Friday, January 17, 2003

Online travel agency shifts sales strategy


In a major change of strategy, Hutchison-Priceline (Travel) will offer published-price travel products, a departure from its loss-making United States counterpart's name-your-own-price model.

The Li Ka-shing controlled online ticketing agency announced the change just two days after rival said it was aimed at capturing 30 per cent of the Asia-Pacific Internet market within three years.

Hutchison-Priceline chief executive Alfredo Gangotena said the online ticketing agency would introduce a new range of discounted, published-price products before the Lunar New Year, starting with hotel bookings and car rental.

"We will expand the products to air tickets and package tours later," he said.

AC Nielsen director Peter Steyn said Priceline's new strategy was partly due to the fact many consumers in Asia were still reluctant to try the online bidding model.

"Priceline recognised that you can't please everybody with the same product offering, so it makes perfect sense to broaden their choices by adding discounted published-price travel products to complement their name-your-own-price products," Mr Steyn said.

Hutchison-Priceline has been advertising the introduction of the United States "name-your-own-price" concept into Asia.

It claims the travel site can help customers save up to 30 per cent from conventional channels.

The online ticketing agency, a 65-35 per cent joint venture between Hutchison Whampoa and, was launched in Hong Kong in April last year.

Mr Gangotena said that with the addition of the new published products, customers would be presented with two options that both deliver discounts.

"In peak holiday periods, when prices are higher and availability limited, customers can still name their own price through Priceline," he said.

"Yet if there are no seats or rooms available for specific dates or itineraries, customers can now go straight to our retail options and be confident of getting the best market prices available."

Mr Steyn said online spending in Hong Kong was still low compared with countries such as the US, Europe and Australia where transactions were driven mainly by convenience.

In Hong Kong, shops and travel agencies were a short walk or drive away from most people's homes, he said.

"To increase online shopping in Hong Kong, shoppers need incentives such as lower prices and a wider online product selection than what is available in stores, a high level of online security, and superb service and return policies," Mr Steyn said.

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