Beam me up, Scott

The new year will see continued growth of online travel across Asia/Pacific. P@SSPORT talks to ZUJI's Chief Executive Officer, Scott Blume, on what's driving the growth in the online travel landscape in the region.

Three major trends will fuel the growth of online travel in the region:

• The emergence of international online travel brands in Asia.

• The progression of dynamic packaging technology which will allow consumers to create their own packages rather than purchase pre-packaged tours.

• The growth of online hotel bookings and ability for hotels to now distribute globally via international networks.

Pointing to the acquisition of ZUJI by Travelocity last January, Mr Scott Blume, ZUJI's CEO, said that other global brands were also investing, expanding or planning expansion in Asia Pacific.

ZUJI will launch 'Travelocity India' shortly, he said. "The India-based team is being built and the site itself is very close to being finalised for formal launch."

The progression in dynamic packaging technology (see related story linked below), long awaited in Asia Pacific, will also make it easier for consumers to buy packaged travel.

Mr Blume said dynamic packaging was already here in a simplistic form, but consumers would soon see highly complex dynamic packaging which will change the way packaged travel can be booked online on sites such as ZUJI.

"This is good news for consumers who will be able to pick and choose the elements of a trip in one transaction and be shown a total package price based on the specific elements they've chosen."

Leading the online charge however is hotels. According to PhoCusWright 2005, lodging is anticipated to grow 127% from 2004 to 2007, with its market share approaching one third (32%) of the total online travel market in 2007.

Said Mr Blume: "ZUJI now sources most hotels for consumers from a global database, The Travelocity Net Rate Hotel Program, which offers real time availability and bookings. There are more than 60,000 properties for travellers to choose from, and, for hoteliers, participation means their hotel can be booked by travellers via ZUJI, or other Travelocity-owned online travel sites globally, including Travelocity.com and lastminute.com."

What consumers want

Since its launch in 2002, ZUJI has seen strong pick-up in Singapore and Australia in particular where consumers were quicker to embrace online bookings.

But the travel portal is now seeing pick-up across the region, fuelled mainly by the entry of Low Cost Carriers (LCCs) into Asian countries and their online-centric business models.

Said Mr Blume: "We have been very pleased with the pace of pure online travel bookings on our Korean site, Nextour, following enhancements to flight and hotel online booking paths. We anticipate online travel adoption will be rapid in India, hence our plans to launch a site there in the near future.

"Consumers were historically slower to move to booking travel online on ZUJI in Taiwan and Hong Kong. However, Hong Kong travellers have rapidly embraced online bookings on ZUJI in the past 18 months and Taiwan continues to grow, albeit at a slower pace."

It's a male thing

So do more men than women book online? ZUJI's tracking shows that the pattern of slightly more men online is reasonably consistent over the past two years, except in Taiwan, where there are more female bookers than male.

In Singapore, the ratio of men verses women during the last quarter of 2006 was 58:42, similar to Hong Kong. The ratio across Asia/Pacific was 57% men verses 43% women.

To appeal to the different sexes, ZUJI has themed packages and products which appeal to different age groups and genders. 'Shopping', 'beach', 'city' and 'spa' are the four themed trips currently promoted on ZUJI Singapore and other ZUJI country sites.

Top destinations booked

The top five flight destinations booked across ZUJI sites in Asia Pacific, in the last quarter of 2006 were Bangkok, Hong Kong, Singapore, London and Sydney.

In Singapore, the top five destinations booked on ZUJI Singapore during that period were Bangkok, Hong Kong, Jakarta, Kuala Lumpur and Tokyo.

ZUJI's tracking shows increasingly popular destinations for online travellers booking on ZUJI have been New Delhi, Beijing, San Francisco and Hanoi, and for Singapore travelers particularly, Koh Samui in Thailand.

With the Asia Pacific online travel market expected to more than double to US$25.6 billion by 2007 (PhoCusWright), Mr Blume believes the online channel will become increasingly dominant and will challenge traditional models of travel distribution such as call centres and travel agents.

Early fears that traditional travel agents will lose out though have not quite been borne out, said Mr Blume. "The reality is that both online and offline agency travel bookings are growing as the total travel 'pie' grows in Asia Pacific."

What it takes to be successful

To be successful in the online travel market, Mr Blume said all players must embrace the following:

• Trust and credibility of the brand.

• Comprehensive range of products.

• Competitive pricing or great deals & value.

• Secure online payment, flexible payment options.

• Ease of use, speed, customer service and fulfilment.

• Locally relevant, inspiring travel choices.

ZUJI's strategy is to:

• Move existing online customers from FIT (Free Independent Travel) to also embrace dynamically packaged travel.

• Drive hotel sales and raise brand awareness especially in new markets such as India.

• Increase the scale of its business and reach more customers.

• Expand into new markets and add new features such as business travel in the future.

As for what lies ahead, Mr Blume said, "It will become more challenging for local players to match the product scope of international brands. There will be greater competition and having more sophisticated online travel shoppers brings new challenges, but this is good overall for the growth of the industry in our part of the world."

Read more articles about the online travel market in this issue