Little Big 10: Trends

Changing Travel in Asia

Asia will become a major source of tourists with 1 billion Asian travelers by 2030

Source: Winning the next Billion Asian Travelers – Starting with China, The Boston Consulting Group / TripAdvisor co-brand report, December 2013.

China will account for >60% of the opportunity

*Others includes Philippines, Vietnam, Hong Kong and Singapore; Note: Population figures exclude individuals under the age of 15 Source: Euromonitor, BCG analysis

(Mill

ion

s o

f p

eop

le w

ith

an

nu

al in

com

e >$

15

k U

SD)

Source: Winning the next Billion Asian Travelers – Starting with China, The Boston Consulting Group / TripAdvisor co-brand report, December 2013.

0

100

200

300

400

500

600

700

800

China Japan India South Korea

Indonesia Taiwan Thailand Malaysia Other*

2013 2020 2030

80

250

700

2013 2020 2030

China outbound travel spend will reach 250Bn in 6 years

China Travel Market money spent on travel (in US$ Billion)

1750 total

711 total

260 total

Outbound travel

Domestic travel

Source: Winning the next Billion Asian Travelers – Starting with China, The Boston Consulting Group / TripAdvisor co-brand report, December 2013.

What destinations are Chinese travellers dreaming of?

Next trip

Maldives

Japan

Taiwan

Korea

Thailand

Singapore

Hongkong

Australia

France

US

UK

Italy

New Zealand

Malaysia

Spain

Source: Winning the next Billion Asian Travelers – Starting with China, The Boston Consulting Group / TripAdvisor co-brand report, December 2013.

Maldives

Japan

Singapore

Australia

France

US

What destinations are Chinese travellers dreaming of?

Next 5–10 years

UK

Greece

Italy

New Zealand

Canada Germany

Switzerland

Egypt Taiwan

Source: Winning the next Billion Asian Travelers – Starting with China, The Boston Consulting Group / TripAdvisor co-brand report, December 2013.

Between 2010 and 2020, the

number of Chinese travellers

to the EU will grow by 5x

Source: Winning the next Billion Asian Travelers – Starting with China, The Boston Consulting Group / TripAdvisor co-brand report, December 2013.

China to account for ~20% of inbound trips to EU* by 2020

*Asia excl. Japan and Korea; Source: WTO (World Tourism Organization); WTTC (World Travel and Tourism Council), Euromonitor; BCG analysis

North America

EU

China arrivals as % of total arrivals

China arrivals as % of total excluding intra-region trips

Source: Winning the next Billion Asian Travelers – Starting with China, The Boston Consulting Group / TripAdvisor co-brand report, December 2013.

1% 2% 5%

19%

2010 2020 1%

3% 3%

9%

2010 2020

Winning Chinese Travellers

Source: Winning the next Billion Asian Travelers – Starting with China, The Boston Consulting Group, December 2013.

Top 4 cities account for <30% of outbound travellers

The 4 mega cities

Beijing, Shenzhen, Shanghai,

Guangzhou account for only

27% of traffic

(Roughly 300) account for the

remaining 73% and show growth

of 2–3x that of the mega cities

The other cities

China unique visitors to TripAdvisor

for outbound travel

Source: Winning the next Billion Asian Travelers – Starting with China, The Boston Consulting Group / TripAdvisor co-brand report, December 2013.

Where are Chinese travellers willing to spend more?

Dining

70%

57%

Shopping Entertainment

43%

Hotel

54%

Airline

16%

Source: Winning the next Billion Asian Travelers – Starting with China, The Boston Consulting Group / TripAdvisor co-brand report, December 2013.

What would make their hotel stay more enjoyable?

Wi-fi Air-con Menu with pictures

City map or travel-related brochures

Chinese-speaking staff

Cash machine that accepts UnionPay card

Chinese & Western-style breakfast

Free airport pick-up/drop-off

Kettle

中文服务

Source: Winning the next Billion Asian Travelers – Starting with China, The Boston Consulting Group / TripAdvisor co-brand report, December 2013.

For more info….

Download report for free at

www.bcgperspectives.com

1. Mobile Dominates Asia

14

15

Google Search Queries for

Travel Related Keywords on Smartphones

18.6%

by Google Japan

– Jul-Dec 2013

Germany

16

Google Search Queries for

Travel Related Keywords on Smartphones

30.0%

by Google Japan

– Jul-Dec 2013

Indonesia

17

Google Search Queries for

Travel Related Keywords on Smartphones

55.2%

by Google Japan

– Jul-Dec 2013

Japan

18

Google Search Queries for

Travel Related Keywords by Devices

by Google Japan

– Jul-Dec 2013

56.0%

40.0%40.9%

59.0%73.7%

61.5%57.5%71.5%

55.9%

34.8%55.2%55.2%

28.7%

23.2%

30.0%25.4%

18.6%

32.6%

9.2% 4.8% 3.9%12.3%

3.1% 8.5%17.0%

9.9% 11.5%

Tablets

Smartphones

PCs

19

Growth of Smartphone Queries, 1H vs 2H in 2013

by Google Search Queries for Travel Related Keywords

by Google Japan

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Jan-Jun

Jul-Dec

+ 3.5

+ 3.3

+ 6.7

+ 7.7

+ 11.2

Traffic on Travel.jp + Hotel.jp

by Travel.jp, Hotel.jp 20

Jan

Feb

Ma

r

Ap

r

Ma

y

Jun

Jul

Au

g

Sep

Oct

No

v

De

c

Jan

Feb

Ma

r

Ap

r

Ma

y

Jun

Jul

Au

g

Sep

Oct

No

v

De

c

Jan

Feb

Ma

r

Ap

r

Ma

y

Jun

Jul

Au

g

Sep

Jan 2011 Sep 2013

Threefold YoY increase via smartphones

Over 40% of All Traffic via smartphones

2. Legacy in Asia

21

Rank Companies

1 JTB 9,082 M

2 Hankyu Travel 3,874 M

3 NTA 3,870 M

4 HIS 3,784 M

5 Recruit Holdings * 3,300 M

6 KNT 3,278 M

7 Rakuten Travel 3,275 M

8 JTB-Syutoken 3,200 M

9 JTB-Worldvacations 2,478 M

10 ANA sales 2,035 M

11 JTB-West 1,914 M

12 JALPAK 1,690 M

13 Club Tourism 1,530 M

14 JTB-Corporate Sales 1,495 M

15 i.JTB 1,305 M

16 JTB-Chubu 1,246 M

17 JTB-Kyusyu 1,077 M

18 KNT-Individual Tour Sales 970 M

19 Meitetsu 893 M

20 JTB-Kanto 833 M

Gross Sales (US$)

22

Top Travel Agencies in Japan

- Gross Sales Volume 2012

by Ministry of Land, Infrastructure,Transport and Tourism, Japan

* estimate data (USD/JPY 100.0)

Pure OTA

23

Travel Agencies’ Business in Japan

- Breakdown of 1st category agents(*) Gross Sales (2011)

by Japan Association of Travel Agents

(*)1st Category Travel Agents : Companies that organize and sell overseas and domestic tours, and also make travel arrangements for the clients as agents.

Domestic (Overnight)Trip

Overseas Trip

24

Breakdown on Travel.jp + Hotel.jp

by Travel.jp, Hotel.jp, 2013 data

Lead Generations

Packages Flights Hotels

25

Search Queries

in Vacation Packages Category

by Flocations’ data

47%

Gross Bookings in APAC Tour Packages 45B

Hotels 153B

Q3 2013 in Indonesia

3. Diversified Customers in Asia

26

27

Median Age of The Total Population (2010)

by United Nations

28

Diversified Customers

Young Inexperienced Guided Tour Packages Sightseeing Shopping : :

Senior Experienced

Non-Guided Tour Packages Spas

Entertainment Gourmets

: :

29

Travel.jp User Profile

30

Diversified Interests

Girls party plans

Spas

Private Outdoor bath

4 hours stay

@keishibata

Follow Me On Twitter

Instagen. [in-stuh-jen] 1.The ‘instagram-able’ generation: digitally-savvy people who constantly share personal details and experiences with words, abbreviations, #hashtags, emoticons, photos, and videos primarily with a smartphone or tablet device; not scoped by age, gender, nationalities, sexual orientation, income level, or education.

2.The most influential consumers to have ever roamed Earth; people who will make or break your brand.

INSTAGEN SEGMENTS

33

Marie: Gen Y Frontierswoman;

ditched Facebook, Instagram

rules, about to SnapChat

Ivan: Mainstream Gen Y; he’s on

all the social and mobile

platforms but WeChat rules him

Morris: Gen X Connoisseur;

tech-background, quick to

browse/experiment but slow to

share

Rob: Mainstream Gen X; no-

tech background, on Facebook

and Instagram; little content

Don: Boomer Arbiter; tech

background, categorizes new

services, still mostly on emails

Hilary: Mainstream Boomer; no-

tech background, discriminate

about services to use

Rich SOCIAL MEDIA GROWING FAST

Source: Frank N Magid Associates, n=2K, 2013 34

• September 11: Destabilized sense of security

• China as a New Global Super Power: Altered global competition

• Global Financial Crisis, 2008+: Destabilized financial security

• High Unemployment Levels: Destabilized career optimism

• Potential Fiscal Debt Challenges: Rise in need to depend on selves

• Cheap/Available Computing: 24x7 global access to loads of stuff,

including shared goods

• New ‘Geek’ Entrepreneur Heroes: Positivity towards technology and

lack of privacy

• Social Connectivity: Able to find/share/create/provide + get feedback

• Rise in Value of Social/Virtual vs. Financial/Physical Currency:

Shortened expectation on time to gratification/recognition

Formative Events For The Generation

35

Big Data 1.Big Data is the term for a collection of data sets so large and complex that it becomes difficult to process using on-hand database management tools or traditional data processing applications.

2.Where competitive advantage exists, if you can discover them.

Data Creating New Opportunities

Source: Waze, Jawbone, Yelp 37

Each Generation: More Data

38

1st Generation Wearables are Here

Source: MIT, KPCB 39

Sharing Economy 1.The Sharing Economy is an economic system built around the sharing of human and physical assets. These systems take a variety of forms but all leverage information technology to empower individuals, corporations, non-profits and government with information that enables distribution, sharing and reuse of excess capacity in goods and services.

2.Potentially, the biggest disruptor to the travel industry.

Rise of instagram and snapchat

Source: KPCB 41

100 Hours of Video uploaded/min.

Source: YouTube 42

Sharing Economy INNOVATIONS

43

Sharers are in Emerging Markets

*Source: Ipsos OTX, n=12,000, 2013 44