Arnie Weissmann
It's been five years since Marc Andreessen penned a now-famous essay in the Wall Street Journal titled "Software is Eating the World." The world took note because Andreessen had been co-author of the pioneering web browser Mosaic; co-founder of Netscape, the software company that created the once-industry-dominant Netscape browser; and general partner of the tech-focused venture capital firm Andreessen-Horowitz.
The essay laid out the argument that in almost any field of industry, a software-driven company will "win" over an analog competitor, citing the number of huge tech companies -- Apple, Google, Amazon -- that operate primarily on software platforms.
Today, it reads a bit like overstating the obvious. There have been follow-ups by tech gurus in subsequent years: Mobile is Eating the World; Big Data is Eating the World; Virtual Reality is Eating the World; and Artificial Intelligence is Eating the World. All these world-eating things are actually subsets of software, but I was reminded last week in Singapore that not all world-eaters wear technology labels.
At the 13th edition of Web in Travel (WIT), a tech conference and sister company within Northstar Travel Group, Filip Filipov, vice president of product management for meta-search company Skyscanner, presented his argument for why he thinks Asia is eating the world. The issue is personal for Filipov: Skyscanner, born and raised in Scotland, is now owned by Ctrip, one of China's largest OTAs.
Filipov's technology-focused presentation demonstrated how, in many areas and aspects, the products of software-driven companies in Asia -- especially, though not exclusively in China -- are simply being adopted more quickly and growing faster than those of companies in the West.
I had come to a similar conclusion while preparing both a presentation on cruising to entrepreneurs at the conference's "Bootcamp" and to moderate a panel of Asian cruise executives in a general session.
I was aware of predictions that Asia is on track to be the world's largest cruise market and that, shortly thereafter, China by itself will be able to claim that title.
The growth of cruising in Asia is phenomenal by any standard. CLIA reports departures are up 250% since 2012, with capacity increasing 300% in the same time frame.
WIT is a tech conference, and one reason cruising as a topic was making its debut only this year is that consumer-facing cruise booking technology, even in app-happy Asia, is conspicuous by its absence. Why is software not eating Asian cruise bookings?
I put the question to Sean Treacy, managing director of the Asia Pacific region at Royal Caribbean Cruises Ltd. (RCCL) and a panelist at the WIT conference.
"We don't make it easy," he said, citing the number of cabin types on each ship. While travel agents still book 65% to 70% of cruises in the U.S., Treacy said, it remains as high as 90% in some Asian countries.
Observing that OTAs have been a mixed blessing for hotels, I asked if cruise lines had concluded that they might not want to engage with a channel that can sometimes have a depressive effect on pricing.
"We want to be where our customers want us to be," Treacy replied, suggesting RCCL was open to the possibility.
One other contributing factor to the slow development of consumer-facing cruise booking tech is that software developers carefully calculate the size of an opportunity. Despite rapid growth, the entire cruise industry is peanuts compared with hotels, where booking technology is competitive. All the cruise inventory worldwide is still considerably less than the number of rooms managed by any one of the top five multinational hotel companies.
If that should change, it will likely be due to further growth in Asia. Treacy and Dream Cruises president Thatcher Brown both pointed to the potential of Indonesia, which has a population of 255 million but is still in the early stages of cruise development. Also mentioned as ripe for growth were the Philippines, with more than 100 million inhabitants, and Vietnam, with 91 million.
Many residents of those three countries who do cruise currently do so out of Singapore, the regional hub.
The nationality that cruises out of Singapore most is Indian. I asked Brown and Treacy why India itself was not being developed as a cruise market. They pointed to a lack of cruise infrastructure, the paucity of ports of call near enough to India's coastline and an unfavorable tax environment.
One other thing that struck me about the development of cruising in Asia is the dominance of U.S.-based companies, in striking contrast to commercial air, where most regional traffic is handled by home-grown enterprises.
Hong Kong-based Genting's Star Cruises claims to be "the most popular cruise line in Asia," but it has only six ships. The company's upscale Dream Cruises will soon become a fleet of only two. (Genting's two-ship luxury Crystal brand is based out of Los Angeles and, while it calls at ports in Asia, it is not viewed as an Asian brand.)
Thus far, cruise companies' attention to Asia has not come at the expense of North America. New ships are still being home-ported in the U.S., and Carnival Cruise Line just last week expanded its trade-facing sales efforts.
But given the explosive growth in Asia, U.S.-based travel agents must continually demonstrate their value or risk losing the attention and affection of cruise lines, which are easily distracted by the demands of ravenous Asian appetites.