Asean tourism campaign will boost Murdoch empire
February 1, 2010 by Imtiaz Muqbil and Don Ross
Filed under News
Report by Imtiaz Muqbil, executive editor, Travel Impact Newswire and Don Ross, TTR Weekly editor.
US aid funds will be spent on a project that claims to be enhancing the region’s competitiveness in tourism, but also appears set to give the meta-search portal Wego.com, financially backed by Rupert Murdoch’s News Corp, clear dominance in the Asean online travel market.
The site http://www.southeastasia.org is being developed as a critical component of the Asean Competitiveness Enhancement Project, under which US$4 million is to be channelled over 2008-2013 through the US Agency for International Development (USAID). The project is being managed by a US consultancy firm Nathan Associates Inc with RJ Gurley as project director.
According to an announcement at last week’s Asean Tourism Forum, Wego.com has been chosen to provide technological support for the website, the core component of the new tourism campaign designed to attract visitors to the Asean countries. Wego.com will cover half the website development costs.
About US$500,000 will be spent on online marketing to build traffic on the website. That side of the account is being outsourced to Qais, a Singapore web design consultancy company, chaired by Keith Timimi, who states on his website www.qaisconsulting.com that he “was a founding investor in Wego.com”.
Australia’s News Digital Media, the digital division of News Limited Australia, has a financial stake in Wego. NDM, in turn, is categorised under “other assets” on the website of parent US-based News Corporation. In their own words, Wego executives state in recent advertisements seeking software developers: “We’re backed by News Digital Media, which is the Australian online division of Rupert Murdoch’s News Corporation.”
The campaign built around southeastasia.org is now said to be “supported” rather than “endorsed” by Asean NTOs and the website itself has been described in earlier press releases as “the official website of the Asean Tourism Association” (Aseanta), the private sector grouping. Major marketing campaigns were announced at the ATF to generate content and attract visitors, travel writers and bloggers to the site, the three most critical prerequisite steps in the path to generating business.
Asean tourism ministries and NTOs will be providing the travel and tourism related content, apparently free of charge, on each of their countries. Content for the doing-business component will come from the member associations of Aseanta, which will cover all their individual members.
There has been intense debate amongst Asean NTOs as well as Aseanta about the use of the name “Southeast Asia” as against “Asean.” But both governments and the private sector appear to have been sold on the big picture benefits – an increased marketing presence that will supposedly bring more tourists to the Asean countries, generate more business for the private sector, and a commensurate income for Aseanta.
But as more information is made available to the public about how the project was packaged and promoted, numerous questions and inconsistencies emerge.
Although claimed to be backed by research, there are strong indications that use of the name SoutheastAsia was decided long before any substantive research was done. A marketing strategy paper commissioned by the ACE Project claims that “it is time for a change,” but an earlier study requested by the Asean secretariat to assess the impact of Visit Asean campaign clearly says that it was more a question of backing the campaign with adequate resources rather than changing it entirely.
According to the current registration details, the domain name http://www.southeastasia.org was created as far back as May 2001 and last updated 7 December 2009. It has changed hands a number of times since its initial registration. The current registrant organisation is Nathan Associates Inc. and RJ Gurley is identified as the registrant, administrator and technical contact using the Nathan Associates’ Bangkok office address.
The immediately previous registrant is identified as Mason Florence and the registrant organisation, TMG, also operating out of an address in Bangkok. This record specifies the last update as being in October 2009. Mr Florence is presently executive director of the Mekong Tourism Coordinating Office, based in Bangkok.
In response to questions, Mr Florence said he bought both domain names, southeastasia.travel and southeastasia.org, for personal business use.
“I was approached by ACE and after listening to what they planned, I agreed to sell southeastasia.org at the price I paid, which was US$550 for the domain name and US$25 for the transfer fee.”
Mr Florence said it was a personal matter and that he had owned both domain names for some time before discussions had taken place with executives in the ACE project.
“I felt there was more in the southeastasia.travel domain name for me to work with and didn’t feel the same way about southeastasia.org.”
The entire project is also now being touted as an “initiative” of Aseanta, which is being cited as a “partner” in the venture. However, Aseanta is maintaining a low profile. At the Asean Tourism Conference in Brunei, many of its senior board members left for the airport to catch flights home even as the project was being unveiled. At a subsequent press conference, not a single Aseanta member was on the panel to take questions.
Officially, the campaign is said to be targeted only at the UK, Australia, India, North America and Hong Kong, but Mr Gurley told an ATF media conference that talks are under way to establish a Chinese-language website. That will expand the base to a far larger audience than just Hong Kong.
Mr Gurley also sought to present the ACE project as a doing-good venture from which the US expects to get nothing in return. That contradicts USAID’s own tagline which says it “provides economic, development and humanitarian assistance around the world in support of the foreign policy goals of the United States.” Presently, promoting US business and economic interests is a major component of US foreign policy as well.
USAID projects operate under strict supervision, particularly on the matters of bids, budget spending and good governance, which includes transparency and accountability. So far, however, USAID has declined to comment on seven questions filed with the agency on 15 January.
Mr Gurley made a strong case for the ACE initiative by claiming it would help Asean’s tourism SMEs to improve their competitiveness, but the facts indicate that bringing in more SMEs will also help wego.com, an already cash-rich meta-search engine. It stands to gain a substantial increase in search traffic by having a content-wealthy website bolted to its portal.
To ensure Asean’s SME community is well represented on the search engine, Aseanta will have to add partners from the region, particularly Myanmar, Laos, Cambodia and Vietnam. Content will also come from the membership lists of the Aseanta member associations.
Wego has promised to share referral revenue generated from the website 50-50 with Aseanta, but this is no more than it offers any of its affiliates. The split on referral revenue is presented on the Wego website (Wego Affiliated Distribution Agreement Item 4) and can be taken advantage of by anyone who runs a website. They simply sign up and download the collateral and links at no cost.
Wego’s revenue is derived from (pay per click) advertising and an override commission paid by its commercial partners (airlines, hotels, car rental and tour operators) on completion of a successful referral. Search criteria is weighted in favour of partners.
Wego’s Affiliate Agreement, a downloadable PDF document, explains the revenue mechanism for websites affiliated with its search engine. It states that Wego pays 50% of net search revenue generated through an affiliate site.
This is how it works. A traveller, visiting an affiliate website, uses the Wego search engine panel to do a little comparison shopping. If he clicks through to one of Wego’s commercial partners, displayed in the search listing, it earns exit click revenue for Wego. Wego splits the revenue equally with the affiliate site, after deducting any fees, commission, or revenue shares, due to third parties.
Wego earns from its commercial partners gross search revenue based on exit clicks that are registered when a shopper views a Wego search listing and clicks through to one of partners displayed. This exit click revenue depends on the individual commercial agreements Wego has secured with partners, so the rate may differ and in some cases the exit click may not carry any revenue earning at all.
However, other competitive systems are available in the region such as HotelsCombined.Com that pays 75% of all revenue generated by visitors from its affiliate websites.
Based out of an office near Boat Quay, Singapore, wego.com was launched 8 May 2008 to replace Bezurk, a B2B comparison shopping site established in 2005, according to the Wego website. Martin Symes, who joined Bezurk as CEO in March 2006 from ZUJI, where he was executive director commercial, stayed on to manage the new Wego brand and its expansion into a leading search engine for the Asia Pacific region.
A financial restructuring, concluded 15 January 2008, saw Australia’s News Digital Media become an investor, with NDM corporate development director, Sue Klose, taking a seat on the board, according to press releases issued by Wego and the Australian media company. It was viewed as a pivotal factor driving the brand remake and the decision to go B2C. It was also NDM’s first international investment.
NDM in turn is the digital division of News Limited Australia, which is part of Rupert Murdoch’s News Corporation, trading on US stock markets.
Financially, Wego is a one of the fat cats in the region’s online travel business, according to an independent financial analysis by OWW Capital Partners Pte Ltd (www.oww.com.sg). The analysis suggested in a document to customers that Wego was on par with other online travel industry players such as Wotif and Asiatravel.com that “saw a 40% and 22% increase in revenues respectively in 2008”.
Hence, the ACE project, funded by US taxpayers, may have opened the door to a US registered global corporation that declared a cash balance of US$6.5 billion in 2009, annual revenue of US$3 billion and assets exceeding US$56 billion to expand its online influence in the Asean region.
Some Aseanta board members as well as Asean NTO officials claim not to have been aware about Wego’s financial links to NDM in Australia and ultimately the parent company US-based News Corp. Others who knew about it paid scant attention to the broader implications, but preferred to see only that they would get a free website to help them generate business, visitor arrivals and cash flow.
However, Asean tourism industry private sector executives now are seeking more transparency about the entire process, including terms and conditions, payments, liability issues, etc.
There are also other procedural concerns about which USAID has so far declined any comment. Reliable sources have confirmed that Wego was already identified as the preferred technology partner and host of the proposed website in a Terms of Reference sent out to a few companies in early 2009.
Wego cropped up in initial discussions in late 2008 as the preferred partner and was also linked to a similar project under consideration by the Mekong Tourism Coordinating Office, whose website also clearly says that it is “supported by” USAID and the ACE project. This was confirmed by its executive director, Mason Florence, shortly after he took over from former consultant and advisor to the MTO, Peter Semone who were privy to the discussions.
As the financially-strapped Asean NTOs have also seen fit to get the ACE Project consultants involved in preparing the Asean Tourism Strategic Plan for 2011-15, just about the entire future of Asean and Mekong tourism development and marketing plans is now in the hands of the US government and its consultants.
Questions are now clearly arising about whether the ultimate beneficiary will be the foreign policy goals of the US, Rupert Murdoch’s online media empire or the Asean tourism industry.
Strange how the very people this debate is about have chosen to sit it out, no doubt because they haven’t a clue how to communicate what it really is that they are doing. The mists around ACE and their strange funding are growing murkier, and the fact that the good burghers of Asean tourism at first thought it was they who would have to cough up the funds shows just how poorly ACE is messaged. Too many stakeholders are now questioning the credentials of the entire effort, and the fact that a supplier such as Wego had to fight its own corner says little for the leadership at ACE. Maybe they do not read internet pieces, preferring old parchment tomes from USAID about being nice to the natives, but not patting them on their heads.
Surely the fact that Wego had to fight its own corner says more for the poor quality of the journalism involved than the leadership at ACE!
These two journalists represent more than 60 years of experience in the field and in the region. They make a formidable pair and their professionalism has brought numerous gains for the industry they report on, including the demise of some very shady characters in very high places. The travel business is open to anyone, without qualifications, experience or principles, and Don and Imtiaz are fearless in rooting out the bad eggs. This is a thankless task at times, but somebody has to do it. ACE should be proud to be given the ink it gets, considering it is a very mysterious organisation with some pretty strange connections, some of whom are well known to this investigative duo.
John, I think that your comments regarding the need for a clearer marketing plan (minimum 3 year plan is required) is actually a reasonable comment and I agree that the new initiative needs to me marketed properly with sufficient resources.
I live in Australia and have previously worked for state funded tourism projects and am well aware of the inherent challenges in trying to develop a unified initiative, which satisfies the various State government interests. In my experience I have not come across an initiative, which has not been contentious.
Australia, is full of journalists like Mr. Muqbil, I apologize if my opinions regarding his article were on the personal side, but its hard not to when he is trying to be sensational and attention grabbing by accusing Mr. Murdoch personally with trying to muscle in on the ASEAN tourism industry.
I have just read the comments from Wego’s CEO and applaud him for shooting straight back at Mr Muqbil (the “wanna be” investigative bully.)
I really hope for all concerned that this initiative gets the required marketing funding and planning it deserves. And more importantly that its gets the much needed support from the ASEAN tourism operators.
Finally, some passion in Asean tourism!
Maybe Mr Sacks should not get quite so personal, because said investigative journalist Muqbil has amazing contacts and might just detect what his particular scam is.
The fact is, the facts are sketchy and have been hopelessly communicated by the various USAID flunkees, but none of that is new.
The big issue, though, is the total lack of either proper research and also a valid marketing plan. This make-shift ‘build it and they will come’ effort insults everyone who makes a living in tourism in the region.
Mr Imtiaz Muqbil you sound like a frustrated trade journalist who still holds dreams of being an investigative journalist. What I see is someone who has used Google to try and dig up some potential dirt on the companies who are behind this new travel initiative. What you have found are pieces of information which you have tried to piece together without proper context or investigation……….the result is a hackneyed B grade investigative story. Which unless substantiated with proper facts beyond a cursory Google search is defamatory to all your accused parties.
It’s a real shame that you have missed the point that international travellers now searching for information on the South East Asia region now have a useful tool to use. I think that readers of this article should be asking themselves whether you have pre-existing gripes
This article, as it relates to Wego, is so inaccurate, both factually and in its offensive innuendo, that it demands correction.
The factual errors include (but are not limited to) the following –
1. You state that “Wego.com has been chosen to provide technological support for the website”. This is wrong. Wego will integrate its meta-search technology into the website and will build a multi-destination trip planner for the site.
2. You state that “Wego’s revenue is derived from (pay per click) advertising and an override commission paid by its commercial partners…on completion of a successful referral”. Wrong. We do not have a single “override commission” agreement in place.
3. You state that “Search criteria is weighted in favour of partners”. Wrong. By definition, only partners are displayed in our search results. Furthermore, the commercial aspect of a partnership does not affect the display order of search results, which are listed according to price (airfares) and a popularity based algorithm (hotels).
4. You state that Wego is “Based out of an office on Boat Quay”. Wrong.
5. You state that wego.com was launched on 8 August 2008. Wrong.
6. You state that Bezurk was “a B2B comparison shopping site established in 2005”. Wrong – Bezurk was always B2C.
7. You state that “A financial restructuring, concluded 15 January 2008, saw News Digital Media become an investor”. Wrong – there was no restructuring; just a straight-forward investment by a new shareholder.
8. You state that the investment by News …”was viewed as a pivotal factor driving the brand remake and the decision to go B2C”. Wrong. The acquisition of the wego.com domain name and the decision to re-brand from Wego to Bezurk was made prior to News’ investment and the business was B2C from inception.
9. You describe Wego as “a business unit of…” News Corporation. Wrong. Wego is an independent, ASEAN based business employing 24 ASEAN residents and taxpayers.
Quite aside from the above, and the numerous other errors which I have neither the time nor inclination to bother correcting, the article’s over-riding claim – that US funds are ‘set to give Wego… clear dominance in the Asean online travel market’ would be laughable if it wasn’t so offensive to everyone involved in the project.
The facts are these; USAID is donating money (you state $4 million – we are not aware of where this number comes from) to help boost multi-destination tourism in the ASEAN region. A small part of that money will be used to build a website. Wego was approached to provide functionality for part of the site. The traffic and revenue Wego will receive from being on the website is small. To imply that somehow this deal will be the making of Wego is utter nonsense.
And even – EVEN – if we were given four million bucks to spend on marketing Wego, we still wouldn’t get anywhere close to the ‘clear dominance’ you claim we would. In fact, if any of your readers know how we could achieve clear dominance with such a sum, I’d love to hear from them, I really would.
Martin Symes
CEO
Wego Pte Ltd
Bottom line: if it’s either USAid or Murdoch, it’s unacceptable: that is, as a CONSUMER, I won’t go near it. WEGO away.
As an e-commerce business we can’t compete against this sort of funding and it loses us business. It is very unfair practice from USAID if true and why are they interfering in commercial fields? For the past 4 years we’ve been developing e-business for small businesses in the East Asia market. The comments made so far should be of great concern to the US government and US taxpayers. Will USAID be conducting a full investigation into the procedures and have USAID rules and regulations been met?
The very term ‘Asean Tourism Strategic Plan for 2011-15′ suggests it should be written with the engagement of Asean tourism experts, not US-funded carpetbaggers who will have long gone before any of the results have to be accounted for. By handing over the most important planning exercise after military cooperation to a bunch of expats living large off US funding shows just how little Asean tourism leaders care about cooperation. None of them will be around either, long out to pasture as local politics changes. Tourism ministries have by nature been the dumping ground of spent politicos or used as sops to coalition politics. This is entirely suspect and when the provenance of Wego is factored in, it makes a mockery of Asean. Murdoch is fighting for his survival with debts the size of the Himalayas, his family has turned on his Fox fossicking of journalistic principles and even his Hong Kong wife has joined the fray, backing the public comments of his PR maven son-in-law Freud. Asean deserves better than this, and the belotioned “experts” at ACE better have one up their tailored sleeves, because outing is about to happen.
What a shame that the private sector of Asean travel + tourism businesses cannot put together funds to promote Asean effectively. To have to depend on foreign aid to do marketing for an industry that has proven to enrichen the Asean nations only shows how weak the Asean associations are. The government bodies are no better, for not giving proper support.
Have more pride and confidence in yourselves instead of bickering and being biased because of self-interest.
This entire process has the word con attached to it. The people involved have no credibility, they have “history”, including a couple with dubious PATA connections, and the sordid fact is Asean tourism as one concept is unresearched and unrealistic, given the divisions that get deeper by the minute in Asean. Cambodia and Thailand promoting arrivals jointly … puhleeeze! A US government agency using US taxpayers’ money to fund a campaign to visit Burma … illegal. It goes on. Thailand’s tourism leadership is politically corrupt, and the only reliable player sidelined. Singapore doesn’t need US money to promote tourism, and Malaysia does just fine with excellent branding of its own.