Dutch player enters the online travel market fray

ONLINE travel agency FlightEngine.com plans to spend four million euros (US$5.79 million) in China this year to market flight bookings from the mainland.

The Dutch company's entry will intensify competition in the Chinese online travel market, where overseas agencies like Expedia Inc of the United States and Japan's Rakuten Inc have already set up Websites to rival local players.

The investment is expected to help FlightEngine achieve a turnover of between 150 million yuan and 200 million yuan from flight sales in China by the end of this year, and generate a profit in its first year, said Ramon Dwarkasing, FlightEngine's general manager, in an e-mail to Shanghai Daily yesterday.

"Our biggest advantages lie in four simple elements: safe, simple, reliable and cheap," he said, adding that in most cases its customers can save at least 100 yuan or more per ticket, because the firm does not charge a booking fee.

He said a hotel booking service is also available, and FlightEngine is working to increase the number of contracted Chinese hotels.

The company is still working on a Chinese language Website, which will offer domestic flights. Dwarkasing said it won't open offices in China, as bookings will be through toll-free numbers to its call center in Europe. Marketing will take place mostly in Shanghai and Beijing.

Chinese travelers from Shanghai, Beijing and Guangzhou like to travel in comfort when they travel overseas. One-third of Chinese outbound travelers choose to stay in four-star hotels, with a further 10 percent opting for five-star, according to a report by The Nielsen Company in October.

FlightEngine, which is privately held, is among the leading online travel agencies in Netherlands, Belgium and Germany. It expects the Chinese market to rank third after India and Europe this year if sales targets are met.

China's online travel service market is expected to expand by up to 40 percent between now and 2010, as infrastructure matures and electronic plane tickets spur demand, according to Analysys International.

The market, covering plane tickets, hotel bookings and package tours, will generate sales of 3.54 billion yuan this year, an increase of 38 percent from 2007.