Interview with Barney Harford on Expedia's plans for Asia sheds a little more light on what they are thinking about in Japan. He killed off my musings on an acquisition in Japan but indicates a determination to launch in the market with a hotel only offering and then look at expanding into full service. Selling flights online in Japan is extremely hard. On a stand-alone basis you need to connect to more than one GDS to see all of the domestic possibilities - no one has really cracked that yet. For packaging, you have to explain face-to-face the cancellation requirements and other restrictions killing off online packaging sales (assuming my understanding of Japanese tourism law is still up to date). That is before you get into licensing, bonding and fulfilment issues. Hotels are clearly the easy first sell but they too have some issues. Mytrip/Rakuten Travel created the online hotel market in Japan (like Wotif did in Australia, HRS in Germany, Venere in Italy etc). This is good news as the market is proven. The bad news is they did it offering less than 10% commission - I think as low as 6.5-7%. There is no way that Expedia can compete for domestic travel sales using 25% commission.
Barney will know all this - not least of all because before Rakuten bought MyTrip, MyTrip was the provider of Japanese inventory for Hotels.com.
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