Fri, Jan 21, 2000 - Page 17 News List

Net shaking up tourism businesses

E-VOLUTION As more travel agencies move online, comparison shopping becomes easier and prices drop

By Sharon Chuang  /  STAFF REPORTER

As more and more firms introduce online travel services, competition among travel agencies is expected to become even more intense, with consumers the biggest winners, according to industry observers.

Lion Tours (雄獅旅遊) is the latest firm to announce plans to set up an online travel service, following ysticket.com (玉山票務) and buylowtravel.com.tw (百羅旅遊網).

Stone Chen (陳碧松), manager of Lion Tours, predicted that more and more travel agencies will set up online travel services in the future. "It [online travel service] is the future trend. Online travel services along with Taiwan's entry into the WTO will cause a shake-up in the tour industry during the next three to five years," Chen said.

According to Chen, the competition will become fiercer with many smaller travel agencies going out of business, and many others forming alliances to increase their competitiveness.

Alice Chang (張華禎), CEO of buylowtravel.com.tw, said that consumers will greatly benefit from online travel services because prices of travel products on the Internet are transparent, and customers are treated equally. Customers can compare prices and details of travel products and travel agency services posted on the Internet, allowing them to more easily find the best deal.

Buylowtravel.com.tw even posts on its Web site a promise that if customers find cheaper plane tickets elsewhere, they will pay the difference.

Though online travel services are expected to make it more difficult for travel agencies to survive, industry observers say that the shakeout effect will take time as the use of the Internet is still limited, with the majority of Internet users under the age of 35, industry sources said.

"All industries will be doing business online in the future, including the tour industry," said Chang. According to Chang, online travel services were an original part of buylow.com.tw. As the company saw online travel services finding increasing demand, they set up an independent Website for travel business.

"Travel services are a perfect fit with the Internet," said Chang. Subsequent services of purchasing travel products online, delivering tickets and information and returning tickets are relatively simple compared to selling other products like computers, according to Chang.

Industry insiders say that setting up online travel services has several advantages for travel agencies.

Traditionally, travel agencies have to set up branches around Taiwan to cover the business in different areas, while for online travel agencies, there is no such need. Online travel agencies also do not have to hire as many sales people as traditional travel agencies do.

According to Raymond Tung (童雪鈺), general manager of ysticket.com, the company's 13 employees have generated NT$200 million in sales in 1999. And sales this year are expected to reach NT$800 million. Tung said that its plane tickets are 4 to 6 percent cheaper because of the expenses saved on administration and marketing.

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