E-commerce: Selling NZ to the world

The $9 billion travel industry is poised to become one of the biggest beneficiaries of the internet, says Tourism New Zealand.

Chief executive George Hickton points out that New Zealand's four main markets - the US, Germany, Japan and the UK - account for 79 per cent of global net users according to the World Tourism Organisation.

Tourism New Zealand's site (www.purenz.com), which went live last July, received a respectable 4269 users in September, but it was developed to "showcase the breadth of the New Zealand offer to the consumer" rather than as a selling device.

The people actually selling online are the hundreds of operators with sites offering anything from accompanied motorcycle tours of the Far North to campervan hire in the South Island. Individual motels and hotels sometimes maintain their own sites but many are also selling through online intermediaries.

One of the earliest companies to venture into this field was Newmarket-based travel publisher Jasons, which began offering advertisers in its New Zealand Motels Directory a free text entry on its site (www.jasons.co.nz) in 1996.

Jasons' site now contains 23,000 operator listings covering New Zealand, Australia and the South Pacific and receives more than 2 million new visitors a year, offering them a searchable database of accommodation and the ability to book online, using Jasons as a commission-free "infomediary".

In the New Zealand section of the site, which lists 5400 motels, campgrounds and other tourism operators, 65 per cent of the traffic comes from overseas.

Chris Adams, Jasons' general manager, marketing, believes the net is good news for the tourism industry because small operators now have access to markets that were previously very hard to reach.

"The tourism business is all about information - after all you can't try before you buy," he says.

"Up until the net the only way a small business could reach a worldwide audience was to use expensive networks like Galileo or Sabre that the travel agents use. But these cost thousands of dollars a year and take up to 20 or 30 per cent in commission."

The net is also encouraging a trend towards what are known as "free and independent travellers" (FITs), who use the web to research destinations and book flights and accommodation, rather than relying on package deals.

Mr Adams believes that New Zealand is uniquely suited to this shift away from structured travel as it offers the sort of the adventure activities that appeal to FITs.

He also believes that the net will lead to a shakeout of travel industry intermediaries. The key to success, he says, will be to maximise revenue by rapidly altering prices according to changing supply and demand - on a daily basis or even in real time, by auctioning off hotel rooms for example.

"It's no good setting rates for the whole year any more. On the net demand meets supply head on."

Denise Campbell, director of Wellington-based online travel agent The Web Travel Company (www.experiencenz.com), agrees that the net will change the travel industry.

"I think it's the way the whole industry will go. If you or I wanted to go to Malaysia for example, it would be better to talk to someone there."

Mrs Campbell's company's specialises in inbound travel, and 90 to 95 per cent of its business comes from overseas, with the US the biggest market.

"They are just more internet confident. They don't have any qualms about using the net or booking by credit card. The European and Australian market is about one or two years behind; they eventually go ahead but they make a booking more slowly."

As well as offering accommodation, the company takes bookings for domestic travel including ferries and flights. However, Mrs Campbell has been unable to come to an arrangement with some operators, which have been concerned about the reaction of overseas distributors losing business.

"I can't see it myself," she says. "Customers are either going to book on the internet or they are not. The internet has no barriers."

Case Study:

Jasons Travel Media

Why did you get into e-commerce?

It allows us to publish information anywhere in the world at any time at extremely low marginal cost.

What did you do?

From 1996 we began to put listings from all of our directory publications online. The online database now includes 23,000 operator listings in NZ, Australia and the south Pacific.

What benefits has it had?

The internet allowed us to reach more than 200,000 new customers a month online.

How have you measured this?

The site has been database driven from day one. W also use the Web Trends package to see exactly how many page impressions each listing has received and how many booking were made.

What difficulties have you had?

Recruiting qualified technical staff.

In hindsight, would you have done anything differently?

We probably should have spent more up front, it might have been better to hire more technical staff early on

What next?

More real-time information and pricing. For example motel owners will be able to auction off accommodation to the highest bidder.

Links:

www.jasons.co.nz

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