TravelBizBuzz

Hot spots south of the border, like Mexico, are smoldering with opportunity, especially now that they’ve been touched with the LCCs’ magic wand.

What’s changed: Latin America’s middle class is assuming more discretionary income and can now travel for the first time by plane, says Worldspan’s Mike Parks. “The carriers themselves will tell you that they’re carrying a lot of first-time travelers,” adds Parks, who is senior VP of Latin America. And increasingly, those carriers are LCCs like Mexicana Airlines’ spin-off, Click Mexicana.

Room for a middleman: While more of the population is logging on, the reality is that many Latin Americans don’t have easy access to the Internet. However, they “do have easy access to the travel agency on the corner,” Parks tells TDR. So between the target audience and the LCCs who’d prefer to deal direct, there’s plenty of room for players to get in there and connect the dots. For example, Worldspan recently jumped on a distribution agreement with Mexican LCC Alma de Mexico.

Bottom line: Early moves into the industry by LCCs and GDSs spell opportunity for other players in the distribution chain to smooth out the travel buying and selling process.

Want to more in-depth information about what’s moving and shaking in Latin America? Read the TDR article “Latin American Market Reveals LCC Niche, Distribution Players Jump In.” Get your free copy by writing to me.

-- Kimberly Gilbert, Managing Editor, Travel Distribution Report

Posted by TDR at 01:08 PM | Permalink | Comments (0)

I blogged a couple weeks back on Latin America as the next up-and-coming international market, and I was convinced even further that this is a growing hot spot after reading an American Express Business Travel (AEBT) press release.

I looked into Latin America's rise in leisure travel in the last issue of TDR (see Vol. 15, No. 10), and AEBT says business travel is seeing an increase too.

Reporting May 8 from the Association of Corporate Travel Executives Global Conference and Latin America Summit, AEBT named Latin America & the Caribbean (LAC) as one of the company’s fastest growth markets in 2006.

In fact, the LAC market was up 20 percent on a total travel sales basis -- following Greater China and India, AEBT said. The company also revealed that small-to-medium sized enterprises accounted for 65 percent of its 2006 LAC annual dollar sales volume.

Focus on air: The average domestic/short-haul economy airfare for LAC increased 2.7 percent between 2005 and 2006, while the international/long haul business fare grew 4.4 percent, according to the AEBT 2006 LAC airfares index. (The index tracks all city pairs flown by clients across Argentina, Brazil, Chile and Mexico.)

The driver: Amex attributes the fare increase to a “strong business travel demand associated with economic growth and commercial activity” across the LAC.

Details: Argentina’s average short-haul fare spiked 18.2 percent to $133.17; Brazil’s increased 11.6 percent to $175.75; and Chile’s rose 10.4 percent to $272.75. In Mexico, however, new domestic carrier entrants increased airline fare competition and helped to push average short-haul fares down nearly 5 percent.

Average long-haul fares in Argentina, Brazil, Chile and Mexico increased 11.7 percent to $803.12, 4.4 percent to $475.81, 1.2 percent to $635.95 and 2.4 percent to $379.47 respectively, AEBT reported.

--Lindsey Rushmore, Editor-In-Chief, Travel Distribution Report--

Posted by TDR at 03:24 PM | Permalink | Comments (0)

Most of the news and commentary I read about travel companies entering international markets is predominantly about India -- and with good reason, as multiple experts and research indicate the country’s growing middle class and discretionary income to spend on travel. (See TDR, Vol. 14, No. 22)

But now that everybody’s aware of the Indian market (and wants a piece of the pie), what’s the next big thing?

Watch for: A couple months back, Timothy O’Neil-Dunne, managing partner for T2Impact, suggested to me in an interview that the Latin American market would start turning peoples’ heads in 2007.

Well it looks like at least one company is taking notice of this market’s potential. Just last week, Wordspan announced (March 26) that Aerolineas Mesoamericanas (a Mexican low-cost carrier, better known as Alma de Mexico) signed a multi-year, full-content agreement with Worldspan. Worldspan customers and business travelers using Worldspan Trip Manager XE, have access to all of Alma de Mexico’s published fares, Web fares and related inventory.

More: Then on April 2, Worldspan announced that GOL Transportes Aereos, a Brazil-based LCC, signed a Limited Connect distribution agreement with the GDS. GOL’s schedules, availability, low fares and booking capabilities will be available to all Worldspan travel agency, corporate and online points of sale worldwide, the GDS said.

Next step: Will other GDSs and travel companies follow? And will Worldspan continue to see promise in this market, signing on more Latin American carriers? More to come in the next issue of TDR.

--Lindsey Rushmore, Editor-In-Chief, Travel Distribution Report--

Posted by TDR at 05:43 PM | Permalink | Comments (529)

Will a bold Hilton proposal fill a huge void that’s supposedly keeping the Indian travel market from booming to it’s awesome potential?

While researching my recent article about India’s online travel market (TDR, Vol 14, No. 22), I uncovered some interesting ideas about why the travel market in India has yet to see its best days. Besides some obvious cultural factors, such as Indian consumers not warming up to credit cards, according to experts, hotel inventory is hurting — which means there’s slim pickings for those eager travelers to stay.

“Hotels [in India] don’t have the overcapacity that they do in much of the world, especially in Europe and the US,” Jared Blank, editor of Online Travel Review told me in an interview. “So while online agencies in the U.S. are making a nice profit on hotel rooms, the inventory doesn’t even exist in India.”

Well apparently, the inventory’s coming. In a recent press release, Hilton Hotels said it’s aiming “to form one of the largest international hotel chains in India.” Hilton, in a joint venture with Indian company DLF Limited, plans to build “50 to 75 hotels and service apartments over 7 years.”

For the full press release, click here.

Challenge for Hilton: Getting consumers to book on the hotel’s Web sites could be quite difficult, according to a recent email exchange I had with Himanshu Singh, Travelocity India’s managing director. “Hotels in India get less than 1 percent of their business through their own Web sites,” he said.

-- Lindsey Rushmore, Editor-in-Chief, Travel Distribution Report

Posted by TDR at 03:46 PM | Permalink | Comments (0)

There’s no doubt about it: The India market is hot — especially online.

In fact, “a unique blend of forces” is spurring online channel growth, which promises to quadruple within two years, says travel research firm PhoCusWright in a September report titled The Emerging Online Travel Marketplace in India. And various players in the industry — both suppliers and agencies — are taking aim at grabbing a piece of this pie.

Right now the largest online channel is supplier Web sites, which snagged 61 percent market share in 2005, according to PhoCusWright. That's compared to traditional travel agencies (via suppliers) which grabbed 32 percent and online travel agencies (OTAs) with 7 percent. However, by 2008, OTAs will take 25 percent market share. Supplier sites will grow to 65 percent, and traditional agencies will shrink to 10 percent.

The most recent issue of Travel Distribution Report offers subscribers even more key details from the PhoCusWright report, which highlight just where the Indian online marketplace will grow and compare 2005 booking numbers with 2008 projections.

For further information on the report, The Emerging Online
Travel Marketplace in India, visit http://store.phocuswright.com/emontrmainin.html.

Posted by TDR at 03:51 PM | Permalink | Comments (0)

China and India are well on their way to becoming online travel powerhouses.

And while Europe’s online travel market is still blossoming, growth in the U.S. online travel market is beginning to slow, according “Online Travel Worldwide,” an eMarketer study released August 3.

The report pointed out several key areas for experimentation within all regions that could lead to continued growth. For example, the U.K. market could test out user-generated content, RSS feeds and other technologies that have worked for the U.S. online travel market. The U.S. online travel market could experiment with the Asia-Pacific region’s mobile phone applications.

By trying out the technologies and marketing programs used in different regions, travel companies can shorten development times and avoid costly mistakes, the study noted.

Posted by TDR at 04:01 PM | Permalink | Comments (13)

TRB's first guest blogger is Ankur Bhatia, executive director of The Bird Group, an IT and travel services provider for India. Bhatia took the time to share his thoughts on the challenges online travel agencies will face as they move more deeply into online travel in India:
___________________________

Online travel players are quickly swooping into the Indian travel space, but don’t think they have an easy journey ahead.

India is being touted as the world’s fastest growing aviation market in the world. Its thriving economy and investment in aviation are contributors to India's thriving travel market, but the country can also thank its geographic size, population, lack of road infrastructure and increased consumer spending.

Bonus: The Indian online travel space has huge potential for growth. It is projected to be one of the fastest growing travel and tourism markets (behind Montenegro and China) between 2006 and 2015. And, currently only 2 percent of India’s local population travels by air, but the middle class is 10 percent of that population — which means local travel will pick up, as well.

But, online agencies have their work cut out for them. They will have to find and aggregate the content that travelers need and want. They’ll also need to invest in the technology necessary to provide high quality service. Passengers want more convenience and less cost.

Most important: To reap the benefits of India’s travel boom, online agencies must focus on innovating online travel so that they can offer the travel-related information and services that consumers need for a unique travel experience.
___________________________

For more information about online travel agencies’ expansion into India, check out the June 19 issue of Travel Distribution Report, which features a one-on-one interview with Scott Blume, CEO of ZUJI, the company spear heading Travelocity’s move into the Indian travel market with Travelocity.co.in.

Want to be a guest blogger? Simply send us an e-mail with your thoughts and we'll take it from there.

Posted by TDR at 04:31 PM | Permalink | Comments (0)

Travel companies are flocking to the Indian online travel space.

MSN India is out to become the number one travel portal for Indian professionals. The site has partnered with U.S.-based online travel company Desiya.com to allow its users to book travel products online, the companies announced June 8.

Desiya’s goal is to “address the travel needs of people looking for an avenue where they can plan and book their travel to India from just one place,” said Amit Taneja, CEO of Desiya Inc.

MSN India hopes its partnership with Desiya will also attract India’s growing traveling population, which wants “convenience and hassle-free travel services,” explained Niraj Dutt, executive VP of MSN India’s sales partner NDTV Media.

On May 8, Travelocity announced its interest in expanding into India with the launch of Travelocity.co.in.

“In India, the online travel trade is about two percent today, but has the potential to reach 30 percent in five years,” said Scott Blume, CEO of Zuji, Travelocity’s Singapore-based APAC affiliate. The portal will become active in late 2006.

The online agency is specifically interested in acquiring Indian companies: “Our targets could be potential travel portals or systems that would fuel our operations,” Blume noted.

Not to be left behind, Mobissimo launched Mobissimo.in, “the first travel search engine for India” on May 15. The site searches every Indian airline, including airfare sites Air Deccan, Air Sahara, SpiceJet, GoAir, JetAirways, Air India and Kingfisher -- and online travel agency, including MakeMyTrip.

Mobissimo also searches Indian hotel and car rental sites, and includes India travel options in its Mobissimo Activity Search.

Internet services provider Sify Limited has thrown its hat in the Indian travel ring by purchasing Globe Travels, an e-ticket provider for travel between India and the U.S., according to a June 5 release.

“This strategic acquisition brings into our fold fast growing services that enhance our online offerings to customers” -- which include 3,330 iWay cyber cafes and 200,000 broadband users across India -- while opening up new sources of revenue, said R. Ramaraj, CEO of Sify Ltd.

Posted by TDR at 04:40 PM | Permalink | Comments (0)