Travel Research Online: A Study in an Emerging Market
One of the
most compelling economic stories of the past decade has been the transformation
of travel research online in China. Unprecedented economic growth has fueled
the country’s travel industry, which is now positioned to overtake Japan as the
largest travel market in Asia. China already has the largest aviation market in
the region in terms of passenger volume, as well as the most investment in
hotels. The country is now seeing significant investments in travel, tourism
and infrastructure across all sectors, including rail, road, airports and
for international players has historically been the government control of key
parts of China’s travel value chain, such as the CRS (central reservation
system), airlines, travel retailers and the media. But over the past several
years, China’s travel industry has opened up and become considerably more transparent,
due in part to the 2008 Beijing Olympics. This, along with the fact that China has
the largest broadband user base and the fastest growing credit card market in
the world, means that there are exciting opportunities to be tapped as the
demand drivers for online travel fall into place.
full-service travel retailing, relationships with local flagship carriers and
the dominant CRS player (TravelSky) will be critical as well as time-consuming.
Those pursuing the fulfillment model will have to take into account payment
alternatives including partial payment, offline credit card payment, a call center-
based model and final cash collection. Immediate opportunities exist for
entrepreneurs, investors and market entrants on the demand side of the travel
value chain, especially in the searching and shopping phases of the online
travel research and planning process.
Travel Research Online in China
the explosion of broadband access and Chinese consumers’ pursuit of
authenticity online have heightened the relevance of social media-based travel
applications. Search and metasearch players not involved in transaction fulfillment
will likely see continued growth. Outbound Chinese travelers are increasingly
sourcing destination information online, rather than through conventional, offline
media, and destination marketing organizations (DMOs) need a bold approach that
incorporates localized, rich media strategies in Mandarin. Since service-based
commissions are low in China, it is important to build a low-cost Chinese
business model. For success in China’s travel industry, it will be critical to think
local, act local and be local.
travel marketplace is highly service-oriented, and most transactions are completed
through call centers. Systems should be able to integrate localized processes and
fulfill transactional and reporting requirements. More specifically, the
partner must have the technological capability to interface with TravelSky as
well as the appropriate licenses from government agencies to issue air tickets
in each city in which it operates.
In an effort
to control the burgeoning population, in 1979 the Chinese government instituted
its one-child policy. The impact of this policy on travel behavior is evident;
despite the importance of family, there is an increasing preference for
choosing friends and/or groups as travel companions, says Phocuswright’s travel research online.