Priceline launch offers e-ticketing with a difference

ONLINE TRAVEL

Carolyn Ong

After nearly a year's delay, Hutchison-Priceline's much-anticipated online travel services Web site launched yesterday without fanfare.

Hutchison-Priceline's travel portal, at www.priceline.com.hk, lets users in Hong Kong book hotel accommodation and airfares at discounted prices. The company's Singapore and Taiwan Web sites will launch next month. Holiday packages will be added in the next few weeks, while car rental services will be launched later.

The Li Ka-shing-controlled on-line ticketing agency claims users can save up to 30 per cent in hotels and flight charges through its reservation system, compared with conventional channels.

Priceline.com is one of four leading travel sites in the United States. It is differentiated from hundreds of similar sites by its unique name-your-price model that lets users bid for the travel service they are interested in.

Priceline.com competes with Travelocity, Expedia and Orbitz in the growing online travel services business - one of the few flourishing area in business-to-consumer e-commerce.

According to research by Boston Consulting, travel is the biggest category on online purchases by US consumers, accounting for US$4 billion in sale in 1999 and forecast to grow to US$29 billion next year.

The online travel service opportunities in Asia are projected to grow as quickly in the next three years.

Priceline's Web sites in Asia will face little competition. Priceline.com.hk is the first travel services Web site in Asia since Ebookit, a travel services start-up that closed last year, to offer the convenience of using the Internet to book discount deals.

Some sites offer online hotels booking services such as South China Morning Post partner Asia-hotels.com and Asia Travel, and Web sites operated by the larger travel agencies such as Farrington Travel, Wing On Travel and Reliance Travel that do not provide real-time online booking services.

Sites operated by airlines, such as Cathay Pacific, Singapore Airlines and Qantas Airways, have been criticized for offering limited services. According to an AC Nielsen/NetRatings survey, the top travel Web site frequented by Internet users in Hong Kong is Cathay Pacific's home page.

While travelers in Europe and the US have enjoyed the convenience of booking discounted travel on the Internet for several years, travelers in Asia are only just coming around to the concept of booking travel online.

The airline has been successful in driving traffic to its site by leveraging its popular frequent flyer programmes.

The airline frequently lists low fares on its site and conducts on-line auctions for air miles members where they can bid for a variety of travel services such as flights, hotel stays and tickets to tennis matches using their accumulated miles.

Peter Steyn, a director at ACNielsen, said: "Hong Kong users going to travel sites online are visiting local sites, not global brands such as Expedia and Travelocity, because these sites typically do not provide good discounts for Asian destinations."

Mr Steyn predicted Asian shoppers would be keener to book online once local sites offered steep discounts and ease of use similar to that offered by Expedia and Travelocity. He said Hutchison-Priceline could do well if it was able to deliver good discounts.

"Pricing is key and is a bigger draw than convenience in getting people to use their services." He said.

At present, the site provides hotel bookings for 40 cities around the world and flights to 27 destinations.

The company said it would add more suppliers and partners in the future.

However, the site's user-friendly ease will probably find many users returning to it even if they do not at first find bargains through the site.

Hutchison-Priceline's main competition is expected to come from Zuji.com, a travel services portal backed by 11 airlines in Asia-Pacific including Cathay and Singapore Airlines.

Singapore-based Zuji.com had repeatedly delayed its launch dates. Chief executive Pascal Bordat said the events of September 11 had led to a decline in air travel so the company had pushed the launch date to the third quarter of this, when air travel was expected to bounce back.

However, much of Hutchison-Priceline's challenge lay in the offline world. To gain users, the well-designed site needs to offer discounts better than those offered by traditional travel agents. Most traveler in Asia, including Hong Kong, still trudge down to their favourite travel agent and wait in line to buy their next holiday.

However, Mr Steyn said there was a growing group of younger, Internet-savvy working adults who prefer to book travel online because they were more informed about their destinations, such as more control over their itinerary, and liked the convenience of booking online.