Interview with Lee Lai Huat, chief executive officer, HolidayCity.com

HolidayCity.com recorded 190,000 room bookings with a transaction value of US$25 million in 2005.

The company’s chief executive officer Lee Lai Huat says the target markets are United Kingdom, the United States, Australia, New Zealand, and Singapore.

In an interview with EyeforTravel.com’s Ritesh Gupta, Lee spoke about major developments in the online travel business in Asia, competition vis-à-vis other online players and much more. Excerpts:

What according to you are the major developments in the online travel business in Asia or the markets which you serve in the last six months or so? How have these impacted or shaped up business opportunities for your organisation? 

The advent of Low Cost Carriers (LCC), I feel, has made a positive impact on the online travel industry as it has improved and enhanced consumer confidence in making online purchase and transaction. This has led, among others, to an increase in the number of bookings made by first-time customers through HolidayCity.

It is also not wrong for me to say that the LCCs plays an important role in making previously unpopular destinations more accessible; opening up new markets for the travel industry and creating an increase in accommodation demand. We see a clear pattern or trend emerging from our UK customers who book hotel rooms in smaller cities in Europe that are served by the LCCs.

There is an increase in demand for accommodation in locations served by the LCCs especially for short haul breaks and we are ready to meet this requirement. At HolidayCity, we see a large number of Singaporeans making room bookings in Hong Kong.
            

Of all the markets you cater to, which market is most promising in terms of online travel business and why?

As of now, our main target markets are United Kingdom, the United States, Australia, New Zealand, and Singapore. All of these markets are promising as they have all delivered the highest number of bookings and customer spending, as well as consistency in terms of frequency in travel. The customers from these markets are more accustomed to buying online due to the high level of Internet penetration and high level of confidence in online security.

Could you share some insight into how are people currently researching and buying travel online in Asia?

Credit card remains a major concern for customers who make online purchase. Most would browse online to search for information on destinations, tours and attractions, and compare hotel and room rates, among others. However, when it comes to making actual room bookings, a majority still prefers to do it offline. They want to communicate with a real person; comforted by the thought that there is another person at the end of the other line whom they can refer to for assistance.

We at HolidayCity are certainly sensitive to this trend. Our team of customer service officers can be reached via telephone, email and fax; ready to assist our customers with their queries. We have also introduced the ‘Online Chat’, where they can contact our customers online in real-time. We find that most of our customers are appreciative of the ‘personal touch’ accorded by this feature. They feel more comfortable and assured knowing that they are talking to a real person in real-time; someone who can give them the information they seek and ease their worries.
            
What marketing initiatives have you taken in the recent past?

We are embarking on a media introduction exercise in our key target markets; Australia and New Zealand. We have acquired the service of experienced media consultants to assist us, not only in planning and organizing media interviews with the media, but more importantly, to understand the consumer behaviour and patterns.

We have also enhanced our marketing report to enable us to derive more specific and targeted data on our customers which are useful in determining their buying behavior, favored destinations and spending habits. In the cards is an advertising campaign which would see a joint collaboration with our hotel partners to further strengthen our brand through a series of targeted advertisements in selected international publications.

How do you assess competition vis-à-vis other online players such as Zuji, Wotif and meta-search players?
            
Zuji and Wotif are among the top players in the online travel industry especially in their respective markets. They have the largest number of offerings in hotels and destinations and have managed to gain prominence in selected markets. Wotif, for example has the highest offerings of hotels and destinations in Australia compared to other sites but it is not the case for the European markets.

Wotif has a distinctively different business model. They work on distress inventory model with room available for the last 28 days whereas HolidayCity offers our customers the opportunity to book up to a year ahead. We find that about 60% of bookings received from our customers have a lead time of more than one month which indicates that many travelers still prefer to make their accommodation arrangement well in advance of the travel date. Our customers also have the advantage of paying directly to the hotels.

How has packaging as a product shaped online?

Product packaging has shaped tremendously as hoteliers and online travel agents constantly try to come up with various ways of selling their products as one whole package. However, at HolidayCity, we believe that customers should not be drowned by too many choices. We offer them the flexibility of choosing and making other travel arrangement on their own, as different customers may have different preferences and product packaging may tend to limit their choices. In a way, HolidayCity provides customers with the freedom of choice by only concentrating on one offering.