Asia Pacific is currently the world’s largest travel market (40%) led by China (220 million outbound trips by 2025) and Southeast Asia, the latter being the fastest growing region globally. With the rise in outbound travel and spending power has come the rise of longtail travel and aspirational travel. Aspirational travel can be defined as the kind of traveling that focuses on local or “off of the beaten path” experiences that can’t be found on most major travel booking websites.
The current challenge is that the activities and tours market is extremely fragmented with more than 50% being small travel suppliers with less than $250,000 in annual revenue. Out of these, 80% are currently transacted offline, creating a massive need in the market. In fact, the estimated market for China and Southeast Asia travel is expected to hit US$38 billion by 2020. This massive opportunity has caught the attention of innovative companies.
With blockchain technology, smaller aspirational travel providers and travelers will be encouraged to participate in a new wave of co-operative travel powered by smart contracts and token incentivisation. For millennials, this fits well as millennials traveled more than 35% more in 2017 than in 2016, with most being tech savvy and keen on local experiences.
This massive opportunity has caught the attention of innovative companies, such as WeGold and Beetoken, who are dedicated to providing the blockchain ecosystem to power what will inevitably be the future of travel in the region.
A Look into Asia’s Booming Travel Economy
Considering the travel industry as a whole, Asian travelers are already opened up to technology. In fact, over 50% of online travel bookings in China were done on mobile devices. According to Envision Intelligence, the age group of 32-43 years occupies a major share in the Asia Pacific online travel market, whereas the young traveler aged 22-31 years old would be increasing due to the extreme usage of smartphone and social media to plan their trips. For China, the leading destination after Macau is Southeast Asia, drawing in over 120 million travelers annually.
Across the age spectrum, travelers are increasingly desiring unique local experiences. For Chinese travelers, this often means islands and activities unique to islands. In the western world, Airbnb has tried to explore this feature with local experiences, but has admitted in the recent past that it is still a work in progress. Given the desire for longtail experiences and the extreme fragmentation in this sector of the market, blockchain technology makes sense.
As distributed ledger technology, blockchain technology is known for eliminating intermediaries that may be either congesting or complicating a market. For travel, monopolistic companies overshadow local providers that struggle getting the awareness to thrive. Local providers also traditionally lack the resources to service a diversified set of travelers.
Small Wins for the Travel Industry Using Blockchain
Some innovations are centered around travel convenience and reliability. Companies like BeeToken and BedSwap are creating home and room sharing platforms to rival AirBnB and help offer alternatives to traditional hotel bookings.
Other projects focus on smaller tasks, such as helping track lost luggage and identity management when traveling. Established companies such as WebJet are also exploring ways of integrating blockchain technology into their existing platforms.
The beauty of these projects is that each has their niche. In Asia, the demand for unique experiences has led way for one company to go after the longtail of travel in the region, focusing on aspirational travel specifically.
Tokenised Travel Platform to Impact the Market
WEGOGO is a Singapore based travel company with offices in China. Since 2017, the WEGOGO App has achieved over 5,000 transactions and collected over 400 local activities, authentic tours, attractions, and events in 10 island destinations. Facilitated in both WeChat and an iOS-based app, the company focused on providing a mobile-first experience for outbound Chinese travelers to authentic Southeast Asian destinations.
With early proof points, WEGOGO will soon launch the Wegold Travel Token (WGD) which will utilise blockchain technology to create a co-operative travel ecosystem focusing on a “fair-share” model. The ecosystem will include WEGOGOers who are travelers and users on the platform, as well as PathFinders, travel enthusiasts who discover and share new experiences, and Travel Aspirational Service Providers (ASPS).
Blockchain will power a cashless ecosystem that will reward and incentivise early participation, customer loyalty, content creation, marketing, and importantly ASPS. Tokens will be the central utility of the platform service transactions and incentives.
The implications of this technology are exciting as it will help bridge the gap between mainstream and local travel providers, while incentivising all parties to participate in a new form of aspirational travel in the region. For both Chinese travelers and Southeast Asian providers, a blockchain powered solution could finally provide the best experience that benefits all parties.
Disclaimer: the author of this article has had a relationship with one or more companies in this article. This article does not represent investment advice. Please consult your financial professionals about the high-risk of cryptocurrencies.
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