Farzana FattahSkift met with two Singapore-based travel entrepreneurs on a recent trip to the city and they talked of how exorbitant costs have made Singapore both a blessing and a curse for startups.
Winnie Tan, founder and CEO of TripZilla, a travel planning and media company founded six years ago with a large presence in Singapore, Malaysia and the Philippines, told Skift that 80 to 90 percent of her monthly costs are wages and salaries.
Regarding management executives, Tan has noticed global travel brands with regional offices in Singapore or elsewhere in Asia don’t hire enough locals and often prefer sending executives from the U.S. or Europe to the region once or twice a month.
“We have enough talent here for people to run a company’s regional office,” said Tan. “At TripZilla we have to localize our product for each country and there’s something about Asia that’s different. The market is so fragmented and people from each country have their own ways that they consume travel content. Asian consumers are not getting their news from newspapers anymore; they’re getting it from social media and [messaging apps] and these are the places where they’re getting inspired for travel the most.”
“Southeast Asia is really a difficult monster from different languages and cultures to different phases of technological development,” Tan said. “It also takes a lot of time to grow organically in each country because of this and it’s probably a good idea to find a local partner when moving into a new country. I think anyone who comes in and thinks they can have a blanket solution is naive. [Travelers from each country] don’t just want a site in their own language, the user interface and user experience has to be different in every country.”
Working With Investors and Larger Travel Brands
“Singapore is one of the best places in Asia to start a startup because of government grants, access to investors and many of the world’s largest travel company’s have regional headquarters in Singapore such as Airbnb, Expedia, Skyscanner and Sabre,” said Tan. “A lot of these travel giants with a presence in Singapore realize that they can move faster … by listening for new ideas and watching for new [startups] to back. We’ve gotten advice from Sabre and Expedia and they’re not afraid to share their knowledge with us because we’re all trying to crack the same problems together.”
“There are also certainly enough acquisitions in the city to make it exciting, such as HomeAway acquiring travelmob which is based in Singapore and one of the main vacation rental sites for the region. I think the big boys realize as well that it’s difficult to grow organically in Southeast Asia.”
Tan added Singapore and the wider region’s investors now seem more cautious and have made a shift back towards emphasizing profitability. They focus more on funding travel startups with real revenue potential and looking at the talent of individual team members compared to a few years ago.
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