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| Talking Point | Interviews | Success Stories | China Today | Import & Export | Legally Speaking | Regional Development |
Travel commerce casts a broad net
A whole new generation of web sites is making travel one of the fastest growing and most successful sectors in e-commerce

Looking for an air ticket or hotel room? These days, getting a good deal and just what you want is almost as easy as a Web search on Google. Both business and leisure travellers are increasingly likely to start planning their trip by tapping in the URL of an online travel company. Traditional ‘bricks and mortar’ travel agents lacking any Web presence are finding they’re left out of the loop.

For frequent travellers with a limited budget, doing what used to be the travel agents’ job - checking out a list of transport options and accommodation for the trip - can mean bigger savings and a better end result. Following the success of the initial ‘find it all here’ travel websites, hotel, airline, rail, cruise and ferry companies are all getting into direct on-line sales. Only three or four years ago consumers winced at the idea of exposing their credit card details online to save a few bucks, but now the travel industry and e-commerce are synonymous.

It’s only in recent years that the biggest players in Asian travel have been seriously investing in their web sites, but now they’re consistently achieving high volumes in online trade - and attracting literally of millions of online hits per year.

One of the best known travel sites in Asia is Zuji, whose home page directs the visitor to one of six sub-sites where it has offices (Hong Kong, Taiwan, Singapore, Korea, Australia and New Zealand), though it accepts transactions from anyone, anywhere, who has a valid credit card. The Zuji website provides access to the services and packages of more than 400 airlines, 60,000 hotels, 50 car hire companies and 3,000 “activities and attractions.” In 2005, more than 7,200 readers of TTG Media’s travel trade publications in 17 countries across the Asia Pacific region voted Zuji the ‘Best Online Travel Agent’ in Asia Pacific.

Travelocity, the world’s first online travel agency, acquired complete ownership of Zuji in January 2006. Travelocity itself has attracted millions of registered members globally since it was founded in the USA, and in 2004 it booked US$4.9 billion worth of travel - an indication of the massive size of this sector of e-commerce.

An interesting newcomer to the world of online travel sites is Qunar, founded in Beijing in early 2005 by three entrepreneurs with a number of years’ experience in Asian media, IT and advertising. The site has its own multi-language price comparison search engine. Although the site is too new to reasonably assess its progress, Qunar claims to have made a “significant step in the development of the constantly changing, albeit rapidly growing online travel industry within the region”.

Certainly, one of its strongest selling points is offering real-time comparisons of virtually all available prices for air tickets, hotels, car rentals and tour packages, which can be viewed simultaneously on one screen window. It culls results from more than 300 Chinese-language travel websites in the mainland, for whom it acts as an agent. However, at present only airline searches are up and running - though there are ad links to hotel booking websites. Random searches for this article netted an impressive 216 results for a return flight from Hong Kong to Bangkok; and for Hong Kong to New York, 1,165 popped up. Results can be sorted for ease of viewing by price, itinerary, airline, and stops en route. Some European long-haul destinations, however, do not offer many choices. Qunar plans to complete testing of its Japanese and Korean versions soon.

Websites such as these require customer registration, thereby securing personal data that is not only used for crosschecking credit card payment details but also for client profiling. A point to note: online travel agents hope that customers will not tick the boxes on their registration forms that say “No” to receiving direct promotional emails. This is partly because the site hopes to send the customer constant updates, but also because it hopes to sell valuable personal contact information, which brings further revenue.

Customer confidence and loyalty to these new travel websites usually depends on the range of information and choices that are offered, ease of navigation and security of online payment. At Zuji, for instance, payment is secured by VeriSign, a global leader in online security for e-commerce payments. Qunar directs the customer to other online travel Websites and then earns its cut from any resulting transaction, so its payment guarantee varies according to the found agent.

These two very different business models might inspire competing businesses. Certainly the first category has several other online operations to contend with: Asiahotels, Asiatravel, Asiatravelmart, Asiahotelmart and Passionasia are just some that offer further options for travel website interface.

The chief costs for start-ups are the company and website domain registration, website design and maintenance, content editing and modest office space rental. ‘Web-hosting’ companies can handle all this for a retainer, allowing venture capital partnerships to start-up a travel website as a subsidiary business that requires no additional office space.

Travel websites are on the increase, and with growing numbers of punters turning to the ‘global marketplace’, it seems that business and leisure travel will provide much of its custom and, in turn, be provided with an ever-improving corporate or consumer cyber-service.

As regular travel agents beef up their online presence, the risk of encountering a fraudulent or unstable operation becomes greater; but local consumers can establish a Hong Kong-based travel site’s credentials by checking the Hong Kong Association of Travel Agents’ (HATA) website (www.hata.org.hk), which lists more than 350 approved companies. HATA has been around since 1954, when it was launched by a group of Hong Kong International Association of Travel Agents (IATA) accredited agents.

The government-funded Hong Kong Trade Development Council is keen to endorse and advance the mushrooming phenomenon of online travel commerce. It offers a very useful online database (http://my.tdctrade.com/webdir/directory_detail.asp?catid=14&subcatid=101) that lists authorised travel agents, tour operators, local travel authority bodies and airline websites. It has a separate section that targets the business traveller coming to Hong Kong, lists local accommodation, banking, public holiday and other useful information, and has detailed maps.

A growing crossover into the online travel business, allowing further competition and consumer choice, is happening through publication websites. South China Morning Post, for example, works with Asiahotels.com to present the hybrid Hotels.SCMP.com; and Net Media, whose Chinese-language publications include Apple Daily, posts travel purchase links on their online travel pages. In both cases, the publications stand to profit from cyber bookings.

While several guidebook and lifestyle book publishers in Europe and North America have teamed up with hotel, transport and car hire companies, this has yet to happen in Hong Kong. But just watch this space!

 
April 2006

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