Why Asia is shaping the future of travel

Traditionally when people think ‘tech hub’ or ‘innovation hotspots’, San Francisco, Seattle, London or Berlin are likely to spring to mind. It is no secret that the West has been strong on tech superiority for decades. Historically we have seen developed economies in the West lead on technology innovation, and then introduce it to the East for adoption.

However, the early to mid-2000s heralded an extraordinary shift. Many Eastern markets, particularly China, transitioned from “cheap and cheerful manufacturers” to markets producing quality technology to rival or outclass that of its Western counterparts. Today, Asian countries are spearheading new technologies to solve contemporary challenges.

The rise of the Asian traveller
With the shift to service-based economies, emerging and developing countries in Asia are seeing some of the strongest GDP growth globally. They are forecast to grow at around 6.5 per cent over 2018-19, and continue to contribute to more than half of global growth annually.

Strong economies and Asia’s increasing wealth have led to the rise of an affluent middle class. The travel industry has been a clear beneficiary: Today, China is the largest travel market globally and by 2020 two in every five travellers will be Asian.

Accelerating innovation capacity
Along with its increased wealth, Asia’s capability to innovate has accelerated and will push digital transformation in the travel industry forward. The region is already ahead in several critical factors that support tech advancement. Four out of the top 10 countries boasting the fastest Internet speeds globally are in Asia; South Korea is leading the charge with the highest average connection speed in the world, followed closely by Hong Kong, Singapore and Japan.

Meanwhile, China is leading the push for 5G mobile technology, and is shaping up to have the biggest 5G market by 2022. By 2025, China will account for more than 40 per cent of the world’s 5G connections. Companies in Asia are also truly ‘mobile-first’, developing for mobile before desktop. Finally, but increasingly importantly, the cost of maintaining cloud infrastructure in Asia is much cheaper than in the West, helping them to push ahead.

There’s also an abundance of STEM skills coming out of Asia, coupled with an entrepreneurial spirit. Notably, Asia was home to more than 47 per cent of all international patents filed in 2016, almost the combined total from North America and Europe. We launched the travel tech startup community Amadeus Next for Asia-Pacific to support the thriving ecosystem of ‘next gen’ travel technologies in Asia, and to learn from some of the region’s most innovative travel startups.

Asia also has a strong commitment to investment in research and development (R&D). China’s R&D investment will surpass that of the US by 2020, with companies dedicating phenomenal amounts to research. For example, 40 per cent of Chinese ICT solutions company Huawei’s 170,000 staff is purely focused on its research efforts. Even Amadeus, despite being a European company, has a large R&D centre in Bengaluru with nearly 1,800 employees.

Asia needs to innovate for itself
A large part of Asia’s success is, and will increasingly be, a result of its ability to address its own market needs. A lot of what happens in the West isn’t relevant, therefore the region must develop its own ideas and technologies to solve its unique challenges.

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