China: Online travel ready for profitable voyage

August 01, 2006 |

Established online travel agencies such as Ctrip and 96115.com as well as newer firms such as search engine Qunar.com and booking site Aoyou.com are offering innovative services to exploit China’s tremendous appetite for online travel.

The online travel market in China is the latest segment in China’s vibrant internet industry to show signs of huge consumer potential, according to a recent survey published by Beijing-based travel search engine Qunar.com.

With increased purchasing power and a keen desire to see the world, China’s internet-enabled consumers are set for take-off.

Conducted in May and June of this year, the survey asked China’s frequent travelers a range of questions, and their answers provide a unique insight into this exciting and world-beating market.

People who book online are frequent travelers. The recent survey indicated that Chinese consumers who book online are already keen travelers.

- 25% said that they traveled 4 or more times for business during the past 12 months
- 26% said that they traveled 4 or more times for leisure during the past 12 months

And more and more Chinese are planning to travel abroad. Although Chinese internet users primarily travel within China, a significant number plan to travel abroad within the next few months.

- Almost 40% expect to travel abroad for their next trip

Online travelers belong to highly attractive demographic groups. Clearly, online travelers are part of the emerging consuming class in China, and are highly sought after by advertisers.

- 73% use a credit card
- 22% own and drive a car
- 69% have a computer at home
- 35% own their own apartment or home
- 88% have received a university degree

“With high disposable income, we feel that from an advertiser’s perspective, online travelers are a valuable demographic from which to build brands,” noted Mr Kevin Huang, CEO of Pixel-Media in Hong Kong.

More are willing to use the internet to make their bookings! Over half of internet users have at one point or another bought a ticket online and slightly less than half have booked a hotel room online.

- 57% have already purchased a flight online
- 43% have booked a hotel room
- 24% have ordered a tour package

Mr Tan Zhi Guo, CEO of Beijng’s largest airline ticketing agency 96115 concurred with these results. “The industry is seeing a dramatic shift among consumers from offline to online as evidenced by the latest data. The internet provides consumers with a reliable and efficient medium to reach companies who offer great deals for consumers, like 96115.”

How do consumers find out what they are looking for? Consumers are willing to utilize a range of channels when researching and booking online. Market leaders such as call-center company Ctrip and search engine Baidu, as well as travel search engine Qunar.com, which is China’s third largest travel web site, are on the short-list of destinations where consumers find travel information.

- Over 60% of consumers identified Ctrip, Baidu and Qunar as the three most useful web sites for finding travel information.

Most consumers research online and over half book online. About 1/2 of internet users book online. Other internet users, although they may search online, still go offline such as their local travel agent or preferred vendor to buy flight tickets or book hotel rooms. However, more and more are expected to make their purchases online.

- 53% of business travelers personally make their own bookings online.

According to Mr Hu Fa Jin, Marketing Manager of Air China and one of China’s leading international airlines, “Along with the explosive growth in e-ticketing and increased levels of internet usage, we certainly are looking forward to generating more online transactions. Of course, meta search engines and online agencies will continue to be an important part of our marketing communications strategy.”