NB: This is a guest post by Maggie Rauch from China Travel Daily.
As China’s travel market continues to grow, with an 11% uptick in the number of travelers last year, adoption of online booking is picking up as well.
But while only 10% of 2009 trips were booked online, this proportion should double by 2011, forecasts China-based internet research firm iResearch.
How best to serve the search needs of the travelers who feed what iResearch projects will be a $2.3 billion industry by 2013 is becoming the hot topic in the country and elsewhere.
Online booking challenges
One reason for the slow pace of search innovation might be the lack of a well-developed web-based market for travel products.
China still has catching up to do in the automation of its online travel booking process, claims Ram Badrinathan, general manager for Asia-Pacific at PhoCusWright during the recent China Travel Distribution Summit.
He says China's online travel booking options have not developed at the same pace as thought, and compared online travel booking in China unfavorably to the other emerging Asian giant, India.
“In India, you can book, cancel and reschedule online without talking to a person,” he says. “With Ctrip and Elong, you can’t do this.”
He also notes that India reached this point without a well-developed broadband market or web penetration to rival China's.
Badrinathan suggests that eLong and Ctrip’s shortcomings are likely largely due to China’s global distribution system (GDS) environment, which is closed to outside competition.
Immobilized
In naming key coming trends for the travel search and distribution space, Glenn Fogel, executive vice president at Priceline.com, says an area where China still lags far behind other markets is in mobile.
China’s smartphone market, fragmented with a number of competing platforms, has a dearth of practical apps.
Fogel predicts that in the North American market, strong search and booking apps are emerging, adding that using an app designed for travel was “habit-forming,” and “better than going to a mobile browser”.
"Travel apps favor intermediaries,” he says. “Consumers won’t download all the apps for all the suppliers. They might download two from suppliers, plus the one intermediary that they like. People will choose the ones that work best, and are the most fun.”
Social Scene
While China’s online booking and mobile infrastructure may be lacking, it has a vibrant ecosystem in another area that holds promise for online travel marketing and distribution: social media.
“Search is becoming more social,” says Yen Lee, founder and CEO of semantic travel search site UpTake.
He notes that from 2009 to 2010 the percentage of travelers in the US who read a travel blog or their peers’ trip reviews, or watched a travel video online, all increased.
One of the travel industry’s biggest believers in the power of social media in China is Jens Thraenhart, partner of Beijing-based social marketiong consultancy DragonTrail.
Thraenhart notes that although globally popular social media such as Facebook, Twitter and YouTube are all blocked in China, web users here have their own copycat sites and use them at higher rates than their peers in North America and Europe.
Meanwhile, social media is very promising for travel marketing on the mainland, says Bob Cao, chief analyst of Chinese internet firm iResearch.
“On social media, there is a lower threshold for people to acquire, share and get feedback,” Cao says. “The cost of communicating is reduced significantly.”
Meta void
Interestingly, China still lacks a metasearch site for travel that intelligently combs various social media to deliver targeted results.
All of China’s leading travel search and booking sites, such asCtrip, eLong, Qunar, Kuxun and Daodao, include social elements and offer searchable user-generated reviews, but their social search capabilities are limited to within the site itself.
Almost five years after Uptake and similar sites launched in the US, offering ways for travelers to easily tap social networks for tips on all aspects of a trip, Chinese travelers still have no such option for search.
China’s top options for travel search, including the sites named above and also the market’s overall search leader, Google-clone Baidu, still focus primarily on searches for hotels and air tickets, with less emphasis on tourist attractions and restaurants, for example.
“One type of search is for the route—How can I get there? That area is relatively well served in China,” says Wei Liu, general manager of search engine marketing at Baidu.
“Another is for scenic spots, and few companies in domestic China engage in that. What are the best tourist spots, best local food - as a search engine we need to provide all of this.”
Competition is coming
But with so much untapped opportunity and so many underserved needs, the leading providers of travel search in China can expect to see competition heating up in the near future.
Local companies with travel search expertise are undoubtedly looking at grabbing more market share by developing the right products, and international players appear to be kicking at the tyres.
Japan’s Rakuten Travel is eyeing expansion, and while Taiwan and Korea are natural next steps, a travel market that is fast becoming the world’s largest also seems to be like a likely target.
“We’re looking at hotels and more transportation services, then expanding outside of Japan,” says Hideaki Yokomizo, who heads the International Business Division for Rakuten Travel.
“Today, 99% of our bookings are from the Japanese market. We are trying to get to 50% from outside Japan in ten to 15 years, and we’re particularly going after the Asia-Pacific region.”
Baidu is also refining its travel search options, Baidu's Liu, but she adds that travel-specific metasearch sites will be necessary. “Baidu needs these companies to help solve specific problems for travel search,” she says.
Ivan Zhang, CEO of Kuxun.com, gets the final word: “Kuxun knows that it is a rat to Baidu’s elephant.
"In the long term, Baidu does not need to do metasearch but they need the technology to make their practice better.”
NB: This is a guest post by Maggie Rauch from
China Travel Daily.
As China’s travel market continues to grow, with an 11% uptick in the number of travelers last year, adoption of online booking is picking up as well.
But while only 10% of 2009 trips were booked online, this proportion should double by 2011, forecasts China-based internet research firm iResearch.
How best to serve the search needs of the travelers who feed what iResearch projects will be a $2.3 billion industry by 2013 is becoming the hot topic in the country and elsewhere.
Online booking challenges
One reason for the slow pace of search innovation might be the lack of a well-developed web-based market for travel products.
China still has catching up to do in the automation of its online travel booking process, claims Ram Badrinathan, general manager for Asia-Pacific at PhoCusWright during the recent China Travel Distribution Summit.
He says China's online travel booking options have not developed at the same pace as thought, and compared online travel booking in China unfavorably to the other emerging Asian giant, India.
“In India, you can book, cancel and reschedule online without talking to a person,” he says. “With Ctrip and Elong, you can’t do this.”
He also notes that India reached this point without a well-developed broadband market or web penetration to rival China's.
Badrinathan suggests that eLong and Ctrip’s shortcomings are likely largely due to China’s global distribution system (GDS) environment, which is closed to outside competition.
Immobilized
In naming key coming trends for the travel search and distribution space, Glenn Fogel, executive vice president at Priceline, says an area where China still lags far behind other markets is in mobile.
China’s smartphone market, fragmented with a number of competing platforms, has a dearth of practical apps.
Fogel predicts that in the North American market, strong search and booking apps are emerging, adding that using an app designed for travel was “habit-forming,” and “better than going to a mobile browser”.
"Travel apps favor intermediaries. Consumers won’t download all the apps for all the suppliers. They might download two from suppliers, plus the one intermediary that they like. People will choose the ones that work best, and are the most fun.”
Social scene
While China’s online booking and mobile infrastructure may be lacking, it has a vibrant ecosystem in another area that holds promise for online travel marketing and distribution: social media.
“Search is becoming more social,” says Yen Lee, founder and CEO of semantic travel search site UpTake.
He notes that from 2009 to 2010 the percentage of travelers in the US who read a travel blog or their peers’ trip reviews, or watched a travel video online, all increased.
One of the travel industry’s biggest believers in the power of social media in China is Jens Thraenhart, partner of Beijing-based social marketiong consultancy DragonTrail.
Thraenhart notes that although globally popular social media such as Facebook, Twitter and YouTube are all blocked in China, web users here have their own copycat sites and use them at higher rates than their peers in North America and Europe.
Meanwhile, social media is very promising for travel marketing on the mainland, says Bob Cao, chief analyst of Chinese internet firm iResearch.
“On social media, there is a lower threshold for people to acquire, share and get feedback,” Cao says. “The cost of communicating is reduced significantly.”
Meta void
Interestingly, China still lacks a metasearch site for travel that intelligently combs various social media to deliver targeted results.
All of China’s leading travel search and booking sites, such asCtrip, eLong, Qunar, Kuxun and Daodao, include social elements and offer searchable user-generated reviews, but their social search capabilities are limited to within the site itself.
Almost five years after Uptake and similar sites launched in the US, offering ways for travelers to easily tap social networks for tips on all aspects of a trip, Chinese travelers still have no such option for search.
China’s top options for travel search, including the sites named above and also the market’s overall search leader, Google-clone Baidu, still focus primarily on searches for hotels and air tickets, with less emphasis on tourist attractions and restaurants, for example.
“One type of search is for the route - how can I get there? That area is relatively well served in China,” says Wei Liu, general manager of search engine marketing at Baidu.
“Another is for scenic spots, and few companies in domestic China engage in that. What are the best tourist spots, best local food - as a search engine we need to provide all of this.”
Competition is coming
But with so much untapped opportunity and so many underserved needs, the leading providers of travel search in China can expect to see competition heating up in the near future.
Local companies with travel search expertise are undoubtedly looking at grabbing more market share by developing the right products, and international players appear to be kicking at the tyres.
Japan’s Rakuten Travel is eyeing expansion, and while Taiwan and Korea are natural next steps, a travel market that is fast becoming the world’s largest also seems to be like a likely target.
“We’re looking at hotels and more transportation services, then expanding outside of Japan,” says Hideaki Yokomizo, who heads the International Business Division for Rakuten Travel.
“Today, 99% of our bookings are from the Japanese market. We are trying to get to 50% from outside Japan in ten to 15 years, and we’re particularly going after the Asia-Pacific region.”
Baidu is also refining its travel search options, Baidu's Liu, but she adds that travel-specific metasearch sites will be necessary. “Baidu needs these companies to help solve specific problems for travel search,” she says.
Ivan Zhang, CEO of Kuxun, gets the final word: “Kuxun knows that it is a rat to Baidu’s elephant.
"In the long term, Baidu does not need to do metasearch but they need the technology to make their practice better.”
NB: This is a guest post by Maggie Rauch from China Travel Daily.