Online travel services on the rise

09:29, October 08, 2010      

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The Mid-Autumn Festival and National Day holiday this year caused problems for some employees because working days and rest days were split.

However, it had little effect on sales of flights and hotel bookings as China's burgeoning travel market enjoyed a seasonal boom.

The country's largest online travel agent, International Ltd, said the number of orders during the Mid-Autumn Festival and the National Day holiday had increased year-on-year, especially for hotels and flights to Shanghai, where the World Expo was held this year.

Nasdaq-listed did not disclose specific figures for its orders but said the increase was "obvious", in an e-mail to China Daily., a latecomer to the online travel market which launched its travel platform in May, said total sales of flight tickets, hotels and entrance tickets on Taobao have increased by 40 to 50 percent since August compared with the non-peak season.

Taobao earlier said the flights sold on its travel platform numbered 10,000 every day. More than 200 travel agents have set up online stores on Taobao since May.

The long holiday and the Shanghai World Expo will help accelerate the popularity of booking flight tickets, hotels and other travel-related services online, industry experts said.

According to domestic research firm iResearch Consulting Group, total online sales of flight tickets, hotel services and package travel products are expected to reach 4.75 billion yuan ($709.91 million) this year, an increase of 27 percent year-on-year. The figure is forecast to rise to 9 billion yuan by 2013.

New players have entered the online travel market with the hope of cashing in.

Chinese Internet conglomerate Tencent Holdings Ltd will open a travel site "in the near future", according to a notice from the company. Tencent, in fact, launched the site in September. It provided bookings for flights and hotels but was later suspended and has been available only to invited users for beta testing.

Expedia Inc, a US-based online travel agency, earlier said it will pump at least $50 million into China by the end of 2011. It is also looking for new acquisition targets in the latter half of this year after acquiring two Chinese online travel websites and launching a Chinese travel website of its own last year.

Traditional players in the travel industry, such as airlines and hotels, have also begun to do direct sales online.

"Major players in the online travel industry will be those with many user resources, especially the telecom carriers. Online travel agents, such as Ctrip, will have to reduce their dependence on ticket bookings and provide comprehensive travel services," Chen Shousong, an analyst with Chinese research company Analysys International, said in a research note.

However, China has one of the lowest levels of online travel penetration in the world by per capita percentage. The rate in the United States is about 70 percent, while that in China was around 14 percent in 2009, according to US-based research company PhoCusWright.

"The online travel war is just beginning," Zhuang Chenchao, president of Chinese travel search engine Inc, said to media. He added that the Chinese online travel market made up only 5 percent of the total travel market, and the remaining 95 percent, which has yet to go online, will be big enough to produce real market leaders.

David Jones, chief executive officer of travel technology provider Amadeus IT Group SA, agreed.

"The Chinese travel industry grows even faster than the country's GDP growth but to gather all the information and structure it is quite a big challenge for airline companies and service providers," Jones said, adding that there is scope for the Chinese travel industry to be better informed and well structured.

He said the company is looking for opportunities to bring its global services to China and intensify its investment in the country.

Source:China Daily


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