The Start of a Long Trip
When Shanghai high-tech executive Jason Kwok books a trip through online travel agency Ctrip.com, he doesn't point and click. He picks up the phone.
Mr. Kwok says he likes the wide range of flights and hotel rooms Ctrip offers -- but he isn't comfortable placing an order through its Web site. He believes using a credit card online "can be risky," leaving him open to fraud.
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So when he wants to make plans, he calls Ctrip, where an agent uses the company's Internet database to help him buy a plane ticket and book a hotel. Then a courier, usually on bike, delivers the ticket to Mr. Kwok's home.
Online travel booking has come to China -- sort of.
A handful of Web sites have sprung up that let Chinese travelers purchase airline tickets, book hotel rooms and arrange travel packages much more easily than with state-run travel agencies. The sites are enjoying tremendous growth, particularly among the young, wealthy and tech-savvy. They have also caught the attention of overseas investors, who want a piece of China's mammoth $87 billion travel market.
Much of the growth is being driven by increasing wealth and Internet use among Chinese consumers, according to Shanghai iResearch Co. Shanghai-based Ctrip.com International Ltd., which accounts for about 51% of China's online travel market, saw revenue grow to $30.1 million in the third quarter, up from $13.4 million a year earlier. At Beijing-based eLong Inc., the second-largest site, with 21% of the market, revenue rose to $11.8 million in the third quarter, up from $5.7 million.
But the sites face a number of obstacles before they match the success of Western operations such as IAC/InterActiveCorp's Expedia and Cendant Corp.'s Orbitz. Internet penetration, though rising, is still low in China, and the nation lacks a credit-card culture: Few people have plastic, and those that do are reluctant to use it online. Moreover, the state-run agencies still dominate the market. Web sites like Ctrip account for less than 5% of China's travel and tourism sector.
Taking Off
Still, as China grows wealthier, the long-term potential of the sites is attractive. The World Travel and Tourism Council predicts China's travel and tourism market will more than triple to $300 billion by 2014.
Foreign investors are attracted to those possibilities, says analyst Dick Wei of J.P. Morgan Chase & Co. When Ctrip listed on Nasdaq in December 2003, it nearly doubled its share price on its first day of trading -- the first initial public offering to do that in more than three years.
ELong, meanwhile, has attracted IAC, America's largest online travel company. Last month, New York-based IAC, which owns Expedia and Hotels.com, upped its stake in eLong to 52% from 30%, gaining control of the company. "It's a great opportunity to get into one of the fastest-growing travel markets in the world," says Barry Harford, president of the Asia Pacific region for IAC.
ELong will likely become part of Expedia, which IAC is planning to break off to create a publicly traded company. But Justin Tang Yue, eLong's chief executive, says his company won't be phased out by Expedia: The sites will remain separate but integrate their travel offerings. So Expedia customers will get access to tickets on major Chinese airlines and hotels in more than 220 destinations in China -- and eLong customers will be able to choose from Expedia's world-wide offerings.
"We can offer very attractive Chinese-destination products to their customers outside China and vice versa," says Mr. Tang. "They can offer their international inventory to us." Mr. Tang says eLong hopes to consolidate its information base with Expedia by mid-2005.
Ctrip is also branching beyond its home market. In November, the company formed an alliance with Dallas-based hotel consolidator Pegasus Solutions Inc. that will give Ctrip access to Pegasus's reservation database of more than 60,000 hotels world-wide.
But while the long term looks promising, China's online travel sites have to deal with plenty of stumbling blocks in the present. Perhaps the biggest is China's lack of a credit-card culture, which keeps online sales low and forces the sites to maintain call centers for phone orders. In the first nine months of 2004, Ctrip says its customers made only 25% of payments by credit card. ELong says credit-card use is low among its customers, though on the rise.
"True revolving credit card use is insignificant in China," says Paul French, director of Access Asia, a research firm based in Shanghai. "Cards are being issued, but then not being used. Even when merchants accept credit cards, they accept them very reluctantly."
Mr. French says merchants don't like paying the 4% charge when a customer uses a credit card, and haven't yet gotten used to the practice of including it in the price. Consumers, for their part, either don't have bank accounts and use cash for transactions, or their bank hasn't offered them a credit card.
Avoiding the Issue
So far, China's online travel companies have avoided the issue by focusing on commissions from hotel bookings, since hotels in China accept reservations without requiring prepayment with a credit card. Ctrip made three million hotel bookings from January to September, which represented nearly four-fifths of its revenue, says the company's co-founder and finance chief, Neil Shen.
"Obviously, I would love to see the credit-card culture grow in China," says Mr. Shen. But since Chinese consumers aren't used to making purchases online, Ctrip has to "work with the travel market" as it is, he says.
ELong also relies mainly on hotel commissions, which make up 80% of its revenue, compared with 7% from airline-ticket commissions.
Another stumbling block to online payment is that many Chinese airlines don't offer e-tickets, which would mean more credit-card purchases rather than courier deliveries. Ctrip puts e-ticket buying at just above 5% of airline purchases. ELong says 5% to 7% of its airline sales come from e-tickets.
Both Ctrip and eLong argue that e-ticketing will become more popular in the next few years, especially as airlines gear up to serve consumers during the 2008 Olympics, which will be held in Beijing. Once that happens, they say, their Web sites will be ready to accommodate the change.
The Old Guard
Meanwhile, even though the state-run travel agencies -- China International Travel Service and China Travel Service -- dominate the booking market, they have a number of disadvantages. For one, the agencies focus mainly on tour-group travel, says Victor Shao Yong Shu, director of sales and marketing of China Highlights Travel, the online platform partly owned by China International Travel Service.
This makes it a hassle for a state travel agency to track down a flight or a hotel room for a single person. And Mano King, a consultant manager at Shanghai iResearch, says that wealthier, younger travelers are starting to look more toward individual travel as China eases restrictions on visas and travel requirements.
Then there's consistency. The state-run agencies don't have a single database of hotels and airline offerings. So what travelers are offered by an agent in Chengdu may differ from what they get in Shanghai.
The offices of China Travel Service "have no relation to each other," says Mr. Tang of eLong. "There's no global distribution system of hotels like you have in the U.S. We've been able to consolidate our offerings and provide a wider range of choices and prices."
Mr. Ortolani is a staff reporter of The Asian Wall Street Journal in Hong Kong.
长途旅行刚刚开始
当上海一家高科技企业的管理人员Jason Kwok希望通过携程旅行网(Ctrip.com International Ltd.)安排旅行时，他没有在网上点击鼠标，而是拨通了电话。
Kwok说，他很喜欢携程旅行网提供的大量可供选择的航班和酒店房间，但却对通过网站下订单感到不放心。他认为在网上使用信用卡风险较大，有可能会上当受骗。
因此他想确定行程时，就给携程旅行网打电话。携程网就会利用网上数据库帮助Kwok购买机票，预订酒店。然后由快递人员（往往是骑著自行车）把机票送给Kwok。
网上旅行订票已经来到了中国－－就某种程度而言。
众多网站的蓬勃给中国游客带来了极大的便利，通过网站购买机票、预订酒店和安排旅行计划要比求助国营旅行社方便多了。这类网站获得了空前的增长，尤其受到年轻、富有的高科技精英的青睐，也引起了海外投资者的注意，他们也希望能从中国高达870亿美元的旅行市场上分得一杯羹。
上海艾瑞市场咨询有限公司(Shanghai iResearch Co.)称，中国消费者越来越富有和互联网的普及是旅行网站业务增长的主要原因。总部位于上海的携程旅行网2004年第三季度的收入就从上年的1,340万美元增加到3,010万美元。该公司在中国网络旅行市场上的占有率约为51%。排名第二的艺龙网信息技术（北京）有限公司(eLong Inc., 简称：e龙公司)的占有率为21%，2004年第三季度的收入从上年的570万美元增加到1,180万美元。
但这些网站要想达到IAC/InterActiveCorp旗下的Expedia以及Cendant Corp.旗下的Orbitz.等西方网站的成功还需克服众多障碍。中国互联网的普及率尽管不断上升，但仍然偏低，中国也缺乏信用卡文化：拥有信用卡的人很少，即使这部分人也大多不愿在网上使用。而且，国营机构仍然控制著市场。携程旅行网等网站的业务仅占中国旅行市场的不足5%。
但随著中国越来越富裕，这些网站的长期潜力不容低估。世界旅运及旅游业议会(World Travel & Tourism Council, WTTC)预计中国的旅游市场到2014年将增长两倍以上，达到3,000亿美元。
摩根大通公司(JPMorgan Chase & Co.)的分析师Dick Wei说，海外投资者就是受到了这种可能性的吸引。当携程旅行网2003年12月在那斯达克上市时，其股价在首个交易日上涨了近一倍，是3年多时间里首只表现如此出色的股票。
与此同时，e龙公司也得到了美国最大的网上旅行公司IAC的青睐。上个月，IAC将持有的e龙公司股份从30%提高到52%，获得了该公司的控股权。IAC旗下还拥有Expedia和Hotels.com。IAC亚太区总裁巴里?哈佛德(Barry Harford)说，这是进入世界上增长最快的旅行市场的大好机会。
e龙公司可能会成为Expedia的一部分，IAC正在计划将后者分拆，成立一家上市公司。但e龙公司的首席执行长唐越(Justin Tang Yue)说，他的公司不会被Expedia逐步取而代之：e龙的网站仍将保持独立，但会对旅行产品进行整合。因此Expedia的客户将能够买到飞往中国220多个主要城市的机票及预订这些城市的酒店，同时e龙公司的客户也能够选择Expedia在全球推出的产品。
唐越说：“我们能够向国外的客户提供极具吸引力的中国目的地的产品，反之亦然。他们可以将国际产品提供给我们的客户。”唐越表示，e龙公司希望能在2005年年中前与Expedia对信息库进行整合。
携程旅行网也希望能将触角伸向国际市场。去年11月，该公司与位于美国达拉斯的酒店解决方案公司Pegasus Solutions Inc.结盟，得以进入Pegasus拥有的全球6万多家酒店预定数据库。
但尽管前途看好，中国的旅行类网站目前却不得不解决众多问题。也许最大的问题就是中国缺乏信用卡文化，这导致网上销售不振，网站必须保留呼叫中心接受电话订单。携程旅行网称，2004年前9个月，只有25%的客户是通过信用卡付帐的。e龙公司称，使用信用卡的客户数量尽管在增加，但总人数依然很低。
驻上海研究机构爱克亚(Access Asia)的主管鲍尔?弗伦奇(Paul French)说，真正的循环信用卡在中国还很少使用。信用卡的发行量不断增加，但使用的人不多。尽管商家接受信用卡，但接受的却很勉强。
弗伦奇说，商家不愿缴纳客户使用信用卡带来的4%的支出，尚未习惯将商品价格纳入其中的做法。而对消费者来说，要么是因为没有银行帐户而采用现金交易，要么是银行没有向他们发行信用卡。
到目前为止，中国的网上旅行公司解决这个问题的办法是，向酒店收取预定客房的佣金，因为中国的酒店在预订时无需先通过信用卡预付定金。携程旅行网的共同创始人兼财务总监沈南鹏(Neil Shen)说，去年1至9月期间，该公司接受了300万次酒店预订，占其收入的近五分之四。
沈南鹏说：“显然，我愿意看到信用卡文化在中国的兴盛。”但他表示，由于中国消费者不习惯在网上购物，因此携程旅行网只有开拓旅行市场。
e龙公司也主要依赖于酒店佣金，这占公司收入的80%，机票佣金则占7%。
网上付费的另一块绊脚石是许多中国航空公司没有提供电子机票。携程旅行网销售的机票中仅有略高于5%为电子机票。e龙公司称，销售的机票中仅有5%-7%为电子机票。
携程旅行网和e龙公司都表示，电子票务将在今后几年间越来越普及，尤其随著2008年北京奥运会的日益临近，他们也会大力改善客户服务。一旦这一天终于到来，他们的网站已准备好迎接这些变化。
与此同时，尽管中国国际旅行社(China International Travel Service)和中国旅行社(China Travel Service)等国营旅行机构控制著预订市场，但他们也有很多缺陷。中华游
(China Highlights Travel)的销售及营销主管邵永树(Victor Shao Yong Shu, 音译)说，其中一点就是国营旅行社主要重视团体游。中华游是一个网上平台，中国国际旅行社持有部分股份。
因此国营旅行社很难为个人预订航班或酒店客房。上海艾瑞市场咨询有限公司的咨询经理Mano King说，随著中国放宽对签证和旅行要求的限制，富有的年轻游客正开始寻找更多的个人旅行机会。
然后就是统一性的问题。国营机构没有统一的酒店和航班数据库。因此游客从成都的旅行社获得的信息可能与从上海获得的不一样。
e龙公司的唐越说：“中国旅行社的各分支机构之间都没有往来。酒店也不像美国一样拥有全球分销系统。而我们的网站能够整合产品，提供更广泛的选择和价格。”
