Analysys International has projected that the rise of vertical targeted search engines will produce a "great influence o

Analysys International has projected that the rise of vertical targeted search engines will produce a "great influence on China's online travel industry and exacerbate the competition" in its recently released Focus Report on Internet-online Travel 20

Published: 26 Oct 2005

Analysys International has projected that the rise of vertical targeted search engines will produce a "great influence on China's online travel industry and exacerbate the competition" in its recently released Focus Report on Internet-online Travel 20

As of the first half of 2005, by amount of transaction revenue, the
market share of the main players in the domestic online travel market
are: Ctrip with 51.2% followed by eLong with 24.8%, where as Aoyou only
takes 3.3% of the market, says the report.

A statement from the company says: "Search engines provide travel
consumers with information they want by summing up, combining and
optimizing numerous pieces of information and thus prevents them from
getting lost in the vast sea of data from various channels. To take the
newly rising price comparison travel search engine of Qunar as an
example, the strong interactive search function has overturned the
display format of traditional travel search websites." It adds, "Qunar
is recognised as a "new star" in the online travel industry by providing
users with real-time pricing information and other descriptive details
from more than 20 airlines and 10,000 hotels servicing mainland China."

Liu Lei, an analyst of Analysys International, says the newly emerged
travel search engines empower consumers with the transparency of travel
products.

"As price is the most sensitive factor that travel consumers care about,
those large traditional online travel service providers, with a better
awareness of brand and website but also a higher price have lost their
advantage," says Lei. The analyst also added that this price competition
requires online travel service providers to promote its overall
strength, increase consumer groups, enhance reseller resources and
therefore reduce the resource costs got from travel resource vendors.

"So we think operations on a large scale is the only way for online
travel service providers to move forward," said Lei.

Analysys International also cautions that the rising of vertical search
engines weaken the advantage of one-stop services of online travel
service providers, while enabling the travel resource providers with
price advantages for online direct selling. Competition for consumers in
the whole value chain and reseller channels will be intensified and
finally lead to a tendency of flatter channel structure.

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