Asian travellers’ unhealthy addiction

Carl Jones |

I’ve been living in Asia for more than 15 years, and I’m not afraid to say it: Asians love a good bargain. In many instances – night markets in Thailand, for one – fighting for the lowest price isn’t just acceptable, it’s mandatory. But when it comes to corporate travel, haggling over costs often proves counter-productive to everyone involved.

From my experience in the region, I’ve seen that most business travellers still prefer to call their travel management company (TMC) to book their trips. Not only do they call, but they keep calling – trying to whittle down the price as low as possible, or vacillating over itinerary details that they can’t seem to commit to. It’s well known in the TMC industry that American corporate travellers typically firm up their bookings within 2 or 3 calls or emails; Europeans take a little longer with around 7 to 8. In Asia, it takes around 15 calls or emails to finalise a booking! What’s going on?

Usually, the traveller is playing what those in Singapore would call the “kiasu” (afraid to lose) card. They’re calling up multiple TMCs, playing their rates off against one another, trying to squeeze prices down to the minimum. That, in turn, expends huge amounts of each TMC’s time – which, in the long run, either forces them to keep their costs up or reduce their margins to barely-sustainable levels. Ultimately, Asian travellers’ addiction to the bargain-hunt may end up putting many TMCs out of business, or otherwise reducing the options available to them.

High-touch, low-cost?

There is, however, a better way. We’ve already seen it play out in the consumer travel space with booking aggregators and comparison sites: automated systems which offer maximum choice and lowest cost in the one place. Adopting such platforms also promises to significantly reduce how much time TMCs spend managing each booking – usually their biggest operating cost by far. So why hasn’t business travel gone digital in Asia?

I believe part of the issue lies in the complexity of Asian business itineraries. Often, these involve multi-sector routes which still confuse online travel platforms. Ticket regulations often vary between each stopover location, further complicating matters. But the main reason, I believe, is cultural: Asian travellers believe the interpersonal exchange will get them not only the best deal, but also the best service.

That means TMCs must deliver a customer experience online that equals, or even exceeds, that of a phone or email booking. The only way to do this is by taking advantage of the automation that digital can offer. That may involve using analytics to automatically monitor for a route’s cheapest fares, then automatically purchase the fare if it matches the traveller’s preferences and past trip history. Alternatively – and perhaps more compellingly – it may involve offering previously-exclusive services to corporate travellers of all stripes.

I was having dinner in Sydney when an SMS came in from my TMC saying that my flight had been cancelled – and asking me if I wanted to reschedule. Being in the middle of my meal, I left it until we’d finished, then clicked the button that said “Yes”. The next notification informed me that my TMC had already rebooked the flight for me to something as suitable and within my travel policy – and at no extra cost. That’s something no consumer travel aggregator can offer, at least not yet. But it’s the sort of experience that could, by making top-tier service accessible to all, drive Asian business travellers to finally make the switch to online bookings – and save TMCs millions in the process.

Only technology can break Asian business travellers’ bargain addiction. The question is: will it come fast enough? It’s up to the region’s TMCs, and the digital investments they make, to decide.