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HKU716

KEVIN ZHOU

HUELLA ONLINE TRAVEL: GAINING MARKET
INSIGHT INTO HONG KONG CONSUMERS
In April 2007, Huella Online Travel Ltd,1 a Malaysian-based online travel portal targeting Asia, including Greater China, announced its results for the financial year 2006. Since the launch of the company’s Hong Kong site in 2000, its market share for the city had been hovering just under 5%. Indeed, Huella’s performance in Hong Kong had been lower than in its other markets. Previous market research commissioned by the company had found that low consumer awareness of the Huella brand and the general risk-averseness among Hong Kong people towards online travel purchases appeared to be the key factors behind this situation. Jenny Leung, marketing and market research manager of Huella Hong Kong, was surprised that the online travel industry had not picked up in Hong Kong despite the city’s high internet usage penetration rate and the techno-savvy nature of its population, especially among young people. In order to confirm earlier findings, Leung decided to hire MarketSense, a boutique market research firm headquartered in Australia, to conduct a study on its Hong Kong market. Through this study, she hoped that she would be able to devise a viable marketing strategy. What information would Huella need? How could MarketSense help Huella achieve its goals?

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Although this case is based on real events, certain details, including company names, ownership structure, locations and company-related financial and market figures, have been changed to ensure anonymity.

Isabella Chan prepared this case under the supervision of Dr Kevin Zhou for class discussion. This case is not intended to show effective or ineffective handling of decisions or business processes. © 2008 by The Asia Case Research Centre, The University of Hong Kong. No part of this publication may be reproduced or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise (including the internet)—without the permission of The University of Hong Kong. Ref. 08/369C

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This document is authorized for use only in PGP 1st Year -01032013 by Dr. Anjali Malik, Ms. Anju Gulla at IILM from January 2013 to July 2013.

08/369C

Huella Online Travel: Gaining Market Insight into Hong Kong Consumers

The Changing Air Travel Distribution Scene
Despite downside risks facing global tourism twelve months ago—in particular terrorism, health scares due to avian flu and rising oil prices— 2006 was another year of good growth above the long-term forecast rate of 4.1% backed up by one of the longest periods of sustained economic expansion ... Three years ago world tourism began a historically new phase of growth, as it broke the barrier of 800 million international arrivals, growing more than 20% since then.

- Francesco Frangialli, Secretary-General, United Nations World Tourism Organization (UNWTO)2

Around the world, particularly in the Asia Pacific region, the travel industry was booming [see Exhibit 1 and 2]. Despite the dampening effects of events such as 9/11 and SARS on global tourism, the industry enjoyed a spectacular rebound in 2004 and had been growing ever since.

Development of the Flight Bookings Systems
The current airline bookings systems could be dated back to the late 1950s when American Airlines began to build a system that was accessible by its branch offices and travel agents for obtaining real-time flight data and for bookings purposes. The system was intended to integrate and automate the company’s reservations and ticketing processes. Other airlines, including United Airlines, followed suit, developing their own proprietary Airline Reservations Systems (“ARS”). Since then, images of people making manual airline bookings using physical “cards” representing seats on the airplanes were no longer seen [see Exhibit 3 for descriptions of the key industry players].

The various ARSs soon evolved into a single...
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