First-time users, the future growth engine for online travel in Asia

August 03, 2007 | Online Travel

In the United States, online travel sites are fighting to take over consumers from competitors. In Asia, the race is on to capture the interest of the first-time user and build up some brand loyalty to sites.

Online travel in the Asia-Pacific region is likely to experience explosive growth the rest of the decade. From 2006 to 2010, India is expected to grow at 271.6 percent annually, while Vietnam’s online travel sector is forecast to expand 202 percent and China’s and Indonesia’s in the 70 to 83 percent range. (The biggest markets in revenue terms outside of Japan are India at US$300 million and China at US$200 million.) The U.S. online travel business, by contrast, will grow 17 percent on an annual basis during the same time.

A crucial difference in the U.S online travel market, where sites such as Travelocity.com, Expedia.com, and Travelport.com are big players, is that the growth in new customers is quite slow, given most Americans already have Net access and are familiar with online travel planning.

In Asia, the race is on to capture the interest of the first-time user and build up some brand loyalty to sites. “In the United States, companies are fighting to take over consumers. But in Asia-Pacific, there is opportunity to acquire new users who are using the Internet for the first time,” says Jeffrey Grau, senior analyst at eMarketer.
“You want to plant the seeds now because that’s going to be the future growth engine.”

That’s why the big international online travel sites are now ramping up their marketing and online service efforts in the region. Paris-based Carlson Wagonlit Travel, a worldwide business travel management company, has big aspirations for Asia. “The big four markets in Asia-Pacific, Australia, Japan, China, and India will see their online (managed business) travel adoption rate go up to 40 percent in three or four years,” says Nicolas Pierret, director of global accounts for Asia-Pacific.

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