Blume view: Traditional agents must grab opportunities

SINGAPORE – Online travel can only grow and traditional travel agents have to make an online offering – and that means going beyond just a website and offering deep, relevant and dynamic content.

That’s the message from Scott Blume, who stepped down as CEO of ZUJI/Travelocity Asia Pacific last month.

Blume was at the helm of Asia Pacific’s leading online travel company for six-and-a-half years during which time he grew ZUJI into a multi-country brand with a presence in Australia, Hong Kong, India, New Zealand, Singapore, South Korea and Taiwan.

Blume predicts that in the next three to four years, online travel transactions as a percentage of total travel transactions will double from the current 15 per cent to 30 per cent.

“There’s still a lot of upside and ground to play with.”

He added, “People believe online travel is still in its infancy in Asia Pacific. In five years, the established online travel brands and some new brands which will come along in the next few years will become incredibly successful.”

Blume said one reason some travel agents have been slower to move onto the online space was the lack of cost-effective technology. “But now there’s a lot of technology available.”

He added, “I am not saying that offline travel agents will not have a place in the future, but they need an online offering – it’s a different opportunity now, and it’s not about saying, by the way, we have a website.

“Consumers are evolving. They are getting more demanding and they get bored easily. If they don’t like your content, they move on.”

In the Online Travel Agency (OTA) space, having competitive content has become a hygiene factor. “That’s a given,” he said.

“I don’t believe it’s all about price. People are shopping online for convenience, for the best deals, but it’s not about shopping down to the last dollar. They will look for value and book with the brand they trust.”

He called 2009 the “year of the deal” and in this climate, that’s helping to move more consumers online.

“We are not going to get better deals than what we’re seeing this year. Air fares are down, hotels are doing offers such as stay two nights, get one free – we are seeing unprecedented deals.”

Asked if he would also describe 2009 as the year of online travel in Asia Pacific, Blume said, “In economic downturns, OTAs have proven to be resilient and have grown but I wouldn’t go so far as to say this is the year of online travel.”

“The OTA market share will grow faster than the market average, but it will take three to four years to get to the magic 30 per cent and then players with strong brands and strong product will be in a great place to maximise the commercial value of that share.”

Blume said that one of the challenges of growing a business in the online travel space in Asia is the diversity of the Asian markets. “No two markets in Asia are the same, no two consumer offers in Asia are the same.”

“Asia definitely has its idiosyncrasies which makes it different from how the US online travel market has evolved. I’d say we are more similar to Europe.”

Asked if he saw ZUJI as a regional brand with local presence or a local player with regional presence, Blume said, “We are a multi-country brand for the consumer, so consumers don’t see it as a pan-regional brand, but suppliers see it that way.”

Digital marketing is also an area of growth in the region. OTAs such as ZUJI started as transaction models, earning commissions through bookings, but have now evolved into transaction-and-media models in which advertising revenues drive as much of the income as commissions.

“It’s a question of monetising the eyeballs we were getting. The reason people like spending their marketing dollars online is it’s incredibly ‘trackable’,” said Blume.

The challenge is the lack of knowledge and talent in the digital marketing space.

“One thing I am incredibly proud of is the team we’ve built at ZUJI. There is a need for more expertise in this area in the region, especially in the area of creative online producers who know how to build the customer interface so that more people want to open and click on the content.”

“We need people who understand that digital marketing is more than SEO (Search Engine Optimisation) or SEM (Search Engine Marketing). Paid and natural search have an important part to play in enabling consumers to find you, but we also need creativity in building customer interfaces – consumers are being bombarded online and you need to stand out in this space, and that’s increasingly difficult.”

Blume also said he does not see any dramatic game changes in the next three years in the way consumers plan and book their travel.

“We have suppliers trying out social media, but the jury’s still out on that. No one yet knows how to monetise it.”

“I think the next big thing – and that’s next four to five years – will be how to get transactions on mobile technology, whatever that is. We are beginning to see how it could work with 3G and that does have the potential to generate revenue upside for online marketing businesses including travel.”