Stanley Wang has been in the hospitality business for 15 years, but he’s relatively new to the online booking sector. He left his job at Hilton Hotels, where he served as regional head of sales for China properties, to start work at Hotel Reservation Service (HRS), a Berlin-based online hotel booking agency that wants to convince Chinese consumers to make their hotel reservations online. CHINA ECONOMIC REVIEW spoke with Wang about the challenges of getting a new generation of Chinese consumers to trust e-commerce.
Q: You say you moved over to HRS because of the "challenge." What is the biggest challenge?
A: The biggest challenge is consumer education. It takes quite a bit of time to educate travelers here in China to go online to book hotels because they have spent relatively less time online compared to users in other countries. At present the mainland travel industry is very much a call-center driven market. People will search online but call the toll free number to make a booking.
Q: Have online shopping sites like Taobao helped in this respect?
A: Definitely. The number of people shopping online has increased dramatically compared to four or five years ago. Sites like Taobao helped educate the market as to how to navigate the internet effectively, and we will definitely benefit from that.
Q: How have you tailored your website for Chinese consumers?
A: We’ve had a Chinese language version of the website for the last 10 years, but it was a simple translation of the English and German sites. This year, after we did a study on how Chinese people use the internet, we realized there is a big difference between Chinese users and Westerners in terms of the way they search for destinations and points of interest. So we developed a new website for the Chinese consumer. It’s very "Web 2.0," very interactive. When we introduced it we got good feedback and a surge in new reservations.
Q: Can you give a few examples of differences between Chinese and Western user habits?
A: The Chinese outbound travel sector has only really developed over the last five years. Therefore, it takes our customers quite a bit of time to make the decisions to take a trip – much longer than Western users – and they need more support. Chinese customers are also more interested in shopping than their Western counterparts, and they do a lot more searching on shopping destinations and brands. So we give our customers information about the shopping opportunities in their destination cities.
Q: What are your user demographics?
A: Obviously, our customers are all internet users, so they tend to be younger, white collar, and more female than male. Most of them do speak English, but the Chinese website is easier for them to navigate.
Q: Are you seeing any signs of pickup in the industry?
A: We have two different kinds of business, leisure and corporate. In terms of inbound tourist travel, we have seen a decline, but for outbound it seems like there has been no impact at all. More and more Chinese people have disposable income with which to travel. Combined with the strength of the renminbi, traveling overseas is becoming more affordable. Our numbers indicate that there has been a 180% increase from last year for outbound leisure travel. As far as corporate travel is concerned, we’ve seen an even larger boost – 390% over the past year. This is because right now most corporate clients are looking for ways to save money. In general, our business has increased, not decreased, during the economic crisis.
Q: Who are your main competitors?
A: We mostly compete with local players like Ctrip and eLong. Our principal advantage is that we have access to 250,000 hotels globally, far more than these domestic competitors. As a result, focusing on outbound business for Chinese consumers is our major objective. At the same time, we are working to bring multinational customers to our hotel partners in China.
Q: How do you protect your access to these hotels?
A: We have been in business for more than 36 years and have offices all over Europe. This is a strong selling point for us. We’ve been doing business with these hotels for a long time. You can’t build up these relationships in a year.