Good Japan market stats from iMedia Asia hide unfortunate market challenges

Andy Radovic of Outrider has a nice high level piece over at iMedia Asia on the Japanese search market. Called "Searching for travel, the Japan way", it is the BOOT Recommended Read of the week. Paints a very positive picture of online travel in Japan - which is fair and true. When discussing Japan it is important to know that the success of online travel in Japan is despite the fact that the online travel market has not one but two hands tied behind its back.

Firstly the two main airlines - ANA and JAL - still make it virtually impossible to conduct a search query that includes results for both carriers on domestic routes. This has crippled any efforts by intermediaries to sell air in Japan and led to the focus by the major online intermediaries (Jalan/Recruit and Rakuten) on accommodation.

Secondly I have been reliably informed that there are very strict laws on the requirements for disclosure to consumers about the cancellation policies on package sales. When I last investigated this the cancellation policy for a package tour had to be explained to a customer. That is that it had to happen over the phone or face to face rather than a consent online. If this law is still in effect, then it eliminates the "hands free" sale of group tours online. That is the sale of group tours/travel without the intervention of a sales person.

[above assumes my knowledge of JP market is still up to date - please let me know if I am out of the loop]

thanks to Hyougushi over a flickr for the photo

Ctrip may rule China - but that's not stopping Rakuten from trying

I posted last week on the Chinese market, particularly the dominance of Ctrip in "online" travel sales. A complementary story appeared this week in Hotelmarketing.com (add to your RSS feed immediately if not already there) on Rakuten Travel's plans for China.

Rakuten Travel is the number one online travel company in Japan. This makes them a big player globally. With gross bookings in excess of $1 billion in hotels, Rakuten is easily a top ten online hotel company, maybe even sneaks in as number 5 behind the "big four" of Expedia, Orbitz, Travelocity and Priceline (in terms of hotel sales online).

China is big play for Rakuten as it is the natural largest next market for them. It is also a market they have a lot of knowledge about. Up until August last year Rakuten was one of Ctrip's largest shareholders, owning some 20% of the company. At the time Rakuten disposed of their Ctrip stake I said that there was probably two reasons for the sale: the profit on the sale; and to free up Rakuten to take on the Chinese market all by themselves.

There is a lot more background in the Hotelmarketing article which I suggest you read. If you are sitting in Europe dismissing this as another Asia story by Tim I urge you to reconsider and keep a little eye on Rakuten and the number two Japanese palyer Jalan/Recruit. Why? Because both are billion dollar plus players that are looking outside of Japan for places to expand and grow.