After a 4 percent drop in 2009, travel bookings in China will grow by 5 percent in 2010, projects a new PhoCusWright report, “Emerging Online Travel Marketplace in China.” The same report predicts that travel will expand to become a $65 billion industry by 2011, and that 20 percent of that market would be online. 

Where opportunities lie in that growth, and what kinds of companies might be positioned to seize them was one topic of discussion at the recent China Travel Distribution Summit, hosted by China Travel Daily at the OCT Interlaken Resort in Shenzhen in December.

Online booking may be growing, but for a well-established overseas corporation to make its mark in China’s online travel space remains a tricky task, said experts at the meeting.As Demopolous explains it, a successful online venture requires capital, technical information and local knowledge. Chinese companies have access to as much capital as a strange participant,and

Investment activity in the Chinese travel industry isn’t all going straight to the Web. Earlier this year, the China National Tourism Administration projected that Chinese travelers would take 50 million outbound trips in 2009, and domestic tourism revenue would grow by 8 percent. One recent entrant to the market here is low-cost Malaysian carrier Air Asia, which has been “aggressively” going after Chinese business for the last two years, in the words of Kathleen Tan, regional head of commercial for Air Asia.

Today, Air Asia operates 200 weekly flights to nine Chinese cities. Tan says the airline has succeeded by listening to what Chinese travelers want, and then promoting that. Getting employee buy-in has also helped.

Flexibility and enthusiasm to actually listen to local partners are key to realizing return on investments in China’s travel industry, says Bao Bean: “If you try to control from abroad or put in international systems, you will have a distinct disadvantage in the Chinese market.” And if for companies entering China via mergers and acquisitions, he advises: “Make sure you don’t buy the whole company. Make sure the people running it stick around.”
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