PATA: Digitalisation key for SMEs survival as travel industry emerges from Covid-19 impact

According to a report by the Pacific Asia Travel Association (PATA), conducted by Twenty31 Consulting Inc. and supported by Agoda, digitalisation and innovation are key for SMEs survival as the travel industry emerges from Covid-19’s impact.

PATA’s research report “The role of Online Travel Agencies (OTAs) in supporting Asia-Pacific SMEs in Recovery” aimed to provide insights to benefit small and medium enterprises (SMEs) in the hospitality and tourism space that make up a large proportion of travel providers, as they pivot and adapt in the face of Covid-19.

The report highlights key areas where digital travel platforms and governments can support tourism SMEs in the Asia Pacific region.

  1. SMEs are leveraging OTAs’ digital platforms to accelerate recovery. There is a shift in the dynamic of the relationship between SMEs and OTAs, with the latter being acknowledged and increasingly valued as a technology, data and marketing partner. It is vital for SME hospitality providers to understand trends and reach new audiences during these times.

SMEs leveraging OTAs can reduce their top-down investment especially around payments features, customer support as well as marketing efforts. OTAs have also expanded opportunities for destination diversification, helping to drive tourism in second and third tier cities. “We have seen a real push for OTAs to do more than simply selling rooms. They are helping us with other services, and this is really helping us forecast our needs and drive more sales.” says a hospitality SME in Thailand.

In Malaysia, OTAs to some extent perform the function of ‘national marketer’, promoting more areas in Malaysia and the tourism products and experiences. “We understand this is related to KPIs and what will generate the most revenue. Destinations like Langkawi and Penang have benefited quite a lot,” a hospitality SME in Malaysia highlighted.

  1. The use of data insights will future proof SMEs as they navigate today’s ever-changing landscape of the travel and tourism industry. OTAs are technology partners that are well placed to help provide SMEs a comprehensive understanding of data insights to enhance their businesses. Data insights can be used to optimize revenue through meta-search, machine learning, artificial intelligence. product diversification and platform centralization. “OTAs are now using AI tech to tailor offers to customers and that is going to be very interesting. This will likely allow SMEs to match our products and services with high-potential consumers and drive better ROI.” says a hospitality SME in Singapore
  1. SMEs call on governments to work with OTAs to boost post-COVID travel recovery. During this crucial recovery period, more private-public collaboration will boost travel confidence, where the local government can draw on the private sector’s commercial expertise to spot and create new opportunities to improve the industry, businesses and lives impacted by COVID, as well as stay relevant in the transforming economic environment. “The government can do more to engage the private sector, especially around decision making and cooperative marketing.” – tour operator SME in Indonesia

“OTAs are providing a great service by promoting a range of existing and new destinations, all seasons and many different experiences. Given this we really need Government to support the development and management of infrastructure.” Hospitality SME in Malaysia.

“We are optimistic that the industry will eventually recover with governments and private sectors coming together to ensure that no one gets left behind. We look forward to working with our partners, such as Agoda, as we continue to hear from SME operators and how we can advance the discussion around the future of travel and tourism in the Asia Pacific region, one that is sustainable and inclusive for all,” says Mario Hardy, CEO of Pacific Asia Travel Association.

“This report shows how SMEs successfully leverage platforms like Agoda to enjoy the benefits of technology to reach laser-targeted audiences in the far corners of the world. Agoda also helps SME hotels participate in several government partnership programs in Asia. SMEs are calling for further collaboration between governments and tech platforms to help revitalize the hard-hit tourism industry.” says Greg Wong, Managing Director of Global Affairs at Agoda.

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