“It’s such a boring Holy Grail though, nothing sexy,” he said, speaking to Campaign Asia-Pacific on the sidelines of the Web in Travel conference taking place in Singapore. “But it’s the truth when the business we’re in is pretty much a game of inches.”
Hughes, who until six months ago was the hotel booking company’s VP of marketing, said that the online travel industry is driven as much as by demographic changes as it is by technology changes.
“The 20 year olds of 2000 are now 35. As young people who grew up on technology get older, they start to get jobs, earn money and become online travel consumers,” he added. “That natural demographic shift brings them into our purview.”
Hughes also said that as markets grow and become more liberalised, the demand increases as well, with China’s more open economy the landscape is very different from 10 years ago and markets in Southeast Asia such as Malaysia, Thailand an Indonesia continue to grow as well.
“Now we still have to capture this with greater technology improvements and customer relationships,” he added. “But we know that the demographics are on the side of online travel and that’s great for us.”
Hughes describes Agoda’s brand identity as a “global travel company with an Asian heart” and the company’s marketing initiatives are tied to building upon that story.
Its marketing focus is on the fundamentals, such as a clear return on investment, having the ability to experiment and being consistent with all initiatives.
The hotel booking platform, part of The Priceline Group, currently has more than 90,000 hotels contracted throughout the Asia-Pacific region and has served more than 21 million customers since launch.
According to Euromonitor International, Asia-Pacific is expected to be the fastest growing region over the next five years in terms of online travel sales, which are set to double from US$78 billion in 2012 to US$155 billion in 2017 in the region.
Metrics and money
In digital marketing, metrics dominate the discussion and asked about Agoda’s approach; Hughes quotes chief executive of Priceline Paul Hennessy, whom stated that the number one metric is conversion.
“It touches on everything we do, from the quality of the site, quality of our customer care, technology and even quality of marketing,” he said. “And the bigger you get, the more challenging is it to find the little things to improve the business.”
But Hughes believes the company does so from a position of strength, and though he could not share further details on financials, claims that Agoda is a highly profitable venture and here to stay.
“There are a lot of people in Asia scrambling in the online travel agencies (OTAs) space losing a lot of money,” he said. “They look sexy on the outside, and you talk about their growth and presence but they’re not profitable and are buying that sexiness with losses.”
He claims that Agoda is very clear on what metrics defines its success; mindful that it has stakeholders such as hotel partners and customers it needs to keep happy.
“So we incorporate net promoter scores as a big measurable for us with customer satisfaction, we look at production growth for hotel partners and how active they are on our platform to gauge satisfaction levels in addition to revenue growth,” Hughes said. “The metrics are very clear in this business, and I think it is only unclear for companies that are missing that big chunk which is sustainable profitability.”
Hughes said that companies who have yet to garner a profit are the ones dominating the on-going industry debate about which metrics are the right ones to look at in the digital space.
“Because if your company is bleeding, you have to shift the metrics to revenue growth or page views or some other metric that might obscure the fact that you’re losing money,” he added. “You want the metrics of success to be something other than profitability or profit and loss.”
The company also doesn’t spend too much time looking at the competition, Hughes said, and instead chooses to be more internally focused and improve on challenge areas.
“We’re clear on the metrics that succeed on digital marketing for us and we don’t get distracted by the launch of crazy new tech, major PR or marketing campaigns by others,” he added. “We have a good understanding of what drives growth for us and would rather focus on consistency than chasing shiny objects.”
Direct and social
Asked for his thoughts on using social media platforms as a marketing channel, Hughes it is still early days yet for the medium.
“It feels funny saying that because from a consumer perspective, it’s not early days. Everyone is accessing it constantly especially on mobile, you see people in trains and elevators just checking social media,” he said.
But the marketer’s experience is still yet to be fully developed in his opinion. “There’s branding going on, a little acquisition here and there but it’s far from being a ‘Holy Grail’ so we’ll keep exploring and testing but I believe that there’s a next phase to come before it becomes a significant channel,” Hughes added.
Hughes said that art of digital is that one does not have to think demographically like you do with traditional media, you think about the behaviour each individual click or interaction.
“You don’t have to sit there and think so much and think is this a 25 year old college student, you look at each click and the aggregate data you get to make decisions,” he added.
Direct is the company’s largest marketing channel, with consumers engaging with the company directly via its mobile app or website.
“And in 2016, we will be doing a lot more in the direct marketing space,” Hughes said. “That may mean doing some things in marketing that we haven’t done before but we’re still exploring our options.”
He declined to share examples or details on what the company might be launching. “Details are tough to share because it’s part of the secret sauce, because each year you want to be better than the year before. I regularly joke that the secret to Agoda’s success is keeping our secrets secret.”
Attracting the marketers of the future
The key to execution is having the right talent. Good developers and data scientists are the rock stars of the Internet age, Hughes said, and the most valuable resource but there’s a war going on for that kind of talent.
Hughes admitted that when it comes to employer branding to attract such tech-savvy candidates, the company has a lot of work to do.
“Young developers in Asia have other brands in mind ahead of us and that’s something we have to work on,” he said. “We have the largest ecommerce tech team in Asia excluding China and it's a great place to work, with real revenue and resources to launch interesting products, but we have to do more to get that message out.”
Hughes added that Agoda’s marketing team already boasts the inclusion of data scientists, working with marketers from more traditional backgrounds.
“We love nerds, they are champions of the world,” he said. “And they are also the marketers of the future.”