Travelocity, airlines to launch Asia travel site next year

US-based travel portal Travelocity.com has teamed up with 11 airlines to roll out an online travel service in Asia Pacific by early next year.
Written by Nawaz Marican, Contributor
SINGAPORE--US-based travel portal Travelocity.com has teamed up with 11 airlines to roll out an online travel service in Asia Pacific by early next year.

Called Zuji.com, the site aims to offer a "comprehensive range of travel products and services from air tickets to hotel bookings, car rentals, travel packages and land tours" in both English and Chinese, according to a statement.

The joint venture (formerly known as Travel Exchange Asia) was established last June, and includes Singapore Airlines (SIA), SilkAir, Malaysia Airlines, Cathay Pacific, China Airlines, Garuda Indonesia, Qantas, Air New Zealand, Ansett, Royal Brunei Airlines and EVA Air. Travelocity joined the alliance in February this year as a major technology provider.

"We have mapped out the diverse needs of travellers from Asia Pacific and will cater to the diversity of languages and cultures in the region," noted Zuji CEO Pascal Bordat in the statement.

Toward this end, localized versions of the site will be launched in Singapore, Malaysia, Hong Kong, Taiwan, Brunei, Australia and New Zealand early next year, said Zuji commercial director Martin Symes in a phone interview this afternoon.

The travel exchange was initially slated to be launched in the fourth quarter of last year.

"One percent of travel packages are bought online in Asia Pacific (including Japan)...and we expect this figure to grow to 5 percent between 2003 and 2004, which is worth approximately US$8 billion," Symes said today, citing an in-house study.

"In Asia Pacific, we expect to be the market leader within a year of the launch but our position will vary across different markets," he claimed.

Multi-million-dollar investment
Total investment in Zuji stands at between US$50 million and US$100 million, said Symes.

He declined to provide revenue projections but noted that Zuji expects to reach profitability by 2005 or 2006.

Revenue from the venture would be generated from its business-to-consumer (B2C) and business-to-business-to-consumer (B2B2C) units. At the B2C level, Zuji plans to collect a commission from selling travel products online, explained Symes.

At the B2B2C level, sales of its technology and solutions will "allow existing offline travel agencies to distribute their products and service to their customers on an online medium", he added. This phase is expected to begin in 2002, he added without elaborating.

Zuji's idea is not new, however. There are already similar services offered by the online sites of local travel agencies like Chan Brothers and Ken Air; independent online reservation sites like Asiatravelmart.com and Travelsutra.com; as well as the airlines themselves. Singapore Airlines, for example, has been offering an online ticketing service on its Web site for over two years.

When asked in June last year if SIA saw other travel agents as its competitors for the new travel exchange, a spokesperson for the airline said it "intends to work with other airline and non-airline participants to develop the travel exchange", adding that it aimed to be "an Internet enabler for the travel trade. Travel agents will have a key role to play as far as we can see".

Meanwhile, Asiatravelmart.com CEO Alex Kong said that he could not comment on Zuji.com as his company had signed a non-disclosure agreement with Zuji.com. The latter was not contactable for further queries by press time.

Asiatravelmart is on track for profitability by year end, Kong claimed, but he declined to reveal any revenue projection.

According to him, 70 percent of the company's revenues come from Asia Pacific (excluding Japan, Korea and India,) while Europe and the US generate 10 percent each. The Middle East, Korea, India and Japan together account for 5 percent, with other markets contributing the remaining 5 percent.

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