Online travel agents eye largest possible chunk of budding markets

Online travel agencies are continuously expanding their businesses in markets like Asia, either by launching operations afresh or picking up partners for inorganic growth.

Published: 13 Feb 2008

Online travel agencies are continuously expanding their businesses in markets like Asia, either by launching operations afresh or picking up partners for inorganic growth.

According to a media report, OTAs have set their sights on international markets where travelers are not yet accustomed to booking trips online and aim to capture the largest possible chunk of those budding markets.

"The Asia-Pacific market is the biggest market that we're looking at," said Expedia CEO Dara Khosrowshahi. China and India are the most tempting geographic targets, he said at the Reuters Travel and Leisure Summit in Los Angeles.

The report also highlighted that the task is complicated somewhat by slower Internet penetration in Europe and Asia and by the relatively small number of large hotel chains on those continents. It added despite these hurdles, US-based OTAs have established some degree of traction internationally largely through acquisitions.

"We have a very broad footprint with the businesses we have today," said Orbitz CEO Steve Barnhart.

Barnhart has said the company plans to grow its international brands and invest in global technology improvements.

Recently, Priceline.com Inc. was referred as a powerhouse abroad by a media report, which also underlined "the huge opportunities in Europe and in Asia".

Arieh Coll, a fund manager at Eaton Vance Management in Boston, had shared that the people who have a negative view of Priceline "are overly focused on the North American business and are ignoring the huge opportunities in Europe and in Asia."

"Specifically, what they see in the US is a company that is ranked third or fourth in the industry and is losing market share, as opposed to the company in Europe that is ranked No. 1 in the online hotel reservation space and growing 100% year over year," Coll reportedly said. It was highlighted that through the first three quarters of 2007, 55% of Priceline's revenue came from its overseas operations.

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