic people before Boris and Nigel pull up the drawbridge”.
Hugo Burge, CEO of Momondo Group, said there were too many uncertainties currently to predict the future but called on the industry to be positive and work together to ensure travel’s interests were heard by those in power. Short-term, because of the devaluing of the pound, companies like his are gaining but it is clear they are more concerned with long-term impact and what this could mean for the European Tech Alliance of which it is part.
He said that Momondo’s DNA Journey Youtube video, which has gained more than 120 million views and released in June, could also not have happened at a more poignant time. “Our mission remains to open our world,” he said.
He said, as a geographer, he was blown away by the sheer size and scope of Asia’s potential and that the group would be expanding the cheapflights brand in the region. “It’s a name that works,” he said. “While Europe remains our main focus, the group is now ready to expand beyond and grow in Asia.”
Bobby Healy, CTO of Dublin-based the CarTrawler, while saying Brexit meant opportunities for Dublin – which is positioned as a tech hub and already there are talks by companies in London to move there – said it wasn’t good for travel in general.
Speaking about CarTrawler’s experiences in Asia, he said its focus has been on China, where it’s seeing 180% growth and the mainland is now among its top 14 markets. He admits China is tough to penetrate and private equity-run companies are disadvantaged in that it cannot make the necessary investments necessary to make a dent.
“Create a start-up and get the cash to run,” he advised the audience of close to 100 who turned up to learn about the Asia growth story at the Tate Modern.
To enter China, CarTrawler bought Finland-based Cabforce in 2015 to acquire the necessary technology for the market.
On hindsight, he said of CarTrawler’s Asia strategy, “We should have got product and the market right first before we entered Asia. Our other mistake is not investing enough.”
On Skyscanner’s part, Andy Sleigh, who ran the APAC region out of Singapore for two years before returning to Edinburgh, said between 2013 and 2015, Skyscanner saw rapid growth in average APAC Unique Monthly Visitors and is projecting £30m revenues by 2016.
It’s been hair-raising ride and Asia today is a total turf war, with Sleigh likening it to the TV series, Game of Thrones. He advised companies against spending money on marketing when you do not have the right product and user trust.
Japan is one market it’s had good success. Said Sleigh, “Japan is the third largest travel market in the world, with 2015 bookings estimated to rise to $71 billion. The establishment of Skyscanner Japan provides both partners in the joint venture (with Yahoo Japan) an opportunity to accelerate their growth in this important market and offers millions of consumers comprehensive travel options for free. Visitors to Skyscanner’s Japanese site grew 40% in 2014,” said Sleigh.
For China, it bought Youbibi and its founder Steven Pang now runs Skyscanner’s China operations. “Getting the right people is key,” he said, with Healy agreeing. Healy said he had been advised to hire only Chinese women and “you cannot run a business in China by hiring people who look like me”.
Sleigh advised against “seagull management” – “where you fly in, s… on everyone and fly out”.
Skyscanner ran “Immersion” programmes where visiting executives from head office would be given truly immersive experiences in Asia markets.
Leading a team in Asia is all in. “It’s a huge commitment that pays you back in spades. It’s personal hypergrowth, long hours, huge amount of travel. But you make great friends and have unbeatable experiences.