Let me take you down under. All the way down under to the online travel market in New Zealand.
With a population of only 4.23 million (123rd in the world) NZ punches above its weight in a number of arenas (sports, arts and movies being just a few).
Also in online travel. PhoCusWright tell us in their latest Asia-Pacific report that the combined ANZ online travel market is US$6.2billion (2008).
On a pure population split this would put the NZ online travel market in 2008 at just on USD$1billion.
All of the big online travel players are in the market in some shape or form. Expedia has a local site.
So too Travelocity but under their Asia-Pacific name Zuji (no flights and only after a false start joint venture). Orbitz is also very active in NZ through HotelClub and RatesToGo (but I will leave it for others to comment on Orbitz).
Priceline has the lowest touch operations as they don't have an NZD version of Booking.com - but Adrian Currie, chairman of their Asia biz Agoda (and now also listed MD ANZ for Booking.com), is based in the land of the long white cloud.
In addition to the big four, Australian online travel giant Wotif has crossed the Tasman with ease and established themselves as the number one online accom player.
Excluding suppliers, map sites, pure content sites and government sites, the top ranked travel sites according to Hitwise are as follows (in brackets I have put their actual ranking)
1 House of Travel (local offline company) (4)
2 Flight Centre NZ (Au's largest ofline) (6)
3 Wotif (10)
4 HolidayHouses.co.nz (14)
5 Webjet NZ (16)
6 TripAdvisor (17)
7 Expedia NZ (20) (expedia.com is ranked 35)
8 Travelbug (owned by Trade Me - largest site in NZ - more below) (36)
9 Total Travel.com (Yahoo7 owned accomodation listing service) (38)
10 HotelClub and RatesToGo (41 and 40 respectively) (combined would be 25)
11 Booking.com (46)
You’ll note that Zuji/Travelocity is not in the Hitwise top 10.
This is a lot of activity from a lot of large online travel companies for a market that is only worth $1billion. There is an ease of expansion element here as you can enter the NZ market using a lot of the foundation resources set up in the Australian market but it is also a sign of the growth expectations and online adoption rates.
In 2007, into this very crowded and competitive market came the launch of Travelbug.
Travelbug is a domestic/inbound hotel-only online travel company launched by the Fairfax-owned and eBay killing Trade Me.
[NB: Fairfax is one of Australia's largest offline media companies and Trade Me is an online auction site in NZ, the largest website in NZ by traffic and drove eBay out of the market in 2001. More details on Trade Me wikipedia article.]
While new to online travel Travelbug has a huge PR and traffic machine behind it.
An announcement from Travelbug/Trade Me this week saw an escalation of this battle in NZ.
Travelbug/Trade Me announced that it would be buying online booking software provider Bookit.co.nz for an undisclosed sum (press release here on BookIt's blog).
BookIt are a reservation and booking engine for small accomodation, activities and tour providers, allowing a hotel, B&B, farm stay etc to set up a reservation system and website.
it also allows for connections into other websites through channel managers. Finally, it provides distribution through BookIt resellers which include a number of DMOs such as Tourism Auckland.
The small/independent property market solution part of the BookIt system is not a huge win for Travelbug as they have been using a solution called Vianet for many years now (originally an independent company, now owned by Trade Me). But the expansion of inventory and resellers is a good move.
I spoke with Trade Me's manager for strategy and analytics, Alex Fala, about the deal.
He told me that it was a joint supply and demand deal - that BookIt would bring on even more independent inventory that already available on their Vianet system and 40 or so resellers.
Overtime the Vianet system would be completely replaced with the BookIt solution.
Fala says that Travelbug is not concerned about the number of competitors active in NZ or that his company is the only one of the majors focused exclusively on the NZ market (ie no international inventory).
He says New Zealand is "immature but growing. We believe that there is enough growth in the market and it is dynamic enough [to support the number of competitors]".
Travelbug’s challenge remains how to funnel the enormous Trade Me traffic into the Travelbug site.
The BookIt deal comes with some traffic so is a good step but not the full answer to this challenge.
Let me take you down under. All the way down under to the online travel market in New Zealand.
With a population of only 4.23 million (123rd in the world), NZ punches above its weight in a number of arenas (sports, arts and movies being just a few).
Also in online travel. PhoCusWright tell us in their latest Asia-Pacific report that the combined ANZ online travel market is US$6.2billion (2008).
On a pure population split this would put the NZ online travel market in 2008 at just on USD$1billion.
All of the big online travel players are in the market in some shape or form. Expedia has a local site.
So too Travelocity but under their Asia-Pacific name Zuji (no flights and, only after a false start, as a joint venture). Orbitz is also very active in NZ through HotelClub and RatesToGo (but I will leave it for others to comment on Orbitz).
Priceline has the lowest touch operations as they don't have an NZ version of Booking.com - but Adrian Currie, chairman of their Asia biz Agoda (and now also listed MD ANZ for Booking.com), is based in the land of the long white cloud.
In addition to the big four, Australian online travel giant Wotif has crossed the Tasman with ease and established themselves as the number one online accom player.
Excluding suppliers, map sites, pure content sites and government sites, the top ranked travel sites according to Hitwise are as follows (in brackets I have put their actual ranking)
- House of Travel (local offline company) (4)
- Flight Centre NZ (Australia's largest offline) (6)
- Wotif (10)
- HolidayHouses.co.nz (14)
- Webjet NZ (16)
- TripAdvisor (17)
- Expedia NZ (20) (Expedia.com is ranked 35)
- Travelbug (owned by Trade Me - largest site in NZ - more below) (36)
- TotalTravel.com (Yahoo7-owned accomodation listing service) (38)
- HotelClub and RatesToGo (41 and 40 respectively) (combined would be 25)
- Booking.com (46)
NB: You’ll note that Zuji/Travelocity is not in the Hitwise top 50.
This is a lot of activity from a lot of large online travel companies for a market that is only worth $1billion.
There is an ease of expansion element here as you can enter the NZ market using a lot of the foundation resources set up in the Australian market but it is also a sign of the growth expectations and online adoption rates.
In 2007, into this very crowded and competitive market came the launch of Travelbug.
Travelbug is a domestic/inbound hotel-only online travel company launched by the Fairfax-owned and eBay-killing Trade Me.
NB: Fairfax is one of Australia's largest offline media companies and Trade Me is an online auction site in NZ, the largest website in NZ by traffic and drove eBay out of the market in 2001. More details on Trade Me wikipedia article.
While new to online travel Travelbug has a huge PR and traffic machine behind it.
An announcement from Travelbug/Trade Me this week saw an escalation of this battle in NZ.
Travelbug/Trade Me announced that it would be buying online booking software provider BookIt for an undisclosed sum (official press release).
BookIt are a reservation and booking engine for small accomodation, activities and tour providers, allowing a hotel, B&B, farm stay etc to set up a reservation system and website.
It also allows for connections into other websites through channel managers. Finally, it provides distribution through BookIt resellers which include a number of DMOs such as Tourism Auckland.
The small/independent property market solution part of the BookIt system is not a huge win for Travelbug as they have been using a solution called Vianet for many years now (originally an independent company, now owned by Trade Me). But the expansion of inventory and resellers is a good move.
I spoke with Trade Me's manager for strategy and analytics, Alex Fala, about the deal.
He told me that it was a joint supply and demand deal - that BookIt would bring on even more independent inventory that already available on their Vianet system and 40 or so resellers.
Overtime the Vianet system would be completely replaced with the BookIt solution.
Fala says that Travelbug is not concerned about the number of competitors active in NZ or that his company is the only one of the majors focused exclusively on the NZ market (ie no international inventory).
He says New Zealand is "immature but growing. We believe that there is enough growth in the market and it is dynamic enough [to support the number of competitors]".
Travelbug’s challenge remains how to funnel the enormous Trade Me traffic into the Travelbug site.
The BookIt deal comes with some traffic so is a good step but not the full answer to this challenge.