Interview with Tom SooHoo, chief executive officer, eLong

China Special: By EyeforTravel.com Correspondent

How do you assess the transition from McDonald’s China to eLong? What trends have you experienced in online travel industry in China?

I have enjoyed the challenges and opportunities here at eLong.  My experience in well established operations and big branded companies here in China gives me perspective on organisational development, management disciplines, and brand building, all of which I hope to use to help grow eLong. 

How do you assess performance of online travel industry in China in the first half of 2006? Last year, during our conference in Shanghai, it was shared that current online players still only command a small share of total travel bookings with less than five percent of total travel bookings. By how much has it grown?

From our estimates, online travel growth continues to outpace the overall growth of the travel sector by a rate exceeding four times overall industry growth. Overall share of OLTA remain small, affected by a relatively underdeveloped e-commerce platform and credit-card penetration.  All trends though, point to future growth as the pace of acceptance increases.

It is said that more important than pure Internet access numbers is the ability and willingness of Chinese consumers to book and pay online for travel. What’s your viewpoint on this?

I think they are both important.  As we have seen in more developed countries, convergence of increased user groups, technology, and e-commerce and cc security, we believe, will stimulate more Internet penetration and usage. China’s Internet population does differ though, from that of the West as acceptance is disproportionately younger than in more developed countries.  Higher age and higher income population groups are under-represented.

How do you assess positioning of eLong as a brand in China?

Our research indicates that eLong is clearly a brand recognised in China. However, in order to achieve our objectives, we believe that we do need to make more efforts to broaden and strengthen awareness of eLong in key user segments as well as in selected, key markets. 

Coming to trends in China, do you agree with observation that there is evolution of a group of travellers in the higher social demographic segment breaking away from the conventional packaged tours, opting instead for free and easy travel?

I agree.

How do Chinese consumers approach online travel buying process? What new trends have emerged as far as consumer behaviour is concerned?

As with many Internet companies in China, we are seeing improvements in the user experience every day. For eLong, we strive to constantly improve the user interface in the areas of navigation, content, and functionalities.  Another area of focus in credit card payments online.  We are also working to improve this functionality as well.

Analyst had referred to hurdles such as lack of a mature individual credit-check system and the nation’s current financial reimbursement mechanism as temporary ones last year. Is there is any improvement in this regard?

Yes.  We are seeing increases in credit card usage and willingness to use CC to book and pay for travel services.  The recent BSP e-ticket reimbursement policy in June has had some implementation glitches, but directionally, the industry is heading in the right direction.

eLong launched a new travel site for outbound travelers, supported by Expedia’s platform and existing network, enabling eLong to sell a wider selection at lower prices. How is this shaping up?

Absolutely.  We believe that our partnership with Expedia is and will become an more important element in delivering a superior travel experience for Chinese customers. In May, we launched an enhanced online booking functionality called 360 virtual tours as well improved content for a wide selection of hotels in key international destinations. Both of these functions were market-firsts for Chinese consumers. The 360 Virtual tour allows customers to view the rooms and properties in detail, prior to booking, leading to a more informed choice and we believe, leading simply a better travel experience. Our focus is on improving the consumer experience.

What’s on your agenda for eLong?

Three basic objectives:  build a great team, create a great execution platform, and focus on improving the customer experience.