Travel giant casts shadow

By PETER GRIFFIN

The country's online travel operators and traditional travel agents alike could face a shakeup at the end of the year when travel mega-portal Zuji.com launches its New Zealand division.

Zuji, which means "footprint" in Japanese, is operating in Singapore and Australia and plans to spread to five other territories and pick up 500,000 customers across Asia-Pacific in the next few months, offering travel, hotel and car rental bookings online.

It will go head-to-head with websites such as travel.co.nz, flightsdirect.co.nz and the online services of Air New Zealand and Qantas.

Zuji has been advertising key management positions in the travel trade press. While Qantas has a stake in Zuji, Air New Zealand has withdrawn as a backer after being a founding investor.

An initial group of 11 airlines invested US$60 million ($127 million) to get Zuji off the ground.

Despite Air New Zealand's departure, Zuji's backers have grown in number to 16, including Japan Airlines, Qantas, Singapore Airlines, United and China Airlines.

Martin Symes, Zuji's commercial manager, said the New Zealand site would go live early in the New Year at the latest, with Air New Zealand as a supplier but not a shareholder.

"They have committed to participate as an associate carrier and will provide Zuji with access to competitive prices," he said.

Air New Zealand spokeswoman Shannon Huse said the airline wanted to shift its focus away from being an equity participant.

She said Air New Zealand fares offered on Zuji in most cases would be no more competitive than fares offered through www.airnz.co.nz.

While Zuji's launch in Australia had been greeted with strong opposition from travel agents fearing price undercutting, Symes said their concerns about the portal were unwarranted.

"Zuji will be participating on a level playing field versus other online agencies and our airlines are not required to favour us in any way versus their traditional channels," he said.

But that has not convinced the Australian Federation of Travel Agents, which this week will make a submission to the Australian competition watchdog (ACCC) outlining its concerns about Zuji.

Federation chief executive Mike Hatton said Zuji had agreed to include travel agents in the portal from the beginning, but that inclusion was now six to 12 months away.

"It has all-airline shareholders, it is operating in Singapore where there are no anti-trust laws, and it appears on the surface to be operating on margins that would be at cost for credit card [transactions]," he said.

Despite the opposition of travel agents, Hatton said Zuji had not yet made any impact on their market share.

Qantas moved to soothe the fears of agents, saying it would not distribute any fare through the portal that was not available to travel agencies.

In the US, competitors of the airline-backed travel portal Orbitz.com, Travelocity.com among them, have complained that they are unable to get access to the same low fares from the numerous airlines that support Orbitz.

The US Justice Department and Transportation Department have been investigating Orbitz.

So with a handful of travel sites already established in New Zealand, is there any room for Zuji?

Symes said Zuji had the upper hand on the airlines' own sites, which targeted their loyal frequent-flyer base.

Zuji would offer access to 56,000 hotels, 400 airlines and 50 car rental firms.

The site, he said, would employ smarter technology as well. A feature called Price Guru would allow Zuji members to track fares in up to five markets of choice. When a fare in the Zuji database met a member's requirements, he or she would be emailed automatically.

Travelocity.com was providing the software engine for Zuji, while Verisign was a security partner for online payments.

Travelocity owners, reservations specialists Sabre and Abacus, provided Zuji's back-end database content.

Adelaide IT company HostWorks won a A$1 million contract to provide hosting services for Zuji.

Symes said a multilingual call centre in Melbourne would provide customer service 24 hours a day.

Zuji has a marketing budget of A$50 million ($58.2 million) and expects to be profitable by 2006

Zuji.com

Australian Federation of Travel Agents