HUELLA ONLINE TRAVEL : GAINING MARKET INSIGHT

INTO HONG KONG CONSUMERS

SEMINAR 2

Huella online travel ltd. is a Malaysian based online travel portal targeting Asia

Market share was hovering under 5% after the launch at Hong Kong lower than the other markets

Previous market Research showed that lack of awareness about Huella and risk averseness towards online purchases appeared to be the key factors

CASE INTRODUCTION

Jenny Young marketing and Market Research manager of Huella Hong Kong

Online travel industry has not picked up despite high internet usage penetration and techno savvy nature of its population

Lueng decided to hire Market Sense a MR firm head quartered at Australia.

CASE INTRODUCTION

The current airline booking systems – 1950- American Airlines – travel agents to obtain real time flight data

Other airlines followed – ARS – Airline Reservation System

Various ARS soon evolved into single CRS – Computer Reservation System – made available to all travel agents

Airlines had outsourced a significant portion of reservation process

By late 1990 the major CRSs had expanded into GDS –Global Distribution System

THE CHANGING AIR TRAVEL DISTRIBUTION SCENE

Company’s that owned CRS developed a highly profitable technology

CRS /GDS charge a flat fee based on number of segments per trip, agents charged a commission rate

The Air Travel Pie

Cheaper alternative to CRS/GDS Airlines increasingly reduced their

dependence on travel agents and CRS/GDS Sell directly to customers via internet Average online sales had grown from 24.4%

in 2002 to 32.4% in 2006

ONLINE TRAVEL

Travel agents responded by unbundling their services offering tailor made travel packages

A number of travel agents sprung up around the world

Three types of online travel agents- 1. Online stores by brick and mortar agents2. Online travel portals which offered other

services apart from travel products3. Online travel bidding sites

ONLINE TRAVEL

The key advantages of online booking were:1. Convenience2. Speed3. Access4. Control

E-bookings of Air Travel

Air passengers from North America(59%) was most receptive towards online air travel purchases, followed by Europe (35%) and Asia Pacific (19%)

In terms of air travel bookings, Asian consumers were less inclined to purchase ticket online despite the popularity of online hotel bookings

The Asian online retailers did not invest time and manpower to update air fares frequently

E-bookings of Air Travel

Despite its high internet usage penetration, online purchases of air ticket was the lowest in the world

Reasons were :1. Perception of risk outweighing convenience2. Better offline alternatives3. Familiarity with traditional travel agents4. Geographical proximity and efficiency of

city’s public transport system

Hong-Kong Air Travelers

54% of Hong Kong travellers were uncertain about the price competitiveness between online fares and travel agents

57% found the travel agents to be extremely efficient

Concern about the security of the online booking sites as well as their transaction capabilities

Hong-Kong Air Travellers- Study by Cendant Travel Distribution System

Full Service Travel Guru User Friendly Design Pre-packaged tours Results for intended date plus for three

days around the preferred date Best fares within a self chosen date range Besides credit cards other payment

options available Website was ViriSign secured

Huella Online-Business Model

Jenny Lueng believed that any marketing understanding begin with qualitative research

Lueng was puzzled by the discrepancy between low interest in oline travel and its high internet usage penetration

In 2002 she hired MGO a hong based MR company to condut a study for its Hong Kong Market

Huella Hong Kong

Purchasing habits and attitudes of consumers towards online travel

Awareness of Huella brand Attitudes and perceptions towards Huella

brand Actual or intended usage pattern

The objetives of the study

Brand Awareness- low Brand Image – risky and unreliable Brand Positioning – Categorized Huella with

other online travel agents and not with traditional agents

Usage Pattern – most of them never used the site, few used it only to obtain information about available products

MGO suggested a second stage of quantitative research since the findings were not statistically significant

Key Findings

Lueng decided to conduct another MR study and would outsource Market Sense

The goal was to ease consumers concerns regarding online travel purchase and ultimately increase Huella’s market share in Hong Kong.

The Future